Jerome Mayhew
Main Page: Jerome Mayhew (Conservative - Broadland and Fakenham)Department Debates - View all Jerome Mayhew's debates with the Cabinet Office
(9 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Emily Thornberry
If the hon. Lady has a moment to look at the motion before us today, and to consider it in the spirit of fairness and how public money should be spent, I hope that she would agree that the current system has been abused over the past few years by her colleagues in the Chamber and outside it. That is simply not the sort of thing that the public wants. They would be appalled if they knew what was going on with the severance payments we are talking about today.
Emily Thornberry
I will make a bit more progress, and then I will give way.
We are talking about severance payments today. Government Members may wish to speak about red herrings and other issues, but let us talk about the abuse of the severance payments system that we have seen over the past few years, because we should take a clear-eyed look at it. We are not seeking to scrap those payments, nor should we. As Geoffrey Howe said, they were introduced so that Ministers who had given long and dedicated service to their country could adjust to the loss of that salary. I do not think anyone on the Opposition Benches has any quarrel with that. Over the 40 years that those payments have existed, there has never been any previous occasion where it has been open to question that the rules by which those payments were made were wrong. Then, however, we came to 2022-23. It was a year of chaos in our politics, unprecedented in modern times. Sadly, it was a year in which the current severance scheme had its flaws suddenly exposed and its loopholes shamelessly exploited.
Before I address what went wrong with the system in that financial year, I will do something that I find personally unusual, which is to praise some members of Conservative Cabinets. It will be hard for me, and I feel my ancestors starting to shift uneasily in their graves, but I want to give credit where credit is due, and that credit goes to a small collection of Secretaries of State who, for want of a better phrase, did the right thing when it came to severance entitlements during that year of chaos. I praise the current Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for North East Cambridgeshire (Steve Barclay), who was sacked as Health Secretary in September 2022, but reinstated by the current Prime Minister seven weeks later. What did he do with his severance payment? He returned it in full when he regained his old job, so he deserves praise for that.
I praise the current Secretary of State for Science, Innovation and Technology, the right hon. Member for Chippenham (Michelle Donelan), who resigned after two days as Education Secretary in July 2022, but turned down the £16,000-plus severance payment for which those two days had made her eligible, and she deserves praise for that. I even want to praise the right hon. Member for South Staffordshire (Sir Gavin Williamson), the former Chief Whip, the former Defence Secretary and the former Education Secretary. He claimed his £16,000-plus severance in 2019 when he was sacked for leaking top-secret information. He claimed his £16,000-plus severance again in 2021, when he was sacked for all his various school fiascos. However, he finally turned down his severance payment in 2023 after two weeks in the Cabinet Office, because he recognised that it would be inappropriate to accept it while under investigation for bullying. So let us praise him for that—if for nothing else.
What those examples show is that it is entirely possible for individuals to choose to waive their severance payments, or return them, when they feel that accepting them would not be right. Perhaps those individuals even reflected that, at the height of the cost of living crisis—which had been greatly exacerbated by the actions of their Government—it would seem inappropriate to accept thousands of pounds from the taxpayer as a reward for the contribution they had made to the chaos. Perhaps they realised how much like a smack in the face that would feel to their constituents. Either way, those individuals did do the right thing.
However, the hard fact is—numbers bear this out—that, for every one case in the last financial year where a Tory Minister decided that accepting that severance payment would be inappropriate in the circumstances, in at least six or seven other cases the opposite was unfortunately true. That is why we find ourselves here, trying to fix a system of ministerial severance that has been brought into disrepute by dozens of its most recent beneficiaries.
Emily Thornberry
I am saying that this is an important issue that needs to be considered. I suggest that perhaps together the right hon. Gentleman and my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) put in for a debate so that we can air these matters properly. Today, I want to talk about ministerial severance payments.
Emily Thornberry
I will give way to the hon. Gentleman, and then I hope that I will not need to give way to him again.
Jerome Mayhew
I am grateful to the right hon. Lady for giving way. Is not the fact we are getting interesting ideas coming from Labour Members an example of how the motion before the House is so ill thought out? Those ideas are not in the motion. Does she not agree that this is not the way to create legislation?
Emily Thornberry
I am proud to say that my party is full of good ideas, but unfortunately we are unable to put them all into one motion. Let us have a little discipline today by concentrating on the motion at hand and the important issue we are raising. We believe that five particular problems were highlighted by the chaos in 2022-23. I will go through each of them, give an example and explain why the changes we want to put forward will solve those problems, and why we would therefore ask the House as a whole to seriously consider our proposal to ensure that we can pass legislation to change the situation, because it does need to be fixed.
First, let us look at what I call the short stayers problem. More than two dozen individuals occupied Front-Bench roles for just nine weeks at the fag end of the Johnson Government, or just seven weeks during the bedlam of the Truss experiment, all of whom walked away with three months of severance pay. Let us look at the hon. Member for Stoke-on-Trent North (Jonathan Gullis) as an example. Never a shrinking violet when it comes to calling out others, he served just 49 full days as a Minister in the Department for Education, earning less than £3,000 in wages, yet when he returned to the Back Benches he received almost double that in severance—three months’ severance for 49 days’ work. Perhaps the Minister for common sense will tell us whether that makes sense to her.
Secondly, we have the problem of the short-lived promotions: individuals who found themselves elevated from junior ministerial roles to more senior positions, and whose severance was therefore calculated not based on the salary they had earned for most of the year, but based on the much higher salary they had earned for only a few weeks. Let us think of the example of the right hon. Member for Middlesbrough South and East Cleveland (Sir Simon Clarke), who spent a year as Chief Secretary to the Treasury, earning a salary of almost £32,000, but then spent seven weeks as Levelling Up Secretary on a salary of more than double that amount. As a result of those seven weeks alone, the right hon. Gentleman received severance pay of almost £17,000. Again, I look forward to the Minister for common sense explaining where the sense is in that.
Thirdly, we have what I might call the quick returners—more than a dozen Ministers who claimed their three months’ severance pay after quitting the Johnson Government, or being sacked by his successor, but who ended up returning to the Front Bench a matter of weeks later while still enjoying the benefits of their severance payments. Take the Minister for Veterans’ Affairs, the right hon. Member for Plymouth, Moor View (Johnny Mercer), who not only accepted three months in severance after only two months as Veterans Minister, but told Plymouth Live point-blank that he had not accepted a severance payment, and then had the sheer chutzpah to return to exactly the same job seven weeks later without repaying a single penny. Once again, I hope that the expert on these matters will tell us whether that sounds like common sense.
Fourthly, there is a much smaller category—I have decided it is best not to give them a name at all. We also saw severance payments awarded in 2022-23 to two individuals, Peter Bone and Chris Pincher, who left their Front-Bench jobs while under investigation at the time for acts of gross misconduct. The 1991 rules are silent on this issue, and we can only assume that it was thought that any individual forced to quit in those circumstances would have the basic decency not to accept a handout from the taxpayer. However, I am afraid what the Pincher and Bone cases have shown us is that we cannot rely on the decency of individuals like that.
Finally—perhaps most incredibly—five severance payments in the last financial year were made entirely by mistake because the Government forgot to apply the age limit that says no one over the age of 65 can receive one, which is how Peter Bone and Nadine Dorries received their payments. Before the current incumbents of the Cabinet Office tell themselves that they have brought order to all this chaos, it is worth noting that the largest of those mistaken payments, which was made to a Minister in the Lords, was made not during the chaos of the summer and autumn of 2022, but in what one might call the cold light of day in January 2023.
The proposed changes to the severance rules set out in Labour’s motion would address each of the five issues that I have set out.
Anna Firth (Southend West) (Con)
If anyone had any doubt that the Opposition are not fit to govern this country, that doubt must have been dispelled this afternoon. There were many things they could have chosen to debate. It is Children’s Mental Health Week. There are all sorts of incredibly important things going on today about Safer Internet Day. It is the start of National Apprenticeship Week. It was World Cancer Day two days ago. We could have debated the economy or the middle east. As a Parliamentary Private Secretary, I went to a brilliant debate about the Homes for Ukraine scheme today. But no, they have used their second Opposition day debate to talk about party politics. That is all this debate is about, and it is an appalling waste of taxpayers’ money that we are debating this subject today.
The Opposition know jolly well, as the right hon. Member for Islington South and Finsbury (Emily Thornberry) said, that ministerial severance pay is established in legislation passed by Parliament in 1991 and has been used by successive Administrations over decades. It is a statutory entitlement implemented by Governments of all stripes. Payments were made and accepted by outgoing Labour Ministers throughout the Blair and Brown years, as well as by Liberal Democrat Ministers in the coalition Government.
Jerome Mayhew
My hon. Friend refers to the initial legislation in 1991, but that was followed up, as she is no doubt aware, by the Scotland Act 1998, which was brought in by Labour and repeats the same approach for Scotland. Does she agree that it is the height of hypocrisy from the Opposition to claim outrage now, when they brought in similar legislation themselves?
Anna Firth
I completely agree with my hon. Friend’s brilliant point, which brings me naturally to my next point. The last Labour Government had the opportunity to amend the 1991 legislation in any one of the 13 years they were in office. Instead, they chose to do absolutely nothing. Even more outrageously, following Labour’s defeat in the 2010 election, when the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) left that infamous note saying, “Dear Chief Secretary, I’m sorry, I’m afraid to tell you there is no money left.”—
Anna Firth
That is an exact quote: “There is no money left.” I do not mind saying it again, because that is the mess that Labour left us with. The point here is that having said that there is no money left, what did outgoing Labour Ministers do? They pocketed £1 million in that year in severance pay. In today’s money, that would be £1.6 million—truly shocking. That was irresponsible then, and their actions are 100% hypocritical today.
In stark contrast, when we entered office, what was our approach when we saw the mess that Labour had left us in? We cut our ministerial salaries and have kept them frozen ever since.
Jerome Mayhew
My hon. Friend makes an excellent point about Labour, but we have heard from the Scottish National party that somehow it is better north of the border. Does she agree that that is surprising given that the Scottish Daily Express said:
“SNP spin doctors received more than £200k in ‘golden goodbyes’ in 2023 as Humza Yousaf rung tiny changes.”
What does that say about the SNP?
Anna Firth
I totally agree with my hon. Friend. That is absolutely appalling. We also know that shamed SNP MSP, Derek Mackay, who has left office, claimed £155,000 in expenses, including, as I understand it, severance pay. The SNP approach is incredibly hypocritical.
While we were sorting out Labour’s mess, cutting our own pay and keeping it frozen, every single Labour leadership candidate in 2010 refused to hand back their taxpayer-funded severance pay, including the right hon. Member for Doncaster North (Edward Miliband) and the Mayor of Greater Manchester, both of whom were entitled to £20,000, and they still hold elected office today.
When we questioned those severance payments, given the mess that Labour had left us in, a Labour party spokesman responded by saying that it was a pathetic attempt to create a smokescreen around serious economic issues—[Laughter.] Yes. I would be grateful if those on the Labour Front-Bench team can confirm to the House today that this motion is a pathetic and hypocritical attempt to create a smokescreen around their total lack of a plan for Britain. There is no plan for the economy, no plan to tackle welfare, and no plan to deal with immigration. In fact, we know that Labour would take us right back to square one.
As usual, while the Opposition are sniping from the sidelines and making these cheap political points, we are actually getting on with the job of serious government. In the past 14 years, the Conservative party has been focusing on delivering for the people of Britain. Let me remind Labour Members what that delivery looks like: better state schools than ever before; more students securing top grades in maths, physics and chemistry—
Bill Esterson (Sefton Central) (Lab)
I think the best that can be said for the previous speaker, the hon. Member for Southend West (Anna Firth), was that she spent six minutes and 50 seconds speaking about anything but the motion and then the last 10 seconds on severance pay. I am sure other than that she is a delightful Member of the House, but on this occasion I am afraid she did not really get there.
In supporting the motion today, I want to highlight a trio of payments that were made during the chaotic period in the autumn of 2022, which capture the essence of why the rules on ministerial severance were brought into disrepute during that period and how reforms can fix the problem. It is impossible to make those points without speaking about individual cases, as my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) said from the Front Bench, and I have informed two Members that I will be discussing the payments given to them as examples of what happened.
If we cast our minds back to September 2022, colleagues will remember that in the earlier days of the premiership of the right hon. Member for South West Norfolk (Elizabeth Truss) there was some turmoil in her Whips operation. Mind you, the early days were swiftly followed by the middle days, and the final days were not very far behind—and it is fair to say there was turmoil all the way through. Anyway, in those early days, three assistant Whips were sacked and three more put in their place. The appointments were made three days before the mini-Budget and they lasted just 38 days, until the right hon. Member left Downing Street.
The three assistant Whips spent almost their entire time in office propping up a doomed regime while it continued to do huge damage to the country—damage for which my constituents are still paying the price in the shape of crippling mortgage payments. In those circumstances, we might have thought that those who were appointed by the right hon. Member for South West Norfolk would have walked away from their brief time in office feeling some measure of contrition, perhaps even shame, at the role they had played in that disastrous Administration, and wanting only to apologise to their constituents for what they had done.
Instead, unbelievably, each of the three assistant Whips walked away with three months of severance pay—a £4,479 handout from the taxpayer—after just 38 days’ work. They received two and a half times more in severance pay than they were paid in salary during those 38 days. At the same time, a number of departmental Ministers received £5,593 in severance pay, compared with £2,248 for their salary in five and a bit weeks as Ministers. All that happened at a time when people all round the country were struggling to put food on the table, to fill up their car and to pay their bills in the face of a cost of living crisis that those Ministers’ time in office had just made substantially worse.
Average growth in the UK has been 1.5%, compared with the 2% when Labour was in office between 1997 and 2010. That lower growth has meant £150 billion less in GDP, £40 billion less in tax revenues for public services and infrastructure and £10,000 a year less on average per household for each of those years, across the UK. Those are the figures—the price of failure of 14 years of Conservative government. When the right hon. Member for South West Norfolk crashed the economy through her reckless, unfunded mini-Budget, it just turbocharged the damage done. My constituents, and all our constituents, are still living with the consequences of what the then Chancellor, the right hon. Member for Spelthorne (Kwasi Kwarteng), dismissively referred to as “turbulence”, in the form of higher food prices and mortgage payments.
The premium for economic failure, which was created when the right hon. Members for South West Norfolk and for Spelthorne crashed the economy, is still priced into markets today, and private investment in the UK is still at a record low. The scale of severance payments as reward for being part of that disastrous mismanagement of the economy is nothing short of disgraceful. However, it does serves one purpose at least: it makes the case for reform indisputable. It is a shame that the Minister chose not to engage with the substantive point about the severance payment system having been shown not to be fit for purpose as a result of what happened in 2022.
Under Labour’s proposals, the three assistant Whips would have received not a quarter of their annual salary, but a quarter of their actual earnings, reducing their severance payments from £4,479 to £454, which is almost a tenth of what they originally received and a much fairer and more sensible amount. The hon. Member for Southport (Damien Moore) was at pains to point out in his recent comments to the Liverpool Echo that the payment he received was an automatic entitlement—in other words, he was just following the rules as they stand. The £4,479 that he received—compared with the £454 that would have been due had the legislation referred to on the Order Paper been in place—really says it all. The hon. Member for South Ribble (Katherine Fletcher) made a similar defence to the Lancashire Post, to which she said that severance payments
“are governed by Acts of Parliament”.
Our proposal would have seen her severance payment down from £5,593 to £562, which is much more proportionate to her time served.
I am more than happy with what both Members said in public, but I hope that they accept that in no other job would the severance payments from which they benefited be allowed. That was among the questions that the Minister did not address—in what other job is full severance pay available from day one in that way, or in the event of gross misconduct? Those are the reasons why the measures proposed by my right hon. Friend the Member for Islington South and Finsbury are so important.
The good news is that Conservative Members, including the beneficiaries of excessive payments, have the opportunity to make amends today.
Jerome Mayhew
The hon. Gentleman is making an interesting point, and I want to ask him to explore it a little more. The immediate availability of redundancy payments, if I can call it that, would not be affected by the motion, so is he suggesting that the motion is not fit for purpose either?
Bill Esterson
It sounded to me like the hon. Gentleman was defending the status quo, while we are trying to make the system proportionate and fair. He and his colleagues will have a chance to do something about this unfair system, which has been shown to be completely out of order by what happened in 2022. Those who took advantage of the rules can do something about it by voting with us tonight. Rules, to use the word of the hon. Member for Southport, can be changed, and Acts of Parliament, to use the words of the hon. Member for South Ribble, can be replaced.
This evening, all the Members who benefited from severance payments when the right hon. Member for South West Norfolk resigned can do something about the excessive nature of those payments. They can take advantage of the opportunity that we are offering and take the logical step of voting to change the rules by supporting Labour’s proposal for a fairer and more proportionate severance payment system for Ministers.
Jerome Mayhew
It has been an absolutely fascinating debate, and I am grateful to the right hon. Member for Islington South and Finsbury (Emily Thornberry) for proposing this motion, because it has given us an opportunity to explore what responsible government really is. I will tell the House what it is not: it is not about creating one-paragraph legislation to get a soundbite on this evening’s news. One need only listen to the debate that we have had to see how the current drafting of the motion is totally inappropriate. It makes only one recommendation. It states that retiring Ministers should
“receive an amount equal to one-quarter of their earnings over the previous 12 months as a Minister, minus any period covered by a previous severance entitlement, where that is lower than an amount equal to one-quarter of the annual salary paid to that Minister before their departure”,
but that applies only to those under the age of 65. However, in this relatively empty Chamber we have heard several suggestions as to why that is inappropriate—whether it does not go far enough or it is missing important additions.
This is a serious issue and an area that could do with review. My right hon. Friend the Member for Tatton (Esther McVey) suggested from the Front Bench that the Government are open to reviewing it, but this is absolutely not the right way to do it, as this debate has demonstrated, and we need only look at the contribution from the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle). He fairly raised the issue of the prime ministerial pension or severance payment, which continues beyond the moment of retirement. It is not just a one-off payment, but continues for the rest of his or her life, as I understand it. That is a perfectly proper area for review, although it is not mentioned in this motion.
The hon. Member for Sefton Central (Bill Esterson) made the very good point—I intervened on him at the time—that the entitlement comes from day one. Is that reasonable? My hon. Friend the Member for Bracknell (James Sunderland) recognised that there is a contradiction. Those under the age of 65 are entitled to these severance payments, but times have moved on; we work much later, and the retirement age is rising to 67 and then to 68. There was an article in The Times just yesterday suggesting that in future years it might rise to 71, yet the legislation has this arbitrary figure of 65—why? That is a perfectly reasonable area to explore as part of a wider review of a piece of legislation that is perhaps coming towards the end of its natural life and needs to be reviewed. This motion, however, is not the way to do it.
Labour Members cobbled together this drafting last night when they were thinking, “What’s a good wheeze that we can have to create a soundbite or a bit of a line in our social media content this evening, saying ‘Conservatives vote against…’?” That is not legislation, and in my submission it is particularly inappropriate to use the exceptional mechanism of disapplying Standing Order No. 14 to achieve it. There are many benefits to Brexit, but one of the costs is the adoption of this mechanism to interrupt the workings of Parliament by disapplying Standing Order No. 14. If that disapplication is acceptable in any situation, it is in exceptional and urgent situations, not to get a soundbite for the evening news.
Emily Thornberry
I am not standing before the House saying that this motion and this legislation will fix every single issue that people can possibly think of in relation to the payment of Members of Parliament in every circumstance, but it will at least deal with the situation whereby someone can work as a Minister for two months, get three months’ severance pay and then seven weeks later go back to exactly the same job and essentially be paid twice. That is what this legislation is here to stop. Surely the hon. Gentleman can support that.
Jerome Mayhew
As I said at the start of my speech, there are elements where there is genuine cause for review, but if we followed the right hon. Lady’s train of thought, we would have thousands upon thousands of one-paragraph Acts clogging up the legislation. We need to do better than that. With responsible government, which is what we on the Government Benches try to focus on, we review appropriately, we use advice from civil servants and then we propose legislation.
Beyond the poverty of Labour’s motion drafting, there is the wider issue of ministerial pay and value for money. As my hon. Friend the Member for Southend West (Anna Firth) pointed out in her good speech, when the Conservatives came to power in 2010 as part of the coalition, it was not a case of just accepting what had gone before. The Government, under the leadership of David Cameron, cut ministerial salaries by 5%. More importantly, every single year since then—throughout the coalition period and the Conservative Government period—ministerial salaries have been frozen.
Let us look at value for money and the difference we get between a Labour Administration and a Conservative one. I see the Labour Whip, the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), is in his place. In 2010, under Labour, he would have benefited from a salary of £40,926. [Hon. Members: “He doesn’t get anything.”] Under the Conservatives, that equivalent position—if he were in government—receives a salary of £17,917.
For Parliamentary Under-Secretaries of State, Labour Members paid themselves £48,270 in addition to their parliamentary salaries. Under the Conservatives, that has been reduced, in modern terms, to £22,375. At Minister of State level, under the Conservatives they are paid £31,680; under Labour, they paid themselves the equivalent of £63,594—they would have had no trouble with their mortgage payments. Cabinet Ministers under the Conservatives are paid an additional £67,505; Labour thought it appropriate to pay theirs £122,598. We have heard how the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said there was no money left, and now I am beginning to understand where it all went.
We come to the position of Prime Minister. This Prime Minister is paid an additional £75,440. Labour Prime Ministers think it appropriate to pay themselves £204,329, in today’s money, on top. When we add the Pensions Increase (Pension Scheme for Keir Starmer QC) Regulations 2013—the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) has his own special pension arrangements from his work as Director of Public Prosecutions, disapplying any lifetime allowance for him, not for anyone else—to £204,329 for being Prime Minister, plus his MP’s salary of £86,584, it is no wonder he votes Labour. He can afford to be a socialist.
The question for Labour is, will it commit today to continue the freeze on ministerial salaries? The right hon. Member for Islington South and Finsbury was asked that by my hon. Friend the Member for Southend West, and she was unable to answer it. I gave her the opportunity again to answer it, and she refused. If she does not know the answer, perhaps she can write to me.
Anna Firth
My hon. Friend is making a brilliant speech. [Interruption.] He absolutely is. Would he like to comment on Labour Members’ conversion on the road to Damascus, with their sudden desire to tackle something they had 13 long years to do? Not only did they not do it, but they went on to add to the system.
Jerome Mayhew
I am grateful for that intervention. It was mentioned earlier—once, if not twice—that in 2010 the Labour party leadership candidates were invited to return their severance payments, having refused to do so. The suggestion that they should was described, on behalf of the Labour party, as “pathetic”.
This motion is half-baked. We have seen over the course of a couple of hours a number of interesting suggestions that could apply to potential legislation in this event. It is clearly an improper use of the disapplication of Standing Order No. 14. Look at the Labour Benches: if it such an emergency, why are those Benches so bare? Even Labour Members of Parliament do not think that this is urgent. I have no hesitation in voting against this motion and I invite everyone else to do the same.
Christine Jardine (Edinburgh West) (LD)
It is a pleasure to follow the hon. Member for Broadland (Jerome Mayhew) in this debate, which—I have to take issue with the Minister on this—is important. It is an opportunity for which I thank the Labour party. I do not mean it is an opportunity to throw criticisms at Ministers who were sacked—all 147 of them, I think it was, in one year. It is not an opportunity to do that because, as the right hon. Member for Islington South and Finsbury (Emily Thornberry) pointed out, a lot of them did actually hand back the money they were given; nor is it an opportunity to throw brickbats at the Labour party and say, “You didn’t do this while you were in government, and you think this about ministerial salaries.”
Above all else, this debate is an opportunity to say to the constituents out there who come to us every week—who are struggling to pay their mortgages and rents; who have been made redundant and do not have another job with another salary that they can fall back on when they get redundancy payment—that we appreciate what is happening. This was a terrible period for the country. It was chaotic; it cost a fortune. We are looking at preventing it from ever happening again. That is what today should be about: putting ourselves in the place of those constituents and thinking what they might be thinking watching this debate right now.
I have to say, I am acutely aware that my constituents are probably watching and saying to themselves what quite a few people have said to me over the years—I am sure this has been said to many other Members present too—which is that too many of us are only in it to line our own pockets. We have sat here today and debated redundancies for Ministers and complained about ministerial salaries in a country facing a cost of living crisis, where people cannot pay their energy bills. I am sorry if it sounds like I am taking a schoolmarmish attitude to this matter, but I am slightly embarrassed that any of us could think that this subject is not worth reviewing.
Jerome Mayhew
The hon. Lady makes some powerful points—I hope I made similar points clear in my speech—but given her views on the cost of living crisis, does she agree that the freeze on ministerial salaries should be maintained into the future?
Christine Jardine
I am actually more concerned with redundancy payments, which this debate is about. The level of ministerial salaries is something that should be debated on its own, and should be the subject of regular review. What pains me is that I have constituents who, when they are made redundant and get the statutory minimum, have nothing to fall back on. When Ministers are sacked for incompetence, they still have the salary for the job they are actually sent here to do, which is to serve as a Member of Parliament. They have the privilege of serving as a Member of Parliament; they then get paid more for the extra privilege of being a Minister. I think a lot of the public watching this debate today will be asking, “They get a salary for being a Minister? They get redundancy payments for being a Minister?”
We need to think about this very seriously. We need to think about what our constituents will be thinking. I do not want to throw brickbats at individuals, but I will just take one example very briefly: when the right hon. Member for South West Norfolk (Elizabeth Truss) resigned as Prime Minister, her golden goodbye was more than the minimum salary in this country. It would have gone a long way for a lot of families. We should be thinking about what those families think about that, not what we think about or whether the Labour party or the Conservative party is wrong, or the SNP—frankly, we should not take any lectures on financial probity from that party.
We should be thinking about what our constituents think. For many, it would have felt like a kick in the teeth. They could not pay their mortgage and they were struggling to pay for their children. They saw—this is not my judgment, but theirs—dozens of Conservative MPs raking in thousands of pounds in severance pay, completely down to the chaos that the Government caused during a cost of living crisis. To our constituents, it would have felt like taxpayers’ money was paying for the revolving door of Ministers. In their view—and mine—the Conservatives trashed the economy, but our constituents were paying for it.
That is why these payouts have to stop. I completely respect the Members who have paid them back—we should recognise that that was the right thing to do. They should be stopped because, as has been said several times today, the legislation was introduced in 1991. It could have taken no account of the sort of situation that we would see in 2022-23, because it is beyond anyone’s imagination that such a situation would have arisen—we did not take account of it when it happened. Today we have an opportunity to rectify that. We have an opportunity to say that there was a unique set of circumstances that the 1991 legislation did not foresee. We can have a review and we can look at it, but we need to recognise that when millions of families in this country were at their lowest point, they looked at the television and saw Ministers who had worked for a few days, and been sacked for incompetence or falling out with the boss, getting thousands of pounds more, when they got nothing.
The Liberal Democrats have proposals. There should be a major overhaul of ministerial severance pay. MPs who have resigned, for breaking the ministerial code in particular, should not be able to claim severance pay. Ministers should have to serve in post for a reasonable period of time, and payouts cannot be claimed if they are reappointed to the Government within a year. None of that is unreasonable. More than anything else, it would give us the opportunity to go out there and look our constituents in the face and say, “No, we are not in it to line our own pockets, we will not take anything that we don’t deserve, and we will not take for granted the privilege of being here and expect more than you think we deserve.”
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.