WHILE millions worry about being made redundant, MPs have increased the “golden parachute” payments they will receive when they leave parliament.

According to rules that come into force at the election after next, most MPs will receive a larger lump sum when they leave Westminster. Many MPs will be paid a full year’s salary, currently £63,291, after leaving the Commons.

Critics say the payment is a “reward for failure” when millions of taxpayers are facing a difficult economic future.

Under current rules, any MP who leaves parliament under the age of 50 receives six months’ salary, but under the new rules they will get up to 90%.

The lump sum is based on the age of the MP on leaving parliament and the number of years worked. By 2014, the likely date of the election after next, MPs in their early fifties who had sat for two parliamentary terms would get almost £19,000 more. A 50-year-old MP who had worked for 17 years would get a year’s salary, rather than the current 60%.

Most MPs would see their pay-off rise under the new rules if they stood down in 2014. Jacqui Smith, the home secretary, would receive a full year’s salary, an increase of £20,253; David Cameron, the Tory leader, would get £18,987 more.

When disgraced MP Derek Conway stands down from parliament at the next election he will receive £31,645, of which the first £30,000 is tax free.

MPs’ salaries are assessed every three years by the Review Body on Senior Salaries (SSRB), which suggests pay levels. In the most recent report, the SSRB recommended that MPs receive a resettlement grant of one month’s salary for each year’s service as an MP, up to a maximum of nine months’ salary.

The review body recommended that the money should be paid only to MPs who lost their seats at a general election or due to boundary changes, and not to those who retired or resigned.

However, a committee of MPs, including Harriet Harman, the leader of the house, and Michael Martin, the speaker, have overruled the SSRB’s findings to make the lump sum available to all MPs, even if they simply choose to stand down.

Lord Oakeshott, the Liberal Democrat pensions spokesman, queried the pay-offs. “Redundancy risk is high for MPs, but it is rocketing for their constituents too,” he said.

At present an MP with 20 years’ service can retire with an income of £30,000 a year but it emerged this weekend that Gordon Brown had ordered a review that may stop such final-salary pensions.

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