pounds 10m in payoffs will ease pain for defeated MPs

Members of Parliament who retire or lose their seat at the forthcoming general election will share a pounds 10m bonanza, free of tax, writes Paul Routledge.

The money will be paid under a variety of arrangements for MPs, who could individually receive up to pounds 70,000.

The biggest bill will be for "resettlement grants" of up to pounds 43,000, the annual salary for a parliamentarian. These have become much more worth having since MPs awarded themselves a 26 per cent pay rise last year.

The best estimate is that about 200 MPs will either quit or be voted out of Parliament, costing the taxpayer more than pounds 5m under the resettlement deal, which is worth a minimum of pounds 21,500.

Among former Cabinet ministers who will receive the full amount are Kenneth Baker, a former home secretary, and Paul Channon and John MacGregor, who both held the post of transport secretary. All are standing down from choice, and have already been compensated once - for losing ministerial office.

Sir Nicholas Scott, the former social security minister who was ousted from his Kensington and Chelsea constituency after being found face-down on the pavement during last year's Conservative party conference, will also get the full pounds 43,000.

His ex-boss at the Northern Ireland Office, Tom King, stands to pick up pounds 36,120, as does Sir Patrick Mayhew, the outgoing Secretary of State for Northern Ireland, and John Patten, the former education secretary. Douglas Hurd, former foreign secretary, will get pounds 32,680.

On the Opposition benches, Roy Hattersley will receive the full grant, as will Sir David Steel. Both are retiring, along with anti-abortion campaigner David Alton, who will get pounds 21,500. Edwina Currie, the former health minister facing defeat in her Derbyshire South constituency, stands to get pounds 24,080.

On top of these resettlement grants, all MPs who lose or quit are given a "winding-up" allowance of pounds 15,454 "to enable parliamentary and constituency business to be completed".

They will also qualify on 1 April for part-payment of their annual pounds 46,000 grant for office costs, probably around pounds 11,500, which could be spent on computers or any other office equipment, as long as a receipt is obtained. In total, the bill for the parliamentary changeover is likely to reach pounds 10m.

If Labour comes to power, Gordon Brown, the incoming Chancellor, would order a thorough review of the pay and perks of parliamentarians, an aide said last night.

Denis MacShane, Labour MP for Rotherham and a member of the committee considering the Finance Bill, commented: "This will be the final act of the sleaziest Prime Minister since Lloyd George, to hold back the election so his cronies can rip off the taxpayer one last time."