My Political Journalist of the Year Award: Praise be the Whitehall moles

Revealed: My secret source in Whitehall Pic Credit:BBC

Revealed: My secret source in Whitehall Pic Credit:BBC

Today I am really thrilled to win Political Journalist of  the Year Press Gazette awards for Exaro News -award  last night.

But the real tribute should go to a couple of fearless Whitehall moles who put me on the trail of the story  of massive tax avoidance at the heart of Whitehall.

While journalists must never reveal  their sources, there is at least one good tip from this for journos pursuing questionable deals done in Whitehall.

And it came from first source. He was the originator of the suggestion that senior people in Whitehall had set up  highly complicated arrangements to avoid paying any tax and national insurance. And he had heard a rumour  that one of the most grotesque examples was a recent appointment to the top job at the Students Loan Company. A left of centre character who firmly believed in the ethos of public service  he was worried that Whitehall was being corrupted by the widespread tax avoidance. We now know it is rife.

But rather than leak information which breaks the Whitehall rules we devised a different strategy. Between us we drafted a targeted freedom of information request to the Student loans Company and Vince Cable’s Department for Business  which would make it very difficult for either department to deny. During our meetings at various hostelries across London – I won’t divulge his favourite malt  in case the Whitehall thought police try to trace him- we developed the story.

Sure enough after a suitable interval back came some 60 pages of complicated e-mail traffic between Bis, the Student Loans Company, the Cabinet Office and more surprising, the outside advice from private management consultants – one paper was volunteered because they were worried we would distort their opinions – and even letters from Revenue and Customs approving the arrangement. We spent further hours  at certain hostelries analysing the results which were far worse than he thought. We spent much more time chasing up every conceivable angle before Exaro and BBC Newsnight  were ready to go with the tale.

The result was immediate. Ed Lester, the head of the Student Loans Company, had his tax arrangement stopped and Danny Alexander, chief secretary to the Treasury who had personally approved his salary had to admit he didn’t even spot the tax avoidance. He ordered a Whitehall wide inquiry.

But it was not all over.  The inquiry identified 2500 civil servants on similar deals. But had they gone too far? Enter a new mole from another part of Whitehall.  Seeing Danny Alexander’s letter to George Osborne he was furious. He felt Alexander had caught too many in his net, including genuine freelances  having bona fide reasons for working this way. This guy, a mischievous right of centre social libertarian character who enjoy’s Guido Fawkes blog, decided the world should know before Danny had a chance. Hence another story for Exaro News and BBC Newsnight.

One might feel sorry for Danny – damned if he doesn’t, damned if he does. Except of course while we all suffer his cuts  paradoxically he has never been so wealthy in his life as a Cabinet minister. And he has lots of  dinners with his chum. George Osborne.

Good for him though in ordering the inquiry. But the greatest thing of all is that he couldn’t cover this up even if he wanted to – thanks to the use of freedom of information. No wonder Jack Straw and Tony Blair now regret giving the public and journos the chance to find out what is really going on government.

Victory: Ed Lester now started paying full tax

Following the exposure by the joint  Exaro News and BBC Newsnight investigation  Ed Lester, head of the Student Loans Company, is  now having  his tax and national insurance deducted at source.

 The deal backdated to February 1 will mean he will be on the pay roll until his contract ends in February 2013. The change will mean that he will have to pay full National Insurance contributions. The SLC – which has avoided paying NI will have to pay £17,000 to the tax authorities  this coming year.  Calculations by accountancy specialists means that on his £182,00o salary (including £14,000 bonus and £28,000 pension ) he will be possibly have to pay £26,000 in tax which he could have avoided by placing the contract through his personal service company, Placepass, based at his home on an island in River  Thames  at Marlow, Buckinghamshire.

He could also be charged benefits in kind on his Glasgow flat which the government is funding as part of a £550 a week expenses package.

This is the statement from the Student Loans Company:

“We are taking forward the changes to Ed Lester’s contract, following the announcement by Universities Minister, David Willetts on 2 February 2012.

“Ed Lester will be a Student Loans Company employee with effect from 1 February 2012 and tax and NI will be deducted at source. His salary and bonus arrangements will be consistent with his previous contract.”

One down, how many more to go, when the investigation by Danny Alexander, chief secretary to the Treasury, starts to bite.