MPs' £1m payoff (and another £12.5m for pensions)

As the expenses scandal claims three more casualties, we reveal the golden goodbyes that the 12 MPs giving up their seats will receive from the taxpayer
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Indy Politics

The dozen MPs who are quitting at the next election in the wake of the expenses scandal will receive from the taxpayer "golden goodbyes" worth more than £1m combined.

Their continuing salaries will cost a further £600,000 if the Prime Minister Gordon Brown delays calling the polling day until next spring.

And they will leave Westminster knowing that they sit on a combined taxpayer-subsidised pension pot of some £12.5m – more than £1m each.

The hidden cost to the voters of the expenses storm emerged as the Conservative MP Julie Kirkbride and Labour's Margaret Moran bowed to overwhelming pressure yesterday and announced that they would step down at the next election.

Ms Kirkbride, the MP for Bromsgrove, was forced out less than a week after her husband and fellow MP, Andrew MacKay, an aide to David Cameron, announced his resignation.

After a spate of disclosures about her expenses claims, Ms Kirkbride blamed the "unbearable" pressure on her family for her decision.

Ms Moran was being investigated by the Labour Party over a £22,500 claim that she made to treat dry rot at her partner's home, 100 miles from her Luton South constituency. She cited ill health for her departure.

A third MP, the Tory Christopher Fraser, who claimed £1,800 for 215 trees to mark his property boundary, also announced his impending retirement.

He said that he was standing down to look after his sick wife and stressed that the move had "nothing to do" with the expenses issue.

Their departures bring to 12 the number of MPs who have said they will quit Westminster since details of their expenses were leaked. More are expected to follow their lead.

However, their political pain will be offset by a considerable financial cushion, with the taxpayer forking out some £1,098,000 to ease their departure from frontline politics.

Seven of the 12, including Mr MacKay, will get handouts worth more than £105,000. Ms Moran is in line to pick up £95,000, while Ms Kirkbride will receive £73,000.

Apart from Michael Martin, who is quitting as both Speaker and as an MP next month, the MPs qualify for two handouts because they are remaining in the Commons until next year.

All MPs who step down or are defeated at a general election are paid a "resettlement grant" of up to a year's salary – currently £64,766 – varying according to their age and length of service. The first £30,000 is tax-free.

In addition, all MPs can claim a maximum of £40,799 for "winding-up costs", covering the cost of paying off staff and ending office leases.

Their final salary pension schemes mean that departing MPs with 27 years' service are entitled to an annual pension of £43,400 at today's prices when they reach the age of 65.

Even an MP with only 13 years in the Commons, such as Ms Kirkbride or Ms Moran, could expect to receive a pension of more than £20,000.

Pensions expert Tom McPhail, of Hargreaves Lansdown, said: "The scheme is unsustainably generous. It exists in a different world to the 28 million working taxpayers."

The 11 MPs stepping down at the election will also draw about £55,000 more salary if – as expected – Mr Brown announces in late March that a general election will take place in May.

Yesterday, Nick Clegg, the Liberal Democrat leader, said that voters should be given the right to sack their MP before the next election.

"Many people, including myself, think that if MPs have done something bad enough to feel that they have to stand down at the general election, then surely it is time that we prove that they have done something wrong and if they have, give people the right not to have to wait until the general election but... to sack their MP and have a say now," said Mr Clegg. Many more Tory and Labour MPs face fresh charges over their expenses and party sources believe dozens more could announce their resignations.

A Tory review of expenses claims is almost complete, with MPs whose claims look questionable facing instructions to reimburse the taxpayer.

Meanwhile a Labour "star chamber" has begun investigating the cases of Ms Moran and three other Labour MPs, Elliot Morley, David Chaytor and Ian Gibson. Ms Moran had not attended the first session because of ill health. Detectives considering complaints over MPs' claims will interview senior Fees Office officials before deciding whether to launch fraud investigations.

Ed Balls, the Schools Secretary, said yesterday that it could take years to restore the public's trust in MPs. "It is going to take some time and will not be solved by one event, one decision, one reform, one piece of legislation or one general election," he said. People were reading "about MPs doing things which in some cases are illegal but certainly unacceptable and irresponsible".

On the way out: MPs and their payouts

Andrew MacKay (C, Bracknell) £105,565 (£64,766* + £40,799*)

Julie Kirkbride (C, Bromsgrove) £73,182 (£32,383 + £40,799)

Margaret Moran (Lab, Luton S) £95,202 (£54,403 + £40,799)

Michael Martin (Lab, Glasgow N-East) £40,799 ( winding up costs only)

Sir Peter Viggers (C, Gosport) £105,565 (£64,766 + £40,799)

Douglas Hogg (C, S'ford and N Hykeham)£105,565 (£64,766 + £40,799)

Anthony Steen (C, Totnes) £105,565(£64,766 + £40,799)

Ben Chapman (Lab, Wirral S) £77,068 (£36,269 + £40,799)

Ian McCartney (Lab, Makerfield) £105,565(£64,766 + £40,799)

Sir Nicholas Winterton (C, Macclesfield) £105,565(£64,766 + £40,799)

Ann Winterton (C, Congleton)£105,565(£64,766 + £40,799)

Christopher Fraser (C, S-West Norfolk) £73,182 (£32,383 + £40,799)

* The first figure after the total is the 'resettlement package' (akin to redundancy pay, and related to years' service and age). the second figure is for 'winding up' costs (such as paying off staff and office rent).