The Taxpayers’ Alliance has published today figures showing how much money was paid to MPs who departed the House of Commons, either voluntarily or through defeat, at the general election a month ago.
As its report notes, departing MPs are entitled to a one-off Resettlement Grant of 50-100 percent of their annual salary, dependent on their age and length of service, the first £30,000 of which is tax-free and is in addition to their parliamentary pension.
It’s something of a relic of a system. For a start I would have thought any form of payment based on age is verging on the illegal under equalities legislation – especially with some younger MPs receiving less money than older colleagues despite having served as MPs for longer.
Nor does there seem any justification for paying MPs who choose voluntarily to stand down from Parliament: that is their choice, and it is hard to see why the taxpayer should pick up the tab, especially as many will have lined up new (and in many cases more lucrative) work in readiness for their retirement.
I can understand and support the principle that MPs who are defeated should receive a payment in order to help them plan what they do next – the equivalent of a redundancy payment paid in both public and private sectors to individuals who finish their employment unexpectedly.
Unsurprisingly, given its world-view, the Taxpayers’ Alliance regards this as a rip-off:
When a MP wins an election, he or she enters a contract with a term of up to five years. If they then go on to lose the election this is not the equivalent of redundancy – it is the end of their contract.
The practical effect of such a decision, however, would be MPs in marginal seats spending their (potentially) last year focused almost as much on lining up a new job as on focusing on their parliamantary work. And I don’t see how that helps deliver value-for-money. As so often, the Taxpayers’ Alliance sees only numbers when other people see humans.
Sixteen Lib Dem MPs left the Commons on 7th May – here’s the list, together with the resettlement grants they were awarded, compiled from the Taxpayers’ Alliance figures. You can view the spreadsheet by clicking here, and read it below:
Lib Dem MPs Resettlement Grants
(Any corrections needed to the above, please let me know.)
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18 Comments
Age is taken into account when calculating redundancy packages outside of parliament as well; age & length of service – not sure if it’s statutory though. It’s to reflect their ability to find another job.
I also don’t agree with your assumptions around the MP who steps down voluntarily and that who loses. Isn’t an MP that steps own voluntarily at an election a bit like voluntary redundancy, as opposed to forced redundancy (losing)?
On projects that I have worked on work on we often use VR and additional retention bonuses to encourage people to stay on until the optimum leaving time for the company, rather than whenever they feel like it, which is a bit like avoiding a by-election – which would be what would happen if an MP stood down at a time of their choosing. An MP who causes a by-election, such as Blair when he left or an MP being elevated to the Lords should not get a ayment (in my opinion).
So, I don’t mind the principle of payments on stepping down or losing but I do think they get a much better redundancy package than the statutory that most people in private or public sector get – I’m not sure why somebody should get 50% of their salary after only 5 years service £30k.
Some money for the fighting funds of those who want to get back though.
what’s particularly annoying is that all those MPs that stood down because of the expenses scandal still got a pay-off!
As for what JC-H says about MPs standing down being like VR, it can be argued it’s more like retirement (especially since they then get a pension), which afaik, doesn’t entitle to a pay-off.
“For a start I would have thought any form of payment based on age is verging on the illegal under equalities legislation ”
It is taken into account in statutory redundancy pay which varies based on length of employment and age.
The assumption is presumably that older people will find it harder to get new jobs, of course that is a highly questionable assumption
Sandra F
It depends how old they are, I guess – when I took VR, I didn’t lose my pension either but at 34 I was a bit young still to draw it!
On MPs leaving voluntarily, surely we want a system that encourages them to go the moment they stop wanting to be there ? Being an MP requires complete commitment, heart & soul. We dont want anybody just killing time.
How many of the remaining LibDem MPs, will vote against the manifesto commitment, and refuse to back an amendment to include Trident in the SDR?
You can link redundancy to age as long as you follow the same ratios as statutory redundancy.
But why should they get anything higher than statutory redundancy.they passed a law saying this was what everyone else should be entitled to : this should apply to them.
And like statutory redundancy these payments should stop at 65
There is no justification at all for making these payments, certainly not beyond that statutory equivalent redundancy payment of 1 week salary per year of service. And paying according to age is simply age discrimination. It’s funny how the old are against age discrimination when it prevents them getting jobs, but in favour of it when it gets them more money.
It is a mess of a system, in principle, and also where (with due respect to him) Willie Rennie gets exactly the same as Matthew Taylor.
As far as I can see, you have to be over 50 and there for more than 10 years to get any extra? Everyone else got a standard £32383
especially as many will have lined up new (and in many cases more lucrative) work
I think you will find that while Tories with pro-big-business views and ex-ministers may get lucrative work after being MPs, there are some quite sad stories of ex-MPs who didn’t fall into either category finding it difficult to get employment.
I certainly find the prospect of being an MP for a few years then losing the seat to be frightening enough to be a major disincentive on trying. Not that the TPA could give a toss about that, no doubt they’d be thoroughly in favour of the system being set up to scare off lefties and others who couldn’t so easily get a job in the business world.
At the moment, the job market is terrifying for anyone who has had a career in public service but find themselves out of work. Essentially, there are NO jobs going except in specialist areas. Anyone middle aged who loses their job in this area may never work again.
Matthew makes a very good point. The following is from Tam Dalyell’s obituary of Bob Mitchell, Labour, then SDP, MP who lost his seat in 1983:
“As has been the case for many other former MPs, people are wary of employing men and women who have had a considerable status and may be uncomfortable employees. Mitchell suffered more than most and was conscious of never regaining the status that he had once had as a deputy headmaster. The tag of “honourable gentleman” does not help when it comes to getting a position in a difficult labour market. He was appointed to be a lecturer in Business Studies at Eastleigh College of Further Education between 1984 and 1993, when he retired.”
“Mitchell suffered more than most and was conscious of never regaining the status that he had once had as a deputy headmaster … He was appointed to be a lecturer in Business Studies at Eastleigh College of Further Education between 1984 and 1993, when he retired.”
I’m almost in tears here.
Anthony Aloysius St
I’m almost in tears here.
I assume you meant this sarcastically, but it’s a real issue. Someone loses a job at a high level, then finds they can’t get another because there’s nothing going at that level, but try anything a grade or too lower and the reaction will always be “You’re over-qualified – you won’t fit in”.
Tory millionaire types just don’t see that, because they live in another world where there always contacts they can use and strings to be pulled and big dollops of cash at hand to set up their own business if necessary. That is what I fear about this government – it is just so stuffed with Tory millionaire types who may mean well but they just haven’t a clue about real life.
The Taxpayers Alliance are factually wrong if they are saying that employees on fixed terms contracts aren’t entitled to redundancy at the end of their contract. Since 2002, if employed for more than 2 years, employees with fixed term contracts are treated like any other employee as regards redundancy, even at the “natural” end of their contract. This was to stop employers putting all their employees permanently on short term contracts, albeit renewed regualrly, to avoid paying redundancy. I suppose the TPA doesn’t see MPs as employees – as indeed they are not precisely – but as “consultants” with a contract for goods or services, but in our local paper the TPA talked specifically about “employees”.
“I assume you meant this sarcastically, but it’s a real issue.”
Obviously I was responding to the bit I quoted, about the “suffering” of a man who had to take a job as a lecturer in a College of FE, and was conscious of his “loss of status” because he had previously been a deputy headmaster.
As you say, some politicians haven’t a clue about real life.
It strikes me that none of these MPs are actually getting as big a redundancy package as I did from the BBC in the early 1990s. I was 51 and had 29 year service and got what my contract specified – 2 years salary (which was about £54k). Like them the first £30k was tax-free; as the remainder was added to my salary for that financial year, it was taxed at 40%. I realise that I was very lucky financially then and later, and getting out of a very stressful job with a lot of travelling and long hours allowed me to start doing normal things like politics and voluntary work, and take on a part-time job that I got satisfaction from.
My point really is that these are not fantastically generous settlements by industrial management standards and most of these redundant MPs will have resettlement costs and difficulties. It will be impossible to predict which will have the problems. Of course, you could set up a complex cohort of resettlement grants and large squad of civil servants to administer that complicated system……
We must remember that the reason we give pay and allowances to elected representatives is to ensure that people without large capital or private income can put themselves forward for election. We don’t want to go back to the situation from earlier in the twentieth century when you had to be a well-heeled toff to be an MP or councillor.