Management of the Economy and Ministerial Severance Payments

Nigel Evans Excerpts

Tuesday 15th November 2022 Commons Chamber

[Lucy Frazer]

I am going to continue; I think I have been very generous with interventions.

The payments being discussed today exist because of the unpredictable nature of ministerial office. Unlike in other employment contexts, there are no periods of notice, no consultations and no redundancy arrangements. The statutory entitlement has existed for several decades and been implemented by all Governments over that period. Payments on ceasing office were made and accepted by outgoing Labour Ministers in the Blair and Brown years and by Liberal Democrat Ministers during the coalition Government.

The hon. Member for Wigan was asked a question by my hon. Friend the Member for Orpington (Gareth Bacon) about the level of those payments, and she either did not know the answer or decided not to respond. So I will tell her—[Interruption.]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Lisa, please would you allow the Minister to give her speech in silence? I can hear you more than I can hear the Minister.

[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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[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I just inform the House that the amendment was not selected.

[David Linden]

What a shame.

[Mr Deputy Speaker]

Indeed. So there is no amendment and it is a straight vote on the motion.

[Patricia Gibson]

Thank you, Mr Deputy Speaker. I regret that the amendment has not been selected.

The Government have brought us into this mess, inflicted financial harm and are thrashing around to try to fix it. It is a failure of the Labour party not to be able to take on, in England, these arguments. The Labour party is preparing for government, but it has been caught out, because its interim leader, who was intended to steady the ship, will now, by himself, by default, lead the party into the next election. This is a London-centric ostrich, in common with the Tories, who thinks he can dictate, in a deluded fashion, to Scotland just how much democracy it can have. I think he will find, when the votes are counted in Scotland, that that will not have worked very well for him.

The reality is that when Labour and the Tories dictate to Scotland at election time, they are, in effect, two baldy men fighting over a comb. The voters of Scotland are sick to death of being patronised and talked down to, with their right to choose their own path dismissed and ignored by those who set themselves above them as their betters. The UK is in a mess—it is broken. Scotland did not vote for this and the incompetence of this Government is having an impact on Scotland in a way that is undemocratic, because we did not vote for this. It will never vote for a Labour party that is trying to out-Tory the Tories to win Tory seats in England with a pretence that Brexit can be good for the UK and to impose it on Scotland despite the damage it is causing. Shame on you! A plague on both your houses. Scotland will choose her own path and we will extract ourselves from this sorry mess of Westminster. Scotland will choose her own path in spite of, and because of, this shower in Westminster.

[Laura Farris (Newbury) (Con)]

Implicit in the wording of this motion is a rebuke, and I start by accepting it; errors were made during the tenure of the former Prime Minister. But I take issue with the Opposition in three parts: first, on the suggestion that the mini-Budget is responsible for the economic situation in which we find ourselves; secondly, on the suggestion that my right hon. Friend the Member for South West Norfolk (Elizabeth Truss) should be treated differently from any other Minister, current or historic, in this Parliament; and, thirdly, on a suggestion that was not really developed by the hon. Member for Wigan (Lisa Nandy) in her opening remarks, which is that my right hon. Friend should pay some sort of compensatory amount of £6,000 and that there should be some form of atonement. That theme has been heard more than once from those on the Opposition Benches. I think it was the voices on the left who said it was not enough that Tony Blair should take the country into war, but that he should stand trial and go to prison, and in this case people are saying that my right hon. Friend should pay some kind of reparations, of a figure that has no basis in reality. I refute that and I will set out why. I know that Opposition Members will react if I suggest that some of the economic predicament we find ourselves in is a result of external forces, but when I say that the Bank of England base rate has been climbing all through 2022, I challenge them to name a country in the G7 where the base rate has not been doing that, just as every country on mainland Europe has suffered a huge inflationary spike as a result of the war in Ukraine and the energy blockade that has been the decision of Vladimir Putin. I challenge them to name a country in western Europe that has not suffered those effects. I also respectfully remind the Opposition that the 10 years we have had of unprecedented low interest rates were part of a one-off sustained emergency response by the Bank of England to the 2008 financial crisis that happened on their watch, and I will come back to that.

I wish to talk for a moment about the ministerial severance package. I have looked at the legislative journey of the law that underpins it. When the Ministerial and other Pensions and Salaries Act 1991 went through the House, the Opposition did not vote against it. Section 4 of that Act said ministerial severance is paid irrespective of rank, length of service, performance in the role and the circumstances in which the Minister leaves. The Labour party did not complain when that was applied to more than 300 Ministers who served at one time or another under the Blair and Brown Governments, irrespective of their performance, even in the case of people such as Peter Mandelson, who got this twice in 24 months. When the last Labour Government saw fit—through the Constitutional Reform and Governance Act—to revisit the legislation in April 2010, six weeks before the general election, they made extensive changes to the terms of ministerial severance, but none to the qualifying criteria or the terms of repayment. There was no change even though the country was in the grip of the most serious economic crisis of my lifetime, even though there was, in the immortal words of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), “no money left”—he will never be allowed to forget that—and even though they were responsible for the catastrophic economic decision to sell off our gold reserves. That was presumably because they were lagging in the polls, they were six weeks away from a general election and they were all looking forward to receiving their own pay-outs, which they did.

We are, in this debate, talking about a former Prime Minister, but I cannot let the moment pass without saying a few words about the former Leader of the Opposition, who, when he departed office, was entitled to an almost identical amount of severance despite his having led the once great Labour party into a sewer of antisemitism. I was recalling some of the main acts of his tenure. In 2018, the former Member for Liverpool Wavertree was hounded out of a party that she described as “institutionally antisemitic”. The serious and systemic discrimination that certain Members endured—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Did you inform Jeremy Corbyn that you were going to make reference to him?

[Laura Farris]

I did not.

[Mr Deputy Speaker]

In which case, can I ask you to move on then, please?

[Laura Farris]

I did not inform the right hon. Member for Birmingham, Hodge Hill, but he has been referred to more than once.

I will confine my point to this: whatever the Opposition say about severance payments, it might be surprising to learn that the former Leader of the Opposition would have been entitled to exactly the same severance payment. The only reason he did not get it was that he was over the age of 65—it was timed out on age criteria—but I am not drawing an equivalence in any event.

Whatever mistakes were made by the former Prime Minister, and I conceded at the start that mistakes were made, the ambition was laudable—as, to be fair, it so often is for Leaders of whatever stripe when they are at the helm. She was seeking to create a rapidly growing economy for the good of the country, even if her execution in that ambition failed. It is an ambition that many of us on these Conservative Benches share, and it is an ambition that Opposition Members share, too, as shown by the wording of their next motion, which is all about economic growth. But Conservative Members do not spend our time calling for scalps, or jail sentences, or compensation, or unique terms because a politician has failed. Rather than wasting time seeking social media clips, we think government is about the serious endeavour of delivering for the British people and providing answers to the issues that matter.

[Mr Deputy Speaker]

If we are to get everybody in and move on to the next debate at 4 pm, wind-ups will have to start at no later than 3.40 pm. If everybody stuck to about eight minutes without my putting the clock on, that would be helpful.

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[Paul Howell]

What do I think? I think it depends on the individual. The hon. Lady has chirped and talked—[Interruption.] Do you want to hear, or do you want to shut up?

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Hold on.

[Paul Howell]

My apologies, Mr Deputy Speaker.

[Mr Deputy Speaker]

We accept the apology, but, by the way, this is not a chat—this is a debate.

[Paul Howell]

My apologies. On the particular reference to the Prime Minister getting her severance and being in the job short-term, she was a Minister for many, many years, which drives the severance.

Going back to my final point, I have every confidence that the Chancellor and Prime Minister will do the right thing on Thursday. I look forward to the autumn statement.

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[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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[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?

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[Beth Winter (Cynon Valley) (Lab)]

I rise to speak in support of the motion on the management of the economy. The mismanagement of the economy by the Conservative party and the inaction on runaway inflation and profiteering has meant that millions of people are struggling with the impacts of inflation on their household incomes. The Bank of England decision to raise interest rates, the biggest rise since 1989, is going to hit mortgage and private rental costs, with devastating impacts on so many people and communities, including mine. The rise will have an immediate effect on over 2 million people on a variable rate mortgage, and while more than 6 million on fixed-rate mortgages may be currently insulated, when their deal expires in the coming weeks and months they will be paying £500 more per month on average. Recent analysis from the Joseph Rowntree Foundation reveals that nearly 2.5 million people with a mortgage are already in poverty. It also found an additional 400,000 people will be pulled into poverty over the coming year.

Even before the rate rise, the housing system was broken. Shelter has done a lot of research, and it shows that one in three adults in Britain are affected by what it calls housing’s “national emergency”, an apt description of the current situation in the housing sector. We have a severe shortage of affordable, accessible, habitable, safe and secure housing. Having worked for many years in the housing and homelessness service, including with Julian Trust night shelter in St Pauls in Bristol, Cyrenians in Bristol and then Shelter Cymru for a number of years, I have seen at first-hand the pain and suffering of people in desperate housing need—and it can affect anyone, including people sitting here in this Chamber today.

I recently held an appreciation event in my constituency office in Cynon Valley for the housing providers, including Llamau, Hafal and the local authority. They are absolutely terrified about the current situation in housing and the cost of living emergency.

One of the few benefits of frequently speaking last in debates in the Chamber is that I can listen intently to all the contributions. I want to take the opportunity to set the record straight on the current situation and where blame lies. The blame for the current economic crisis and the cost of living catastrophe lies solely with the Tory Government and their economic and ideological approach. While others were speaking, I was looking at some figures. The Office for National Statistics said that, by 2020, almost half the wealth in the United Kingdom was concentrated in the hands of the top 10% of households, while the bottom 50% had only 9%. It has been estimated that the utility companies will make in excess of £170 billion in the next two years, and bankers’ bonuses are absolutely extortionate. We are the fifth richest nation and yet we have some of the highest levels of inequality in the world. Shameful, it is. More than 330,000 deaths have been directly attributed to the austerity policies of the Tory Government. The eminent Professor Sir Michael Marmot recently called the impact of the cost of living catastrophe a “humanitarian crisis” that will lead to thousands more deaths. That is the reality of the situation that we are experiencing.

I return to the specifics of the motion. Housing is and must be regarded as a fundamental right. In Wales, the Welsh Government are trying to do things differently by reducing short-term evictions, and they have a commitment to end homelessness. However, the Welsh Government and other devolved nations and regions throughout the United Kingdom are constrained by the fact that the purse strings rest here in Westminster. More must be done by the UK Government. We need a mass-building programme for affordable, appropriate and climate-proofed housing. The Government must provide a fair, needs-based funding settlement to Wales and the devolved nations. The homelessness charity Crisis has called for an increase in housing benefits and for the Tory party’s commitment to end no-fault evictions to be honoured. London Renters Union is calling for a day of action to freeze rents and link local housing allowance to market rates. We must extend financial support for people struggling with mortgage payments.

Alongside increasing the supply of genuinely affordable housing and better support for those on low incomes, we must see: a strengthening of the social security system; social security benefits increasing in line with inflation; a continued commitment to increase the national living wage; inflation-proofed increases in wages; and employment rights protected and, indeed, improved. We should be introducing windfall taxes and a wealth tax. Tax Justice UK has estimated that £37 billion could be raised by introducing a wealth tax.

The Government are to blame and are allowing the Bank of England, through its independence, to hit living standards as it seeks to tackle inflation. I pose this question before the autumn statement: should the Bank be required in future to take account of the impact of its decisions on real incomes and on living standards measurements?

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The wind-ups are starting unusually early—there are reasons for that—so, before I call the Front Benchers, I will say that, whatever the agreed time limits were for wind-ups, you can both go longer, if you so wish.