The severance pay for Ministers is established in legislation that was passed by Parliament in 1991 and that has been used by successive Administrations over several decades. The Ministerial and other Pensions and Salaries Act 1991 states that where a Minister of eligible age ceases to hold office and is not reappointed to a ministerial office within three weeks, they will be entitled to a severance payment of a quarter of their ministerial annual salary. The context of this legislative provision is the reality that ministerial office can end at very short notice indeed, that reshuffles are a fundamental part of the operation of Government and, by their nature, routinely remove Ministers from office, and that, unlike in other employment contexts, there are no periods of notice, no consultations and no redundancy arrangements. Section 4 of the Act therefore makes provision for severance payments.
This is a statutory entitlement, and it has existed and been implemented for several decades, by Governments of all stripes. Severance payments were made and accepted by outgoing Labour Ministers between the Blair and Brown years, as well as during the Administration in 2007, and by Liberal Democrat Ministers during the coalition. To ensure transparency, severance payments are published in the annual reports and accounts of Government Departments. As an example of the previous operation of this provision, the data published in 2010 indicated that severance payments made to Labour Ministers in that year amounted to £1 million. Finally, let me be clear that although this is a statutory entitlement, Ministers are able to waive such payments. This is not a matter for the Government; it is an entirely discretionary matter for the individuals concerned, and this is an approach that has been taken before.