25 April 2013
The Sefton - Who is Telling the Truth? The bail out of the Sefton Group by the Council of Ministers has been achieved by using four and a half million pounds of tax payers’ money. One million, three hundred thousand has been used to give the Group an unsecured loan under the Enterprise Act via the Department of Economic Development and three million, two hundred thousand pounds has been used from the Land Acquisition Reserve to purchase the Middlemarch site from the Group. The Council of Ministers have agreed to lease this site back to the Group for five years at £160,000 per annum and have given the Group an option to repurchase.
The Treasury Minister stated on Tuesday that “It was worked up in consultation with colleagues from the Department of Economic Development. The option on this land became available to us and we thought that it was a sound move to purchase the land. As I said before, it gives us control over a significant site in lower Douglas.”
Liberal Vannin fail to see how this purchase gives Government any control over this site and believe that it is in reality a loan at 5% interest secured on the land.
The Chief Minister did give an undertaking to circulate to Members of the House of Keys confirmation of which Acts gave the Government the power to complete on both the purchase of the land and the granting of the loan as doubts have been raised about this but this information has not been received as yet.
The Chief Minister has stated that the rationale for the whole deal was to protect jobs and the economy in general. There was concern that if the company went into receivership three hundred jobs would be lost and the doors of the Sefton Hotel and the Palace would be closed as we approached TT week. However, less than a week after the Council of Ministers signed off the recuse package, Brett Martin (the chief executive of the Sefton Group) is reported as saying that “the company had never been under immediate threat of going bust”. In response to this the Chief Minister is reported as saying, “ I never said it was going to collapse tomorrow. But there was a very clear impression given to myself and the Treasury Minister that if the restructuring package had failed, then the company would have struggled to continue”.
Surely the Chief Minister and the Treasury Minister must have convinced the other Ministers to back the rescue package with more than a “clear impression”? They must have been able to provide Ministers with clear, explicit financial information. How else could they have been persuaded to support this use of tax payers money particularly at a time when Government is short of funds and is struggling to rebalance its budget?
On Tuesday the Treasury Minister stated in the House of Keys that, “As somebody who has got more experience than most in this Hon. House with receiverships, having appointed receivers on quite a few occasions, it is not a given that the business will be sold straight away”. There has been a lot of talk about how it could take a long time to find a buyer and the damage the situation could do to the Island but there was no mention of any parties who had stated an interest in acquiring the hotel side of the Group. The same day the managing director of the Sleepwell Hotel Group heavily criticised the deal which he claimed had created unfair competition and he later revealed that the Sleepwell Hotel Group had been, and still was, interested in buying the Sefton Hotel.
The Chief Minister, Allan Bell, has taken responsibility for the decision to go ahead with the rescue package and said, “We have a responsibility to look at the wider role of certain businesses in the economy. We had to make a judgement call. This is a judgement call which I believe is fair. It is justified at this particular time.”
Liberal Vannin do not believe that public money should have been used in this way and time will tell whether or not Mr Bell has made the right judgement call but meantime there are questions that do need to be answered by the Chief Minister.
Did the Council of Ministers have the power to push this rescue package through? The Chief Minister and the Treasury Minister have stated that they did have the power but there is some doubt.
How precarious were the finances of the Sefton Group? The Chief Minister and the Treasury Minister said that they had to act quickly but the chief executive of the Sefton Group says that they were not on the verge of collapse.
The Chief Minister and the Treasury Minister say that if the Sefton Group had gone into liquidation it could have taken a long time to find a buyer but Sleepwell Hotels say that they have been, and still are, interested in negotiating a purchase.
“ENDS” Roy Redmayne Chairman Liberal Vannin Party T: 824361 M: 309694 email@example.com
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Sefton - Who is telling the truth