Ministerial Severance: Reform

Alex Cunningham Excerpts

Tuesday 6th February 2024 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

I am pleased to add to the important points that have already made by my right hon. and hon. Friends and thoroughly ignored by Conservative Members. I want to look specifically at the proposed reform relating to how the severance payment should be calculated for outgoing Ministers.

When the rules were introduced, I am confident that the expectation was that any individual claiming three months of severance pay would almost certainly have served a decent length of time in that post. In fact, to be sure of that, I looked back at the Second Reading debate of the Ministerial and Other Pensions and Salaries Bill 33 years ago this week. I was struck by the words of Joe Ashton, the legendary Labour MP, who was unhappy at the idea that a Minister could receive three months’ severance after

“having had possibly only two years in a ministerial job.”—[Official Report, 31 January 1991; Vol. 184, c. 1147.]

Only two years in a ministerial job! Can you imagine if Joe had known that, 33 years on, Members in the Whips’ Office would be claiming three months’ severance after just 38 days in the job? It is daft, it is wrong and it is a betrayal of the people who send us to this place. Can you imagine if we had told Joe that Cabinet Ministers would be claiming almost £17,000 each after just nine weeks as a Secretary of State?

I have no doubt that if the MPs who agreed those rules in 1991 had known how they would be abused three decades later, they would have designed the rules differently, and I am confident that those rules would have looked something like the proposals before us today. First, this reform would say to a Minister, if you have served only a few weeks on the Front Bench, your severance will be calculated at a quarter of a few weeks’ salary, not a quarter of a full year’s salary. That is clear, sensible and fair. Secondly, when a Minister has served most of the year at junior level but has been elevated to the Cabinet for a few weeks, this reform would say that their severance should be calculated as a quarter of their actual earnings over the past year, not a quarter of just their final annual salary. Again, that is clear, sensible and fair.

Critics of these changes might argue that what happened in 2022-23 was a one-off and does not warrant wholesale changes in the rules. They might say that Joe Ashton did not envisage Ministers claiming three months’ severance after less than three months’ work, but he also did not envision there being three different Prime Ministers in the space of 16 weeks. Abnormal circumstances produce abnormal results. I accept that, but once a loophole in the rules is revealed, the loophole ought to be closed, and when that loophole is as grossly abused as we have seen in the last financial year, we have an absolute duty to act on it. We owe that to the British taxpayer, and we owe it to our predecessors in this House, to Joe Ashton and all those who could never have contemplated that the law they passed in 1991 would be used, or even abused, in this way. As the hon. Member for Edinburgh West (Christine Jardine) made clear, Ministers do not lose their day job when they are sacked or decide to resign. They still have their £86,000 a year salary as a Member of Parliament, and surely that is enough.

I am fully behind this motion, but I feel it could have gone a little further on the related issue of the public duty costs allowance paid to former Prime Ministers after their departure from office. My hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) raised this earlier but, for those unfamiliar with the allowance—I hope nobody in the Chamber is, but the vast majority of taxpayers in my constituency and around the country will be—the current rules stipulate that, when a Prime Minister leaves their post, they are entitled not just to a one-off severance payment of almost £19,000 but to a payment of £115,000 every single year for the rest of their life, to assist them in their future work.

The right hon. Member for The Wrekin (Mark Pritchard) challenged my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) on whether she would remove from former Prime Ministers the money for their security. No Opposition Member would do so, but the House will be interested to know that the Government website has something to say about this:

“these costs can include managing an office…handling correspondence as a former Prime Minister; and support with visits and similar activities. The allowance is not paid to support private or parliamentary duties, nor is it used for security purposes.”

Agreeing with us would therefore not be a problem for the right hon. Member for The Wrekin.

As with the severance payments we are debating today, it does not matter how long someone has served as Prime Minister, and it does not matter the circumstances under which they depart. The law says that, once they have held that position, the public duty costs allowance is theirs for life, which has, of course, left us in the frankly ridiculous position where the former Member for Uxbridge and South Ruislip is able to claim the allowance despite bringing disgrace to his office and shame on this House, and where the right hon. Member for South West Norfolk (Elizabeth Truss), who I have informed, will receive £115,000 a year from the taxpayer towards her public duty costs after spending just seven weeks in the job. That is £3,200 a year, every year of her life, for each day she spent in office. The expression she made famous in relation to the high level of fruit and cheese imports is very apt: “That is a disgrace!”

The right hon. Lady is relatively young, and I wish her a long life, but she could end up taking millions from the taxpayer over the next three, four or five decades. Yes, that is a disgrace. There is no public scrutiny of this allowance, unlike for our office costs allowance, which can be claimed in addition to this huge sum of money. To my mind, both former Prime Ministers have brought the public duty costs allowance into disrepute, just as surely as some of their colleagues have brought severance payments into disrepute. I think there is a strong case for reforming both systems, rather than just the latter.