Payoffs for MPs who lose seats or resign at general election set to double

MPs will recieve payment covering four months rather than two

Matt Mathers
Friday 25 August 2023 15:33 BST
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IPSA explains MPs’ pay

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Payoffs for MPs who lose their seats or are not running at the next election are set to double as millions of people across the country struggle with the cost of living squeeze.

The so-called “winding down” payments, which will rise from £8,600 to £17,300, are designed to help departing members close their offices and manage the departure of staff.

A think tank described the move as a “kick in the teeth” for taxpayers. But the Independent Parliamentary Standards Authority (Ipsa), which regulates MPs’ pay and approved the hike, said the changes could save money because MPs’ staff should no longer need payment in lieu of notice.

Ahead of the last election in 2019, MPs received a payment covering two months after losing their seats, but Ipsa said this was too short and increased it to four months.

The public body said the decision was made because the time to fully close down an MP’s parliamentary and financial affairs was longer than the time covered.

The ruling said: “Former MPs will continue to have access to their normal budgets (pro-rated) for that four-month period, and they will continue to employ staff as needed to assist them in winding up their affairs.”

Some 71 MPs have already announced they will walk away from the House of Commons next year.

MPs who have served more than two years are also eligible for loss-of-office payments with longer-serving MPs receiving larger amounts. Those who announce their departure outside of an election period will not be eligible for the payment.

The payments, similar to redundancy packages, will be available to all eligible MPs who leave parliament at the next election.

MPs are paid an annual salary of £86,584 before tax and many have second jobs. The more high-profile ones often receive payment for media appearances and books.

Some MPs who enter politics from the worlds of banking, finance and business were already extremely wealthy. Sajid Javid, the former health secretary and chancellor, is reported to be worth around £8m.

Mr Javid, a former banker, announced in December last year that he would not stand again in Worcestershire’s Bromsgrove constituency.

The TaxPayers’ Alliance described the move as a ‘kick in the teeth’ for taxpayers
The TaxPayers’ Alliance described the move as a ‘kick in the teeth’ for taxpayers (PA Archive)

Labour’s Harriet Harman, the former Commons leader, Dominic Raab, the former justice secretary, and Matt Hancock, the former health secretary, are among other high-profile MPs who will leave politics next year.

Nadine Dorries, the former culture secretary who said she would resign “immediately” in June but is yet to do so, is set to get an extra £22,000 from the taxpayer by clinging on to her job in parliament over the summer – despite having promised to stand down two months ago.

Earlier this year, official records showed that Ms Dorries had earned nearly £145,000 in the past 12 months – from her salary, ministerial severance and outside media work – despite not speaking in parliament for a year.

She will also be eligible for the extra payment if she follows through on her pledge to quit.

The TaxPayers’ Alliance, which campaigns for lower public spending, described the move to double the payoffs as a “kick in the teeth” for taxpayers, many of whom were struggling during the cost of living squeeze.

“Hard-pressed Britons are already funding generous salaries, perks and pensions for elected officials,” John O’Connell, TA chief executive, said. “Ipsa should be mindful of that when recommending more taxpayers’ money for politicians.”

Speaking on TalkTV, Tory Isle of Wight MP Bob Seely said: “I don’t think people resigning should be getting a payout.

“But this is an independent body, I’m afraid to say we don’t get to vote on it unless somebody tells us that we do, and frankly, I am more concerned about dealing with my constituency casework.

“So I’m not particularly happy about this either because it just shows us in a bad light and despite the fact it’s an independent body, everyone is going to blame us for it.

“It really winds me up, frankly.”

A spokesperson for Ipsa said: “Following a public consultation earlier this year, based upon the evidence available to us and our own experience from previous elections, we agreed that the winding up period is too short for former MPs and their staff to close down their offices and deal with outstanding casework.

“It is also unfair to expect those closing their offices to do so once their employment has ended. We therefore have extended it to allow a smoother transition for members of parliament and for their constituents.”

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