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Management of the Economy and Ministerial Severance Payments
15 November 2022
Lead MP
Lisa Nandy
Debate Type
General Debate
Tags
TaxationStandards & Ethics
Other Contributors: 41
At a Glance
Lisa Nandy raised concerns about management of the economy and ministerial severance payments in the House of Commons. Other MPs contributed to the debate.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
The House censures the former Prime Minister, Elizabeth Truss, and the former Chancellor of the Exchequer, Kwasi Kwarteng, for their mismanagement of the economy which has resulted in an average increase of £500 per month in mortgage payments for families across the UK. The motion calls upon both Rt Hon Members to waive at least £6,000 of their ministerial severance payments.
Lisa Nandy
Lab
Wigan
Constituents have been facing difficulties due to the mini-Budget which crashed the economy and sent interest rates soaring. Mortgage offers are being withdrawn, and many families are paying an additional £500 per month towards mortgage repayments.
Concerned about new homes not selling due to increased mortgage costs, leading to job losses in the construction sector.
Neil Coyle
Lab
Bermondsey and Old Southwark
8,000 mortgage payers in Southwark face an average monthly increase of £1,254. Constituents are waiting for an apology from the Government.
Gareth Bacon
Con
Orpington
Asked Lisa Nandy whether Labour Ministers refused their severance payments in 2010.
Jim Shannon
DUP
Strangford
Stressed that this issue is not just about those who need to re-mortgage but about people’s dreams of home ownership being thwarted. Agreed with the speaker's statement that we are at a crossroads.
Chris Elmore
Lab
Bridgend
Shared an example of constituents whose mortgage costs increased by £276 per month after coming out of a five-year fixed mortgage, forcing them to sell their home or go into private rented accommodation.
Anxious about the possibility of double-digit interest rates if the Government does not take immediate action.
David Linden
Lab
Newark
Expressed astonishment at the absence of Elizabeth Truss and Kwasi Kwarteng, questioning what else they are doing that is so important to avoid this debate.
Chris Bryant
Lab
Rhondda and Ogmore
Emphasised the anger among constituents about losing homes due to increased mortgage fees. Highlighted previous instances where similar censure motions have led to significant consequences for the Government.
Lucy Frazer
Con
South East Cambridgeshire
Stressed that global economic challenges were not unique to the UK. Cited the IMF's projection of a third of the world’s economy in recession due to pandemic and war. Acknowledged mistakes but highlighted the government's fiscal responsibility and sound money approach, aiming for lower mortgage rates and long-term growth.
David Linden
Lab
Aberdeen South
Challenged Lucy Frazer on her statement about not crashing the economy and mentioned that after the mini-budget there was a run on pensions necessitating intervention from the Bank of England.
Fleur Anderson
Lab
Putney
Noted constituents blaming the government for London's rising mortgage rates, with an average increase of £835 per month, questioning how hard-working families will cope with these increases.
Bury South
Supported Lucy Frazer by highlighting global energy price rises due to Putin's invasion and acknowledged the government's efforts to help households despite high inflation rates in other European countries.
Challenged Lucy Frazer on rewriting history, specifically regarding the Prime Minister's role in economic failures over years, questioning why fiscal tables show Britain at the bottom of economic rankings.
Anthony Browne
Con
Carshalton and Wallington
Highlighted that home ownership rates fell under Labour but rose again after Conservative measures were introduced post-2010 election, despite Labour's traditional support for homeownership.
Anthony Browne
Con
Taunton Deane
Mr. Browne highlighted that despite Labour's critique, their own ministers took £1 million in severance pay and questioned the validity of linking economic performance with such payments.
Patricia Gibson
SNP
North Ayrshire and Arran
The Government's recent decisions, especially the so-called mini-Budget, have caused significant financial harm to people across the UK. The SNP member criticises the Tory government for their fiscal irresponsibility, citing examples such as the removal of the bankers' bonus cap and reduction in taxes for the wealthy. She highlights that 41% of mortgage deals were pulled by banks following the mini-Budget announcement, leading to higher mortgage costs for many families. Additionally, she mentions that inflation is soaring at over 10%, outpacing normal earnings growth and threatening Scotland's economic recovery. The SNP member also criticises the revolving door of government jobs and severance payments made to former ministers due to the instability caused by this government.
David Linden
SNP
Glasgow East
Supports his colleague Patricia Gibson's criticism, pointing out that the Scottish Government does not experience the same level of ministerial churn as Westminster and thus does not face similar severance payment issues. He calls for action to prevent such situations in the future.
Nigel Evans
Con
Chorley
Noted that there is no amendment and it is a straight vote on the motion.
Rejected the Opposition's three-part argument: first, blamed external forces for the economic situation; secondly, argued against treating the former Prime Minister differently from other Ministers; thirdly, rejected the suggestion of a compensatory amount of £6,000. Highlighted the impact of global factors such as inflation and the Ukraine war on the UK economy.
Nigel Evans
Con
Chorley
Called for speakers to limit their contributions to around eight minutes to ensure all voices are heard before moving to the next debate at 4 pm.
Naseem Shah
Lab
Bradford West
Responded by stating that the economic disaster was a result of actions in No. 10, and the public can see through the Government's attempts to blame external factors for their incompetence.
Paul Howell
Con
Sedgefield
Acknowledged the mini-Budget's short-term reaction but emphasised that long-term economic challenges stem from the pandemic and war in Ukraine. He cited Government spending of between £300 billion to £400 billion on various pandemic-related issues and noted support measures for energy prices expected to cost £60 billion over six months. Criticised Labour for scaremongering about interest rate increases and severance payments.
Helen Hayes
Lab
Dulwich and West Norwood
Described the unprecedented anxiety in communities due to increased financial burdens and economic uncertainty caused by Government's ideological decisions. Criticised the Chancellor for undermining public finances, blaming others instead of addressing the situation, and pointed out that loss-of-office payments are 'salt in the wounds' of those struggling financially.
Birmingham Erdington
The Labour MP argues that the Conservatives crashed the economy and working families’ pay is falling by £1,300 on average due to rising costs of energy, food and fuel. She provides an example of a nurse in debt who struggles to afford her children's school dinners and skips meals herself while pregnant with her third child, highlighting how tough economic times are affecting many people. Hamilton criticises the Government for expecting people to pay £400 more every month on their mortgages, questioning where these individuals should make savings, such as turning off heating or skipping meals. She emphasises that young people who scrimped and saved to get onto the property ladder have been left trapped in a broken rental market due to Tory chaos. Hamilton states that 800,000 fewer households under the age of 45 own their homes now compared to when Conservatives came into power in 2010, and she questions who will clean up the mess caused by the Government.
Anthony Browne
Con
Carshalton and Wallington
Echoed the Minister for Levelling Up, Housing and Communities' statement that mistakes were made but emphasised the government's rapid correction of these errors. He highlighted the economic challenges faced since the 2019 election, acknowledging both the pandemic and the war in Ukraine as significant crises. Browne argued that despite these crises, the government has provided substantial support to households through measures such as the energy price fix and a windfall tax. He criticised Labour's historical economic performance, citing periods of increased unemployment under previous Labour governments, including the doubling of workless households from 1997 to 2010. Additionally, he pointed out that youth unemployment also increased during this period. Browne further noted that despite favourable economic conditions inherited in 1997, Labour left office with a note stating they had run out of money, illustrating the lack of fiscal conservatism.
Matt Rodda
Lab
Reading Central
Challenged Anthony Browne's assertions about Labour’s economic performance during his intervention. He questioned whether Browne would reflect on the period of higher growth under Labour compared to Conservative governance and pointed out that current home ownership rates are declining, contrary to government claims.
David Linden
Lab
Aberdeen South
The hon. Member for Aberdeen South argues that the rise in mortgage interest rates is not solely due to events such as the Ukraine conflict and the COVID-19 pandemic, but also attributes it to Brexit and its aftermath. He criticises the government's handling of the economy post-mini-Budget, stating that it has affected his constituents significantly, with many losing out on mortgages or facing high interest rates after taking financial advice. He further emphasises that government ministers who resigned in quick succession should not receive severance payments equivalent to those available to longer-serving employees.
Drew Hendry
SNP
Inverness East, Nairn, Badenoch and Strathspey
The hon. Member for Inverness East, Nairn, Badenoch and Strathspey supports his colleague's arguments by highlighting the impact of rising food prices due to Brexit on Scottish households, pointing out that these price increases are unsustainable for many families. He also criticises the government’s £100 energy support package as insufficient for those off the gas grid.
Gerald Jones
Lab
Merthyr Tydfil and Aberdare
The former Chancellor's financial statement caused significant hardship in my constituency, with mortgage advisers reporting increased monthly payments of £550 to £600 for some families. The lack of OBR impact assessments exacerbates uncertainty. Labour advocates a windfall tax on energy companies’ excess profits and the abolition of non-dom status to raise funds and respect independent institutions.
Taiwo Owatemi
Lab
Coventry North West
My hon. Friend is correct, constituents have written to me expressing concerns about their ability to get on the housing ladder due to rising mortgage rates caused by the Government's actions. The economic vandalism has significantly impacted first-time buyers.
Helen Morgan
Lib Dem
North Shropshire
Ms. Morgan highlighted the impact of soaring mortgage rates on constituents, citing that typical mortgage holders will see annual repayments rise by approximately £3,000 over the next year due to the mini-Budget. She noted that 750,000 households with mortgages and an additional 120,000 households are at risk of plunging into poverty as a result of increased mortgage costs and affordability issues. Ms. Morgan also pointed out the strain on private renters, potential cutbacks in essential public services, and the discrepancy between rural and urban areas' cost of living. She criticised the redundancy payments for Ministers despite political instability, suggesting that such funds should be redirected to assist families struggling with the cost of living.
Justin Madders
Lab
Ellesmere Port and Bromborough
The current crisis has spooked the markets, causing a significant rise in mortgage rates. It is not disputed that there was an upward trend before the Budget, but it is the Government’s reckless actions that have exacerbated the situation. The constituent facing increased mortgage costs of £25,000 over five years exemplifies the impact on ordinary people. This situation has also affected those trying to move house and secure mortgages with limited options available, leading to higher monthly payments and unnecessary anxiety.
Beth Winter
Lab
Cynon Valley
Supports the motion on the management of the economy, criticising the Conservative party for mismanaging the economy and failing to address runaway inflation. Mentions the Bank of England's decision to raise interest rates, impacting mortgage costs and pushing more people into poverty. Emphasises the housing crisis, highlighting shortages of affordable homes and the impact on families. Calls for a mass-building programme for affordable housing, better support for those struggling with mortgage payments, and increased social security benefits in line with inflation.
Sarah Owen
Lab
Luton North
Despite what Government Members may say, this is an important debate reflecting the economic struggles of ordinary people. The UK economy has seen next to no growth for 12 years and faces a predicted recession due to Tory policies. Labour calls for urgent legislation to end section 21 eviction notices and criticises the Government's lack of action on housing and renter support. Sarah Owen emphasises that the former Prime Minister and Chancellor should return their severance pay, as they are responsible for crashing the economy. She highlights the struggles faced by individuals like teachers and small business owners who cannot afford rising mortgage payments.
Alex Burghart
Con
Brentwood and Ongar
The debate has veered from the motion on severance pay. Payments related to ministerial office are defined by law and have been in place for successive Administrations, including Labour and Liberal Democrat Ministers during coalition Government years. The unpredictable nature of ministerial roles necessitates these statutory entitlements, which cannot be waived by the Government but only by individual Ministers. The debate also touched on mortgage payments, with the Minister highlighting that factors affecting mortgage rates are complex. However, the Government is providing support to tackle rising living costs through a cost of living payment and an energy price guarantee.
Rachel Hopkins
Lab
Luton South and South Bedfordshire
Asked the Minister about the figure of £6,000 in severance payments that should be waived by former Prime Minister and Chancellor if they have not already done so. Emphasised that the average mortgage-paying householder in Luton South will face an extra £500 a month due to Government policies.
Clive Efford
Lab
Eltham
Provided evidence from Resolution Foundation showing a £35 billion gap entirely attributable to the mini-Budget. Highlighted that £45 billion is attributable to unfunded tax cuts, with higher interest rates accounting for £30 billion.
David Linden
Lab
Dudley South
Challenged the Minister's criticism of Opposition members about figures by pointing out that the mini-Budget was brought forward without an OBR forecast, and that the Government had locked them in a boot.
Sarah Owen
Lab
Luton North
Asked if it is right for former Prime Minister and Chancellor who crashed the economy to take ministerial severance pay. Noted that the legalities of severance payments have been laid out by the Minister.
Emma Hardy
Lab
Kingston upon Hull West and Haltemprice
Asked about changes regarding access to mortgage interest rate relief scheme signed off by the former Chancellor but not yet implemented. Requested that pressure be put on Treasury colleagues to ensure this promise is realised.
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