Page last updated at 04:26 GMT, Tuesday, 8 June 2010 05:26 UK

Former MPs entitled to 10.4m resettlement grants

By Gerry Northam
File on 4

"Golden goodbyes" are paid in addition to any parliamentary pension

The 218 MPs who were either defeated or stepped down at the general election were entitled to payouts totalling £10.4m, the BBC has learned.

The figures shown to the BBC by the TaxPayers' Alliance reveal the amount in resettlement grants available in addition to pension and other payments.

It is not known how much of the money has been accepted, but the alliance described the figures as "huge sums".

A parliamentary watchdog said it planned to look at future payments.

The grants, nicknamed "golden goodbyes", are paid in addition to any parliamentary pension an MP receives or the winding up payments given to MPs to pay off their staff or the rental on their constituency offices.

The payments are tax free for the first £30,000.

Salary cap

The figures from the TaxPayers' Alliance, a group that campaigns for lower taxes, do not reveal if the former MPs took their entitlements.

Long-serving MPs who are still of working age can receive the equivalent of a year's salary, £64,766, but the payments are reduced when an MP reaches the age of 70.

TaxPayers' Alliance analyst John O'Connell, who compiled the figures, argued that MPs were mistaken if they considered the grants to be similar to redundancy payments.

"It is not redundancy pay, they take the job on a five-year fixed contract and need to be aware it is fixed term," he told File on 4.

Adding that MPs who retire voluntarily also receive the payment, he said: "They get it if they stand down which negates the redundancy argument.

"These are huge sums."

Labour MP Harry Cohen had his resettlement grant stripped because he had breached parliamentary expenses rules, while three other Labour MPs - David Chaytor, Elliott Morley and Jim Devine, who face criminal charges over their expenses claims - have had their grants suspended.

The Prime Minister's spokesman said the payouts to retiring MPs were "contractual entitlements". He said IPSA is looking at the whole regime and making recommendations for the future but as a general principle the Government is in favour of restraint.

The Independent Parliamentary Standards Authority (IPSA) said it had been given access to review resettlement grants under the Constitution and Governance Bill, at the end of the last parliament.

A spokesman said it was currently looking at reforming MPs' expenses but would look at resettlement grants in the future, although there is no timetable of when that will happen.

Another payment for ex-MPs has also come under scrutiny.

SNP MP Angus MacNeil has called for more transparency over the public duty costs allowance paid to former prime ministers after they leave office.

PMs' payout

Former PMs are allowed £109,000 a year for the rest of their life, according to Mr MacNeil, who said: "There is a massive amount going to former prime ministers, we don't know who's getting it and what they get.

"It's time we knew."

Mr MacNeil also told File on 4: "I accept that they have duties and need money but we don't know how it is justified, a side of A4 each year ought not to be too much."

File on 4 asked each of the past three prime ministers - Gordon Brown, Tony Blair and Sir John Major - for an interview about this allowance, but none of them was available.

File on 4 is broadcast on BBC Radio 4 on Tuesday, 8 June, 2010, at 2000 BST, repeated Sunday, 13 June, at 1700 BST. You can listen via the BBC iPlayer or download the podcast.

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