Ministerial Severance: Reform

Debate between Jerome Mayhew and Bill Esterson

Tuesday 6th February 2024 Commons Chamber

[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.

United Kingdom Internal Market Bill

Debate between Jerome Mayhew and Bill Esterson

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Tuesday 29th September 2020 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

Clause 46 has been the subject of much heated debate in this Chamber, yet when I read it, it seems innocuous enough. It provides power for a Minister of the Crown to provide financial assistance to promote lots of good things—economic development, infrastructure, cultural activities and sport—yet this has caused such seeming offence to the nationalists in Scotland that they have tabled amendment 18 to do away with the power in its entirety.

The SNP talks of a power grab, and yet it is an incontrovertible fact that not a single power held in Edinburgh, Cardiff or Belfast is being removed. In fact, the opposite is taking place—more than 70 powers currently held in Brussels are being devolved, which the SNP would like to give back to the EU. It is true that not every power currently held in Brussels is passing to the devolved Administrations. The reason is that the Government are properly applying the constitutional devolution settlement between the four nations, and quite right too.

I have heard the Scottish nationalists assert that clause 46 goes against the principles of devolution, but the opposite is true. Devolution in Scotland was devised by the late right hon. Member for Glasgow Anniesland. As the father of devolution, Donald Dewar set out his vision in the 1997 White Paper “Scotland’s Parliament”, which said:

“Westminster will continue to be responsible for those areas of policy best run on a United Kingdom basis.”

It goes on:

“By preserving the integrity of the United Kingdom, the Union secures for its people participation in an economic unit, which benefits business, provides access to wider markets and investment and increases prosperity to all.”

That is the vision that Scots backed in 1997, and it is exactly the approach that the Government are following in clause 46.

To be clear, this is not money repatriated from the EU, nor is it money taken from the devolved Assemblies. This is money granted by the Parliament of the United Kingdom to be spent across the United Kingdom. This is money that is needed throughout our country. The response to covid-19 is the most recent example of why we all benefit from this power residing at UK level and as the devolution settlements require.

To cushion the profound economic shock of the virus, the UK Government put in place a truly monumental system of business and employment support, in addition to their spending allocations to the four nations. In Scotland alone, nearly 800,000 jobs—almost a third of the entire workforce—were protected by the furlough scheme and the self-employment income support schemes. In addition, a minimum £12.7 billion has been provided, including £6.5 billion to Scotland, on top of the spring Budget—a 25% increase on pre-virus spending levels.

How do we have access to that money? It does not come from our financial reserves as a nation. Sadly, it comes from the UK Government’s ability to raise debt at very low interest rates because the markets have faith in the financial strength of this United Kingdom. It is the strength created by a unity of 68 million people with the financial firepower of the City of London and Charlotte Square combined. To pretend otherwise would be to perpetrate a fraud on the people of Scotland, Wales and Northern Ireland.

There are arguments for independence, but to remove the powers of the UK Government to provide ongoing financial assistance to every part of the United Kingdom would be a huge disservice to the people of Scotland. And for what reason? To promote a nationalist agenda, even at the cost of support for the people of Scotland.

[Bill Esterson (Sefton Central) (Lab)]

The Chancellor of the Duchy of Lancaster described the breaching of international law as a “safety net”. That breaching of international law is set out clearly as being such in article 5 of the withdrawal agreement that this Government signed up to, put to the British people and passed in legislation. There is no shadow of a doubt that even bringing this legislation to the House means breaching international law, with all the consequences that flow from that.

To call this a safety net is entirely wrong. It is anything but that. There is nothing safe in the breach of international law whatsoever, as the Minister well knows. The breach of international law invites retaliation under the terms of the World Trade Organisation. It invites us being regarded as a pariah. It invites others to say that we are in no position to criticise those who routinely break international law. It undermines this country’s fine reputation, as set out by Margaret Thatcher—revered by all Conservative Members—who said that Britain is nothing if not a country that sets an example to other countries. It undermines the promised negotiations for deals around the world, including the fundamental negotiation right now with the European Union. We were promised by this Government—by their Prime Minister—that 80% of our trade would be covered by international trade agreements after Brexit had been concluded. What is the figure now? It is 8%—that is all they have managed, not the 80% they promised. The safety net has a great big hole in it; it is nothing of the kind. What of the Prime Minister, who described it as a safety net as well—as a means of preventing this fanciful blockade of Great Britain to Northern Ireland trade? If that were true, why is there nothing in the Bill that deals with this alleged shortcoming?

No safety net is needed, either, because the dispute resolution mechanisms set out in the withdrawal agreement and in the Northern Ireland protocol provide everything that we could possibly need. If those protections are followed step by step, we stay within international law, so why are the Government so keen to go beyond that? The right hon. and learned Member for Torridge and West Devon (Mr Cox) set out what is already provided—I remember; I was here—when he stood at the Dispatch Box and described the process as providing a clear and lawful set of responses, and he was right to do so.

We should not be going down this road. The agreement was signed, it was promised to the British people, and the Prime Minister told us that it was in perfect conformity with the Northern Ireland protocol. This Bill is not needed in its current form. The Government should take out the illegal actions that they are proposing and they should be honest with the British people.