In a new manifesto pledge, the Tories will commit to capping payouts at less than £95,000.
The party said it would legislate against big redundancy payments as one of the first acts of a Tory government, as payouts in recent years have included packages worth more than £450,000 in the civil service, £500,000 in the NHS and more than £1m in the BBC.
Treasury minister Priti Patel said it was not right that taxpayers on low salaries have to “fund huge payouts when well-paid people get made redundant”.
“We’re going to do something that’s long overdue and that will bring some fairness back to the system – we’re going to introduce a new public sector redundancy pay cap,” she said.
“This goes to the heart of our long-term economic plan for Britain – it’s about backing hardworking taxpayers and making sure the economy is tilted in their favour. And it’s about saving money so we help bring down our deficit and make our economy more financially secure.”
Those earning less than £27,000 will be exempt to protect the very small number of low earning, long-serving public servants who might have been caught by the cap.
Labour said the move was too little, too late as many huge payouts to NHS executives have already been made during the government’s reorganisation of the health service.
Jamie Reed, the shadow health minister, said: “David Cameron can’t get away from the fact that this horse has already bolted. He wasted £1.6bn on redundancy payouts to NHS managers as part of his reckless reorganisation.
“Frontline NHS staff found it galling that 4,000 managers who received payoffs are now back in NHS jobs.
“The government wasted billions on its reorganisation while patients are waiting hours on end in A&E and longer for cancer treatment too – proof you can’t trust the Tories with the NHS.”
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