Management of the Economy and Ministerial Severance Payments

Drew Hendry Excerpts

Tuesday 15th November 2022 Commons Chamber

[David Linden]

That is very helpful, and over the course of that drink I will explain to the hon. Gentleman that the behaviour of his colleagues in the Scottish Conservative party during Opposition day debates is quite something. It reminds me of that biblical verse about removing the log from your eye before removing the speck from your neighbour’s.

There are two parts to the motion before the House. The first aspect of it is how interest rates are rising. A theme has been developed throughout the course of the debate that that is to do with what has happened in Ukraine and the covid pandemic. I would not dispute for a minute that what has happened in Ukraine has had an impact on the economy and that the global pandemic has had an impact on the economy. However, as I said to the hon. Member for Sedgefield (Paul Howell), there is a third aspect that has also had an impact on the economy, and that is the nature of the Brexit that we took. I think most people and most respected economists would argue that Brexit has had an impact on the economy, and the cherry-picking—to use the Minister’s term—that the hon. Member for Sedgefield was indulging himself in, to try to ignore the fact that Brexit has had an impact on the economy, does a disservice to the debate.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

My hon. Friend is making a very important point. People are struggling to make ends meet just now because of a number of factors. A key one is food price inflation, which has rocketed due to the costs of Brexit. We have seen prices double, and the price of basic foodstuffs has gone up 60%. It is a price that people cannot afford to pay and should not have been forced into paying, especially in Scotland, where we voted resolutely against Brexit.

[David Linden]

Absolutely. I do not intend to rehash the debate on Brexit, though I am tempted to do so and feel that I would be on pretty strong political ground, but my hon. Friend is right to talk about the impact on food prices. In his constituency in particular, it is not just food prices that are crippling people; it is the fact that many of his constituents are off the gas grid. The paltry £100 that has been offered by the UK Government is not acceptable, as I think my hon. Friend is about to explain.

[Drew Hendry]

I am grateful to my hon. Friend for giving way once again; he is being very generous with his time. This is another vital point. The energy price guarantee does nothing for those people who are already paying an average bill of £4,000, which might rise to £6,000 a year, and for those off the gas grid, the £100 put forward by the UK Government has been described as “derisory” by Energy Action Scotland. These costs are crippling for people in constituencies like mine, where many people are off the gas grid.

[David Linden]

Absolutely. I am conscious that the motion focuses specifically on mortgages, so I will move away from energy and deal with the issue of mortgage interest rates.

The general theme that Government Back Benchers are developing today is that Ukraine is to blame, and covid is to blame, and that is why interest rates have risen. I would not want to indulge in a whole lecture on the Phillips curve—[Interruption.] The Parliamentary Secretary, Cabinet Office tempts me. A number of people, including me, would question whether the Bank of England holding interest rates at the historic low levels they have been at relative to unemployment is something that merits a debate. Whether today’s Opposition day debate is that, I am not sure.

There has been a rewriting of history in the course of the debate. A number of Members seem to be suggesting that this is the fault of covid and Ukraine, and the mini-Budget had nothing to do with it. The reality is that the mini-Budget did spook the markets. The UK was put on a watch list by the IMF. Members have been falling over themselves with excitement to say, “What would have happened if the right hon. Member for Islington North (Jeremy Corbyn) had become Prime Minister?” I am not sure that even they would have imagined that under the right hon. Gentleman’s leadership the UK would have been put on an IMF watch list, as it was after the antics of the right hon. Member for Spelthorne (Kwasi Kwarteng).

Over the course of the debate, Members have said that this is to do with covid and Ukraine, but the Scottish housing market review for quarter 3 of 2022—which we must bear in mind is written not by politicians but by economists and civil servants—says:

“There was a substantial increase in the number of high LTV products offered by mortgage lenders after the Covid-19 pandemic, with the number of 95% LTV mortgages products increasing from 14 in September 2020 to 274 in September 2022. However, after the UKG Plan for Growth/mini-budget on 23 September 2022, the residential mortgage market saw a dramatic fall in the number of deals available to new borrowers over the month. The total number of residential mortgage products dropped to 2,258 in October.”

I am not going to do a “woe is me”, as a highly paid politician, but I am one of the people whose house was on the market at the time of the mini-Budget. We had an offer in, and then the mortgage product was pulled, so the sale of the house has fallen through. I am also one of the people who took sound financial advice and was told to fix my mortgage rate for two years, because most of us expected—quite rightly—that, given relative levels of unemployment, mortgage rates would start to rise. That is why a number of people fixed for two years. As I say, I am not saying “woe is me”, because I am a politician, and I am very highly paid; I am far too overpaid, in my view. However, as a result of the changes to mortgages that happened in an accelerated fashion as a result of the mini-Budget, the vast majority of my constituents will now have to go back to the position of many of my constituents in the 1980s—the people who live in the Mount Vernon area—who saw interest rates of 14% and 15%. We are not there yet, but I would not be surprised if we ended up in that place, because this is not going to be fixed overnight. The harsh reality for the Government is that, yes, interest rates have been rising and should have been rising, but everybody in the Chamber knows that the mini-Budget spooked the markets, and there was a run on the pound and a run on pensions. That was a direct result of the actions of Government Ministers.

As for the second part of the motion, most of us would accept that if somebody started working at, for example, Tesco on a Monday, and they were in charge of the frozen foods aisle, and in the three days that they were in work, they did not turn on the freezers and all of that supermarket’s stock was lost, the chances are that they would be given their jotters—they would be sent home from work, and they would be fired. The Government have conducted some sort of economic experiment based on the Thatcherite economics of the gruesome twosome of the right hon. Members for Spelthorne and for South West Norfolk (Elizabeth Truss). They have crashed the economy—the equivalent of ruining all the frozen goods—and they have got off scot free. The thing that really sticks in the craw of Members of this House and, most importantly, of people outside the House is the fact that not only have they walked away and left absolute economic carnage behind them but they have been given a severance payment.

Far too often, watching Conservative Members and Opposition Members fighting with each other is like watching two bald men fight over a comb. Conservative Members say, “Oh well, in 2010, you took this much by way of ministerial several payments,” but we are not living in normal times: it has been calculated that a Minister resigned every four days over the last year. The Conservative party has the audacity to lecture people about sound money and sound government when, at one point, Ministers were resigning on average every four days as a result of complete incompetence. Some of the people we saw at the Dispatch Box, particularly over the summer, are folk I never dreamed would have a red box—people who I would not put in charge of tying shoelaces—but they are all walking away with ministerial bungs.

As far as I am concerned, there is a legitimate debate to be had by the Government and His Majesty’s Opposition about severance payments. As luck would have it, last month, I introduced a private Member’s Bill, the Ministerial and other Pensions and Salaries (Amendment) Bill, which seeks only to bring Ministers into line with mere mortals outside of this House. If someone has not been with their employer for two years, they are not subject to a statutory redundancy payment.

We are in a ridiculous situation. Granted, the right hon. Member for Chippenham (Michelle Donelan), who was Education Secretary for, I think, a day, did the right thing and said, “I’m not taking my severance payment,” but under the current legislation, Ministers and Secretaries of State who are in post for literally hours or a couple of days are entitled to vast severance payments. That needs to change. We can have the what-aboutery in the Chamber about Labour or Conservative Ministers taking payments, but for goodness’ sake, let us fix the legislation to ensure that Government Ministers are subject to the exact same regulations as those we in this place seek to represent.

[Drew Hendry]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Before the hon. Gentleman makes his intervention, I want to say that the advisory time limit is eight minutes.

[Drew Hendry]

I will be brief. My hon. Friend is making a powerful point. Earlier, he reflected on the cost for people and their households. How does he think that the vast payments that Ministers are walking away with after a matter of days resonate with people who are struggling to pay their bills?

[David Linden]

I am always keen to use the local Glasgow vernacular, but I am mindful that if I used it to explain how angry my constituents are, I would probably get chucked out of the House for unparliamentary language. That gives my hon. Friend a flavour of how my constituents feel about the grotesque sight of failed Government Ministers coming into the Chamber, playing with their little Tufton Street economic strategies and using my constituents, who are incredibly economically vulnerable, as lab rats, then walking away with thousands of pounds in a pay-off. That is absolutely outrageous and most of my constituents would not stand for it.

The motion before the House talks about severance payments. In reality, I would like to amend the legislation. Given the disgusting behaviour that we have seen from Conservative Governments, however, I would be keener to see Scotland severed from this Union altogether.