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Public Sector Exit Payments (Limitation) Bill

Volume 738: debated on Friday 20 October 2023

Second Reading

Debate resumed.

Question (3 March) again proposed, That the Bill be now read a Second time.

Mr Deputy Speaker, I had already finished speaking, and I think the Minister’s predecessor was in the middle of responding.

That is entirely my error. I did not have the pleasure of being here for the first part of the debate. I call the Minister.

Thank you, Mr Deputy Speaker, and I thank my hon. Friend the Member for Christchurch (Sir Christopher Chope) for raising this important topic. If I may say so in passing, we did not debate today his thoughts about children’s clothing, but I am very happy to meet him about that on behalf of my Treasury colleagues.

My hon. Friend and indeed I and all my colleagues believe passionately in people keeping more of what they earn. To do that, we need to ensure that Government money is spent as if it is our own. We need to ensure it is always spent prudently and delivers the maximum return possible for ordinary taxpayers. It is also true, and I hope he would join me in recognising, that many of our public sector workers are a source of real pride to this country—from our healthcare workers in the NHS to our armed forces on the front line and those local government officials who do such important work for our local communities. Their services are paid for by the taxpayer, and indeed they are taxpayers themselves, and all of us seek to take a responsible and balanced approach to the conditions offered to public sector workers. We as a Government have sought to do that in every pay round. For the 2023-24 round, we accepted the headline pay recommendations of the independent pay review bodies in full for the armed forces, teachers, prison officers, the police, the judiciary, medical workforces and senior civil servants. For most workforces, accepting these recommendations has resulted in the highest pay uplifts for three decades, providing a fair reward for workers and a fair deal for taxpayers and employers alike.

Exit payments, such as for redundancy, are an aspect of this. They help employers to make necessary organisational change, just as regularly happens in the private sector, and they support individuals and uphold employment law as they leave employment. However, my hon. Friend is absolutely right that the taxpayer ultimately foots the bill for these individual payments. They can be many times larger than average earnings elsewhere in the public sector, and it is absolutely right—I hope to have support for this across the House—that we look at how fair and how proportionate these payments are, particularly at a time when it falls to the Government to make difficult but responsible decisions about the public finances. The Government share his concern about the overall level of spending on exit payments, particularly the number of very large exit payments made to individuals in recent years. That is why we are committed to limiting large exit payments and making provision for the recovery of those payments when that is appropriate.

Can the Minister also give an assurance that large exit payments will never be agreed for public sector workers facing disciplinary proceedings who choose to leave instead of facing those disciplinary proceedings? Can he assure me that no big exit payments will be given in those circumstances?

I thank my hon. Friend, who is a doughty champion of the value of taxpayers’ money, and he makes a very important point. The commitment I can give goes rather more broadly than that, which is that the Government will seek to make sure that any exit payments always offer value for money and that every pound of taxpayers’ money should be well spent. In responding ultimately to the consultation that the Government conducted almost a year ago, I will ensure that the point he raised is fully addressed.

My hon. Friend says that the Government are committed to doing something, but we are now in 2023, and it was in 2015 that the Government first resolved that something must be done about obscenely high public sector exit payments in excess of 95k. In the intervening period, the Government have been all over the place, and I wonder whether the Minister could tell me the result of the most recent action, which was a consultation paper in August 2022. The closing date for that was 17 October 2022, more than a year ago. What has happened to that?

My hon. Friend makes a fair point about the pace with which the Government have been able to proceed. I will write to him, following his important intervention, with the latest on the prognosis for that. I hope he will also recognise that it is not correct to say that the Government have done nothing. The Chief Secretary to the Treasury, my right hon. Friend the Member for Salisbury (John Glen) is, as we speak, leading an important piece of work about productivity across all public sector spending. All my colleagues in government are endeavouring every day to ensure that every pound of Government money is well spent. My hon. Friend will recall—this is why it is so important to get this right—that past attempts have not always delivered the desired results.

In 2020, the Government laid legislation—notwithstanding his own prolific endeavours on this, I know that my hon. Friend is not in general a big advocate of the Government constantly legislating—but in 2020 the Government legislated to introduce a cap on payments. That was subsequently withdrawn following unintended consequences, and the risk of overriding and conflicting with people’s contractual entitlements. Let me be clear: my hon. Friend is absolutely right in his intention.

The Minister says that he will write to me—I always love receiving letters, particularly from him—but the Government have known that this Bill has been on the Order Paper. It was introduced in June last year, and in August last year the Government issued a consultation paper and said, “Everybody must respond to this paper by 17 October 2022”, thereby indicating some sense of urgency. What has happened to the response to that consultation? Surely the Minister can give an answer now, rather than saying that he will write to me later.

As so often is the case, it is sometimes better to be right than to be quick. Given that the Government absolutely understand and share my hon. Friend’s concerns, it is much better that when they bring forward that response to the consultation, we celebrate. I acknowledge today the first anniversary of the closing date for that, and it would indeed be unfortunate for there to be a second anniversary. Notwithstanding that, it is not the case that the Government are not making progress on this matter, and if my hon. Friend really supports the cause that he has so nobly championed over so many years, chronicling the period since 2015 that he talked about, we must do it right. We are dealing with a complex interplay between existing public sector arrangements, consultation with impacted bodies, including the unions, and the potential role of legislation. I said I will write to my hon. Friend. He will have to contain his excitement as to the specifics of my letter, but it will follow in due course.

Only “in due course”—it is not being promised for next week, even. Perhaps it will be next year sometime? Will my hon. Friend accept my interpretation of what has happened, which is that we have had eight years since the Government committed to doing this, and the score now is eight to the blob and nil to the ordinary people of this country, who are the taxpayers.

I will not accept that construction, but what I will accept is my hon. Friend’s entreaties that every day it is the duty of this Government—indeed, it is the proud philosophy of this party—to spend taxpayers’ money wisely. There are many, many ways in which we can do that. I have referred to the productivity review by right hon. Friend the Chief Secretary. Local government has a significant responsibility. Local government was not in scope of that consultation, but separate guidance has been given to local government, and it is the duty of us all to ensure, for example, that the many arm’s length bodies that are so important to the delivery of government in this country are entirely responsible with their pay arrangements. The Government have also separately legislated and taken action to curtail the use of non-disclosure agreements and confidentiality agreements that prevent the transparency of daylight and oxygen intruding into this space, and that is an important measure, too.

To conclude—unless my hon. Friend the Member for Christchurch wants to intervene further—this is a very important topic. The Government and my hon. Friend are at one in terms of the destination. I understand that he would like more velocity in reaching that destination. As I say, not only will I write to him, but I am happy to meet him or other colleagues on this important Bill that seeks to achieve the right balance of fairness between those who serve our community in the public sector and protecting the interests of the taxpayer.

What more can one say? This is just desperate, is it not? I would say it is no joking matter. We have made light of it, and in one sense, perhaps one of the reasons why the blob might respond ultimately is that we are mocking it so much. Up to now, it has been successful in preventing any action being taken on this key policy issue, which is of concern not just to national taxpayers, but to local government council tax payers. There is so much abuse. We reckon the cost to the Exchequer may be as much as £1 billion a year. We hear from the Prime Minister about his commitment to reducing the burden of tax and the debts of this country, but why are we not reducing this area of public expenditure? It is avoidable. We can do it, but nothing is being done and that suggests to me that there is something fundamentally wrong with how this Conservative Government are operating. They are not in control; the blob is in control. I urge my hon. Friend the Minister to reverse that situation so that the Government once again take back control.

What more can one say today? I will let the House know if and when I receive a response in writing, as promised by my hon. Friend, but I am so lost for words on this that I can only ask that the debate be adjourned. I do not want to put the Bill to a vote.

Ordered, That the debate be now adjourned.—(Rebecca Harris.)

Debate to be resumed on Friday 27 October.