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Politics live blog: Tax row over top civil servants' pay Politics live blog: Tax row over top civil servants' pay
(40 minutes later)
5.54pm: One story I haven't tracked today is the latest outrage over bonuses - this time relating to Network Rail's chief executive, Sir David Higgins, who could receive a potential bonus of £330,000.
"Sir David Higgins – who earns £560,000 a year – and two other chiefs will seek the 60% pot at a special meeting of the £4bn state-funded company next week," reported my colleague Torcuil Crichton at the Daily Record today.
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This comes just days after Network Rail admitted safety failings at a level crossing where two girls were killed more than six years ago.
Former Labour rail minister Tom Harris tabled a motion, signed by 27 other MPs from his party, calling on Higgins and the firm's directors to turn down any bonus payment.
The prime minister's official spokesman said at the morning lobby briefing that David Cameron wants to see restraint. "The prime minister has been very clear... He's consistently said he wants to see responsibility and restraint."
In a Westminster Hall debate on Network Rail this afternoon, transport minister Norman Baker said the government expects Network Rail bosses to handle the award of bonuses in a "responsible and sensible manner". But he said the government did not have the powers to stop bonuses however, due to structures put in place by the last government.
"We haven't inherited powers to deal with those bonuses – this is the structure of Network we have inherited and are now trying to sort out." (Quotes courtesy of PoliticsHome)
Maria Eagle, Labour's shadow transport secretary, said the bonuses by an industry relying on huge subsidies courtesy of the taxpayer were completely unacceptable.
"Ministers are showing they are desperately out of touch by refusing to exercise the powers they have to halt these bonuses and must explain why they have failed to fulfil the commitment in the coalition agreement to make Network Rail more accountable.
"The government and Network Rail need to recognise that times have changed and accept that additional payments on top of salaries should be for exceptional performance, not the rule, and the bonus culture that has existed for too long in too many companies must come to an end. "
5.32pm: The justice secretary, Kenneth Clarke, plans to reduce the length of time during which job applicants are legally required to disclose past criminal convictions.
The proposal is in an amendment to the legal aid, sentencing and punishment of offenders bill and would shorten the period during which a conviction remains live, unspent and has to be declared to prospective employers, insurance companies and in civil proceedings. The plan follows analysis which linked employment and reduced re-offending.
Prison terms of up to six months would be spent two years after the end of the sentence, compared with seven years after conviction now, and only jail terms of four years or longer would never be considered spent, compared with all those of 30 months or longer now.
Here's a quote from justice minister Lord McNally courtesy of Press Association: "First and foremost, criminals must be suitably punished for their crimes. But it is no good for anyone if they go to jail and come out and then can't get an honest job and so turn back to crime again. That is why we are bringing forward reforms which will give offenders who have served their sentence a fair chance of getting back on the straight and narrow, while ensuring safeguards are in place to protect the public."
5.05pm: Just last night I was discussing the good work Alastair Campbell does to diminish the stigmatisation of mental illness, and today I see on his blog that he'll be joining Michael Portillo on BBC1's This Week, to discuss this very issue.5.05pm: Just last night I was discussing the good work Alastair Campbell does to diminish the stigmatisation of mental illness, and today I see on his blog that he'll be joining Michael Portillo on BBC1's This Week, to discuss this very issue.
His presence on the sofa is also well timed to coincide with the publication of David Miliband's essay in the New Statesman on the need for Labour to engage in "restless rethinking" of its purpose and its policies if it is to return to power. (see 9.50am). Not to be missed.His presence on the sofa is also well timed to coincide with the publication of David Miliband's essay in the New Statesman on the need for Labour to engage in "restless rethinking" of its purpose and its policies if it is to return to power. (see 9.50am). Not to be missed.
4.30pm: Another Labour MP lobbing questions this morning was Shabana Mahmood, Labour's shadow minister for higher education. She has now sent a letter to her opposite number, David Willetts, listing a number of questions she wants answered:4.30pm: Another Labour MP lobbing questions this morning was Shabana Mahmood, Labour's shadow minister for higher education. She has now sent a letter to her opposite number, David Willetts, listing a number of questions she wants answered:
1 Who approved "the structure" of Lester's contract - Willetts, Alexander, or both?
2 If it was the both of them, when was it approved at the Department for Business, Innovation and Skills, and when was it approved at the Treasury?
3 Has he approved any other similar arrangements?
4 Did he ask about the tax and National Insurance implications of employing Lester on this basis?
5 Did HMRC approve the arrangement after Lester was appointed as chief executive in January 2011 or only when he was the interim chief executive (from May 2010)? Did he ask whether additional approval was required when the employment was confirmed in January 2011?
6 How much tax and national insurance has been avoided by these arrangements?		1 Who approved "the structure" of Lester's contract - Willetts, Alexander, or both?
2 If it was the both of them, when was it approved at the Department for Business, Innovation and Skills, and when was it approved at the Treasury?
3 Has he approved any other similar arrangements?
4 Did he ask about the tax and National Insurance implications of employing Lester on this basis?
5 Did HMRC approve the arrangement after Lester was appointed as chief executive in January 2011 or only when he was the interim chief executive (from May 2010)? Did he ask whether additional approval was required when the employment was confirmed in January 2011?
6 How much tax and national insurance has been avoided by these arrangements?
Mahmood said:Mahmood said:
It is deeply concerning that David Willetts was happy for the chief executive of the Student Loans Company to be appointed in this manner. That's why I have written to him to demand answers.

It is clear that the government still has questions to answer about this issue. We need to know which ministers signed off these arrangements, and who was aware of the tax and national insurance arrangements in the contract. We need to know why ministers thought this to be an acceptable arrangement – especially at a time when the economy is flatlining, people are being squeezed and David Willetts is tripling tuition fees.

If ministers have sanctioned a pay deal for a senior official which appears to be designed to make it easy for him to avoid paying tax, it is clear that the government is totally out of touch on this issue.		It is deeply concerning that David Willetts was happy for the chief executive of the Student Loans Company to be appointed in this manner. That's why I have written to him to demand answers.

It is clear that the government still has questions to answer about this issue. We need to know which ministers signed off these arrangements, and who was aware of the tax and national insurance arrangements in the contract. We need to know why ministers thought this to be an acceptable arrangement – especially at a time when the economy is flatlining, people are being squeezed and David Willetts is tripling tuition fees.

If ministers have sanctioned a pay deal for a senior official which appears to be designed to make it easy for him to avoid paying tax, it is clear that the government is totally out of touch on this issue.
4.28pm: Margaret Hodge, Labour MP for Barking, east London, and chair of the public account select committee, was among the MPs (see 12.45pm) firing questions at Danny Alexander late this morning over the revelation that the head of the Students Loans Company, Ed Lester, had been paid via his personal company without tax deductions.4.28pm: Margaret Hodge, Labour MP for Barking, east London, and chair of the public account select committee, was among the MPs (see 12.45pm) firing questions at Danny Alexander late this morning over the revelation that the head of the Students Loans Company, Ed Lester, had been paid via his personal company without tax deductions.
I asked the committee clerk whether in light of what surfaced today, the committee was considering its own investigation?I asked the committee clerk whether in light of what surfaced today, the committee was considering its own investigation?
Hodge responded to the query by saying:Hodge responded to the query by saying:
We will be looking very closely at the circumstances that led to this deal and will want to know how widespread such arrangements are.We will be looking very closely at the circumstances that led to this deal and will want to know how widespread such arrangements are.
3.49pm: For those who haven't pencilled in any plans for the last full weekend in March, can we have a sort of commercial break so I can flag up the Guardian's festival?3.49pm: For those who haven't pencilled in any plans for the last full weekend in March, can we have a sort of commercial break so I can flag up the Guardian's festival?
It's called the Open Weekend and it's basically the Guardian opening up its doors to the Guardian's favourite people: you, the readers. Like Glastonbury, it's not free, but unlike Glasto it's not too expensive, plus there will be no mud.It's called the Open Weekend and it's basically the Guardian opening up its doors to the Guardian's favourite people: you, the readers. Like Glastonbury, it's not free, but unlike Glasto it's not too expensive, plus there will be no mud.
Sessions will include listening to Steve Bell and Martin Rowson discussing their work and sharing tips on how to draw. For those who follow politics, there are plenty of sessions to choose from. To name just a couple, one session is on "Tricks of the Trade: how the politics lobby keeps some secrets and reports others". Another session is with Polly Toynbee, who will reflect on how policies of successive governments have shaped the society we live in.Sessions will include listening to Steve Bell and Martin Rowson discussing their work and sharing tips on how to draw. For those who follow politics, there are plenty of sessions to choose from. To name just a couple, one session is on "Tricks of the Trade: how the politics lobby keeps some secrets and reports others". Another session is with Polly Toynbee, who will reflect on how policies of successive governments have shaped the society we live in.
Have a look here. Plug over.Have a look here. Plug over.
3.20pm: While I was at lunch, it emerged that the director of public prosecutions, Keir Starmer, will announce tomorrow whether Chris Huhne, the energy secretary, is to face charges over allegations that his ex-wife accepted speeding penalty points on his behalf in 2003. He will also announce a decision on Huhne's ex-wife, Vicky Pryce.3.20pm: While I was at lunch, it emerged that the director of public prosecutions, Keir Starmer, will announce tomorrow whether Chris Huhne, the energy secretary, is to face charges over allegations that his ex-wife accepted speeding penalty points on his behalf in 2003. He will also announce a decision on Huhne's ex-wife, Vicky Pryce.
It was less than two weeks ago that the Sunday Times dropped its challenge to a court ruling ordering it hand over emails relating to the investigation.It was less than two weeks ago that the Sunday Times dropped its challenge to a court ruling ordering it hand over emails relating to the investigation.
The correspondence was between Vicky Pryce, Huhne's former wife, and Isabel Oakeshott, the Sunday Times political editor. If charged, Huhne may struggle to hold on to his cabinet post.The correspondence was between Vicky Pryce, Huhne's former wife, and Isabel Oakeshott, the Sunday Times political editor. If charged, Huhne may struggle to hold on to his cabinet post.
The deputy prime minister, Nick Clegg, said recently that it would be a "very serious issue" if Huhne were charged and that he and David Cameron would have to "take a view" if the Crown Prosecution Service decided to press charges.The deputy prime minister, Nick Clegg, said recently that it would be a "very serious issue" if Huhne were charged and that he and David Cameron would have to "take a view" if the Crown Prosecution Service decided to press charges.
2.09pm: So are the pay arrangements of Ed Lester, now abruptly ended, a one-off or will we learn that similar arrangements are in place for other senior public sector staff? Not a good morning for the coalition government, which has highlighted its determination to stamp out tax avoidance.2.09pm: So are the pay arrangements of Ed Lester, now abruptly ended, a one-off or will we learn that similar arrangements are in place for other senior public sector staff? Not a good morning for the coalition government, which has highlighted its determination to stamp out tax avoidance.
Here's a lunchtime summary:

• Alexander took the flak as he faced a tough grilling following an urgent question tabled by Labour backbencher Nick Brown over revelations that the head of the Student Loans Company, who earns £182,000, has been paid via a company without tax being deducted. 		Here's a lunchtime summary:

• Alexander took the flak as he faced a tough grilling following an urgent question tabled by Labour backbencher Nick Brown over revelations that the head of the Student Loans Company, who earns £182,000, has been paid via a company without tax being deducted.
Alexander, who is responsible for approving any salary to public servants above £142,00, confirmed that from now on, the Student Loans Company would deduct tax and national insurance "at source".Alexander, who is responsible for approving any salary to public servants above £142,00, confirmed that from now on, the Student Loans Company would deduct tax and national insurance "at source".
He also pledged to "unwind" any similar arrangements across the rest of the public sector. He said:He also pledged to "unwind" any similar arrangements across the rest of the public sector. He said:
Across government, if any appointments are found, whether agreed by this or the previous government, which do not provide value for money, I would urge departments to seek to unwind them as quickly as possible and as quickly as is compatible with securing good value for public money.Across government, if any appointments are found, whether agreed by this or the previous government, which do not provide value for money, I would urge departments to seek to unwind them as quickly as possible and as quickly as is compatible with securing good value for public money.
Alexander said Lester's package was reduced by £13,000 when the interim appointment became permanent in January last year but that he was not "made aware" of any tax benefit made available at the time he was asked sign off the arrangement.Alexander said Lester's package was reduced by £13,000 when the interim appointment became permanent in January last year but that he was not "made aware" of any tax benefit made available at the time he was asked sign off the arrangement.
He has requested that all departments carry out an internal audit by the end of March. He also agreed to a request to make the list of other senior civil servants paid under similar arrangement available to the house, once the review was completed.

• Damian Green, the immigration minister, delivered a speech in which he said middle managers, unskilled labourers and those seeking benefits would be kept out of the UK as the government seeks only those migrants who "add to the quality of life in Britain". Critics say the rules will favour the wealthy.		He has requested that all departments carry out an internal audit by the end of March. He also agreed to a request to make the list of other senior civil servants paid under similar arrangement available to the house, once the review was completed.

• Damian Green, the immigration minister, delivered a speech in which he said middle managers, unskilled labourers and those seeking benefits would be kept out of the UK as the government seeks only those migrants who "add to the quality of life in Britain". Critics say the rules will favour the wealthy.
You can read the full speech here.You can read the full speech here.
• The foreign secretary William Hague has called for a stepping up of the fight against Somali-based terrorism as he became the first British foreign secretary to visit the war-torn state for 20 years.• The foreign secretary William Hague has called for a stepping up of the fight against Somali-based terrorism as he became the first British foreign secretary to visit the war-torn state for 20 years.
• The TUC has warned that that the economy has been left "dangerously lopsided" because of decades of under-investment and low levels of bank lending.• The TUC has warned that that the economy has been left "dangerously lopsided" because of decades of under-investment and low levels of bank lending.
A report published today by the union umbrella organisation, entitled Banking After Vickers, says extra lending will not happen without "radical reform" of the banking sector.A report published today by the union umbrella organisation, entitled Banking After Vickers, says extra lending will not happen without "radical reform" of the banking sector.
TUC general secretary, Brendan Barber said:TUC general secretary, Brendan Barber said:
Much of the media and political debate around banking has been on top bonuses and preventing another financial crash. But while these are both important issues, people are more concerned about jobs, better wages and healthier businesses, and banks have a vital role to play in creating all this ...Much of the media and political debate around banking has been on top bonuses and preventing another financial crash. But while these are both important issues, people are more concerned about jobs, better wages and healthier businesses, and banks have a vital role to play in creating all this ...
Greater lending to small and medium-sized enterprises and support for green investment is vital to our future economic prospects but our current banking system is woefully ill-equipped to lend. Bold new ideas are needed to reform the banking sector so that it returns to its proper place as the engine of wider economic growth, and not as the cause of an economic depression.Greater lending to small and medium-sized enterprises and support for green investment is vital to our future economic prospects but our current banking system is woefully ill-equipped to lend. Bold new ideas are needed to reform the banking sector so that it returns to its proper place as the engine of wider economic growth, and not as the cause of an economic depression.
12.45pm: The Treasury doesn't have the full statement Alexander gave as his response to the urgent question. He had begun by quoting from a government document which stated:12.45pm: The Treasury doesn't have the full statement Alexander gave as his response to the urgent question. He had begun by quoting from a government document which stated:
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.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.
He went on to say that while he couldn't comment on the specifics of an individual's tax arrangements, he wanted to explain the action he had taken:He went on to say that while he couldn't comment on the specifics of an individual's tax arrangements, he wanted to explain the action he had taken:
As honourable members are already aware, for senior civil servant appointments, where the salary exceeds £142,500 (the prime minister's salary level), terms and conditions are negotiated by the appointed department and are then presented to me for approval of the salary level. These arrangements are in place to control excessive pay. In light of this recent case, I have asked the Treasury to urgently review the appropriateness of allowing public sector appointees to be paid through this mechanism.As honourable members are already aware, for senior civil servant appointments, where the salary exceeds £142,500 (the prime minister's salary level), terms and conditions are negotiated by the appointed department and are then presented to me for approval of the salary level. These arrangements are in place to control excessive pay. In light of this recent case, I have asked the Treasury to urgently review the appropriateness of allowing public sector appointees to be paid through this mechanism.
I have also asked the Treasury officer of accounts, to write to all to 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 in considering value for money. Furthermore, I have requested that all departments carry out an internal audit by the end of March, as my right honourable friend has said [I think he means David Willetts, the universities minister, who had made some comments earlier during oral questions to the business, innovation and skills ministerial team].I have also asked the Treasury officer of accounts, to write to all to 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 in considering value for money. Furthermore, I have requested that all departments carry out an internal audit by the end of March, as my right honourable friend has said [I think he means David Willetts, the universities minister, who had made some comments earlier during oral questions to the business, innovation and skills ministerial team].
The Student Loans Company will, for the remainder of the contract in question, change the arrangements and deduct tax and National Insurance at source. 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 are found, whether agreed by this or the previous government, which do not provide value for money, 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 that we all pay our full and fair share. That is why I have taken this action to make sure government departments do not support tax avoidance schemes.Across government, if any appointments are found, whether agreed by this or the previous government, which do not provide value for money, 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 that we all pay our full and fair share. That is why I have taken this action to make sure government departments do not support tax avoidance schemes.
It seems likely that public accounts select committee may decide to look into this. Its chair, Margaret Hodge, the Labour chair of the public accounts select committee, tasked Alexander during the Q&A session to give a number of commitments to MPs, namely:It seems likely that public accounts select committee may decide to look into this. Its chair, Margaret Hodge, the Labour chair of the public accounts select committee, tasked Alexander during the Q&A session to give a number of commitments to MPs, namely:
Whether he would publish the complete list of senior civil servants paid through companies once he has completed his review by the end of March. Also, would he report back to the house on the HM Revenue and Custom's role in authorising the arrangement,as well as to why the cabinet secretary appeared to have authorised it. Finally, would he also check out why "in this particular case" a contribution to his pension was also agreed.Whether he would publish the complete list of senior civil servants paid through companies once he has completed his review by the end of March. Also, would he report back to the house on the HM Revenue and Custom's role in authorising the arrangement,as well as to why the cabinet secretary appeared to have authorised it. Finally, would he also check out why "in this particular case" a contribution to his pension was also agreed.
Alexander said he would make the list of other senior civil servants paid under similar arrangement available to the house, and her committee.Alexander said he would make the list of other senior civil servants paid under similar arrangement available to the house, and her committee.
12.14pm: And again with feeling ... Thomas Docherty, wants to know who signed it off. We're not getting anywhere here.12.14pm: And again with feeling ... Thomas Docherty, wants to know who signed it off. We're not getting anywhere here.
Alexander took questions from 34 MPs in about 35 minutes. Phew.Alexander took questions from 34 MPs in about 35 minutes. Phew.
12.03pm: Labour's Barry Sheerman asks why Lester was awarded a higher salary than the prime minister. Alexander said Lester was brought in to turn the Student Loans Company around and has done a good job of it.12.03pm: Labour's Barry Sheerman asks why Lester was awarded a higher salary than the prime minister. Alexander said Lester was brought in to turn the Student Loans Company around and has done a good job of it.
Alan Campbell, Labour MP for Tynemouth, has asked whether the urgent review will take in local government employees on high pay. Alexander says he intends to discuss with the communities secretary as to whether that is appropriate.Alan Campbell, Labour MP for Tynemouth, has asked whether the urgent review will take in local government employees on high pay. Alexander says he intends to discuss with the communities secretary as to whether that is appropriate.
Simon Hughes, for the Lib Dems, says the public needs to be reassured that everyone pays their share of tax. Obviously, Alexander agrees.Simon Hughes, for the Lib Dems, says the public needs to be reassured that everyone pays their share of tax. Obviously, Alexander agrees.
Mark Durkan, SDLP MP, asks whether there is going to be any "restitution" for HMRC. Alexander says he will give this consideration. (Lester is said to have save tens of thousands of pounds in tax by having his £182,000 salary paid gross to his company.)Mark Durkan, SDLP MP, asks whether there is going to be any "restitution" for HMRC. Alexander says he will give this consideration. (Lester is said to have save tens of thousands of pounds in tax by having his £182,000 salary paid gross to his company.)
Alun Cairns, Tory MP for the Vale of Glamorgan, suggests the complexity of the tax system enables such arrangements to take place and that a simpler tax system would help. Alexander says that's an important point.Alun Cairns, Tory MP for the Vale of Glamorgan, suggests the complexity of the tax system enables such arrangements to take place and that a simpler tax system would help. Alexander says that's an important point.
Dennis Skinner, Labour MP for Bolsover, asks "which minister is going to carry the can for this mess". Well, I'm here answering questions, Alexander points out.Dennis Skinner, Labour MP for Bolsover, asks "which minister is going to carry the can for this mess". Well, I'm here answering questions, Alexander points out.
Jon Ashworth for Labour asks him why it didn't occur to him to conduct a review when he was signing off Lester's salary, and asks when David Willetts, the universities minister, knew of the tax benefit.Jon Ashworth for Labour asks him why it didn't occur to him to conduct a review when he was signing off Lester's salary, and asks when David Willetts, the universities minister, knew of the tax benefit.
Alexander reiterates he was not aware of the tax benefits. He says his role in this is to sign off salaries. He had reduced the salary.Alexander reiterates he was not aware of the tax benefits. He says his role in this is to sign off salaries. He had reduced the salary.
He is asked "who signed off the tax avoidance measures in this deal" by another Labour MP. Alexander refers him to the review he has just initiated.He is asked "who signed off the tax avoidance measures in this deal" by another Labour MP. Alexander refers him to the review he has just initiated.
The review will root out arrangements made by this or the previous government.The review will root out arrangements made by this or the previous government.
Labour's Helen Jones adds to the clamour for an answer on who signed off "the tax avoidance arrangement". Alexander just repeats himself by saying he signed off the salary (which he reduced).Labour's Helen Jones adds to the clamour for an answer on who signed off "the tax avoidance arrangement". Alexander just repeats himself by saying he signed off the salary (which he reduced).
11.57am: Labour's Gareth Thomas said he had previously asked questions about this and had been given reassurances which are at odds with what has emerged today. Alexander said the answer Thomas had at the time reflected the information he had at the time.11.57am: Labour's Gareth Thomas said he had previously asked questions about this and had been given reassurances which are at odds with what has emerged today. Alexander said the answer Thomas had at the time reflected the information he had at the time.
Alexander went on to say that this government has worked hard to crack down on tax avoidance. There has been a "quadrupling" of court cases relating to tax avoidance.Alexander went on to say that this government has worked hard to crack down on tax avoidance. There has been a "quadrupling" of court cases relating to tax avoidance.
11.56am: Lorely Burt has asked whether the urgent review will also include the terms set out by the previous government. Alexander has said that the cases brought to his attention only relate to levels of public sector pay above £142,500. He will be happy to share with the house what he finds.11.56am: Lorely Burt has asked whether the urgent review will also include the terms set out by the previous government. Alexander has said that the cases brought to his attention only relate to levels of public sector pay above £142,500. He will be happy to share with the house what he finds.
Labour's shadow biz minister Shabana Mahmood asked Alexander whether he was aware about any tax benefits when approving Lester's salary. The interim arrangements were made before he was in post. He doesn't know if there are existing arrangements previously approved and repeats that he has asked for an urgent review over what other similar arrangements may be in place. His review will only look at arrangements still in existence, he says.Labour's shadow biz minister Shabana Mahmood asked Alexander whether he was aware about any tax benefits when approving Lester's salary. The interim arrangements were made before he was in post. He doesn't know if there are existing arrangements previously approved and repeats that he has asked for an urgent review over what other similar arrangements may be in place. His review will only look at arrangements still in existence, he says.
11.53am: Danny Alexander, chief secretary to the Treasury, has just told MPs in the Commons has said there is "no place" for public servants engaging in any kind of tax avoidance. He has said that from now on, all payments to the Students Loans Company will be taxed "at source". He's clearly irritated with the revelations that the head of the Student Loans Company, Ed Lester, has been paid via a company without tax being deducted. He's also demanded an urgent internal audit to review all arrangements across all departments.11.53am: Danny Alexander, chief secretary to the Treasury, has just told MPs in the Commons has said there is "no place" for public servants engaging in any kind of tax avoidance. He has said that from now on, all payments to the Students Loans Company will be taxed "at source". He's clearly irritated with the revelations that the head of the Student Loans Company, Ed Lester, has been paid via a company without tax being deducted. He's also demanded an urgent internal audit to review all arrangements across all departments.
It came up during oral questions this morning and ahead of the urgent question being put by Nick Brown, MP for Newcastle upon Tyne East. Brown followed up in response to Alexander's statement on whether the cabinet secretary had approved the arrangements.It came up during oral questions this morning and ahead of the urgent question being put by Nick Brown, MP for Newcastle upon Tyne East. Brown followed up in response to Alexander's statement on whether the cabinet secretary had approved the arrangements.
The deal, entered into in 2010, was disclosed in an HMRC letter obtained under the Freedom of Information Act by Exaro News and BBC Newsnight .
It was raised earlier by Labour MP Gregg McClymont during oral questions to the business secretary, demanding to know who signed off with HMRC the special dispensation regarding the extraordinary tax arrangements of Ed Lester?		The deal, entered into in 2010, was disclosed in an HMRC letter obtained under the Freedom of Information Act by Exaro News and BBC Newsnight .
It was raised earlier by Labour MP Gregg McClymont during oral questions to the business secretary, demanding to know who signed off with HMRC the special dispensation regarding the extraordinary tax arrangements of Ed Lester?
Earlier the business secretary Vince Cable defended Lester whom he described "an exceptionally useful individual who has helped to turn round that organisation".Earlier the business secretary Vince Cable defended Lester whom he described "an exceptionally useful individual who has helped to turn round that organisation".
Cable told MPs: "The arrangements under which the negotiations took place involved substantial value for money for the taxpayer, a tax cut by the individual, and we will pursue matters of public concern on the tax issues."Cable told MPs: "The arrangements under which the negotiations took place involved substantial value for money for the taxpayer, a tax cut by the individual, and we will pursue matters of public concern on the tax issues."
11.15am: Political scrapbook alerts us to an article in today's Birmingham Post, which reports that David Cameron will "personally decide the fate" of Cannock Chase MP Aidan Burley, once an inquiry into the Nazi-themed stag party that he attended reports its findings.11.15am: Political scrapbook alerts us to an article in today's Birmingham Post, which reports that David Cameron will "personally decide the fate" of Cannock Chase MP Aidan Burley, once an inquiry into the Nazi-themed stag party that he attended reports its findings.
Burley was sacked as ministerial aide to the transport secretary, Justine Greening, after it emerged he was the one who had hired the replica SS uniform worn by the groom to be, and Cameron ordered an inquiry.

Scrapbook comments: "Despite the prime minister's remarks around Holocaust Memorial Day, one could be forgiven cynicism given that Cameron has already written to Burley asking his anti-union TURC campaign to prepare a "report" on activities by union representatives."		Burley was sacked as ministerial aide to the transport secretary, Justine Greening, after it emerged he was the one who had hired the replica SS uniform worn by the groom to be, and Cameron ordered an inquiry.

Scrapbook comments: "Despite the prime minister's remarks around Holocaust Memorial Day, one could be forgiven cynicism given that Cameron has already written to Burley asking his anti-union TURC campaign to prepare a "report" on activities by union representatives."
I called Conservative central office who said the party will not comment until the investigation has concluded and Cameron has been presented with the findings.

But the spokesman did point out that the letter from Cameron to Burley welcoming the fact that he had set up the Trade Union Reform Campaign was sent on 23 November, ie more than two weeks prior to the Mail on Sunday revealing on 11 December that the nazi-style party had taken place.		I called Conservative central office who said the party will not comment until the investigation has concluded and Cameron has been presented with the findings.

But the spokesman did point out that the letter from Cameron to Burley welcoming the fact that he had set up the Trade Union Reform Campaign was sent on 23 November, ie more than two weeks prior to the Mail on Sunday revealing on 11 December that the nazi-style party had taken place.
10.54am: Labour has been granted an urgent question in the Commons later this morning after it was revealed that the head of the Student Loans Company (SLC) is being paid via a company without tax being deducted.10.54am: Labour has been granted an urgent question in the Commons later this morning after it was revealed that the head of the Student Loans Company (SLC) is being paid via a company without tax being deducted.
The SLC's chief executive, Ed Lester, has his £182,000 salary paid gross to his private service company, potentially saving him tens of thousands of pounds in tax. The question's coming up at 11.30am.The SLC's chief executive, Ed Lester, has his £182,000 salary paid gross to his private service company, potentially saving him tens of thousands of pounds in tax. The question's coming up at 11.30am.
10.40am Apologies for the delay. We're having a fair few technical hitches this morning. Douglas Alexander, the shadow foreign secretary, was the first off the block to go on air to discuss David Miliband's thoughts on the need for Labour to avoid the trap of being "Reassurance Labour" and instead rethink its ideas to meet the challenges of the times.10.40am Apologies for the delay. We're having a fair few technical hitches this morning. Douglas Alexander, the shadow foreign secretary, was the first off the block to go on air to discuss David Miliband's thoughts on the need for Labour to avoid the trap of being "Reassurance Labour" and instead rethink its ideas to meet the challenges of the times.
He told the Radio 4 Today programme that the failed leadership candidate "recognises the challenge we all face across political parties at the moment". Quotes courtesy of politicshome.He told the Radio 4 Today programme that the failed leadership candidate "recognises the challenge we all face across political parties at the moment". Quotes courtesy of politicshome.
I think you've got to understand where politics is today, I think in a broader historical context, the global financial crisis of 2008 bears comparison with the Wall Street Crash of 1931, the collapse of the post-war consensus in 1979.I think you've got to understand where politics is today, I think in a broader historical context, the global financial crisis of 2008 bears comparison with the Wall Street Crash of 1931, the collapse of the post-war consensus in 1979.
So, in the years ahead my strong sense is those ideas that are emerging will reflect the consequences of that crisis. Now, what did that crisis reveal? First of all it accelerated a generational shift in wealth and power from Europe and North America towards Asia, that's why this week we've had a political conversation in the Commons dominated in some ways by the reach of Brussels, but the generational question is going to be the rise of Beijing.So, in the years ahead my strong sense is those ideas that are emerging will reflect the consequences of that crisis. Now, what did that crisis reveal? First of all it accelerated a generational shift in wealth and power from Europe and North America towards Asia, that's why this week we've had a political conversation in the Commons dominated in some ways by the reach of Brussels, but the generational question is going to be the rise of Beijing.
Alexander outlined what he sees as the fundamental issues facing parties in the post-crash era.Alexander outlined what he sees as the fundamental issues facing parties in the post-crash era.
There's going to be two other fundamental questions, I think, that the Labour party is confronting, but, in fact, will confront all parties. First of all, a production question, how do we earn our living and pay our way in the world after the financial crisis? And, secondly, if you like, a distributional question. How do we build a good society when there's not much money around?There's going to be two other fundamental questions, I think, that the Labour party is confronting, but, in fact, will confront all parties. First of all, a production question, how do we earn our living and pay our way in the world after the financial crisis? And, secondly, if you like, a distributional question. How do we build a good society when there's not much money around?
Mark Ferguson on Labourlist says that David Miliband's contribution is "thoughtful and weighty contribution" and his comments about moving beyond the state resonates with "aspects of Blue Labour thought" and with the internal party debate about whether some within Labour are "too comfortable with opposition".Mark Ferguson on Labourlist says that David Miliband's contribution is "thoughtful and weighty contribution" and his comments about moving beyond the state resonates with "aspects of Blue Labour thought" and with the internal party debate about whether some within Labour are "too comfortable with opposition".
He takes issue with the Daily Telegraph's frontpage coverage and its claims that the essay is "an attack on his brother Ed's labour party" despite several positive references in the essay to the contrary.He takes issue with the Daily Telegraph's frontpage coverage and its claims that the essay is "an attack on his brother Ed's labour party" despite several positive references in the essay to the contrary.
He writes that "... even the most ardent supporter of Ed Miliband would struggle to argue that Ed Miliband has been 'reassuring' Labour supporters recently.He writes that "... even the most ardent supporter of Ed Miliband would struggle to argue that Ed Miliband has been 'reassuring' Labour supporters recently.
"What is pleasing, and should not be overlooked, is that David Miliband is starting to feel comfortable enough to make a cautious return to domestic political debate. That's something that I'm genuinely delighted about. David wasn't my first choice for leader, but months ago I was calling for him to return to frontline politics. Most activists I speak to – regardless of their personal politics – want Labour to have a team of all the talents. That includes David Miliband.""What is pleasing, and should not be overlooked, is that David Miliband is starting to feel comfortable enough to make a cautious return to domestic political debate. That's something that I'm genuinely delighted about. David wasn't my first choice for leader, but months ago I was calling for him to return to frontline politics. Most activists I speak to – regardless of their personal politics – want Labour to have a team of all the talents. That includes David Miliband."
But while Ferguson plays down the idea that Miliband senior is having a pop at Miliband junior, Dan Hodges, contributing editor to Labour Uncut , writes in the Telegraph, suggests otherwise. He says that the timing of Miliband's intervention is "supremely significant".But while Ferguson plays down the idea that Miliband senior is having a pop at Miliband junior, Dan Hodges, contributing editor to Labour Uncut , writes in the Telegraph, suggests otherwise. He says that the timing of Miliband's intervention is "supremely significant".
This is challenging stuff, and it's crystal clear who is being challenged. Nominally the article is in response to a hitherto unnoticed piece penned by Roy Hattersley in the obscure Political Quarterly. But the real target of David Miliband's attack on "Reassurance Labour" is Ed Miliband. And both brothers know it.This is challenging stuff, and it's crystal clear who is being challenged. Nominally the article is in response to a hitherto unnoticed piece penned by Roy Hattersley in the obscure Political Quarterly. But the real target of David Miliband's attack on "Reassurance Labour" is Ed Miliband. And both brothers know it.
10.05am: The foreign secretary William Hague has called for a stepping up of the fight against Somali-based terrorism as he became the first British foreign secretary to visit the war-torn state for 20 years.10.05am: The foreign secretary William Hague has called for a stepping up of the fight against Somali-based terrorism as he became the first British foreign secretary to visit the war-torn state for 20 years.
He arrived in the capital, Mogadishu, amid tight security, marking the start of a major diplomatic push to help stabilise a country he described as "the world's most failed state", according to the Press Association.He arrived in the capital, Mogadishu, amid tight security, marking the start of a major diplomatic push to help stabilise a country he described as "the world's most failed state", according to the Press Association.
Hague said recent gains by the 10,000-strong African Union force in the country (Amisom) had driven back the radical Islamist group al Shabaab from the capital.Hague said recent gains by the 10,000-strong African Union force in the country (Amisom) had driven back the radical Islamist group al Shabaab from the capital.
But with much of the south of the country still controlled by the organisation, which has links to al-Qaida, he said there must be no let-up in the pressure.
'We need to step this up. We are not complacent about it,' he said.		But with much of the south of the country still controlled by the organisation, which has links to al-Qaida, he said there must be no let-up in the pressure.
'We need to step this up. We are not complacent about it,' he said.
9.50am: Good morning, I'm Hélène Mulholland, standing in for Andrew Sparrow today.9.50am: Good morning, I'm Hélène Mulholland, standing in for Andrew Sparrow today.
An essay in this week's New Statesman by the Labour party leader's big brother on the need for Labour to engage in "restless rethinking" of its purpose and its policies if it is to return to power, promises a lively debate both within the party and without. The former foreign secretary and defeated leadership candidate lays out a seven-point plan for the party. You can read the full article here and see whether you agree with his assessment.An essay in this week's New Statesman by the Labour party leader's big brother on the need for Labour to engage in "restless rethinking" of its purpose and its policies if it is to return to power, promises a lively debate both within the party and without. The former foreign secretary and defeated leadership candidate lays out a seven-point plan for the party. You can read the full article here and see whether you agree with his assessment.
Diarywise, today looks set to be a quiet one.Diarywise, today looks set to be a quiet one.
Damian Green, the immigration minister, will outline reforms to immigration policy at a Policy Exchange thinktank at 10am. The gist seems to be that only those with rosy bank accounts will be able to marry whom they want from abroad or settle in Britain. My colleague Alan Travis has trailed the contents of the speech here.Damian Green, the immigration minister, will outline reforms to immigration policy at a Policy Exchange thinktank at 10am. The gist seems to be that only those with rosy bank accounts will be able to marry whom they want from abroad or settle in Britain. My colleague Alan Travis has trailed the contents of the speech here.
Tourists wandering around Westminster this morning will probably wonder what's going on if they head towards the gates of 10 Downing Street. The web-based lobbying group Avaaz, intend to make a noise about tax using props (a giant "David Cameron" and a "tax burglar", apparently) and a petition which is expected to have more than 100,000 signatures calling for tax transparency across the board and an end to tax breaks for big business. Perhaps one of the activists will contact us and tell us how it went.Tourists wandering around Westminster this morning will probably wonder what's going on if they head towards the gates of 10 Downing Street. The web-based lobbying group Avaaz, intend to make a noise about tax using props (a giant "David Cameron" and a "tax burglar", apparently) and a petition which is expected to have more than 100,000 signatures calling for tax transparency across the board and an end to tax breaks for big business. Perhaps one of the activists will contact us and tell us how it went.
Down the road in parliament, the Joint Committee on Privacy and Injunctions will take evidence from News Group Newspapers and the Press Complaints Commission. Witnesses giving evidence include Dominic Mohan, editor of the Sun and Lord Hunt of Wirral, Chair, Press Complaints Commission.
The committee's remit is here and the session starts at 10.15. My colleague Josh Halliday on media will be covering it in a separate liveblog, which will also take in the Leveson inquiry.		Down the road in parliament, the Joint Committee on Privacy and Injunctions will take evidence from News Group Newspapers and the Press Complaints Commission. Witnesses giving evidence include Dominic Mohan, editor of the Sun and Lord Hunt of Wirral, Chair, Press Complaints Commission.
The committee's remit is here and the session starts at 10.15. My colleague Josh Halliday on media will be covering it in a separate liveblog, which will also take in the Leveson inquiry.
Meanwhile, in the Commons this morning, the business secretary Vince Cable will take questions.Meanwhile, in the Commons this morning, the business secretary Vince Cable will take questions.