Public Appointees (Tax Arrangements)

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 1:53 pm on 23 May 2012.

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Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury 1:53, 23 May 2012

I am grateful for the right hon. Gentleman’s comments and for his role in bringing these matters to the House’s attention. I wholeheartedly agree that it makes no difference when the arrangements started and which Minister was responsible; frankly, the situation has grown up over a number of years and under Governments of different hues. It is right that we are taking action to bring the situation under control and ensure proper transparency so that there is no perception of the potential for tax avoidance. He and I agree 100% on that.

It is impossible to say at the moment what the costs, if any, of unwinding the existing arrangements will be. Of course, as I said in my statement, senior people must be brought on to the payroll, unless there are exceptional short-term circumstances. For others, we need arrangements in place that allow assurances to be given that the proper and full amount of tax is being paid, and that will depend on the outcome of those processes with individual members of staff. Of course, if there are costs to be borne, they will have to be borne from within existing departmental allocations. If Departments do not comply with those rules, there will be a fine of up to five times the salary involved, levied by the Treasury on departmental allocations, which I hope will give Departments a strong incentive to comply with the rules as quickly as possible.