Thursday, 12 November 2009

How much is Levitt's 'Golden Parachute'?

We thought we'd do some research about how much Tom Levitt is likely to cash in when he stands down at the next election.

Aside from a final salary pension scheme and lump sum payment (about which we have no details at present), there's the controversial so-called "golden parachute" payment (aka Resettlement Grant), which is officially paid to "assist with the costs of adjusting to non-parliamentary life".

It is calculated on the basis of the MP's age and length of service. So, by the time Levitt stands down next May, he will be 56, and will have served as an MP for 13 years. Using the ready-reckoner on this page (Table A), we can see that means he will qualify for a lump sum payment of 84% of his annual salary - based on the current MPs salary this will be £54,403. The first £30,000 of this is tax-free.

But that's not all. MPs are also entitled to a "winding up" allowance, which is supposed to pay for office costs and staff redundancy. Of course, this means that Tom will be able to make payments to the family members he has employed. This allowance can be up to £42,068. It is an aptly named allowance, but it is not a wind-up.

Don't believe Levitt's crocodile tears about this whole episode. The weakness of the local Labour Party in not moving to deselect him as an MP sooner means that he is laughing all the way to the bank. For the local newspapers that have chosen to regurgitate Levitt's press release for their 'exclusive story', this is the bit they are missing, deliberately in our view. The gravy train continues to roll on to the final destination.

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