Four worrying things the Covid Inquiry told us about Rishi Sunak

Lee Cain, who was prime minister Boris Johnson‘s press secretary, noted on 19 March 2020, that "Rishi says bond markets may not fund our debt etc. He's back to Jaws mode wank."

The reference to the film Jaws is an ongoing theme within the evidence submitted to this inquiry. Johnson, and maybe Sunak, appear to have been obsessed with the decision that had to be taken by the mayor in that film on whether to close the beach in the face of the threat that a killer shark posed to those on it.

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The two of them obviously thought this an appropriate metaphor for the decision that they had, by March 19 2020, realised that they had to take on whether to close the economy or not. That small-minded characterisation of the task that faced them is not, however, my concern. What worries me is the comment about what else Rishi Sunak, now of course the UK’s Prime Minister, had to say.

Several things are apparent. The first is that by this date (which was just four days before the first lockdown was announced) no decision had been made as to how that lockdown would be funded. Sunak was clearly out of his depth on the issue, and panicking.

Secondly, such was his panic that he thought that if the Government ran a deficit as a result of lockdown it would have to borrow the funds used for this purpose, and he doubted whether the financial markets would make them available.

Third, faced with a choice between appeasing the market or saving lived it seems very likely that he was erring towards sacrificing people to the interests of the financial markets. The mayor in Jaws decided to keep the beach open to save the local economy: Cain obviously thought Sunak was wavering in that direction and was seeking to avoid lockdowns, whatever the human cost.

Fourth, despite the fact that the Government had from 2009 until 2016 used quantitative easing to disguise its creation of new money to fund government deficits, the comment suggests that Sunak clearly had no understanding of this process, or that it could be used again to finance the crisis that he was now facing. This was despite the fact that by 2016 he was a Member of Parliament and apparently taking an interest in financial issues. The reality that he could simply ask the Bank of England to create the money needed to bail out the economy had very obviously passed him by.

It is apparent, as a result, that Sunak was totally unprepared for the task facing him. In part that was due to his very obvious ignorance at that time of matters regarding government financing. Also, and at least as worrying, was his inability to understand that the needs of the people of the UK were more important than the Government’s relationship with financial markets.

It could, of course, be said that I am overinterpreting one comment amongst many presented as evidence to the Covid Inquiry. I do, however, doubt this. Many of those who are presenting evidence recorded what was happening, partly to share their own concerns, and partly (I suspect) to protect themselves, even though I doubt that many of them imagined that an inquiry of the sort now being undertaken would ever happen.

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Cain was an important adviser to Boris Johnson, even if not the most important. What he also was, however, was a journalist. He was used to noting his sources. I think that’s what his note, presented as evidence, represents. It was a contemporaneous narrative record of what was happening in case it was ever needed. For that, we have to thank him.

What it reveals is that we now have a man who is Prime Minister, largely on the basis of his record as Chancellor during the Covid era, who was actually profoundly ill-suited to that task, which he only secured as a consequence of Sajid Javid‘s resignation. It has to be concluded that rarely has a man been so overpromoted. We have all paid a considerable price for that.