Ministerial Severance: Reform
Debate between Esther McVey and Andy Slaughter(2 months, 3 weeks ago)
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Esther McVey
So the right hon. Lady could not apologise. She could not, or did not want to, stop the waste of hundreds of billions of pounds.
I will say this: the Government accept that the current legislation is now a third of a century old, and that this may be an appropriate time to review it and consider changes, but this is not the right time or place to take action. Proper consideration must be given to new legislation.
As Members will know, severance pay is governed by legislation. The statutory provision for ministerial severance pay is contained in the Ministerial and other Pensions and Salaries Act 1991. It has therefore been in place for successive Administrations, and has been paid to Members of all three parties who have made ministerial office during this period. Under the Act, Ministers who leave office are entitled to a payment equivalent to a quarter of the annual salary that they were being paid in respect of the ministerial office that they are leaving. To be eligible for a payment, they must be under a certain age—65—and must not be reappointed to ministerial office within three weeks of leaving their previous office.
I note—and I thank the right hon. Lady for drawing it to my attention—that in 2022 a small number of severance payments were made incorrectly to departing Ministers. I want to make it clear that the Cabinet Office guidance to Departments is that they should seek to recover any mispayment in line with His Majesty’s Treasury’s guidance, “Managing Public Money”. While the incorrect payments were caused by an administrative error and the former Ministers concerned were at no personal fault whatsoever, it is important that the Government seek to recover that money. I am sure I am not the only one who recalls the catastrophic overpayment of tax credits when Labour was last in office, and the fact that many families got into huge difficulties because of that. It is such a shame that the right hon. Lady was not so exercised about that when they were in office.
Esther McVey
No, because we are talking about waste. We are talking about appropriate measures taking place and this faux emergency legislation that the right hon. Lady wants to bring in.
Turning to ministerial severance pay more generally, it is important to note that this is the long-standing policy that successive Governments from both sides of the House have retained. The reason they have retained it that the principle of paying severance remains sound. The Prime Minister, in his constitutional role as a principal adviser to the sovereign, can recommend the appointment and removal of Ministers at any time. This flexibility, necessary as it is within our political system, means that having a reasonable severance pay policy to reflect the uncertain nature of ministerial office has had wide support from across the House since its introduction.
Members will be aware that similar arrangements are in place for Members of Parliament, who also hold the status of officeholder. In certain circumstances, Members of Parliament who lose a seat at a general election are eligible to receive a loss of office payment. The eligibility for the loss of office payment is determined by the Independent Parliamentary Standards Authority, which is responsible for setting and regulating MPs’ salaries, pensions, business costs and expenses. Severance payments recognise the unpredictable nature of ministerial office. The fact that a Minister can lose their office with no notice when the Government or a Prime Minister change will inevitably lead to a substantial increase in the money paid out in that financial year—