Following a Cabinet reshuffle that saw Andy Burnham replace Sir Keir Starmer as Prime Minister on Monday, several ministers who were closely aligned with Starmer have been removed from their positions and are set to receive severance payments totaling more than £200,000. The decision to remove Starmer’s loyalists from the Cabinet resulted in the exit of key figures including Rachel Reeves, David Lammy, Steve Reed, Peter Kyle, Liz Kendall, Darren Jones, Hilary Benn, Jo Stevens, Nick Thomas-Symonds, Lord Hermer, and Baroness Chapman.
Under government rules, Cabinet ministers in the House of Commons earn an annual salary of £67,505 on top of their pay as Members of Parliament. Those leaving the Cabinet are entitled to severance pay amounting to 25 percent of that annual salary. For each outgoing minister, this translates roughly to £50,000, cumulatively exceeding £200,000 among the affected officials. Additionally, cabinet reshuffles can sometimes trigger "resettlement grants," which may be equivalent to up to 12 months’ salary, though Downing Street confirmed the severance pay but declined to clarify whether the former ministers would receive these grants.
The practice of offering severance pay to former Cabinet ministers stems from their status as government employees under contractual arrangements, a distinction that does not apply to MPs. Consequently, while ex-ministers receive these payouts, MPs who lose their seats or are deselected do not qualify for such compensation.
Public reaction to the payments has been mixed. One former minister who declined to be named described the payoffs as "more than fair" but expressed reluctance to accept funds drawn from taxpayers. In contrast, criticism came swiftly from Conservative ranks. Tory MPs and candidates described the payments as “outrageous” and ill-timed, amid concerns over government spending. David Jones, a Conservative MP and member of the Public Accounts Committee, sharply criticized the arrangement, stating: “Incredible that, after all the damage these ministers have done, taxpayers still have to fork out severance pay to them.”
The government reaffirmed that the severance payments are a standard entitlement for ministers stepping down after a reshuffle but emphasized that Members of Parliament are not eligible for such compensation upon losing their roles. The payments highlight the contractual and financial distinctions between ministers and ordinary MPs in the current parliamentary system.