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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
(Urgent Question): To ask the Chief Secretary to the Treasury if he will set out the Government’s policy on the operation of tax avoidance schemes in the civil service.
The Chief Secretary to the Treasury (Danny Alexander)
I am very grateful to the right hon. Gentleman for giving me the opportunity to set out the answer to this question. As hon. Members might be aware, departmental public spending encompassing the appointment of senior civil servants is audited against the Treasury’s “Managing Public Money” guidance. That document makes it clear that
“public sector organisations should avoid using tax advisers or tax avoidance schemes as any apparent savings can only be made at the expense of other taxpayers or other parts of the public sector.”
There is no place for tax avoidance in Government.
A recent case has highlighted those issues, and although I cannot comment on the specifics of an individual’s tax affairs, for reasons of which the right hon. Gentleman will be fully aware, I want to take the opportunity to explain the action that I have taken.
As hon. Members are already aware, for senior civil service appointments whose salary exceeds £142,500, terms and conditions are negotiated by the appointing Department and are presented to me for approval of the salary. Those arrangements are in place to control excessive pay.
In the light of that recent case, I have asked the Treasury urgently to review the appropriateness of allowing public sector appointees to be paid through that mechanism—[Interruption.] I have also asked the Treasury Officer of Accounts—[Interruption.]
Mr Speaker
Order. I granted this urgent question because I thought it warranted ministerial comment and scrutiny by the House. The House can rely upon me to ensure that there is plenty of time for Back Benchers, but as a matter of procedure, propriety and courtesy, we must hear what the Chief Secretary has to say, preferably without constant interruption and heckling.
Danny Alexander
I am grateful, Mr Speaker.
As I was saying, I have also asked the Treasury Officer of Accounts to write to all accounting officers across Whitehall to remind them that all appointments should, in line with existing guidance, consider the wider cost of lost revenue to the Exchequer when considering value for money.
Furthermore, I have requested that all Departments carry out an internal audit by the end of March. As my right hon. Friend the Minister for Universities and Science has said, the Student Loans Company will for the remainder of the contract in question change the arrangements and deduct tax and national insurance at source. Across Government, if any appointments that do not provide value for money are found, whether agreed by this Government or the previous one, I have urged Departments to seek to unwind them as quickly as possible and as quickly as is compatible with securing good value for public money.
At a time when we all have to pull in the same direction to tackle the country’s financial problems, it is essential we all pay our full and fair share. That is why I have taken this action to ensure that Government Departments do not support tax avoidance schemes.
Mr Brown
May I point out to the Chief Secretary to the Treasury that the chief executive of the Student Loans Company is the accounting officer? Perhaps the Chief Secretary can tell the House what sort of reply he expects from that accounting officer when he writes to him.
It is reassuring that the Chief Secretary told the House that national insurance and income tax will be paid in future, but the purpose of those arrangements was to avoid paying income tax and national insurance. When considering those arrangements, did he consider the demoralising and corrosive effect that such an arrangement must have on the rest of the public service? What fees are paid by the Department to the service company that is laundering that money? The loss is to the Exchequer and not to the Department’s budget, in which I would have thought the Chief Secretary would take an interest.
The Chief Secretary says—I support him in this—that he will now, belatedly but correctly, scope how many such arrangements there are in the public service. When his investigation is completed, will he put the facts—all of the facts—in front of the House of Commons? Given the controversial nature of those arrangements, will he tell the House whether the Cabinet Secretary approved them, and whether the Prime Minister, the Deputy Prime Minister and the Secretary of State for Business, Innovation and Skills, which is the Department responsible for the Student Loans company, were explicitly aware of those arrangements and whether they explicitly agreed to them?
Danny Alexander
I am grateful for the right hon. Gentleman’s support for the action that I have taken in respect of this case. He is right that accounting officers of organisations are responsible for implementing the “Managing Public Money” guidance. That is why the Treasury Officer of Accounts is contacting all such officers within the Government as we speak. I look forward to seeing the responses, including from the range of individuals to whom he referred.
As I said in my response to the right hon. Gentleman’s original question, my responsibility in such matters is with regard to the salary level. In this case, I reduced the salary level and amount of expenses paid under the contract, the details of which were the responsibility of the Student Loans Company and the Department for Business, Innovation and Skills. I was not made aware of any tax benefit to any individual as a result of this case, which is precisely why I have put in place the arrangements for the review that I have set out.
I can tell the right hon. Gentleman that I would of course want to update the House on the results of that review when it is completed, and I look forward to having a further opportunity to discuss the matter with him.
Mr Richard Bacon (South Norfolk) (Con)
May I say how much I welcome the Chief Secretary’s urgent review? There has been too much of this going on; there was certainly a similar case involving the chief operating officer of the Rural Payments Agency, who was appointed in an interim way under the previous Government, which should not have happened. May I invite the Chief Secretary, in the spirit of the coalition, to say whether he agrees with the former leader of the Conservative party, Michael Howard, who is now in another place, when he said:
“Special rules for special…groups breed anger and division. They blur the distinction between right and wrong. And they give the impression that some people are above the law”?
Danny Alexander
I am grateful for the hon. Gentleman’s support for the action I have taken. I was not aware of the example he gave in relation to the Rural Payments Agency. Of course, if other such cases still exist in other parts of Government, that is something the review I have instituted will bring out. I do agree with the statement the hon. Gentleman read out, which is why the Government have taken a series of strong steps—much greater steps, frankly, than the previous Government—to deal with tax avoidance and make sure that everyone pays their proper amount of tax.
Margaret Hodge (Barking) (Lab)
I welcome the commitment that has been made to review the arrangements relating to this individual and to review whether such things happen anywhere else across Government. Will the Minister agree to publish the complete list of senior civil servants whom the Government pay through companies when he completes his review by the end of March? In particular, will he report to the House on the role of Her Majesty’s Revenue and Customs in authorising the arrangement with this individual? Will he also report to the House on why the Cabinet Secretary appears to have authorised it? Will he ask officials about, and report to the House on, why a contribution to this particular individual’s pension was also agreed?
Danny Alexander
First, I am grateful for the right hon. Lady’s welcome for the action we are taking on this issue. As I said in answer to the original question, I will certainly make available to the House, and indeed to the Public Accounts Committee, if she is interested to follow the issue through that route, too, the results of the inquiry that we have set out and the information on the number of individuals—if there are any others—who are paid under similar arrangements. As I have also said, if there are such arrangements in other places, Departments have actively and urgently to consider unwinding them and making sure that proper arrangements are put in place so that people pay their full share of tax.
There will be opportunities for the right hon. Lady’s Committee to scrutinise the role of HMRC and the Cabinet Secretary in these issues, if it wishes to. It is a matter of public record that the Cabinet Secretary signed off these arrangements. The original arrangements were put in place before I was appointed Chief Secretary, but the salary was brought to me when the appointment was turned from an interim one into a temporary one for two years, which is what the arrangements now are. I am delighted that my right hon. Friend the Minister for Universities and Science has decided, through the Student Loans Company, to make sure that these arrangements apply no further in this case.
Lorely Burt (Solihull) (LD)
Will my hon. Friend confirm that the urgent review will also investigate the terms of appointments made by the previous Government?
Danny Alexander
Yes, I said that in answer to the original question. The cases that are brought to me are cases in which the level of pay is in excess of £142,500. Of course, the review will look not just at those cases, but, potentially, at the cases of people on lower salary levels. Appointments that are currently in operation may well have been put in place under the previous Government. I do not know that there are any; that is why I have instituted a review, and we will see in due course what that brings forward. As I say, I will be happy to share that information with the House.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
The Government have a duty to ensure that everyone pays their faire share of taxes. They should be especially careful when making senior appointments themselves. At a time when the economy is flatlining, families are being squeezed and students are facing the tripling of tuition fees, the news that Ministers approved the contract of a senior official that allowed tax and national insurance to be avoided shows just how out of touch they are.
There are several important questions that the Chief Secretary must answer. When he approved the contract, did he ask about the tax and national insurance implications of employing Mr Lester on this basis? Did HMRC approve the arrangement after Mr Lester was appointed chief executive on a permanent basis, or only when he was the interim chief executive? Does the Chief Secretary know how much tax and national insurance has been avoided by these arrangements? Has he now withdrawn his approval of Mr Lester’s contract, and is it being redrawn? How many other senior appointments have the Government made on these terms? Surely the right hon. Gentleman will know how many he has signed off. If he does not know, is it not time that he started asking questions of his colleagues and defending the interests of taxpayers?
The Government’s handling of higher education has been disastrous. This week, we have heard that their tripling of fees and botched reforms have cut applications to university, and before Christmas the Public Accounts Committee criticised HMRC for its cosy relationship with big business. There will be great concern if it turns out that the Government have turned a blind eye to tax avoidance. I look forward to the Chief Secretary’s answers about what seems to be a Treasury-backed tax dodge, and to a full investigation into the facts of the case.
Danny Alexander
I agree with the hon. Lady’s first remarks: of course we have a duty to ensure that every individual pays their fair share of tax. That is why the Government have done much more to tackle tax avoidance than Labour ever did during its 13 years in office.
The hon. Lady asked some important questions. I was not made aware, when approving the salary level for this post, of any tax benefit to the individual concerned. As I said earlier, the initial interim arrangements were approved before my time as Chief Secretary. I was involved in the re-appointment. As far as I am aware, having looked through the cases, of the 180 appointments with salaries of more than £142,500 that I have approved as Chief Secretary, this is the only one to which such arrangements apply. That does not mean, however, that there are not similar existing arrangements for people appointed under the previous Government or for those with lower salary levels. That is why I have implemented the review that I have set out to the Chamber. I am sorry that she did not feel able to welcome that step. I would have thought that she would have. As I have said repeatedly, however, I will happily bring the information that we unearth back to the House.
Mr Speaker
Order. There is much interest in this subject, and if I am to accommodate it, brevity is required in both questions and answers.
Conor Burns (Bournemouth West) (Con)
Does my right hon. Friend understand that those genuinely working on the front line in the public sector will find these revelations obscene? When his review is complete, will he be able to tell us when such practices first entered the public sector, and whether it was under this Government or the previous one?
Danny Alexander
I well understand why people would see it that way—frankly, I see it that way myself. It is interesting that already today we have heard one example, from my hon. Friend the Member for South Norfolk (Mr Bacon), who is a member of the PAC, of a similar arrangement made under the previous Government. Of course, the review will not look back on arrangements that have now been discontinued, but will look at those currently in existence in the public sector in order to ensure that everyone pays their fair share of tax. I know that my hon. Friend the Member for Bournemouth West (Conor Burns) will strongly agree with that.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
In December, I tabled a round robin question to every Department asking whether senior staff in Departments, Executive agencies and non-departmental public bodies were
“paid by means of payments to a limited company”.
On 5 December, the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey), who has responsibility for consumer affairs, replied on behalf of BIS:
“The Department's policy is that staff salaries are paid into employees’ bank accounts.”
He also wrote that
“there is no evidence that any senior civil servants in the Department for Business Innovation and Skills and its non-departmental public bodies are paid by means of payments to a limited company in lieu of a salary.”—[Official Report, 5 December 2011; Vol. 537, c. 152-3W.]
Why did they get it wrong, and why did I not get an answer from the chief executive of the Student Loans Company?
Danny Alexander
That answer described the arrangements as I understood them until I received information about this case in the past few days. The inquiry that I have put in place will reveal whether any more of these arrangements exist elsewhere in Government.
Mr David Nuttall (Bury North) (Con)
Does the Minister accept that, regardless of whether someone is employed in the public or private sector, tax avoidance—otherwise known as tax mitigation—is actually legal, whereas tax evasion is illegal?
Danny Alexander
Yes, the hon. Gentleman is absolutely right on the point of fact. It is fair to say that this Government have taken strong action to deal with both tax avoidance, where we wish to remove schemes that people use to minimise the amount of tax they pay, and tax evasion, which, as he says, is illegal. We announced an initial £900 million in the spending review for HMRC to invest for that purpose. As a result, we are, for example, quadrupling the number of court cases for tax evasion, to ensure that we make an example of people.
Julie Hilling (Bolton West) (Lab)
At this time of austerity, when the poor are being made to suffer for the behaviour of the rich, is the right hon. Gentleman ashamed that his Government have failed to do anything to stop such tax avoidance? What will he do to close that loophole across all taxpayers?
Danny Alexander
I think a better way to characterise what is going on in the economy at the moment is that the whole country is being made to pay for the mistakes made by the previous Government. I have already set out the action that we taking. An urgent review is taking place, both in Departments and through the Treasury, which I put in place because I take such matters incredibly seriously. That review is of a piece with the enormously wide range of action to tackle tax avoidance and tax evasion that has been put in place by this Government. As just one example, the high net worth individuals unit was not put in place by the previous Government until they had been in office for 12 years. That was 12 years of inaction on tax avoidance in that part of the population. Contrast that with the record of this Government and we see a coalition Government who view making sure that everyone pays their fair share of tax with the utmost seriousness.
Claire Perry (Devizes) (Con)
I think there is a word, Sir, for the mock indignation on the Opposition Benches, but as I was reprimanded for anti-parliamentary language previously, I will not say it today. Will my right hon. Friend please set out what specifically we are doing about tax avoidance in foreign domiciles, which is an equally important issue?
Mr Speaker
Order. I should just emphasise that the right hon. Gentleman will want to focus specifically on the terms of the urgent question, and I know that that is what he will do.
Danny Alexander
The question is a broad one about tax avoidance in Government. There are Government employees in other jurisdictions, and I am sure that the measures we have taken—for example, in relation to Switzerland and Lichtenstein, the non-dom levy that we have put in place, and so on—will ensure that any practices that might have been in place in the past no longer occur.
Simon Danczuk (Rochdale) (Lab)
My understanding is that a service company managed the arrangement for Mr Lester. Can the Minister tell the House what fees were paid to that company?
Danny Alexander
I cannot give a detailed answer about the fees paid to that company. My understanding of the arrangement that was in place is similar to that which the hon. Gentleman has described.
Mr Rob Wilson (Reading East) (Con)
I know that the Chief Secretary well understands that there is a question of fairness at the heart of this issue for all public sector employees, so should we not either allow all employees of the Government the same advantages of tax efficiencies, if legal, or stamp out such practices altogether, right across the public sector?
Danny Alexander
I would not agree with the hon. Gentleman that such arrangements should be put in place for every public sector employee. The review that I have put in place is precisely designed to root out such arrangements across Government.
In answer to the earlier point, I gather that the fees that the hon. Member for Rochdale (Simon Danczuk) asked about are set out in the Student Loans Company annual report, which is available publicly, so he may wish to avail himself of a copy.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
We all know, if we are honest, that the administration of student loans had been a mess for years. However, the fact is that this man was appointed on a higher package of emoluments than the Prime Minister. Why was that?
Danny Alexander
What we had was a situation where, as the hon. Gentleman rightly says, for many years—including for many years under the previous Government —the Student Loans Company was in a mess. This man was brought in to run it, and in fairness I think it is widely agreed that he has done a good job of turning it around. In the context of this conversation, I hope that the hon. Gentleman would also recognise that.
Mr Peter Bone (Wellingborough) (Con)
I do not think there is a problem with what was set up; the problem is that the Inland Revenue allowed it to happen. I do not understand how such a contract can be awarded to somebody working full time. Unless there was some agreement to the avoidance scheme by the Revenue, it is not the law that is wrong, but the interpretation by the Revenue.
Danny Alexander
It is precisely those sorts of issues that the review will seek to examine and properly understand, and I am sure that the Public Accounts Committee might wish to take an interest in that issue.
Mr Alan Campbell (Tynemouth) (Lab)
Will the urgent review extend to the top salaries of people employed in local government?
Danny Alexander
I have so far written to Cabinet colleagues for salaries in central Government, and the Treasury Officer of Accounts has written to accounting officers in central Government, but I will take that suggestion away and discuss with my right hon. Friend the Secretary of State for Communities and Local Government whether that particular extension would be appropriate.
Simon Hughes (Bermondsey and Old Southwark) (LD)
The Chief Secretary has always been very robust in dealing with tax avoidance and tax evasion. May I seek an assurance that the Government’s policy will be what all those who have submitted their tax returns in the past few days want, namely to ensure that everybody in the public service, from the Cabinet Secretary downwards, and in local government service, pays normal tax like the rest of us, in a normal way, with no funny business on the side?
Danny Alexander
My right hon. Friend is absolutely right that we need to be robust about these matters. Frankly, I think this Government have been a great deal more robust on tax avoidance and tax evasion than our immediate predecessor. I certainly agree with the principle that he annunciates, which is that we need to ensure that everyone pays their fair share of tax and that arrangements are not put in place that are in breach of the guidelines that I set out earlier, which specifically say that arrangements to avoid tax for individuals should not be put in place.
Mark Durkan (Foyle) (SDLP)
Can we really have any remedy to such scandalous devices without restitution? Will any review by Revenue and Customs have an eye to possible recovery?
Danny Alexander
As I said, the arrangement has been ended by the Student Loans Company in this case, as my right hon. Friend the Minister for Universities and Science has said. The review that I have undertaken is looking at the degree to which such practices are prevalent across the rest of Government. I have not given any consideration to the question of restitution, but I shall certainly do so in the light of the hon. Gentleman’s question.
David Mowat (Warrington South) (Con)
Will the Chief Secretary confirm that his review will include all parts of the public sector, including, for example, the BBC, in which daily rates are quite prevalent?
Danny Alexander
The review that I have put in place covers all central Government Departments and their non-departmental public bodies. I will have to get back to the hon. Gentleman on whether that includes the BBC, but I can see the point he is making.
Mark Tami (Alyn and Deeside) (Lab)
What message does the Chief Secretary think this arrangement sends to ordinary taxpayers in the public sector?
Danny Alexander
I do not think it sends a very good message. That is why we have ended the arrangement and why I have put in place a review to ensure that any other such arrangements, put in place by either this Government or our predecessors, is unearthed and that appropriate action is taken.
Brandon Lewis (Great Yarmouth) (Con)
Bearing in mind that what has happened is, technically, entirely legal, as my hon. Friends have noted, and that this issue is a matter of what the Government feel is right in policy terms for Departments to do, can my right hon. Friend outline what safeguards, regulations or guidelines from the previous Government he has found in his early investigations that were designed to ensure that such practices do not happen in Departments?
Danny Alexander
There are strict guidelines from the Treasury that have been in place for some time, which are set out in the document “Managing Public Money”, the most recent edition of which was published in October 2007. I quoted the relevant section in my answer to the original question from the right hon. Member for Newcastle upon Tyne East (Mr Brown). The important thing is that Departments, and indeed accounting officers, understand that it is their responsibility to ensure that the rules for managing public money are followed in every case, and I regard it as my responsibility as Chief Secretary to ensure that they are.
Chris Bryant (Rhondda) (Lab)
Clearly two Ministers were involved in the decision—the Minister for Universities and Science and the Chief Secretary—but so far the Chief Secretary has used practically every Murdoch excuse in the book: “I didn’t know the detail,” “Nobody showed me exactly what was going on,” and all the rest of it. Will he publish the precise documents that he and the Minister for Universities and Science signed off, so that the public can make a decision about whose responsibility it is?
Danny Alexander
The hon. Gentleman might not have caught up with this, but a great deal of information has already been released on this issue under the Freedom of Information Act, which is precisely how it has come to my attention and that of others. As I said, my role in such matters is to sign off the salary arrangements and ensure that they are appropriate, given the level of salary in place. As I said at Treasury questions a few days back, in the 83 cases in which I have been involved where a previous post holder has been in place, I have reduced the salary substantially in 45 cases and frozen it in a further 23.
Andrew George (St Ives) (LD)
Although my right hon. Friend has already covered this matter to an extent, will he tell me what effective measures he inherited, and if they were inadequate, what action he took to put them right?
Danny Alexander
As I have said, the terms and conditions of appointments are negotiated by the appointing Department. I have a responsibility to control the salary levels in these sorts of cases, which I discharged in this case. I was not aware of any particular tax benefit to the individual involved. The arrangements in relation to tax avoidance and tax evasion that we inherited were not robust enough, and that is why we have taken significant steps to tighten them up, to ensure that we get the maximum amount of money from people across society. As several hon. Members have said, that is particularly important, given the difficult economic circumstances in which we find ourselves.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
As my hon. Friend the Member for Rhondda (Chris Bryant) has pointed out, the Chief Secretary to the Treasury has repeatedly denied knowledge of this arrangement, yet we know from “Newsnight” that the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts) signed off the deal. Will the Chief Secretary acknowledge corporate responsibility across Government and, despite all his protestations now, acknowledge that it was signed off by the Government?
Danny Alexander
As was revealed on “Newsnight”, and as I have said, a number of Departments were involved in this—the Cabinet Office, and so on. What I am trying to do now, through the review that I have put in place, is to ensure that these arrangements are not repeated in the future, and that any existing arrangements approved by this Government or the previous one are dealt with.
Alun Cairns (Vale of Glamorgan) (Con)
Is not the root of this issue based in the complex tax structure that has grown up over the past 15 years or so? What reassurance can the Chief Secretary to the Treasury give the House that such issues will be rooted out during the tax simplification review?
Danny Alexander
My hon. Friend makes an important point. It is precisely the complexity of the tax system that creates some of the opportunities of which many people take advantage. That is why we have created the Office of Tax Simplification, which continually makes recommendations for ways in which we could simplify the tax system and tackle some of the avoidance schemes. The very complicated tax arrangements that we inherited are gradually being changed by this process, which is in the best interests of the country.
Paul Flynn (Newport West) (Lab)
Will the Chief Secretary to the Treasury be the first Minister to accept responsibility for the conduct of the coalition in creating an “ineptocracy” of greed?
Danny Alexander
I am not quite sure how that relates to the question on the Order Paper today. I do not accept that description of what the coalition is doing. We are cleaning up the terrible economic mess that we inherited from Labour, and we are doing so in a way that is fair and that asks those with broader shoulders to bear the greater share of the burden. Frankly, if the hon. Gentleman’s party had not made such a mess, the country would not be in this position.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Will the Chief Secretary to the Treasury extend his review to cover the culture of bonus payments that has built up? Is he aware, for example, that the chief executive officer of the Rural Payments Agency is being paid a bonus for the work that he did while presiding over the Child Support Agency? Will my right hon. Friend root out this culture of bonus payments for poor performance, when they are simply not warranted?
Danny Alexander
My hon. Friend has raised an important point, although it will not necessarily fall within the scope of the review, which will look at the specific arrangements that we are discussing. However, we have substantially reduced the bonus payments to many individuals and the total amounts available in Departments’ bonus pools. That is the right approach. Of course, we also need to ensure that good performance is properly recognised at all levels in the public sector, and that is what the arrangements that we have in place do.
Mr Dennis Skinner (Bolsover) (Lab)
Which Minister is going to carry the can for this mess?
Danny Alexander
Well, I am here answering questions about it, and that is appropriate, given that the question was a general one about tax avoidance, which I am very pleased to answer.
Jeremy Lefroy (Stafford) (Con)
I welcome the Chief Secretary to the Treasury’s announcement today, and the robust action that the Government are taking against tax evasion and tax avoidance everywhere. They are certainly doing more than the previous Government did. Will he extend his review to cover the extraordinary salaries paid by NHS trusts up and down the country?
Danny Alexander
I am grateful to my hon. Friend for welcoming the tough action that we have taken in this case. I have contacted the Secretary of State for Health and the accounting officer in the Department of Health to ask whether any such arrangements apply in the areas for which they are responsible.
Jonathan Ashworth (Leicester South) (Lab)
I welcome the review that the Chief Secretary to the Treasury has announced, but why did it not occur to him to launch such a review when he was asked to sign off this deal? Secondly, he said that he was not aware of the tax benefits to the individual involved, yet a BIS spokesman said last night:
“Details of the arrangement were transparent throughout”.
The right hon. Gentleman will presumably have received a submission from officials. Will he put that submission in the Library? At what point did the Minister for Universities and Science know about the tax benefits to the individual? Will all the submissions that the right hon. Gentleman received be put in the Library as well?
Danny Alexander
I am grateful to the hon. Gentleman for generously welcoming the steps that we have taken to deal with this issue. As I said in my statement, and in answer to several questions, I was not made aware of any tax benefit to any individual in this case. There is a great deal of information in the public domain that has been released under freedom of information, and I would urge him to study it.
Mr George Mudie (Leeds East) (Lab)
So, is the Chief Secretary to the Treasury actually telling the House that the information passed to him when clearing the arrangement did not include details relating to the unusual aspects of the case, and that they were withheld by the Minister for Universities and Science?
Danny Alexander
No, I am not saying that at all. What I am saying is that the arrangements were put in place by the Department for Business, Innovation and Skills. Terms and conditions of employment are a matter for individual Departments. My role is to sign off the salary level for appointments paying over £142,500. As I have said in answer to several questions, in this case we reduced the salary and the expenses payments. I think that that was an appropriate response to the information that I was provided with.
Bill Esterson (Sefton Central) (Lab)
Who signed off the tax avoidance measures in this deal?
Danny Alexander
I think the hon. Gentleman should be careful about how he characterises these arrangements, given that they are currently subject to a review.
Mr Dave Watts (St Helens North) (Lab)
On a day when another 100 of my constituents have lost their jobs because of the failed economic policy of this Government, how does the Chief Secretary to the Treasury think those people will feel about the Government allowing tax dodges, and allowing Ministers to take no responsibility for their actions? When are the Government going to come clean?
Danny Alexander
I suspect that they will feel, as I do, that urgent action needs to be taken. We have changed the arrangements in this case, and the review will root out whether any other such arrangements were put in place either under this Government or when the hon. Gentleman’s party was in office. He should wait carefully for the results of the review.
Helen Jones (Warrington North) (Lab)
The Chief Secretary to the Treasury has still not answered the question, so I shall put it to him again. Which Minister or Ministers signed off this tax avoidance scheme, and on what date?
Danny Alexander
I have made clear the answer to that question throughout my statement. I am responsible for signing off the salary level for appointments over £142,500, and I discharged that responsibility in this case.
Nick Smith (Blaenau Gwent) (Lab)
Yesterday’s Financial Times reported: “Treasury beset by exodus of top staff”. Officials have also reported that the Treasury’s staff turnover rate is now “higher than McDonald’s”. Can the Chief Secretary to the Treasury ensure that there will be sufficient firepower at the Treasury to thoroughly scrutinise tax avoidance across Government, and did the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts) agree to this arrangement?
Danny Alexander
It is precisely for the reason that the hon. Gentleman suggests that, in the spending review, we announced an additional £900 million for Her Majesty’s Revenue and Customs to enable it to focus attention specifically on tax avoidance and tax evasion. I very much hope that he welcomes that decision.
Diana Johnson (Kingston upon Hull North) (Lab)
Does the Chief Secretary to the Treasury regret not having asked more questions when he was asked to sign off this deal?
Danny Alexander
As I have said, I signed off the salary level for the appointment. I reduced it significantly, and reduced the expenses paid under the arrangement. As soon as the fact that there was a potential tax benefit to an individual was given to me, in the last few days, I took the action described, including writing round to Cabinet colleagues on Tuesday.
Thomas Docherty (Dunfermline and West Fife) (Lab)
Given that this is the Chief Secretary to the Treasury’s third and last chance, will he now tell us which Minister or Ministers signed off the tax arrangements on this deal?
Danny Alexander
I can tell the hon. Gentleman what I have said already. I signed off the salary level in this case. The terms and conditions of the appointment were put forward by the Student Loans Company in the Department for Business, and came to me for approval in the usual way, given the salary level that was being proposed.
Mr Speaker
Order. I am grateful to the Chief Secretary to the Treasury, the Opposition Front-Bench team and the 34 right hon. and hon. Members who were able to question the Chief Secretary. [Interruption.] The hon. Member for St Helens North (Mr Watts) is thirsting to raise a point of order, but I am afraid he will have to wait until after business questions.