Photo of Nick Brown

Nick Brown (Newcastle upon Tyne East, Labour)

To ask the Chancellor of the Exchequer

(1) what the principal elements were of the proposed remuneration package for the Chief Executive of the Student Loans Company that were taken into consideration by Ministers in his Department before the package was approved;

(2) when he first learnt of the proposed arrangements for remunerating the Chief Executive of the Student Loans Company;

(3) when the Permanent Secretary of his Department first learnt of the proposed arrangements for remunerating the Chief Executive of the Student Loans Company;

(4) when Ministers in his Department approved the remuneration package for the Chief Executive of the Student Loans Company, whether officials drew to their attention the implications for income tax and national insurance receipts.

Photo of Danny Alexander

Danny Alexander (The Chief Secretary to the Treasury; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

In May 2010, it was announced that I would be required to sign-off the salaries of any individuals earning over £142,500, in areas under ministerial control.

In December 2010 I was asked to consider the salary of the chief executive of the Student Loans Company, when his appointment was agreed for a two-year fixed term, following his previous appointment as interim chief executive. I agreed to a salary at a rate reduced from that which had applied to the interim appointment. The Permanent Secretary to the Treasury was not consulted as part of this process.

I was not asked to sign off the terms of the salary—and was not made aware of any potential tax benefit to the individual. Since it came to light that an appointment has been made which could be perceived as seeking to minimise tax payments, I have announced an urgent review of senior public sector appointments, to ascertain the extent to which such arrangements are used and to make appropriate recommendations.

The Government do not believe that tax avoidance is appropriate in the public sector, and the use of tax avoidance devices is already expressly forbidden in “Managing Public Money”—the guidance for public spending against which Departments are audited.

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