Treasury accounts revealed the cost of Britain’s recent upheaval in politics on Thursday. They showed the amount of severance pay made to ministers and other officials following mass resignations and dismissals last year.
Treasury reveals that ministers were paid hundreds of thousands of pounds after leaving government following the departure of former premier Boris Johnson and Liz Truss. Some returned to office just a few weeks later.
Johnson received £18.660 as a termination payment after being forced to resign as Prime Minister by his parliamentary colleagues following a series of scandals.
When their government collapsed in just 49 days due to a disastrous mini-budget, his successor Truss and her chancellor Kwasi Kwarteng received £18.660 and £16.876 as severance payment, respectively.
Sir Tom Scholar was compensated £457,000 for being sacked as Treasury Permanent Secretary by Truss on her first working day on the 8th of September.
Truss’s removal of the experienced mandarin symbolised a new approach, one that is pro-free markets and pro-markets.
She was forced to resign six weeks later, after her economic strategy — which included large, unfunded tax reductions — caused chaos on the bond market, driving up borrowing costs.
The Treasury Annual report indicates that Scholar’s payments totaled between £540,000 and £545,000 for 2022-2023.
This was almost a tripling of the amount for the previous year, which ranged between £195,000 and £200,000.
The additional £457,000 pay-off — above his salary for five month — consisted of a £335,000 severance payment, and £122,000 in “annual leave adjustments” and “compensation in lieu of notice”.
Scholar’s dismissal last autumn has been widely criticised. Former Tory chancellor Philip Hammond said he was “alarmed”, about the trend of incoming prime minsters firing senior civil servants.
Scholar spent 30 years in the civil service, including six at the Treasury. He worked on such projects as the Bank of England’s independence and David Cameron’s renegotiation of the EU with the EU.
An aide at Treasury said that Scholar was entitled to the payment under the civil service compensation plan, which reflected his seniority as well as the fact that Scholar had worked for the department for over 30 years. He said that the amount was what Scholar was contractually entitled.
In another sign of the political chaos of last year, the severance payment for ministerial advisers went from £99,000 to £2.9mn between 2021-2022 and 2022/23.
Grant Shapps (now Energy Secretary) and Michael Gove (now Levelling-Up Secretary), both of whom received payments, returned to government just a few months later. Both ministers took £16.876. Shapps donated “a pro-rata portion” (or a percentage) of his payment, according to an aide.
Chris Pincher was suspended last year from the party after being accused of sexual harassment and abuse. He resigned as deputy chief whip in response to these accusations.
Angela Rayner, Labour’s deputy-leader, said that the payments made to departing Ministers demonstrated a “staggering” lack of shame, when “the general public struggled to pay their mortgages or put food on the tables”.
Treasury says that Rishi Sunak, who left Boris Johnson’s Government, received £17,000. He returned the money to the Treasury.