Ministerial Severance: Reform

Debate between Jerome Mayhew and Nia Griffith

Tuesday 6th February 2024 Commons Chamber

[Dame Nia Griffith]

It might surprise the hon. Lady, but I am going to stick to the topic of this debate, which is severance pay.

Like my right hon. Friend the Member for Islington South and Finsbury, I pay tribute to the hon. Members for Macclesfield (David Rutley) and for Hexham (Guy Opperman), and to the right hon. Member for North East Cambridgeshire (Steve Barclay), who I understand gave back some ministerial severance pay upon taking up new ministerial posts, but it is a great pity that no other Members recognised how totally inappropriate it was to take 13 weeks’ severance pay for a post that they had held for a much shorter time than that, or to keep the full 13 weeks’ pay when they were reappointed in a shorter time than that. Today, they have the opportunity to vote to reform the system that their party has brought into disrepute.

Those in government have a duty to get value for money and to respect the hard-earned taxpayers’ money with which they are entrusted. Let us not forget the financial turmoil caused by the then Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), when she and her team pushed through the Budget in September 2022, ignoring expert advice and leaving people with hundreds of extra pounds to pay on their mortgages—and not just for a couple of months, but for years to come. From this Conservative Government, we have had not just higher mortgages but higher rents, rampant inflation, a real cost of living crisis causing people up and down the country to struggle to make ends meet, and, of course, hollowed-out public services that are scarcely able to meet demand.

When the ministerial severance payments scheme was set up back in 1991, no one would have imagined the absolute pantomime that we have seen over the past couple of years, with nearly 100 Ministers leaving office and taking with them some £993,000—nearly £1 million— of taxpayers’ hard-earned money in ministerial severance pay. Back in 1991, the expectation would have been that Ministers would be in post for a number of years, and that those leaving under the age of 65 would receive a quarter of their final annual salary—13 weeks’ pay—as severance pay.

However, let us fast-forward to the summer of 2022, when MPs were hastily appointed to fill gaps after the frenzied mass resignations from the Johnson Government, supporters of the right hon. Member for South West Norfolk were brought in to serve during her time at No. 10, and supporters of the current Prime Minister, who resigned from the ministerial jobs to put pressure on his predecessors, returned only a few weeks later when he became Prime Minister. We are not saying that the rules were broken, except in the cases of the handful of over-65s who were not entitled to severance pay. Under the existing rules, the rest of those Tory Ministers were legally entitled to three months of severance pay at their final salary level, no matter how long they had been in post, no matter how they came to lose their post and, in most cases, no matter how quickly they returned to the Front Bench afterwards. Those are the glaring loopholes that Labour’s proposed reforms seek to close.

[Jerome Mayhew]

The hon. Lady has referred to value for the taxpayer and the contributions of the hard-working people who send us here. Would she support the ongoing freeze on ministerial salaries were Labour to come into power?

[Dame Nia Griffith]

As I have said, I am going to speak to the topic on the Order Paper, and I am not going to be distracted by any other topic.

If Labour’s proposed reforms had been in place in 2022, that would have saved the taxpayer some 40% of those payouts, or some £377,000. During the Tory turmoil of the past couple of years, some Ministers have received more in severance pay than in actual pay. For example, Ministers who only served for a matter of weeks—perhaps only eight or nine weeks—have been entitled to walk away with 13 weeks’ severance pay. That is clearly totally absurd and unacceptable. Labour is proposing a pro rata system, whereby those Ministers who serve for less than a full year should only receive in severance pay a quarter of what they have actually earned. In other words, if a Minister had been in post for eight months, they would be entitled to two months’ severance pay; if they had been in post for eight weeks, they would be entitled to two weeks’ severance pay.

Likewise, we propose to strengthen the rules concerning Ministers who are reappointed. Under the existing rules, ministerial severance pay is only withheld if the departing Minister takes up another post within three weeks of quitting, which covers a normal reshuffle situation. However, with the revolving door we have seen, some Ministers have returned after more than three weeks but less than 13 weeks and yet kept their full severance pay, which is in accordance with the current rules. That is another loophole that our proposals seek to close: individuals who return to the Front Bench while still benefiting from severance pay would have that pay clawed back. For example, if a Minister were entitled to eight weeks’ severance pay but took up another ministerial post after five weeks, they should clearly forgo the remaining three weeks’ severance pay, as they would of course be receiving their new ministerial salary.

Thirdly, we propose that individuals who leave their jobs while under investigation for gross misconduct or breaches of the ministerial code would not receive any severance pay unless and until they were cleared of those allegations by the relevant authority. We would therefore not be in the situation where the disgraced former Member for Tamworth, who should never have been appointed in the first place, has been able to walk away with full ministerial severance pay.

Likewise, under the current rules, the shameful behaviour of the former Member for Wellingborough was no bar to his taking severance pay. However, as he is over 65, he should never have had that payout in the first place. In fact, nearly £50,000 has been wrongly paid out to former Ministers who were over 65 at the time they left their posts. One would hope that the handful of individuals involved would pay back that severance pay immediately, as I believe the former Member for Mid Bedfordshire, Nadine Dorries, has promised to do. Perhaps in his closing remarks, the Minister could update us on whether Ms Dorries has indeed repaid that money, and also on what progress has been made in clawing back the severance payments that were wrongly made to other Ministers over the age of 65. Make no mistake: ordinary citizens owing money to HMRC or the Department for Work and Pensions would certainly be expected to repay it in a timely fashion. Furthermore, I ask the Minister to address the content of each of our proposals and say whether or not this Government will support them, and if not, why not.

I appeal to Conservative Members to do the decent thing and support Labour’s reforms, and to support bringing forward the necessary legislation in the next fortnight, as set out in our motion on the Order Paper. If they do not support our reforms, we will have to conclude that they are more interested in lining their own pockets than protecting taxpayers’ money. I commend the motion to the House.