BBC bosses not included in civil service pay review

Economic Secretary to the Treasury Chloe Smith also confirmed the salaries of executives at other public bodies would not be scrutinised as part of the review announced last month.

Labour MP Andy Slaughter said the decision was “disappointing”.

Speaking in Westminster Hall, Ms Smith said: “If it assists the debate in its early stages, I am happy to confirm that the review in question covers all bodies covered by Her Majesty’s Treasury guidance on managing public money, which no doubt the debate will be familiar with.

“That covers all central Government bodies, such as departments and their arms-length bodies. On the subject of the BBC, I can confirm that it will not cover arrangements in public corporations, public broadcasting authorities, or the publicly-owned banks.”

Ms Smith made her comments as MPs debated the way Whitehall used so-called consultants, who avoided paying high rates of income tax by being paid through a company, limiting their liability to corporation tax at 20%.

Mr Slaughter said often positions were filled by senior civil servants, known as “interims”, who were in effect permanent members of staff.

The MP for Hammersmith added: “These practices would be offensive at any time but at a time when the country is in recession, at a time when all workers in the public sector at a lower level are facing pay freezes, and at a time when there are hundreds of thousands of redundancies around the country, it is particularly offensive to see, what I can only describe, as a new elite in the public sector, who appear to be immune from the worries, fears and constraints of ordinary working life.”

He also claimed that some companies, which were awarded public contracts, were trying to cover up breaches of UK tax law and stifle investigations into their tax affairs.

Mr Slaughter said “something was seriously wrong throughout the public sector” when it came to the way civil servants were paid.