Severance pay is a final insult

NOT one fully fledged Cabinet Minister lost their seat when Labour was defeated at the General Election. Apart from those unelected peers, like Peter Mandelson and Andrew Adonis, every key member of Gordon Brown's top team continues to serve as a constituency MP. They are also shadowing the new Government and receiving the traditional Opposition allowances.

Despite bequeathing the nation a record, and unsustainable, budget deficit, it has now emerged that former Labour Ministers received more than 1m in severance pay when they left office. Of course, this money did not just go to Cabinet politicians; it was also paid to junior Ministers, some of whom lost their seats.

These payments must never be made again. Given the generosity of existing resettlement grants for outgoing MPs, it is simply astonishing that ex-Ministers are entitled to yet another payment from the public purse – and that they have had the temerity to accept this money. Indeed, there does not appear to have been a queue of honourable politicians choosing to forgo their severance pay because it would be morally wrong to accept such money in the current financial climate.

Hide Ad
Hide Ad

It also perpetuates the belief that there is one rule for politicians – and another set for ordinary taxpayers, including those civil servants who served Labour. They now face the prospect of their redundancy payments being capped because the Government simply cannot afford to pay them off because of the parlous state of the public finances.

Even though David Cameron's Government has no room for financial manoeuvre, it is going to have to proceed with caution. Two previous attempts to rewrite the redundancy rules have been blocked by the courts. And, while the approval of new laws is one potential solution, it does set a worrying precedent when an administration is prepared to change contractual terms and conditions retrospectively.

Ministers must also remember that only a relatively small number of public servants are on the gold-plated packages that have caused so much mirth – the vast majority of Civil Service staff are on modest incomes and their redundancy payments, however large or small, will not sustain them for the rest of their working lives.