Exaro News Archive Former cabinet secretary: ‘content’ with SLC tax deal

Former cabinet secretary: ‘content’ with SLC tax deal

-

Former cabinet secretary: ‘content’ with SLC tax deal

Whitehall e-mail also shows Alexander was told Lester would be kept off payroll

By David Hencke | 9 February 2012

Former cabinet secretary: ‘content’ with SLC tax dealProposals to allow the Student Loans Company’s chief executive to stay off its payroll were approved by the UK’s then cabinet secretary.

E-mails between Whitehall officials obtained by Exaro reveal why Sir Gus O’Donnell was “content” with what one internal memo described as the “tax efficient” arrangements, which included no tax being deducted at source.

Our evidence also suggests that Danny Alexander, chief secretary to the Treasury, was informed of the plan to keep the executive off the payroll, although he has said that he was unaware of the tax consequences of the deal.

An investigation by Exaro, in conjunction with BBC2’s Newsnight, last week revealed how Ed Lester was able to save around £26,000 a year in tax as chief executive of the Student Loans Company (SLC) by working as a consultant rather than as an employee.

O’Donnell, who became a member of the House of Lords last month, was cabinet secretary and head of the UK’s civil service until he retired in December. In that role, he sought an “urgent clarification” about Lester’s proposed two-year contract from February 2011 and questioned the payment arrangements, according to a Whitehall e-mail.

O’Donnell’s concerns were raised just days before ministers approved the contract. Whitehall documents revealed by Exaro last week show that Alexander and David Willetts, universities minister, agreed Lester’s contract.

Alexander says that he was unaware of any potential tax benefit to Lester and ordered an urgent Whitehall-wide review of the issue.

He also announced to Parliament last Thursday that the SLC would deduct tax and national insurance from Lester’s pay at source from then on after being challenged by MPs in an emergency debate.

The debate was triggered when John Bercow, the speaker of the House of Commons, gave permission for an ‘urgent question’ on the issue from Nick Brown, the Labour MP and former government chief whip.

The Cabinet Office declined to answer questions about O’Donnell’s role in approving Lester’s contract. A spokesman said: “We shall be working with the Treasury following the chief secretary’s announcement of a review into the issue, and as such shall not be getting into the ‘ins and outs’ of this until that has concluded.”

O’Donnell did not return calls from Exaro this week in time for publication.

Willetts is a minister at the Department for Business, Innovation and Skills, which said that it had followed proper procedures.

The SLC’s position was that Lester’s tax arrangements were a matter for him and HM Revenue & Customs, but that he declined to comment.

The e-mails naming O’Donnell were released to Exaro under the Freedom of Information Act (FOIA). O’Donnell has, ironically, called for greater restrictions on FOIA, for example, wanting civil servants’ advice to be kept secret.

Related Stories

Sarah Davies
Sarah Davieshttps://www.exaronews.com/
Exaro News investigates matters of public interest and seeks to uncover the truth.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest news

Man shot in the head on his way home from work, then victimized by Monroe County Sheriffs

In this episode Shawn Ryan sits down with Don Bradley A.K.A. Head Shot Don, who is a former Green...

Huge spike in coronavirus infections and deaths

There was a huge spike in confirmed coronavirus infections today, along with a significant spike in deaths. Total Confirmed Cases:...

Naked guy ambushes NYPD cop, shooting him in the chest

A 29-year-old man waited naked in the hallway of a housing complex in Harlem to ambush a cop, standing...

Six-year-old kids armed and trained to fight Mexican drug cartels

A child militia in Mexico’s southwestern state of Guerrero is training boys, some as young as 6, to serve...

Canadians Targeted in Debit Card Fraud, Check Your Bank Statements

A number of Canadians have been affected by debit card fraud in the past 30-days despite never having used...

Marshall County Man Convicted of Federal Cyberstalking and Gun Crime

A Marshall County man was convicted Thursday afternoon of cyberstalking as well as a federal gun violation following a...

Must read

You might also likeRELATED
Recommended to you