Public Sector Exit Payments (Limitation) Bill

Christopher Chope Excerpts

Friday 13th March 2020 Commons Chamber

[Sir Christopher Chope (Christchurch) (Con)]

I beg to move, That the Bill be now read a Second time.

The Bill is simple: it imposes upon the Treasury a duty to make regulations under section 153A of the Small Business, Enterprise and Employment Act 2015. You might think it extraordinary, Madam Deputy Speaker, that we have to legislate to require the Treasury to implement legislation that we in the House approved in 2015 and that I have been promised by numerous Ministers since is on the cusp of being brought into law. It has not yet been brought into law, and the consequence is that the taxpayer is probably about £1 billion worse off—the benefit to the Exchequer of the provisions in the Act was about £200 million each year.

It is against that background that I was very pleased to have a meeting with the new Chief Secretary to the Treasury. He has some background knowledge of this that dates back to before even I took an interest, because he was on the Public Accounts Committee when it looked at this issue in the early 2010s. The beginning, after the Committee had looked at it, came in January 2015, when the current Home Secretary, who was then a Treasury Minister, announced that it was intolerable that there were so many exit payments of such large sums. She called it a long-overdue reform and said:

“It’s not right that hard-working taxpayers, many on low salaries, have to fund huge payouts.”

As a result, after the Conservative election win in May 2015 the then Chancellor confirmed the commitment to legislate that was in our 2015 manifesto, saying:

“We will end taxpayer-funded six-figure payoffs for the best paid public sector workers.”

Then, in 2017, when nothing had happened, I had the temerity to ask the Chancellor of the Exchequer on 27 June

“when the Government plans to bring forward secondary legislation to implement the policy”,

and the answer I got on 6 July from the then new Chief Secretary, now the Secretary of State for International Trade, was:

“The Government announced in 2015 that it intended to end six figure exit payments for public sector workers. We legislated for a £95,000 cap in the Enterprise Act 2016 and are currently in the process of drafting the necessary regulations.

In the interim, the government expects every part of the public sector to demonstrate that it is using public money efficiently and responsibly and to ensure that pay and terms are always proportionate, justifiable and deliver value for money for taxpayers.”

Having received that non-committal reply, I asked more questions and then introduced a private Member’s Bill in the 2017-19 Session that was exactly the same as this one, except with different dates.

[Nickie Aiken (Cities of London and Westminster) (Con)]

As a former local government leader, I was involved in many cases in which we had to ensure that the person leaving had received the correct money and final settlement, but does my hon. Friend agree that some of these people have often been working for a local authority —I can only speak for local authorities—for decades? Their salaries will have increased over time, and there should, whatever the legislation, be flexibility in such cases. If a case is sensitive, the local authority should be given powers to ensure that that person is given the amount of money that they are due, but not too much for the public purse.

[Sir Christopher Chope]

That was a very long intervention, Madam Deputy Speaker, and I am afraid that I do not really agree with the tenor of it, which excuses some of the appalling behaviour that is taking place in local government. A recent article in The Times revealed that Steven Mason, a former Northumberland County Council chief executive, was given a £370,000 pay-off, but took up a job four months later at South Tees Hospitals NHS Foundation Trust on £180,000 a year, despite Ministers having pledged to take back exit payments if the recipient returned to the public sector.

One reason why I got interested in this subject was that I was concerned that proposed local government reorganisation in Dorset would be an excuse for a whole lot of public officials employed by local councils to look after each other’s interests at the expense of the local taxpayer and give themselves big handouts. I am afraid that my worst fears proved to be well founded, and some unconscionably high payments were made as a result.

I take the view, unlike my hon. Friend, that this issue is urgent and overdue for action. Indeed, I think an alternative a title to my Bill might be the Overcoming Sir Humphrey’s Resistance Bill, because the resistance of the civil service to what is proposed in this Bill is a textbook example of how the civil service can conspire to frustrate the will of Parliament and, indeed, of the elected Government. How is it, all this time later, that we do not even have the regulations? We have not even had a response to the latest consultation, which was originally promised to be delivered in 2018. I went to see the then Chief Secretary back in 2017 and said to her, “Has it occurred to you that this measure is supported by almost everybody in politics and in public life? Has it occurred to you that the resistance to it is coming from the civil service, because they are going to be losing out as a result of the implementation of the Bill?”

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

My hon. Friend is highlighting an important point. Is he aware that the same issue arises in Scotland, where we have police chiefs, university bosses and other public sector servants getting paid huge six-figure sums as they leave their taxpayer-funded jobs?

[Sir Christopher Chope]

I am sure that the issue does happen in Scotland, and I hope the measures will apply across the whole country, although the latest consultation document that the Government issued indicated that there might be different treatment in different parts of the United Kingdom.

The matter has reached the stage of being a public scandal, because money is tight and the Bill is a means of recovering £200 million a year for the taxpayer, both locally and nationally. It is unfortunate that, as a result of answering questions from me, successive Ministers have had words put into their mouths or put on the record that have now proven to be completely untrue, I am afraid. What more can one say? The current Chief Secretary has assured me that he will not fall in the same trap as his predecessors.

The regulations could be issued pronto. Why have they not been? We were told that there needed to be a consultation. After a lot of pressure, the consultation was issued in April 2019, and the responses had to be in very quickly by July 2019. Have the Government yet issued their response to those responses? No, they have not, because it is all so complex.

[John Spellar (Warley) (Lab)]

The hon. Gentleman is rightly drawing attention to a significant problem. Is there not another aspect to it, which is that many of these individuals, quite frankly, should not be being given any payments, because they should actually be being sacked for failure to perform their jobs? They are taking sums of money and then transferring to other parts of the public sector, where they will have a repeated pattern of failure. Is there not a need for a real change in culture inside the public sector, particularly, I regret to say, inside management levels of the national health service?

[Sir Christopher Chope]

The right hon. Gentleman is absolutely right about that. That is why organisations such as the TaxPayers Alliance are trying to work with the general public to raise the profile of these subjects. What is happening is a concerted fraud upon the taxpayer by these officials, who are cosying up to each other and ensuring that they are the only people who do not suffer as a result of their own incompetence.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

In one of my small local councils, Hambleton District Council, two officials have had pay-offs in excess of £300,000 over the past three years. One of them was only earning £100,000—“only”, he says. The local authority says that it wants the measures brought forward so that it can cap future payments. Does my hon. Friend not agree that it is high time that we did that?

[Sir Christopher Chope]

Absolutely, I agree with that. Of course, the Government said that pending the implementation of the regulations, they would ask the public sector to comply with the spirit of them and the primary legislation that had been passed, but I am afraid that is almost impossible for local councillors and, indeed, the Government to do in practice, because we need to have the law in place. That is why I hope we will hear from the Chief Secretary that we will get the law on the statute book later this year so that public sector exit payments are limited to £95,000.

Clause 2 of my Bill suggests that we should give notice to all people who might be thinking of getting ahead of the game that they would be subject to the provisions of the Bill in respect of any public sector exit payments agreed after 1 April 2020. I do not know whether the Chief Secretary thinks that to be a sensible safeguard, but I hope it will find favour.

It is ridiculous that we should have to legislate to force the Government to introduce regulations. Many new colleagues are here today. I should tell them that on Fridays the Government often promise the earth and never deliver. My right hon. Friend the Member for East Yorkshire (Sir Greg Knight) introduced a Bill to deal with rogue parking operators last year. It got on to the statute book and everyone thought that the Parking (Code of Practice) Act 2019 meant that we would get rid of rogue parking operators. It may be months or years before anything effective is done in regulations.

[John Lamont]

Does my hon. Friend accept that the Government have been rather distracted in the past few years getting Brexit done?

[Sir Christopher Chope]

I am not sure that that is an adequate excuse. It could be a justification for everything, but in the Treasury it is an issue of priorities. There is no reason why, if hon. Members are given a promise that something is going to be done on a particular date, that promise should not be honoured.

[John Spellar]

The hon. Gentleman should come down a bit harder on that explanation from his hon. Friend, who is fundamentally saying that the Government are incapable of chewing gum and walking at the same time.

[Sir Christopher Chope]

I am not sure that my hon. Friend would have put it quite that way. The House needs to have a mood of intolerance of serial incompetence, if not a conspiracy of silence and inaction among people in the civil service.

[Laura Trott (Sevenoaks) (Con)]

Will my hon. Friend give way?

[Sir Christopher Chope]

No. I am going to bring my remarks to a close in the hope that we will be able to hear something from my right hon. Friend the Chief Secretary to the Treasury before we reach 2.30 pm.