‘I’m quite happy to be challenged over the Sefton deal,’ Treasury Minister Eddie Teare has insisted to iomtoday.
The Council of Ministers announced that it has itself referred the controversial bail-out decision to a Tynwald scrutiny committee.
Meanwhile, a raft of questions were due to be asked in the House of Keys today (Tuesday) about the deal which will see government loan £1.3 million to the Sefton Group and buy and lease back the strategic Middlemarch site on Lord Street.
Mr Teare said of the decision to refer the matter to the economic policy review committee: ‘I’m quite happy to be challenged. We are elected to make decisions – and not all our decisions are going to be popular. Whichever way the coin had come down – and it was on its edge, we would not have pleased everybody. In that respect I have not been disappointed!’
Chief Minister Allan Bell said he understood the concerns – but his priority had to be maintaining stability and confidence in the local economy.
He said: ‘I do appreciate the point that companies should normally pay the price for their past mistakes.
‘But in the case of the Sefton Group that approach ignores the fact that a failure would trigger disruption and damage across the domestic economy.
‘It was made clear to government that the Group needed a financial restructure to secure a sustainable future, and that it was at constant risk until the restructure was completed. It was equally clear that government’s support was a vital part of the package.
‘The Sefton Group employs 300 people, with an annual spend of £7.3 million, hundreds of local shareholders, and trade debts in the region of £1.7 million owed to a range of local businesses. The failure of such an organisation, whenever it happened, would be like an earthquake in the local domestic economy. The victims would include not just the company itself but all the creditor businesses and most importantly economic confidence, which would be seriously shaken at a time when the island is coming under renewed international scrutiny.
‘There would of course be other parties who would step in to pick up the prime assets from the rubble. But that would not protect the creditors or confidence and cherry-picking the Group would not be the best solution in the national economic interest. When government is aware there is a real danger of economic upheaval on such a scale, it has a duty to take that risk seriously and to take appropriate action. We would be rightly condemned as grossly irresponsible if we ignored that danger.
‘This is indeed an unusual intervention by government, in unusual circumstances, and because a public company is involved we were unable to give advance notice of the proposed support.
‘There will inevitably be many questions about the details and mechanics of this support for the Sefton Group. But I hope people will understand the fundamental principle behind it is the protection of the local economy, local jobs and local businesses.’
There are no fewer than 16 questions about the Sefton deal down for oral or written answer in the Keys this week.