Student loans chief in tax scandal got job with help of SNP ministers

SCOTTISH ministers were involved in the controversial decision to appoint the head of the Student Loans Company who has been paid via a company without tax being deducted, a series of letters has revealed.

The decision to hand the role of chief executive of the Student Loans Company to Ed Lester was agreed by the Westminster government “jointly with Scottish Ministers”, a letter from the UK Minister for Universities David Willetts to the Glasgow-based firm showed.

A separate letter from the Student Loans Company to Mr Willetts in December 2010 also confirmed that “approval is being sought in parallel from Scottish ministers by Scottish officials” for the appointment of Mr Lester.

The UK government was previously heavily criticised for allowing Mr Lester to save tens of thousands of pounds in tax from his £182,000 salary, after the taxation arrangements were disclosed in an HM Revenue and Customs (HMRC) letter obtained under the Freedom of Information Act.

However, the SNP government was yesterday attacked for its possible role in the decision to “sanction tax avoidance schemes for top civil servants” such as Mr Lester, with ministers urged to publish all the paperwork the administration holds about the appointment.

Scottish Labour’s education spokesman, Hugh Henry, said that SNP ministers should now say “what they were told about his salary and unusual employment arrangements”, as he demanded to know which figure in the Scottish Government had “signed off on the appointment”.

Mr Henry also claimed that a senior civil servant from Scotland education minister Michael Russell’s department has been involved in the decision to appoint Mr Lester.

He said: “I hope we are all agreed that it is unacceptable for ministers to sanction tax avoidance schemes for top civil servants. Scottish ministers need to speak up if they knew about this. The letters which have now emerged are a curious development and one which requires answers from Scottish ministers.

“Since they authorised the appointment of Ed Lester in this manner, we need to know what Scottish ministers knew of his tax avoidance arrangement. Now we need to know which Scottish minister signed off on the appointment and what they were told about his salary and unusual employment arrangements. In particular, which ministers and officials in the Scottish government had sight of the letter setting out the proposed employment arrangements?

A Scottish Government spokesman yesterday admitted that Mr Russell had “agreed with the appointment” of Mr Lester. The spokesman said: “In appointing Mr Lester to his post, Department for Business Innovation & Skills ministers consulted Mr Russell, who agreed with the appointment as did the lead ministers of the other devolved nations. While Mr Russell was advised of Mr Lester’s package as a matter of routine, no sense was given of how this could be a tax avoidance issue.”