Management of the Economy and Ministerial Severance Payments

Anthony Browne Excerpts

Tuesday 15th November 2022 Commons Chamber

[Lucy Frazer]

I think the hon. Member is forgetting that the UK is projected to have the highest growth rate in the G7 in 2023. I think he is forgetting—or is not aware—that we are seeing inflation across the globe. Germany’s inflation rate is 11.6%, Italy’s is 12.8%, and the eurozone’s is 10.7%. These are obviously issues that are affecting people across the globe. This Government are committed to supporting vulnerable people who need the support that we are providing.

Let me now address some of the points made by the hon. Member for Wigan about homes, home ownership and the shattering of dreams. It will not surprise Opposition Members to learn that we believe home ownership to be an essential component of any long-term issues in our economy. This Government are proud of their track record of helping first-time buyers on to the housing ladder, and we have just expanded first-time buyer relief by raising the level at which first-time buyers start paying stamp duty, from £300,000 to £425,000. I seem to remember that the Opposition voted against that. As the hon. Member mentioned, we are also investing £11.5 billion in affordable homes. She will be aware, I hope, that since 2010 we have delivered 598,000 new affordable homes, and Government-backed schemes have helped more than 800,000 households to purchase a home since 2010.

[Anthony Browne (South Cambridgeshire) (Con)]

I welcome the fact that Labour is joining the Conservatives in championing the desire to own homes, which has traditionally been a strong Conservative party position. Is my right hon. and learned Friend aware that the rate of home ownership in the UK rose throughout the second half of the 20th century, reached a peak just as the last Labour Government came to power, and fell throughout almost the entire period of that Government? It was only as a result of a range of measures introduced by the Conservative Government, on their election in 2010, that home ownership rates started to rise again. Labour may say things, but after its 13 years in power it left home ownership rates plummeting throughout the UK.

[Lucy Frazer]

I am grateful for my hon. Friend and neighbour’s intervention. He is knowledgeable on all these matters and makes an important point about rhetoric and not action, because I also know, as I am sure hon. Members across the House do, that the Labour party did not deliver the building of the same number of affordable houses—social houses—as this Government did.

On house building, the hon. Member for Wigan seemed to suggest that she was not aware that the Levelling Up Secretary had committed to our plans to work towards 300,000 homes a year—[Interruption.] I have heard him commit to that several times since I have been in the Department. To that end, we have already announced £10 billion-worth of investment in housing supply since the start of this Parliament, with those supply interventions ultimately due to unlock over 1 million new homes over the course of this Parliament and beyond.

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[Lucy Frazer]

As an example of the previous operation of this provision, the data published in 2010 indicated that severance payments made to Labour Ministers in that year amounted to £1 million. To ensure transparency, the details of these payments are published in the annual reports and accounts of Government Departments. It is important to point out that a Minister will be entitled to a payment on ceasing to hold office only when they in effect step away from Government and are not reappointed for a period of at least three weeks. Periods of continuous employment, where a Minister might move between roles during the same Administration, do not result in multiple payments.

In this context, I would like to draw Opposition Members’ attention to the fact that my right hon. Friends the Members for South West Norfolk (Elizabeth Truss) and for Spelthorne (Kwasi Kwarteng) served as Ministers for considerable amounts of time before they were made Prime Minister and Chancellor of the Exchequer, and that they therefore have a statutory entitlement. Let me be clear that, although this is a statutory entitlement, that is not to say that Ministers are unable to waive such payments. That is not a matter for the Government; it is entirely a discretionary matter for the individuals concerned. The Government do not regard it as appropriate to make arbitrary demands of individuals in relation to their entitlements. While the Labour party seeks to make cheap political points by denigrating the former Prime Minister and Chancellor, from these Benches I would like to pay tribute to the public service of Ministers of the Crown across the board and as long-standing Members of Parliament.

[Anthony Browne]

I would like to thank my right hon. and learned Friend for making an excellent speech. The Opposition are trying to link economic performance with severance pay. I recall that, back in 2010, the last act of the last Labour Chief Secretary to the Treasury was to leave a note saying:

“Dear Chief Secretary, I’m afraid there is no money.”

And what happened to severance pay then? As my right hon. and learned Friend has said, Labour Ministers took £1 million in severance pay. Also, the four leadership candidates for the Labour party, Ed Miliband, David Miliband, Ed Balls and Andy Burnham all took—

[Mr Deputy Speaker]

Order. You cannot mention current sitting Members by name. Anyway, I think the Minister has got the gist.

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[Patricia Gibson]

Some estimates put additional mortgage costs at £5,100 a year, on average, by the end of 2024. I hear the chuntering from the hon. Gentleman about mortgage rates going down. He would do well to reflect on the fact that 73% of mortgage holders are worried about rate rises.

Alongside this, the UK Government are set to raise taxes. They will balance the cost of their own incompetence on the backs of those who are already struggling, and whose struggles have been made so much worse by a Government who could not find their backside with both hands. The number of Scots seeking mortgage help has nearly quadrupled, again as a result of this Government’s staggering incompetence. It is particularly galling for people in Scotland, the majority of whom roundly rejected this Government.

As if all this were not enough, inflation is soaring, rising to over 10% in September, a rate not seen since the early 1980s, outpacing normal earnings growth and expected to peak at 11%. Inflation is partly driven by sky-high energy costs, and the Government are already backtracking on the one thing they have done to bring down energy costs, with the expected bill rises early next year hammering households all over again—we could see bills of more than £4,000 in April. The shadow of recession is looming over the UK and threatens Scotland’s recovery from the pandemic, with the Scottish Government’s budget £1.7 billion lower due to the impact of inflation and the need to help households on which the UK Government have turned their back. This means that in Scotland budgets have had to be reprioritised across a range of areas to provide this much-needed support. Sadly, for the Labour party, when Wales’s budget is under pressure it is the fault of the UK Government because of how devolution works, but when the Scottish Government’s budget is under pressure Labour joins the Tories in condemning the SNP. That is why Labour is thrashing around in its death throes in Scotland, because standing shoulder to shoulder with the Tories is not working for it. The people in Scotland are not fooled.

It is bad enough that households across the UK are struggling to balance budgets in the face of soaring inflation, rocketing energy bills and huge increases in mortgage costs, and it is bad enough that my constituents in North Ayrshire and Arran are facing unprecedented financial pressures, but while they do they are watching the revolving door of Government jobs, which have been changing with breathtaking speed. The loss of a Cabinet post is compensated for with three months’ salary, and that applies even to those who were in post for only a few weeks. Sky News has reported that this ministerial churn has amounted to £709,000 in severance payments for former Ministers and Whips. A total of 71 Ministers are eligible for this pay as a result of the instability of this Government. In view of the financial stress our constituents are facing because of decisions made by this Government, they have a right to know who has taken these payments, which are due entirely as a result of the instability and incompetence of this Government. Perhaps the Minister will be able to tell us today, but I certainly will not hold my breath.

[Anthony Browne]

I wonder whether the hon. Lady would refresh my memory. She has been talking about the severance pay that the UK Government pay to former Ministers, but what do the Scottish Government do? I understand that in Scotland Ministers who leave are also entitled to three months’ pay, just the same as it is for the UK Government, and that they often take it up. Do correct me, but I understand that it is the same.

[Patricia Gibson]

Perhaps the hon. Gentleman has listened to a podcast or something and has not been listening to half of this debate. The point of today’s debate is that the instability created by this Government means that Ministers who have been in post for a matter of weeks are hoovering up huge payoffs. If he can tell me that there is a precedent for this level of instability, I am happy to sit down and let him explain it to me. I see that he is not attempting to do so, so perhaps he should sit there and reflect on the fact that he is attempting to defend tens of thousands of pounds being paid to Ministers who were in post for a matter of weeks. If he is happy to defend that, he certainly will not have the confidence of my constituents.

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[Anthony Browne (South Cambridgeshire) (Con)]

I echo at the outset the words of my right hon. and learned Friend the Minister for Levelling Up, Housing and Communities: mistakes were made. The Prime Minister said the same thing. The most important thing is that we fix them rapidly. That is the difference between the Government and the Opposition: we do not repeat mistakes and go on, but fix them amazingly quickly. We had a quick change of leader and of Chancellor, but most of the measures that the Opposition have been discussing were never implemented. They were reversed before implementation. We await the autumn statement on Thursday to see all the measures that the Government will take to ensure that we live within our means and get the economy on the right path again.

Various Members on both sides of the House have mentioned the different crises that we have faced since the 2019 election. I sit on the Treasury Committee, and we have been following closely the economic response first to the pandemic and then to the war in Ukraine. There is no doubt that the pandemic was an extraordinary economic shock, not just to the UK, but to economies around the world. However, our response was by and large incredibly generous and ensured that the economic reaction was less severe than it would otherwise have been. Likewise, with Ukraine, there has been a huge amount of support for households in the cost of living crisis. Various Members have mentioned the energy price fix. We are also introducing a windfall tax, and there are too many forms of support for households to mention. Most people understand that the Government’s response to those two major, once-in-a-century crises, which happened back to back, has been extraordinary. It would have been amazing if no mistakes had been made. Some were made and we have put them right.

We all know what is happening here. As my hon. Friend the Member for Orpington (Gareth Bacon) said, it is political game playing. The Opposition are looking to the next general election and trying to burnish their economic reputation. They know that the Conservatives are trusted most on the economy and Labour is not. I do not blame the Opposition—they are trying to turn that around and say, “You can trust us with the economy; you can’t trust the Conservative party.”

It is worth reminding people of the Labour party’s economic record and why a lot of my older constituents vote Conservative. They have lived through previous Labour Governments. I will go back not to the Labour Chancellor going cap in hand to the International Monetary Fund in 1967 or to the winter of discontent, which I remember, when the rubbish was piling up in the streets, but to the last Labour Government of 1997 to 2010. I was economics correspondent at the BBC when Tony Blair and Gordon Brown came in and at the time of their emergency first Budget. That election campaign was largely fought on unemployment, but the economic scenario in 1997 was golden. For years afterwards, people said that Gordon Brown was the lucky Chancellor. He inherited extraordinarily benign economic conditions. I gave up being an economics journalist because there was nothing to write about. We had budget surpluses and flat inflation, but it was all inherited from the previous Conservative Government and the result of the reforms they introduced. However, that did not last.

It was mentioned earlier that every Labour Government have left office with unemployment higher than when they came in. The same is true of the 1997 to 2010 Labour Government.

[Matt Rodda]

I am grateful to the hon. Gentleman for going back to the 1990s. It is fascinating to hear him recall that long period of higher growth compared with when the Conservatives have been in power. Does he want to reflect on that and the difference between the two parties’ management of the economy?

[Anthony Browne]

I will come to that. The economy is like a tanker and it generally moves slowly. In 1997, the Labour Government inherited the results of the all the reforms that Norman Lamont, Ken Clarke and others introduced under John Major. However, that did not last.

The Labour campaign in 1997 was fought on employment and I particularly remember Gordon Brown’s rousing speeches about workless households—households where no one had ever worked. That was Labour’s big attack on the Conservatives’ economic incompetence. What happened to workless households under the last Labour Government? They did not decrease—they doubled. There were twice as many workless households when Labour lost power in 2010 than when they came in in 1997.

Another big campaign theme for Labour in 1997 was youth unemployment. One would have thought that, after 13 years of Labour Government, youth unemployment would come down. What happened to youth unemployment? It went up by almost half; 939,000—almost a million—people aged between 16 and 24 were out of work in 2010. That is the legacy of Labour’s economic policies.

We have discussed filling black holes and living within our means. I am a fiscal conservative and I believe that all countries and Governments need to live within their means. Labour inherited a golden economic scenario, but what happened in the end? As I said earlier, the last Labour Chief Secretary to the Treasury left a note for his successor on his desk. We all know what it said: “Dear Chief Secretary, I am afraid we have run out of money.” As Margaret Thatcher famously said, the trouble with socialism is that

“you eventually run out of other people’s money.”

It is not surprising that the Opposition are trying to burnish their economic credentials and point to any mistakes that the Conservatives have made. We are putting those mistakes right and the Labour party would not do that.

Much of the debate has been about home ownership rates. I am a huge supporter of increasing home ownership. I set up the HomeOwners Alliance to campaign for people to own their homes. Some 86% of people want to own their homes. The Labour party has traditionally and historically not been a huge supporter of homeowners, preferring to focus on social housing. That is important, but so is owning your own home. Most people who live in social housing want to own their home. I welcome the Labour’s conversion and attempt to position itself as the party of home ownership—good luck to them. However, what happened to home ownership under the last Labour Government?

Generally, from the 1910s and 1920s onwards, home ownership increased under different Governments—even some early Labour Governments. It went up and up under Margaret Thatcher. What happened when Labour was elected in 1997? It took about two years for home ownership rates to start collapsing, and that continued throughout Labour’s last term. The Labour party was not the party of the homeowner; it was the party of falling home ownership rates. When we were elected in 2010, it took a couple of years to turn things around—a bit like a tanker—but home ownership rates started to increase again through all our measures to help homeowners. I totally support the Government’s ambition to build homes and help home ownership increase.

[Matt Rodda]

The hon. Gentleman is being very generous with his time, but I would like to point out that, as I understand the figures, home ownership is actually declining at the moment. Certainly in my constituency, it has been for some time, and my predecessor, who was a Conservative, wrote an article in The Economist about it. The hon. Gentleman might want to reflect on the difference between what the Conservative Government are claiming and what has actually happened.

[Anthony Browne]

I do not know what is happening in the hon. Gentleman’s constituency, but nationally—I can provide him with a graph later—home ownership rates began going down a bit after 2010, but then they started going up again. They have had a bit of a wobble, but there have been a lot of economic things happening.

Given our economic track record versus the Labour party’s rhetoric, many constituents say to me when I knock on their doors and they are worried about the pandemic, the cost of living crisis and Ukraine, “Just imagine what would have happened if the Labour party under Jeremy Corbyn had won in 2019.” Am I allowed to say that?

[Mr Deputy Speaker (Mr Nigel Evans)]

No—first, you are not allowed to mention a sitting Member by name, and secondly, I gave an advisory time limit of eight minutes, so if the hon. Member could start to focus, it would be appreciated.

[Anthony Browne]

They say, “Just imagine what would have happened if Labour had won and the Labour party had been in power during the war in Ukraine and the pandemic.” It does not bear thinking about.

In my last few seconds, I will talk about the motion on severance pay. I am neither defending nor supporting it, but it is set out in legislation. That legislation has been there for 30 years, and the Labour party did not oppose or change that legislation when it was in power. It is up to the individuals whether they take it or not. I just point out that after the last Labour Government in 2010, Labour Ministers took £1 million-worth of severance pay.

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[Anthony Browne]

Just for clarification on the data—I will provide all that to you afterwards—as I said, home ownership rates went up through most of the 20th century. They reached a peak, you are right, under the last Labour Government, and they started falling—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I remind the hon. Gentleman that it is not me who has been doing that. The hon. Member knows that he needs to address “the hon. Lady”.

[Anthony Browne]

Home ownership rates peaked under the last Labour Government but then fell under that Government, and they are now going back up.

[Sarah Owen]

We can argue statistics all we like, but on home ownership, people know what is happening to them right now and the reality that they face outside this Chamber. On average under a Labour Government, home ownership was 5.5% higher than it currently is.