Documents obtained by Exaro show that Sir Gus (now Lord) O’Donnell (GOD), as cabinet secretary and head of the civil service, approved Ed Lester's special pay deal.
It also seems that Danny "Beaker" Alexander, chief secretary to the Treasury, was informed of the plan, although he has said that he was unaware of any potential tax benefit to Lester.
Tax does have to be taxing.
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