Osborne says he understands that Blackwell is trying to ask why didn't we plan for a lockdown, "and the truth is we didn't plan for a lockdown," he says.

"No Treasury did before or after me or in the Western world."

He says the influenza pandemic did not pose the same economic challenges that Covid did, because in an influenza pandemic lots of people get sick but people are off work for one week, not months and months.

We're hearing from former Chancellor George Osborne now. But let's take a look back at what Oliver Letwin, who was the politician in charge of resilience in government from 2011 to 2016, said before the inquiry took a break.

Here’s what he told the Covid Inquiry:

• He revealed that resilience was only a “small part” of his job
• Government departments were more equipped to prevent a crisis than deal with an emergency
• He said he was an "amateur"; his job, like those of all ministers at the beginning, was “completely” new to him and experts knew a lot more than him
• He regrets not following up with pandemic flu preparations, even though it was a high impact and high probability risk
• The "revolving door" of ministerial appointments undermined their expertise, Letwin said. “If you're a minister responsible for anything for six months, you could have training for the first two months, but by the time you finish your training you've practically finished your job," he said
• He added that going through different roles was seen as a measure of success, something he called a “disaster”
• He said the focus on hazards was compromised by an over-emphasis on security threats
• Emergency response must focus on dealing those people most impacted, he said. “I think it's vital... that we focus on major impacts. It's the major one's that we're not properly prepared for."
• He said a senior minister needs to be in charge of resilience, and added separately that it was “very important that the person heading the work have direct access to the prime minister”
• He said that pandemic exercises every five years would be “pretty good”
• He said the allocation of spending should be looked at, asserting that “most of the steps that really most need to be taken to improve resilience in most fields do not cost very much”

Osborne says he'd make one observation to the inquiry that "unfortunately not all ministers are like Oliver Letwin with the self-starting capacity to check and chase everything".

"You can't build an entire system around a future supply of Oliver Letwins," he says.

Blackwell responds: "No, that's a shame", and her comments are met with laughter in the room.

Oliver Letwin gave evidence to the inquiry earlier this morning.

Image source, PA Media

Osborne says there are questions that could have been asked to the Treasury which they would've answered, in order to prepare better for a pandemic.

"If they'd been asked to provide a budget for stockpiling PPE... I'm pretty certain, like we said yes to everything we were asked to fund with an influenza pandemic, we would've said yes to those things too."

"Should those questions have been asked?" Blackwell says.

With hindsight, yes, Osborne says.

He adds that part of planning is flexibility in the economy and there needs to be more joined up thinking across other governmental departments.

Osborne is asked why he didn't sit down with the Department of Health and work out if there'd be a catastrophic effect to a lockdown and the benefit of considering that in advance.

"We still don't know the answers to some of those questions," he says.

"Should the schools have been locked down in the way they were? Even now after the pandemic we don't know the answers to those questions and hopefully the inquiry can get to the bottom of that."

Blackwell is questioning now why no planning was done for people to stay at home.

"There was no assumption that you would ask the population to stay at home," Osborne replies.

"There was no planning for a lockdown," he adds, "but that it isn't fair to blame someone directly."

Osborne says that if you look at the influenza plans, "it's clear that the Treasury and indeed the rest of the government responds to reasonable requests."

He references that they stocked things they were asked to such as personal protective equipment (PPE).

Kate Blackwell KC asks Osborne if he agrees there was no planning for external shocks that would have a major economic impact, specifically in the Treasury for the pandemic.

He says the UK has an influenza plan and that the Treasury had done some work on what the impact of that would be.

"You're absolutely right there was no planning done by the Treasury for asking the entire population to stay at home for months and months on end, depriving large sectors of the economy like hospitality for months," he says.

"If someone had said 'you the UK government should be preparing for a lockdown that might last for months' then I've no doubt the Treasury would've developed the schemes it did around furlough and loans."

He says that while planning for a furlough scheme could've been done in advance, he's not clear that would have made a better scheme than the one that was introduced.

Blackwell probes Osborne on the plan the Treasury had for a pandemic.

Osborne says there are certain crises that the Treasury is directly responsible for, such as a banking crises or a run on the pound.

"But when it comes to other kinds of rises that might affect our government the Treasury is a contributor to the whole of government plan that usually another department leads," he adds.

In the case of a pandemic, the Department of Health was the lead, Osborne says.

Blackwell reads through Osborne's statement.

He said that between 2010-2016 he contributed to monitoring and assessing financial risks, leading responsibility in responding to risks for the stability of the UK's financial operation, setting budgets and preparing the Treasury's own structures to enable effective crisis management.

In summary, Blackwell says, "you believed that the Treasury's job was to plan for economic and fiscal risks."

Osborne says he wants to draw attention to the fact that "most whole country crises... would probably lead to a second crisis which is an economic or financial one."

Image source, Covid Inquiry

Kate Blackwell KC quotes Osborne stating that when he came to power after the 2008 financial crisis, he imposed an economic policy intended to improve UK public finances, meaning it was in better financial shape to face a pandemic when it hit.

She quotes the statement which said his handling of the Treasury allowed the government to fund the furlough scheme and a bounce back loan scheme and asks if this is a fair summary.

"Yes it is," Osborne says.

"That gives us an understanding how you believe the Treasury under your watch contributed to the government's preparedness for a pandemic," Blackwell says.

Osborne has asked to say a few words before his evidence begins.

He expresses "heartfelt sympathy to all those who lost a loved one during the pandemic"

"For those who feel things could have been done differently, I hope the inquiry gets to the bottom of what those things could have been," Osborne says.

We just heard from Oliver Letwin for over an hour.

Now, George Osborne has taken the oath and will start answering questions.

It's expected much of the focus on his evidence will be around austerity, much like David Cameron.

Baroness Hallett has entered the room and taken her seat.

The inquiry is underway again after a short break.

We are expecting the inquiry to resume very shortly, with George Osborne giving evidence.

You can watch every moment of the Covid inquiry by pressing the Play icon at the top of this page.

If you can't see the play button please refresh your browser or reload this page on the BBC news app.

Image source, PA Media

George Osborne will be appearing very soon.

He and the then-Prime Minister David Cameron led the ‘age of austerity’ together when Osborne was Chancellor of the Exchequer from 2010-2016.

The chancellor’s role means they are responsible for all economic and financial matters. Under Osborne, the NHS faced cuts and saw increased waiting times.

A lot of the focus yesterday was on austerity, and it’s expected Osborne will also have to answer tough questions today over whether cuts to spending led to a lack of preparedness.

However, in his witness statement, he claims that their tough measures following the 2008 financial crisis had a positive effect on the UK’s ability to respond to Covid-19.

Baroness Hallett's next question before the adjournment focused on regional tier of resilience.

"I'm no lover of bureaucracy," she said.

"If you have a regional layer... why doesn't it just become another layer of bureaucracy on top of what is already quite a complex system?"

Lewin said it could become more bureaucratic. He then gave an example from the local resilience forum in Dorset.

"There are various respects in which for a mid-level crises regional coordination is necessary. It's then just a question on whether you set it up ad hoc or whether you have it there permanently.

"My argument for having it there is that then as well as bringing together the relevant people to handle the emergency when it arises, they could be involved in the planning in advance and so when they got to the emergency they'd know about it," he said.

Asking some final questions, shortly before the session adjourned, Baroness Hallett said Oliver Letwin seemed to be disparaging about the lead government department model.

Letwin replied it's inevitable the expertise on transport will lie on the department for transport and health and in "that sense I don't decry the idea".

He said when we have relatively minor problems, and refers to people trapped on the other side of the channel when an airline was collapsing and they couldn't get home, the department of transport were well equipped to handle it.

"The idea those kind of risks should be handled by individual departments is perfectly sensible," he said.

Letwin said that for huge impacts, the idea that one department is in charge "is mad" because they won't be in charge when you get to the response.

Image source, PA Media

Here's some more evidence from the inquiry, short before it adjourned.

Hugo Keith KC says that it's obvious resourcing is a difficult and highly politicised subject.

He adds there would appear to be a problem that decisions about future funding and resources have to be left to politicians.

He asks if the creation of a new resilience institute would be able to make recommendations about how money should be spent.

"Absolutely, I see that as one of the major roles of the resilience institute," Letwin says.

"It's extremely important to realise that most of the steps that really most need to be taken to improve resilience in most fields do not cost very much."

He adds the problem was not that money wasn't available to stockpile PPE or pay for more testing, the problem is identifying where the money needs to go.

Baroness Hallett has risen, and the inquiry breaks until 11:40.

Stay with us while we continue to bring you the best lines and analysis.

Keith quotes Letwin as saying the UK and government should regularly practise responding to whole-scale emergencies by carrying out two such large-scale simulations in each parliament.

Letwin agrees that if every five years we exercised for the impact of "an unknown but ghastly virus or agent... that would be pretty good".

"But if you had for each domain one exercise every five years, you'd be having an exercise at least every year," depending on how many domains you create, he adds.

Jim Reed
Health reporter, BBC News

Letwin said he was “not focusing on pandemic flu” in his time in office because he was being advised that the threat was already being “very well-looked into”.

“That is a matter of regret on my part,” he told the inquiry.

He later came back to that point saying, if he’d been more aware, he might have asked if a “tiny amount of money” could have helped better deal with the threat in advance.

“And that would have been the right question to ask,” he said.

Letwin suggests he was told that there were a number of exercises planned by the civil service to practise dealing with a pandemic flu outbreak and that the threat was already “owed” by the Department of Health.

He said it was a matter of “lasting regret” that he didn’t ask, "'Well, okay, I hear that advice but actually I still would like to look at it [in more detail]'”.