T Y N W A L D C O U R T O F F I C I A L R E P O R T

R E C O R T Y S O I K O I L Q U A I Y L T I N V A A L

P R O C E E D I N G S

D A A L T Y N

HANSARD

Douglas, Tuesday, 19th April 2016

All published Official Reports can be found on the website:

www.tynwald.org.im/business/hansard

Supplementary material provided subsequent to a sitting is also published to the website as a Hansard Appendix. Reports, maps and other documents referred to in the course of debates may be consulted on application to the Tynwald Library or the Clerk of Tynwald’s Office.

Volume 133, No. 9

ISSN 1742-2256

Published by the Office of the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, , IM1 3PW. © High Court of Tynwald, 2016 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Present:

The (Hon. C M Christian)

In the Council: The Lord Bishop of Sodor and Man (The Rt Rev. R M E Paterson), The Acting Attorney General (Mr J L M Quinn), Mr D M Anderson, Mr M R Coleman, Mr C G Corkish MBE, Mr D C Cretney, Hon. T M Crookall, Mr R W Henderson, Mr J R Turner and Mr T P Wild, with Mr J D C King, Deputy Clerk of Tynwald.

In the Keys: The Speaker (Hon. S C Rodan) (); The Chief Minister (Hon. A R Bell) (Ramsey); Mr G G Boot (); Mr L I Singer (Ramsey); Hon. W E Teare (); Mr A L Cannan (Michael); Mr R K Harmer (Peel); Mr P Karran, Mr Z Hall and Mr D J Quirk (); Hon. R H Quayle (); Mr J R Houghton and Mr G R Peake (); Mrs K J Beecroft and Mr W M Malarkey (); Mr C R Robertshaw and Mr J Joughin (); Hon. J P Shimmin and Mr C C Thomas (Douglas West); Hon. R A Ronan (Castletown); Mr G D Cregeen (); Hon. J P Watterson, Hon. L D Skelly and Hon. P A Gawne (); with Mr R I S Phillips, Clerk of Tynwald.

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Business transacted

Leave of absence granted ...... 1167 1. Papers laid before the Court ...... 1167 Matter of Urgent Public Importance ...... 1169 Public Sector Pensions Reforms – Request for urgent debate – Motion lost ...... 1169 Bills for signature ...... 1171 Questions for Oral Answer ...... 1172 1. Enterprise Development Scheme managers – Background checks on applications ...... 1172 2. Housing of Multiple Occupancy – Registered premises ...... 1175 3. Residential and nursing homes – Standards of care ...... 1180 4. Noble’s Hospital – MRSA and C. diff ...... 1181 5. Primary health care centres – Plans to improve and develop ...... 1184 6. Attorney General’s statutory powers – Authorisation of an English barrister ...... 1185 7. Company property – Legal and beneficial title ...... 1186 8. Company property – Ownership ...... 1189 9. Regent Street Post Office – Rent-reduced status for Mannin Retail ...... 1189 10. Manx Telecom – Additional charge for paper bills ...... 1193 11. Grant monies – Legal obligation to pursue recovery ...... 1197 Questions for Written Answer ...... 1200 12. Register of beneficial ownership – Reason not a public document ...... 1200 13. Pinewood shares – Number still held; number sold; price ...... 1200 14. Government contracts – Number let which are still in operation; value ...... 1201 15. Double Taxation Agreement – Legal basis for amending; procedure and timetable ... 1202 16. Health care assistants – Training and qualifications required ...... 1203 Order of the Day ...... 1205 3. Public Sector Pension Reforms – Motion not moved ...... 1205 4. Isle of Man Post Office – Governance structure – Debate commenced ...... 1205 The Court adjourned at 1.01 p.m. and resumed its sitting at 2.30 p.m...... 1218 Isle of Man Post Office – Debate concluded – Amended motion carried ...... 1218 5. Standards and Members’ Interests Committee – First Report 2015-16 – Standards of Behaviour for Members – Debate commenced ...... 1249 The Court adjourned at 5.12 p.m. and resumed its sitting at 5.40 p.m...... 1258 Standards and Members’ Interests Committee – Debate continued – Motion carried ..... 1258 Announcement of Royal Assent ...... 1276 6. Post Office Act 1993 – Chairman of the Post Office – Mr Harmer appointed ...... 1276

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Condolences to girlfriend, family and friends of local rider, Billy Redmayne ...... 1277 7. TT promoter – Appointment of Vision Nine – Motion carried ...... 1278 Suspension of Standing Order 1.2(2) to continue until 9 p.m. – Motion lost ...... 1292 The Court adjourned at 8.04 p.m...... 1292

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Tynwald

The Court met at 10.30 a.m.

[MADAM PRESIDENT in the Chair]

The Deputy Clerk: Hon. Members, please rise for the President of Tynwald.

The President: Moghrey mie, Hon. Members.

5 Members: Moghrey mie, Eaghtyrane.

The President: The Lord Bishop will lead us in prayers.

PRAYERS The Lord Bishop

Leave of absence granted

The President: Hon. Members, leave of absence has been given to Mrs Beecroft for 10 Wednesday and Thursday, should we still be sitting; to Mr Singer for part of Wednesday morning; and possibly Mr Cregeen for part of Wednesday morning.

1. Papers laid before the Court

The President: I call on the Clerk to lay papers.

15 The Clerk: Ta mee cur roish y Whaiyl ny pabyryn enmyssit ayns ayrn nane jeh’n Chlaare Obbyr. I lay before the Court the papers listed at Item 1 of the Order Paper.

European Communities (Isle of Man) Act 1973 European Union (Belarus Sanctions) (Amendment) Order 2016 [SD No 2016/0113]

Fees and Duties Act 1989 Court Services Fees Order 2016 [SD No 2016/0067] Registered Schemes Administrators (Fees) Order 2016 [SD No 2016/0088] Registered Schemes Administrators (Fees) (Amendment) Regulations 2016 [SD No 2016/0089]

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Companies Act 1982 Companies Act 2006 Recognised Auditor (Exempt Company Definition Amendment) Regulations 2016 [SD No 2016/0102]

Financial Services Act 2008 Regulated Activities (Amendment) Order 2016 [SD No 2016/0099] Financial Services (Exemptions) (Amendment) Regulations 2016 [SD No 2016/0100] Financial Services (Fees) Order 2016 [SD No 2016/0098]

Social Security Act 2000 Social Security Contributions and Benefits Act 1992 (Application) (Amendment) (No.3) Order 2016 [SD No 2016/0093]

Social Security Administration Act 1992 Social Security Pensions (Low Earnings Threshold) Order 2016 [SD No 2016/0094] Social Security Pensions (Flat Rate Accrual Amount) Order 2016 [SD No 2016/0095]

Civil Aviation Act 1982 Civil Aviation (Charges) Scheme 2016 [SD No 2016/0078]

Moneylenders Act 1991 Moneylenders (Exempt Person) Regulations 2016 [SD No 2016/0105]

Education Act 2001 Education (Student Awards) (Amendment) Regulations 2016 [SD No 2016/0103]

Reports Public Sector Pensions Authority Fairness and Sustainability of Public Sector Pension Schemes – Revised Proposals [GD No 2016/0017] e

Public Sector Pensions – Addressing the Legacy Funding Gap [GD No 2016/0018]e

Report on the Governance Structure for the Isle of Man Post Office [GD No 2016/0008]

Recommendation for the Appointment of a TT Promoter [GD No 2016/0019]

Standards and Members’ Interests Committee for the Session 2015/16 – Standards of Behaviour for Members [PP No 2016/0052]

The remaining items are not the subject of motions on the Order Paper

Documents subject to negative resolution European Communities (Isle of Man) Act 1973 Belarus Sanctions (Amendment) Regulations 2016 [SD No 2016/0114]

Documents subject to no procedure Gaming, Betting and Lotteries Act 1988 Crown Green Bowling Festival Order 2016 [SD No 2016/0069] Crown Green Bowling Festival (No.2) Order 2016 [SD No 2016/0070] e Laid electronically

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Financial Services Act 2008 Financial Services Disputes (Definition) (Amendment) Order 2016 [SD No 2016/0104] Immigration Act 1971 Statement of Changes in Immigration Rules [SD No 2016/0092] e

Immigration Act 2014 Immigration and Nationality (Fees) Order 2016 [SD No 2016/0062]e Immigration and Nationality (Fees) Regulations 2016 [SD No 2016/0064] e

Insurance Act 2008 Insurance (Supplementary Information) Regulations 2016 [SD No 2016/0107]

Customs and Excise Management Act 1986 Alcoholic Liquor Duties Act 1986 Tobacco Products Duty Act 1986 Excise Duties Order 2016 [SD No 2016/0109]

Reports Report of the Select Committee on the First Time Buyer Arrangements at Harcroft Meadow (Petition for Redress) 2015-2016 [PP No 2016/0054] Office of the Data Protection Supervisor Annual Report 2014-2015 [GD No 2016/0011] Report of the Interception of Communications Commissioner for the year ended 31st December 2015 [GD No 2016/0020] Manx Industrial Relations Service Annual Report 2015 [GD No 2016/0016] Isle of Man Office of Fair Trading – Report on a Preliminary Investigation under Section 9 of the Fair Trading Act 1996 into Potential Anti-Competitive Practices within Tendering for certain Government Stonework Contracts [GD No 2016/0015]

e Laid electronically

Matter of Urgent Public Importance

Public Sector Pensions Reforms – Request for urgent debate – Motion lost

The Hon. Member for Michael, Mr Cannan, to move:

That Tynwald: (a) Receives the report of the Public Sector Pensions Authority entitled “Fairness and Sustainability of Public Sector Pension Schemes – Revised Proposals” [GD No 2016/0017]; (b) Endorses the continued process for negotiating reforms of the Teachers and Police Schemes with a view to consulting on detailed scheme changes and thereafter, preparing formal amendments to be laid before Tynwald for approval no later than November 2016 (parts 5.2 and 5.3 of the report); (c) Endorses the proposals for reform of the Tynwald Members Scheme (part 5.1 of the report);

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(d) Requests the PSPA to commence reform negotiations with members of the Judicial Pension Scheme once the outcome of the UK judicial review is known (part 5.4 of the report); (e) Receives the Report of the Cabinet Office entitled “Public Sector Pensions – Addressing the Legacy Funding Gap” [GD No 2016/0018]; (f) Notes that the Medium Term Financial Strategy has identified that the Public Sector Pension Reserve will soon be depleted; and (g) That Tynwald is of the opinion that the Council of Ministers should establish an independent review commission using its powers under the Inquiries (Evidence) Act 2003 chaired by a QC or person of similar standing to review the options for a fair and sustainable Isle of Man public sector pensions scheme, including consideration of the options already identified by the PSPA, and through further evidence from interested parties; and to report to Tynwald with recommendations by January 2017.

20 The President: I call on the Hon. Member for Michael, who has indicated he wishes to move at this point a Matter of Urgent Public Importance. He has circulated a letter to me, Hon. Members. Are there four Members who stand in support of him?

Several Members rose in their places.

The President: There are more than four Members standing in support, Hon. Members. The 25 procedure is that we shall go straight to a vote on the matter. Now, it has, I understand, been circulated to Hon. Members, so you know what motion you are voting on. Is that clear? So we go straight to the motion. No debate is permitted, Hon. Members, on whether or not we are going to proceed. We go straight to the vote.

Electronic voting resulted as follows:

In the Keys – Ayes 15, Noes 8

FOR AGAINST Mrs Beecroft Mr Bell Mr Cannan Mr Boot Mr Cregeen Mr Quayle Mr Hall Mr Ronan Mr Harmer Mr Shimmin Mr Houghton Mr Skelly Mr Joughin Mr Teare Mr Karran Mr Watterson Mr Malarkey Mr Peake Mr Quirk Mr Robertshaw Mr Singer The Speaker Mr Thomas

The Speaker: Madam President, in the Keys, 15 votes for, 8 against.

In the Council – Ayes 2, Noes 7

FOR AGAINST Mr Corkish Mr Anderson Mr Turner Mr Coleman Mr Cretney Mr Crookall ______1170 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mr Henderson The Lord Bishop Mr Wild

30 The President: In the Council, 2 votes for, 7 votes against. The Branches are in disagreement, Hon. Members. The motion therefore fails to carry.

Mr Cannan: Point of order, Madam President. Is there not a place in Standing Orders where, when the elected House moves for a motion, 35 that desire represented from the people is allowed to carry through to debate? Can I just confirm that Legislative Council Members … I appreciate that some of them might have considered pressing the wrong buttons, I am not quite sure that is – (Laughter and interjections)

40 Several Members: Hear, hear!

A Member: I did press the right button!

Mr Cannan: Is there a point in Standing Orders where the elected representatives actually 45 have, when it is the majority wish for a debate, that that debate takes place?

Mrs Beecroft: Next week.

Mr Watterson: Next month. 50 The President: You can seek to have the vote taken again at a future date, Hon. Member – but then the urgency may have been dealt with. There is no provision in Standing Orders for anything other than the normal rules to apply in respect of a matter of public importance – to my knowledge. I will take correction from the 55 Clerk, if he can advise me any differently.

The Clerk: No, Madam President.

Bills for signature

The President: In that case, Hon. Members, we will now deal with the Bills for Royal Assent, 60 which were not to hand before, but I can announce that the following Bills are ready for signature, Hon. Members: the Consumer Protection (Amendment) Bill; Criminal Procedure and Investigations Bill; Financial Intelligence Bill; Terrorism and Crime (Miscellaneous Amendments) Bill; and the War Memorials Bill. With your agreement, Hon. Members, they will be circulated for signature, while we continue 65 with our business. Is that agreed? (Members: Agreed.) Thank you.

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Questions for Oral Answer

ECONOMIC DEVELOPMENT

1. Enterprise Development Scheme managers – Background checks on applications

The Hon. Member for Onchan (Mr Karran) to ask the Minister for Economic Development:

Whether his Department has undertaken a background check on all parties who made an application to manage the new Enterprise Development Scheme, including identifying who the beneficial owners are of the companies that have applied?

The President: We turn now to Item 2, Hon. Members, our Question Paper. I call on the Hon. Member for Onchan to ask the Question standing in his name. 70 Mr Karran: Eaghtyrane, I ask the Question to the Shirveishagh for Economic Development whether his Department has undertaken a background check on all parties who made an application to manage the new Enterprise Development Scheme, including identifying who the beneficial owners are of the companies that have applied? 75 I so wish to ask that Question.

The President: The Minister for Economic Development to reply.

The Minister for Economic Development (Mr Skelly): Gura mie eu, Eaghtyrane. 80 I thank the Hon. Member for his Question. It was a requirement of the tender for management of the Enterprise Development Scheme that applicants be registered either by the Isle of Man Financial Services Authority or the Financial Conduct Authority in the UK. I can confirm that all parties who made an application to manage the scheme were subject to 85 this regulatory background check by the Department. The tender also required that all shareholder and beneficial ownership information was disclosed by all applicants, including the ultimately successful party. Gura mie eu.

90 The President: Supplementary question, Mr Karran.

Mr Karran: Eaghtyrane, is the Minister aware that SPARK Impact Ltd from the information in the public domain in Companies House in the United Kingdom has two shareholders, SPARK Venture Ltd and Impact Investment Ltd; and that SPARK Venture Management Ltd is owned by 95 Quesh Ltd, which is 100%-owned by Spark Venture Management Holdings Ltd, which is in voluntary liquidation?

The President: The Minister to reply.

100 The Minister: Gura mie eu. What I can confirm to this Court is that we are aware of a number of Spark Impacts who are registered in the UK, and are therefore different operating bodies. What we have done is clearly conducted the appropriate due diligence checks on the organisation that has been awarded the

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Enterprise Development Scheme, and we are satisfied with the due diligence and checks that we 105 have done on the awarded company.

The President: Supplementary, Mr Karran.

Mr Karran: Eaghtyrane, can the Shirveishagh tell this court, is the holding company that owns 110 the company that we are going to give £50 million in voluntary liquidation? And if so, why are the reasons for that? Is the Minister aware of a previous Public Accounts report, where very substantial grants had been awarded to companies who had provided documentation to support, which the Department did not check and which was provided by an accountant who had served two years’ 115 jail service for fraud and forgery? Has the Shirveishagh, being a new Minister of this Government, learnt the lessons as far as the Public Accounts Committee to know whether these things are being looked at?

The President: Minister. 120 The Minister: Gura mie eu. His last point first: yes, we have clearly learned lessons from previous and what we need to do, of course, is look forward. We have had the appropriate measures in place when we are giving grants. 125 Whilst this is obviously put into a third party’s hand, what we have done is due diligence on that specific company that has been awarded. What I will do is actually share with Members the company that has been awarded, so there is no confusion with the other SPARK Impacts that are registered companies in the UK. So I will share that with Members in due course here. 130 The President: Supplementary, Mrs Beecroft.

Mrs Beecroft: Thank you, Madam President. Would the Minister agree that when substantial sums of public money are involved, it is an 135 absolute duty on the part of the Department to make certain that they have undertaken the strictest checks before the money is paid out? And could he confirm whether he was aware, or is it true, that SPARK Venture Management Holdings Ltd is the ultimate holding company, the ultimate parent? Did he discover this under his due diligence or how did he come about finding this fact out? 140 The President: Minister.

The Minister: I absolutely agree: with these sums of money, or any sums of money, with regard to taxpayers’ money, we must follow the utmost due diligence. Of course, we did have 145 that question just recently and we are going to share the due diligence process that we employ within the Department of Economic Development. In this particular case, as I say, what I will do is actually share the information of the company that has been awarded, so there is no confusion about other companies that have this associated name. As stated previously, there are a number of them that are registered in the UK, 150 some of which could be confused with the company that has been awarded the contract. I can reassure this Court that we have done the appropriate due diligence and that is, of course, through the Financial Services Authority locally, and also the Financial Conduct Authority in the UK.

155 The President: Supplementary, Mrs Beecroft. ______1173 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mrs Beecroft: Thank you, Madam President. So just to be clear, could the Minister clarify then that what he is saying is that there is no connection between SPARK Impact Ltd – the company that has been awarded this tender – and the companies who have a similar name in the UK? 160 The President: Minister.

The Minister: Gura mie eu. I am not aware of the connection with this company as stated. And once more, just to re- 165 clarify, I will share the specific company that has been awarded the contract, so that we can be clear as to who has this contract and we can do our own appropriate checks ourselves.

The President: The Hon. Member, Mr Karran.

170 Mr Karran: Thanking the Shirveishagh for his co-operation that he will circulate that as a matter of urgency, with such large amounts of money. But what confidence can we have and guarantee that the likes of the recommendations made by the Public Accounts Committee regarding former failures of the Department to comply with financial regulations when paying grants have been fully considered and all necessary steps 175 have been taken to prevent a repeat of these failures? What assurances can we have – we have got this big pot of money – for the next administration that the issues of the Public Accounts Committee have not just simply been ignored like they normally are?

180 The President: Minister to reply.

The Minister: Gura mie eu. It is very difficult to comment on former failures. However, what I would say is that we have conducted what we would regard as the highest level of due diligence in this process. 185 It is well worth pointing out what we are talking about with regard to the Enterprise Development Scheme. Any monies that there are awarded to any organisation will already actually have funding in place. Therefore we are looking at the taxpayers’ money in the Enterprise Development Scheme being 20% to 25% in an investment in a company, whether that be in a loan or equity. Therefore they would also have had to have secured up to 75% to 80% of 190 their own funding. And any type of funding today – I am sure everyone knows, with regard to the financial institutions – there is a considerable amount of KYC done. If you have ever applied, I am sure you would know that. So clearly, there are different levels of due diligence done before any monies are actually passed over to a company or an individual. There is also the stop-gap of Treasury [Inaudible] at 195 the same time.

The President: The Hon. Member, Mrs Beecroft.

Mrs Beecroft: Thank you, Madam President. 200 Again, just for clarity, could the Minister confirm that the SPARK Impact Ltd that has been awarded the contract is a different SPARK Impact Ltd from the one that has a company number 02323420 in the UK?

The President: The Minister may not have that information. 205

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The Minister: I do not, Eaghtyrane. However, as stated previously, I will actually confirm to Hon. Members the full company name and structure that has been awarded, so that we do not have any confusion and we get absolute clarity on this.

210 The President: Final supplementary, Mr Karran.

Mr Karran: Eaghtyrane, thanking the Shirveishagh, it would be nice to see under new management them circulating that information, as it is vital if it is fundamentally wrong! So would the new Shirveishagh, in the cases where evidence has been produced to prove 215 that grants have been unlawfully paid out from his Department, will the Minister give an assurance and guarantee that he will do everything necessary to recover public funds in such cases, allowing for the fact that we have got such hard economic times in front of us? And I do hope that he will circulate this information as it is fundamentally concerning if we have got a voluntary liquidated company owning the company that we are giving £40 million to 220 £50 million worth of enterprise money to.

The President: Minister.

The Minister: Gura mie eu. 225 Yes, absolutely. If there is ever evidence that can be substantiated, appropriate action, I would give reassurance to this Court that that will be taken to recover and take what necessary action there is needed to rectify that. But we do take very seriously any of our grants, regardless of this particular scheme here, Enterprise Development Scheme, but all the other schemes that Economic Development 230 manages on behalf of the taxpayer. We will actually follow through if there is anything that is untoward, if we are given any incorrect information.

ENVIRONMENT, FOOD AND AGRICULTURE

2. Housing of Multiple Occupancy – Registered premises

The Hon. Member for Douglas South (Mrs Beecroft) to ask the Minister for Environment, Food and Agriculture:

How many premises are registered as Housing of Multiple Occupancy?

The President: Question 2, the Hon. Member for Douglas South, Mrs Beecroft.

Mrs Beecroft: Thank you, Madam President. 235 May I ask the Minister for Environment, Food and Agriculture, how many premises are registered as Housing of Multiple Occupancy?

The President: The Minister to reply.

240 The Minister for Environment, Food and Agriculture (Mr Ronan): Thank you, Madam President. To date there are no Houses of Multiple Occupancy (HMOs) registered in the Isle of Man. The landlords of premises which were in use as Houses of Multiple Occupancy prior to

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1st January 2014, are legally required to register such premises with the relevant local authority 245 by 1st January 2017. My Department’s Environmental Health officers and officers of the Fire and Rescue Service are providing advice to those who are wishing to build new Houses of Multiple Occupancy or convert existing premises, such as former guest houses, to Houses of Multiple Occupancy, but to date, none of these have reached the stage where an application to register has been received. 250 I would like to thank the Hon. Member for the Question.

The President: Supplementary, Mrs Beecroft.

Mrs Beecroft: Thank you, Madam President. 255 Could the Minister just clarify whether he believes sufficient emphasis is being placed on this for people to be aware that by January next year, they have to have registered? And what action will he be taking against these premises if they are not registered by that date, given that they have had ample time to do so?

260 The President: Minister.

The Minister: Thank you, Madam President. Certainly there is enough emphasis, I believe, on this at the moment. There is one property which is currently finalising their application at the moment. There have also been about a 265 dozen other cases which have contacted the Department, and we are working through areas with them to get them to the stage so that they are ready for 2017. What action would be taken? I think it is important that we work with the relevant local authorities to make sure that these properties are of the standard which they should be. It is very important that they are, and that is why I thanked you before for bringing this Question to 270 this Hon. Court. So we will make sure that – certainly during January and building up to January – these properties are up to standard. But also it is identifying areas which may be areas of grey at the moment and the Department have assured me that they will be carrying out work and checking out around the Isle of Man, checking with relevant local authorities what they believe is in their 275 area as well, so we are certainly on to it.

The President: The Hon. Member for Onchan, Mr Quirk.

Mr Quirk: Thank you, Madam President. 280 Could I ask the Minister then regarding the potential number of Houses in Multiple Occupation, could he give us an indication what regions those would be in, like north, south, east or west, to give us an idea Also, could I ask him how is he engaging with local authority officers, if they are becoming the regulatory agent. If prosecutions are occurring, will it not be his officers that would do the 285 prosecutions?

The President: Minister.

The Minister: Firstly, Madam President, the local authority are the registration authority and 290 basically charge a nominal fee, which is a one-off fee. This is where the area needs to be clear here: DEFA undertake inspections and recommend to local authorities; enforcement would be undertaken by the local authorities and with the recommendation from ourselves. Certainly I have given you indications of the number before; there is work ongoing with that. But in regard to the regions, I cannot answer that question today, sir. 295 ______1176 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

The President: The Hon. Member, Mr Malarkey.

Mr Malarkey: Thank you, Madam President. I am glad to hear the Minister say that he is working with local authorities on this very 300 important issue. Is he also working with the fire brigade on this issue? Because a lot of these properties of multiple occupancy do not have the correct fire regulations (Mr Houghton: Hear, hear.) and are just converted hotels that have not been brought up to standard etc. (Mr Houghton: Hear, hear.) So how much importance is his Department putting on the safety in these hotels or these 305 residences, as much as having them registered?

The President: Minister.

The Minister: Thank you, Madam President. 310 I think the Member raises a very important point and this is where the regulations and the orders in regard to houses of multiple occupancy are spread to broadly across different areas of Government. The key area and the most important thing with houses of multiple occupancy is the safety element of that. The fire department will shortly be bringing out a consultation in regard to the regulations 315 that are needed for their orders to come to this Hon. Court. I believe that is due very shortly. (A Member: Hear, hear.) We certainly have advice from the Attorney General’s office at the minute to work with the fire office in regard to getting them up to standard now ahead of these regulations. But certainly, absolutely, this is the key element of this, because of the potential danger of 320 properties like this. I think also it is important to note that properties like this will need to be fitted with sprinkler systems and need to have the relevant regulations surrounding them.

The President: The Hon. Member, Mrs Beecroft.

325 Mrs Beecroft: Thank you, Madam President. Could the Minister just clarify: he mentioned a case of a new property where they were working with the Department and going to them for advice; because it is the older properties that are really giving the most concern, I wonder if any owners of the older properties have been to his Department asking for advice on how they can get up to the required standard? 330 The President: Minister.

The Minister: Thank you, Madam President. Yes, absolutely. I do not believe I said ‘new property’. There is one property currently 335 finalising their application. I am unsure if that is a new or an old build. But one thing is for sure: one of the areas which will probably enter into houses of multiple occupancy is old, large buildings and guesthouses, and certainly as a builder myself, I realise the complexities of that and you raise a very important point. That is why it is important we get the regulations in place and certainly the safety regulations, and also it is important to note that the 340 building control are very stringent on this sort of thing as well. So it is meeting all of those standards, but also – as Mr Quirk quite rightly said – it is the engagement with local authorities and getting that structure right to deliver the regulations and the service which these buildings will require.

345 The President: The Hon. Member, Mr Karran.

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Mr Karran: Eaghtyrane, can the Shirveishagh just clarify for the record what numbers we perceive that will need to be registered under housing for multi-occupancy, if he has got that figure here? 350 What concerns has he got about leaving it to local authorities when we have seen the likes of local building byelaws being completely atrocious in the hands of one local authority, where the developer did the decent thing and bought back the property that was in an awful state, because that local authority, namely Douglas, did not do its job right? What consistent standards are we to have so that they are not going to have different standards as far as the housing for 355 multi-occupancy? Finally, how does he define housing for multi-occupancy and maybe a cheap boarding house where people are living in … classed as boarding houses, but really they are just multi-occupancy properties?

360 The President: Minister.

The Minister: Thank you, Madam President.

The President: We are rather straying wider every question. 365 The Minister: It is and it is okay, Madam President. I think it is recognising – touching on your last point first – the differences between boarding houses and houses of multiple occupancy. A house of multiple occupancy is typically a house shared by more than six people who are unrelated, with shared kitchens and private bathrooms. 370 So there is a difference there. Regarding the numbers, as I said before, there is around just over a dozen at the minute that showed an interest. We are close to registering a few and working with the others up until the remaining part of the year, and as I said before, also there is a body of work regarding ourselves and working with the local authorities to identify actually what the numbers will be. That is work 375 ongoing. I would like to think we will have that by the end of the year, if not well in advance of that. In regard to the concerns with local authorities dealing with this, I think this is a very shared agenda where it is the responsibility of the local authority, but they work with our Department as the regulatory body to enable this legislation to come in so they can work with that. So I am 380 comfortable with that. I do not really want to get involved in the issues regarding Douglas. I am a great supporter of local authorities and being able to empower them with more responsibilities is very important to me. I think also, about the concerns, the consistent standards, behind all the regulations and legislation, Madam President, we have very stringent fire regulations and we have got the 385 building control which are already in place, so I cannot see anybody escaping or putting in a poor sort of standard, because they will not be able to.

The President: The Hon. Member, Mr Malarkey.

390 Mr Malarkey: Thank you, Madam President. Again, leading on from my colleague from South Douglas, as you do not at present have a register, what are you doing to make sure that those properties are aware of what they have to do before next January, and what prosecution will be taking place after January if these places do not conform, do not register and do not come up to standards, because any legislative or 395 registration is extremely well overdue with regard to these properties?

The President: Minister.

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The Minister: Thank you, Madam President. 400 Certainly, in regard to prosecution, absolutely, if they are not up to standard by January, the enforcement notices will be undertaken. But I think one of the things we have to do that I think is important: there is a cut-off date of January at the start of next year and I think it is also important to work with the landlords and the owners to make sure that they meet the standards. There is certainly work ongoing with that. As I said, we have had plenty of interest to 405 date. I think the work we need to do – and this is why I have been grateful for the Question today – really is to work with the areas of maybe greyness out there and engage with local authorities, because we will certainly be asking them, ‘Can you please bring back to us so we can go and notify them?’ 410 So I think realistically there are still bodies of work to be done, but the regulations are in place. There has been a period now to get up to speed and to get up to the cut-off date, which is January. So I am comfortable with where we are.

The President: Final supplementary, Mr Houghton. 415 Mr Houghton: Thank you, Madam President. This is more my supplementary in support of the previous questioner. Can the Minister explain precisely why has it taken anything up to 10 years for this legislation to be actually put into effect? Does he acknowledge that the 12 registered properties, or the 420 owners of those properties who have come to the Department so far, are simply the tip of the iceberg? And when he stated that there was a potential danger in these properties, does he acknowledge that that was the case when the Bill came before the Branches and was enacted all those years ago?

425 The President: Minister.

The Minister: One thing I can say – I cannot comment for previous Houses – is it may have taken a long time but at least it is here now and at least we are enabled to get these properties up to date. I think also it is important to note that social standards, social demands, are 430 changing, where really all the housing lists out there, Madam President, are clear. There is a big demand for single occupancy, there is a big demand for couples not moving into social housing – the demand on that is really great at the minute. So there has been a change in the last 10 years. Certainly what I can say is that I think it is important that we get this right at this stage – which we will. This is why I do think this Question is very timely today, if I am honest with you. It 435 really just highlights the fact that the work is ongoing. There have been a dozen to date. The information I got yesterday – to inform Mr Houghton – is that we think that there is round about another dozen.

Mr Houghton: Only another dozen! There are more than that. 440 The Minister: We think so, but again (Interjection by Mr Houghton) the figures, Madam President, we need to get to, and that is why we will undertake the work. We will certainly let Members know in due course.

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HEALTH AND SOCIAL CARE

3. Residential and nursing homes – Standards of care

The Hon. Member for Onchan (Mr Karran) to ask the Minister for Health and Social Care:

What conclusions he has drawn about the standards of care in residential and nursing homes; and what plans he has to improve standards of care? 445 The President: Question 3, the Hon. Member for Onchan, Mr Karran.

Mr Karran: Eaghtyrane, what conclusions have been drawn about the standards of care in residential and nursing homes; and what plans he has to improve the standards of care? 450 I ask the Shirveishagh Slaynt, Kiarail y Theay.

The President: The Minister for Health and Social Care to reply.

The Minister for Health and Social Care (Mr Quayle): Thank you, Madam President. 455 All adult care homes are inspected against a specific set of standards under the Regulation of Care Act 2013. We have a total of eight nursing homes and 47 residential homes on the Island at the present time, all of which have been inspected by the Department’s Registration and Inspection Unit in the past year. All homes, bar three, currently have outstanding requirements that they need to 460 meet to satisfy the standards that we inspect to. This is not unusual and highlights the fact that standards for both nursing and residential care are dynamic and constantly changing as new best practice comes through. There is a robust process in place, monitored and measured by the Registration and Inspection Unit, to ensure that all service providers are working actively to meet the 465 requirements identified through the inspection process. Within 28 days of receiving a final report from the Unit, providers have to agree a detailed action plan with the Department to show how the requirements will be met. Providers also have to address any immediate risks that are identified through an inspection without delay, and these risks do not wait to be included in action plans. 470 The one conclusion that can be drawn from the inspection visits over the past year is that the needs of residents in nursing and residential homes have increased as people are living longer with more complex medical conditions. As has often been reported in this case, Madam President, the Island faces a significant challenge in the recruitment and retention of adequately qualified care professionals. Whilst we 475 know this is a problem within our own service, it is also a significant issue for private sector providers who are also required to meet high standards of care.

The President: Supplementary question, Mr Karran.

480 Mr Karran: I ask the Shirveishagh: is it illegal on the Isle of Man to restrain elderly persons in care homes, whether nursing or residential; whether the restraint is a physical means, by trussing or tying up, by physical barriers such as bed rails, locked doors, etc. or by medical means as far as sedation is concerned?

485 The President: Minister.

The Minister: Thank you, Madam President. ______1180 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Sadly, with an ongoing case, I think there is an element of sub judice here. I do not think it should be discussed any further. 490 The President: I think we should acknowledge the question of sub judice, Hon. Member.

Mr Karran: Eaghtyrane, I would agree with any issues about sub judice; I am asking about the principles. 495 Would the Shirveishagh not agree that I brought in the original Bill in 1988 about nursing and residential homes? One of the reasons why we fought for that Bill was the fact of the practice of elderly people being tied up in nursing and residential home. Is it illegal or is it not illegal? That is the issue that I am after. I am not interested in different court cases. Can the Shirveishagh – keeping outside any court cases, and if he feels that there is an issue 500 of sub judice and not public interest, I will restrain, but –

The President: Hon. Member, with regard to your concerns about principle, this is very close to a particular case which is being considered at the moment. I think we should respect the sub judice rule in these circumstances. 505 Mr Karran: Okay, Eaghtyrane, I am just concerned that the fact was that we brought about this Bill in 1988. I am worried about the changing of concern about these issues. What I am wanting is the general principles, so that the issue is recognised as far as what the law is for other care homes, as far as these issues are concerned. 510 If you feel that I cannot ask any more questions, I am perfectly happy not to pursue this, but I think the issue is, Eaghtyrane, this is a culture that we need to deal with. I am happy to withdraw, and not ask any further supplementaries at the present time, but I am also distressed that issues that should have been addressed in my 1988 Bill … Bad practices seem to be back again, that is all.

4. Noble’s Hospital – MRSA and C. diff

The Hon. Member for Douglas South (Mrs Beecroft) to ask the Minister for Health and Social Care:

How many cases of MRSA and C. diff have there been in Noble’s Hospital in each of the last four years; and how this compares to hospitals in England? 515 The President: Question 4, the Hon. Member for Douglas South, Mrs Beecroft.

Mrs Beecroft: Thank you, Madam President. I ask the Minister for Health and Social Care: how many cases of MRSA and C. diff have there 520 been in Noble’s Hospital in each of the last four years, and how this compares to hospitals in England?

The President: The Minister to reply.

525 The Minister for Health and Social Care (Mr Quayle): Thank you, Madam President. I hope all Hon. Members will bear with me in my pronunciation of the diseases.

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In the United Kingdom, methicillin-resistant Staphylococcus aureus infection (MRSA) (A Member: Well done!) is a publicly reported indicator that provides a measure of patient safety and the quality of care. 530 The data for MRSA infection at Noble’s Hospital show that in 2013 and 2013-14 Noble’s Hospital had four cases in each year; in 2014-15 there were three cases and in 2015-16 there were five cases. With regard to C. diff, which is clostridium difficile, infection at Noble's Hospital: the figure for 2012-13 was 24 cases; 2013-14, 20 cases and in the last two years, 13 cases in each year. 535 Although infection rate data is available on the Public Health England website, it is impossible to make like-for-like comparisons as the United Kingdom data does not give the infection rate to population size ratio. That said, from the information available, I can state that for nine acute hospital trusts in the North West for 2014-15, the indicated rates for MRSA are between one case in the year, ranging 540 up to seven cases in the year. The rates for C. diff are significantly different, ranging from 20 to 76 in the year. But, as I say, this cannot be directly compared as we do not know the population size per NHS trust.

The President: Supplementary question, Mrs Beecroft. 545 Mrs Beecroft: Thank you, Madam President. Could the Minister just confirm: he said the ‘publicly reportable’ conditions in the UK. Is that the same as here? Do they have to be reported here? I am just wondering: the figures that he has given us today for the last four years, is he sure that they have actually captured all the 550 relevant cases?

The President: Minister.

The Minister: Thank you, Madam President. 555 The Hon Member has asked me a question that I have asked my officers who are in charge of recoding these instances at Noble’s Hospital. They will have a duty of care to record this. It is a serious issue: the two diseases, and I would stand by the figures given as being correct.

The President: The Hon. Member, Mr Karran. 560 Mr Karran: Eaghtyrane, the Hon. Member for South Douglas asked what was the legal status, as far as this is concerned. Is it possible to get an answer on that? Could the Shirveishagh inform us, as far as the issue of how many cases there are? Would the Minister recognise that maybe there are issues as far as management and 565 cleanliness are concerned as a factor? What initiatives does he consider can be taken in order to minimise these cases and maximise the cleanliness within the operations, as far as the Hospital is concerned?

The President: The Minister. 570 The Minister: Thank you, Madam President. In answer to the first part and my hon. colleague for Douglas South, Mrs Beecroft, I am presuming it is legal on the Isle of Man. If that is not the case, I will write to all Hon. Members in this Court to advise them that is not the situation, but if all Members take that it is a legal 575 requirement to report the two diseases asked in the Question. If I could point out in the answer, it is a little bit disappointing that the Hon. Member for Onchan, Mr Karran, seems to be inferring from his supplementary question that we are out of control with the number of cases. I think my Answer clearly shows that in the MRSA, we have ______1182 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

averaged between three and five, and in the C. diff. area we have actually significantly reduced 580 the number of cases in the year. So I would argue that the Hospital does have this under control and is actively working. Whilst it is always pleasant, Madam President, to see a reduction in the instances of disease, one would have to concede that zero would be a far better answer to give to Members of this Hon. Court. 585 The President: The Hon. Member, Mrs Beecroft? The Hon. Member, Mr Karran.

Mr Karran: Eaghtyrane, would the Shirveishagh not agree that the issue of cleanliness is a 590 major factor as far as these infections and other infections? Would the Minister also not agree, what positive policies has he got as the Minister at the flagship of this Department, of how he sees the way forward? I he considering new initiatives to help this on the basis of cleanliness, by maybe considering thinking about some sort of reintroduction of SENs, or a proper matron-style nurse management system, like it was when I first was a member of the DHSS, over 30 years 595 ago?

The President: Straying from the Question, but Minister.

The Minister: Thank you, Madam President. 600 I totally agree with the Hon. Member for Onchan, Mr Karran. It is incredibly important and serious that we make sure that our cleanliness is at an absolute maximum at Noble's Hospital. One of my own pet projects which I have not managed to succeed to yet – I know some of my political colleagues … The reintroduction of a matron has always been one of my pet ideas too, (Interjection) so I cannot disagree – I find myself agreeing with Mr Karran at an alarming rate to 605 day. (Interjection) What are we doing to improve the situation and reduce the rates? Our Department Quality Strategy, Madam President, is being finalised and incorporates targets for the next five years. The target for MRSA and BSI is set at a zero threshold. A new MRSA bloodstream infection in a patient would trigger several actions: (1) the senior management team consultant and senior 610 nurses are informed; (2) we have recently implemented a post-infection review/in-depth investigation process in order to make future improvements; (3) reported as an ‘untoward incident’ to the patient safety manager; (4) surveillance data is presented to the Infection Prevention and Control Committee, Noble’s Patient Safety and Quality Committee, Primary Care Patient Safety Committee, Mental Health Patient Safety Committee, executive committees 615 within the Department of Health and Social Care, and the Corporate Governance Committee. A business case, finally, is being developed for universal admission screening at Noble's Hospital, as undertaken in English hospitals, and this will enable the early identification of high- risk patients that require prophylactic treatment and isolation to prevent cross-infection.

620 The President: Final supplementary, Mr Karran.

Mr Karran: Eaghtyrane, thanking the Shirveishagh for his initiatives, I am grateful for all the committee meetings that he is having, but what initiatives are we going to have about the basic issue of cleanliness towards addressing all these forms of infection within hospitals? Has he got 625 any initiatives outside meetings to discuss the issue with management of actually getting the management sorting out the issue of cleanliness within the hospital, to get it back to what used to be?

The President: Minister, I think you have described what you are doing, but …

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630 The Minister: Well, I am really disappointed with that last comment – ‘back to what it used to be’, Madam President. I have already given the figures which have shown a decrease! A significant decrease to the Hon. Members. So it is very disappointing that anyone listening to this, Madam President, may think there is a serious issue at Noble’s Hospital on health, and I take this as a slur to the hard-working staff – 635 (Several Members: Hear, hear.) Not only that, in my previous supplementary answer, I specifically said, a business case is being developed for universal admission of screening at Noble's Hospital, and that will make a significant improvement, which is what the Hon. Member for Onchan wants and I want, to try and get as close to zero as possible.

5. Primary health care centres – Plans to improve and develop

The Hon. Member for Douglas North (Mr Houghton) to ask the Minister for Health and Social Care:

What plans he has to improve and develop primary health care centres around the Island?

640 The President: Question 5, the Hon. Member for Douglas North, Mr Houghton.

Mr Houghton: Thank you, Madam President. I beg leave to ask the Minister for Social Care, what plans he has to improve and develop primary health care centres around the Island? 645 The President: The Minister to reply.

The Minister for Health and Social Care (Mr Quayle): Thank you, Madam President. The current stock of primary care buildings is generally in good condition and fit for purpose. 650 Primary care services are delivered from 12 GP practices, the majority of which operate from Department premises and a number of distinct community health service bases. Through the capital programme, which is run by the Department to invest in its facilities, Palatine GP Practice will be expanded this year at a cost of £635,000 – and I had the honour of cutting the turf fairly recently with the Hon. Member of Council, Mr Coleman, and the work 655 started the following day. We are at the footings level at the moment. Primarily this work has been scheduled to enable the Department to provide placements for foundation year doctors, who now include a GP rotation as part of their training requirement. The new facilities will be open in November 2017. The Department’s Five-Year Strategy for Health and Social Care identifies that in future we 660 will be focusing on the delivery of care through locality-based hubs, delivering community-based services. At present, the precise number and configuration of such hubs are still to be determined. The aim is to maximise the use of our current resources and buildings rather than necessarily building new ones. It is too early to be clear whether our long-term consequence of the strategic 665 direction will be for community-based schemes to coalesce and co-locate. Plainly, this is easier in Ramsey, where we already have community-based care hub at the District Cottage Hospital, supported by Ramsey GP Practice and in Port Erin, where a number of care services are grouped around Southlands at Four Roads roundabout.

670 The President: Supplementary question, Mr Houghton. ______1184 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mr Houghton: Yes, thank you, Madam President. May I ask the Minister if he could inform this Court the last time he met with GPs themselves as a group? Were they satisfied with developments going forward, and if not, what does the Department intend to do in order to satisfy the wishes of the GPs – and when I mean that, it is in 675 the interests of their patients?

The President: Minister.

The Minister: Thank you, Madam President. 680 I can assure the Hon. Member that my Department, through our Director of Primary Care meets at least every three months with the GPs on the Isle of Man. The adverts are regulated made in all the press to advise that our GPs will be attending a meeting and that there will be cover to allow this to happen. Regular feedback is taken from the GPs in two ways, to try and constantly look at improving our services. Should there be any concerns that the Hon. Member 685 has raised or may be alluding to, I do not know anything about, but I would welcome him giving me that evidence.

The President: Supplementary, Mr Houghton.

690 Mr Houghton: Thank you, Madam President. I will be more than pleased to do that, because there is a serious issue, I understand, developing. So in answer to the final supplementary question I have at this point in time for the Minister, can he give me his full surety that he has all confidence in the way forward in primary health 695 care, i.e. doctors’ surgeries, that he does not have any serious issues – there are no serious issues – in a group fashion with the way forward with GPs?

The President: Minister.

700 The Minister: Madam President, I am the Health Minister and Social Care Minister – I always have serious issues that have to be addressed on a regular basis! What I reassure this Court is that any problems, should they come to the fore, will be dealt with as efficiently as possible, and within the budget this Hon. Court provides me.

ACTING ATTORNEY GENERAL

6. Attorney General’s statutory powers – Authorisation of an English barrister

The Hon. Member for Douglas South (Mrs Beecroft) to ask Her Majesty’s Acting Attorney General:

Under what circumstances an English barrister would be authorised to exercise the statutory powers of Her Majesty’s Attorney General of the Isle of Man?

The President: Question 6, the Hon. Member for Douglas South, Mrs Beecroft. 705 Mrs Beecroft: Thank you, Madam President.

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I ask Her Majesty's Acting Attorney General, under what circumstances an English barrister would be authorised to exercise the statutory powers of Her Majesty's Attorney General of the Isle of Man? 710 The President: The learned Acting Attorney General to reply.

The Acting Attorney General: Madam President, I thank the Hon. Member for her Question. The statutory powers of the Attorney General are many and varied, and this response would 715 be too long in the making if I was to try and identify and explain the nature and scope of all of those powers. In circumstances where for whatever reason, I am unable to exercise any of my statutory powers – perhaps as I am temporarily absent from the Island, or in any particular case I am conflicted – the Attorney General is able to deal with those matters by way of delegation to law 720 officers in Chambers, and the Attorney is also greatly assisted by now having, since July 2015, Her Majesty’s Solicitor General in post, and as I simply explain, the definition of Attorney General now includes the Solicitor General, so now more than ever, the person in whom the statutory powers vest is present and available to act. When however would an English barrister be authorised to exercise those statutory powers 725 of the Attorney General? There is one obvious example to which I will refer in a moment, but generally, I cannot foresee otherwise having circumstances arising when there is a necessity to instruct an English barrister to exercise any of the Attorney's statutory powers. The one set of circumstances when I believe the Attorney General may be required to consider authorisation of the appointment of an advocate outside Chambers or an English 730 barrister to exercise certain statutory powers of the Attorney General is in relation to statutory powers regarding the conduct and the taking over of criminal proceedings. This power is not just a procedural power, as the taking over and conduct of criminal proceedings necessitates a prosecution decision being taken, namely to prosecute or to not prosecute, and a decision as to what charges to refer. 735 As Attorney, I have the power to authorise a local advocate or an English barrister, and in the case of an English barrister, provided they obtain a temporary advocate’s licence on the Island to act in relation to specific criminal proceedings. This does not entail me transferring or releasing my statutory powers to them, but rather authorising that advocate or English barrister to conduct specified criminal proceedings, and for such purpose that English barrister would have 740 all the powers of the Attorney General in relation to those proceedings, subject, however, at all times to the Attorney's continuing directions. The circumstances where I might make such an authorisation might be if I was personally conflicted, or if essential witnesses in Chambers were conflicted, or if a matter required specialist advice otherwise not available on the Island or in Chambers. The circumstances when 745 specialist legal counsel are required or increasingly rare, as the experience and skills of law officers and of the Manx Bar itself continue to expand and develop. Thank you, Madam President.

7. Company property – Legal and beneficial title

The Hon. Member for Onchan (Mr Karran) to ask Her Majesty’s Acting Attorney General:

Whether company law in the Isle of Man is essentially the same as the United Kingdom in that the legal and beneficial title to a company’s property vests in the company as a separate legal person? ______1186 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

The President: Question 7, the Hon. Member for Onchan, Mr Karran. 750 Mr Karran: Eaghtyrane, whether company law in the Isle of Man is essentially the same as the United Kingdom in that the legal and beneficial title to a company’s property vests in the company as a separate legal person? I so ask.

755 The President: The learned Acting Attorney General to reply.

The Acting Attorney General: Madam President, I thank the Hon. Member for his Question. Property, whether real or personal, may only vest in a real or legal person. In the case in the Isle of Man, the companies incorporated under the Companies Act 1931, or the Companies Act 760 2006 have their own corporate identity. This is essentially the same as the position in England and Wales. It means that the company is regarded as a separate legal person. In practical terms, this means that a company in the Isle of Man is able to purchase property in its own name, and that property will vest in that company until it is sold or assigned. 765 Generally, directors of a company are given the powers of management required to manage the company and they exercise these powers by passing resolutions at board meetings. Their powers will be given to them by the articles of association of the company. When making management decisions that relate to property which is owned by the company, the director is making that decision on behalf of the company and that director owes 770 a fiduciary duty to the company in this regard.

The President: Supplementary question, Mr Karran.

Mr Karran: Eaghtyrane, a supplementary. 775 Can the Acting Attorney General, in the case that a Department is awarding grants of public money against assets in a company, is it essential to them to verify the proof that the company has good title to the assets being used to get the public money?

The President: Learned Acting Attorney General to reply. 780 The Acting Attorney General: Thank you, Madam President. In the event that a Department is considering making a grant of funds to a company on the Isle of Man and is using property in the Isle of Man as security for any advance of moneys made, it would be incumbent on the Department through my Chambers to ensure that the company 785 had proper title to the property that was being charged.

The President: Supplementary, Mr Karran.

Mr Karran: Eaghtyrane, thanking the Acting Attorney General for that, when it is proven that 790 a company has been paid grants to which it has no legal entitlement, what powers does the Department making the grant have to demand the repayment of such moneys?

The President: Learned Acting Attorney General.

795 The Acting Attorney General: Madam President, the Department has the power to call for the repayments of any advance which it makes in circumstances where, if I understand the question correctly, the loan has been made on a false premise. In those circumstances, proceedings could be issued for the recovery of the debt.

800 The President: The Hon. Member, Mrs Beecroft. ______1187 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mrs Beecroft: Thank you, Madam President. If a Minister makes the decision not to take action in reclaiming public money from a company that was not lawfully entitled to have it, is that Minister accountable for that decision and if so, who is the Minister accountable to? 805 The President: Learned Acting Attorney General.

The Acting Attorney General: Madam President, if I might say that that is moving from the tenor of this Question because at Question 11, I am asked separately to deal with the issue of 810 the recovery of grant moneys to Manx companies, Madam President.

The President: Perhaps we could deal with that at the next Question.

The Acting Attorney General: If I could deal with that later. 815 The President: Supplementary, Mr Karran.

Mr Karran: Can the Shirveishagh … sorry, I am giving you political status, Acting Attorney General! 820 Can the Attorney General just clarify under what primary legislation would this issue where there is guidance as far as legal entitlement would the legislation be in order for a Department to operate under, where cases of flagrant abuse has happened?

The President: Learned Acting Attorney General. 825 The Acting Attorney General: Madam President, I do not have in mind any specific primary legislation. I am addressing the principle of the Question which was posed, which my understanding was that a grant or an advance of moneys had been made under false premise – in other words, the Department – and I use the word loosely – had been ‘hoodwinked’ perhaps. 830 In those circumstances, the Department would have the right, contractually, under the Scheme upon which the advance had been made, to call for recovery of the moneys advanced.

Mr Karran: Eaghtyrane, can I have one last …. So under that premise, Acting Attorney General, that would be an issue of being civil 835 legislation, not criminal legislation on that basis, as far as if that was the case; but would the Acting Attorney General just clarify, if there is deception and fraud and the Ministers would be prepared to cover it up, then surely they are party to any actions as far as that being a criminal offence?

840 The President: Hon. Member, again we are straying to Question 11, to some degree. Do you want to comment, sir?

The Acting Attorney General: Madam President, if I can leave that till Question 11, please.

845 The President: Supplementary, Mr Karran – in relation to Question 7, please.

Mr Karran: I am happy.

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8. Company property – Ownership

The Hon. Member for Onchan (Mr Karran) to ask the Her Majesty’s Acting Attorney General:

Whether the law of the Isle of Man is that a company’s property belongs to it and not to its directors, management or shareholders?

The President: Question 8, the Hon. Member, Mr Karran. 850 Mr Karran: Eaghtyrane, I ask the Question of Her Majesty’s Acting Attorney General: whether the law of the Isle of Man is that a company’s property belongs to it and not to its directors, management or shareholders?

855 The President: The learned Acting Attorney General.

The Acting Attorney General: Madam President, I thank the Hon. Member for his Question. Property which is vested in an Isle of Man company is owned by that company, which can deal with it freely, subject to any charges that may attach to that property. Until such times, that 860 property is transferred or assigned. The directors have responsibility to ensure the effective running of the company and this may necessitate them making management decisions which relate to property which is owned by the company. Any such decisions made by the directors are made by them on behalf of the company. 865 In circumstances where a winding up order is made or a provisional liquidator is appointed, the liquidator will take custody and control of the company property on behalf of the creditors. The liquidator will use this property to discharge any outstanding liabilities of the company and, subject to the company's articles of association, they then distribute that property to the shareholders of that company. 870 The President: Supplementary question, Mr Karran.

Mr Karran: Eaghtyrane, thanking the Acting Attorney General for his reply. Could the Attorney General tell me: is it permissible under financial regulations and law not to take action 875 to recover public money wrongly paid to a company simply because of political considerations?

The President: Again, we are straying to Question 11, Hon. Member. Perhaps you could reserve your comments until then?

POST OFFICE

9. Regent Street Post Office – Rent-reduced status for Mannin Retail

The Hon. Member for Douglas East (Mr Joughin) to ask the Vice-Chairman of the Post Office:

Is Mannin Retail still receiving rent-reduced status for the Regent Street Post Office; and if so for how long?

The President: Question 9, the Hon. Member for Douglas East, Mr Joughin. ______1189 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

880 Mr Joughin: Thank you, Madam President. I would like to ask the Vice-Chairman of the Post Office: is Mannin Retail still receiving rent- reduced status for the Regent Street Post Office; and if so for how long?

The President: I understand that the Vice-Chairman of the Post Office was ill at the time this 885 was tabled and the Answer will be given by the Minister for Economic Development.

The Minister for Economic Development (Mr Skelly): Gura mie eu, Eaghtyrane. Firstly, I refer the Hon. Member to the Answer provided to him by the Chairman of the Isle of Man Post Office on 1st December 2015. 890 The agreement with Mannin Retail Ltd has been extended to allow for further investigation to be carried out by Isle of Man Post Office into modernised operator models and equipment for retail post offices which have been extensively tested in the UK by Post Office Ltd. The detailed layouts are in the process of being finalised and the Post Office is planning that the service will relocate to a new location by the end of June. This will avoid any disruption to 895 services during the busy TT period.

The President: The Hon. Member, Mr Joughin, supplementary.

Mr Joughin: Thank you, Madam President. 900 Will the Minister not agree with me that the first criterion of any post office or sub-post master or private company is to supply suitable premises, which this company is clearly not doing because the taxpayer is supplying suitable premises? Does he not agree with me that … how can we have fair competition with all the other sub- post office masters and fellow companies when we have one company here – a private company 905 – having rent-free status? It is abhorrent that this company is having rent-free status – £60,000 to £70,000 of rent-free accommodation from the taxpayer or from the Post Office – because the Treasury are making excessive demands on the Post Office of a payment of £2 million a year, crippling the Post Office, at the same time as handing out free rent to a private company.

910 A Member: hear, hear.

The President: Question? Minister to reply, if you sorted the early question out of there.

915 The Minister: Yes, I would agree with the Hon. Member. Should the post office have suitable premises? I absolutely agree 100%. What I believe the Post Office and Mannin Retail are trying to achieve here is exactly that. The continuity, I think, was very important, particularly with the customer in mind, that in this transition phase we do have that in the existing premises; albeit that they have a peppercorn 920 rent and share in the running cost, this will actually be finalised in the very near future. It was intended to be by spring of this year; however that has now extended to June so we can get past the busy TT period.

A Member: When the bluebells come. 925 The President: Supplementary, Mr Karran.

Mr Karran: Eaghtyrane, would the Shirveishagh give us an assurance under his stewardship that we will have a situation of a level playing field as far as the question as far as Mannin Retail 930 is concerned, allowing for the fact of the closed tender basis that was originally given as far as

______1190 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

the operation and the opportunity for the Freedom to Flourish for the few as far as this issue is concerned? What lessons have been learned to sort out the issue of the fact it was a very select tender list to start with and now we hear that they are being given a backdoor subsidy on top of that 935 from the Hon. Member for East Douglas, which is totally against the Freedom to Flourish on a level playing field?

The President: Minister to reply.

940 The Minister: Gura mie eu. I would disagree. This is not about a backdoor subsidy; this is actually about mutual benefit between the Post Office and Mannin Retail, and what we do need to consider is of course what is in the best interest of the customer. Clearly, they have not been able to achieve what they set out to achieve in the timeframe that they set out. So what we are talking about here is literally a 945 matter of a couple of extra months to achieve that outcome, which we believe will be for the long-term benefit of the customer.

The President: The Hon. Member, Mrs Beecroft.

950 Mrs Beecroft: Thank you, Madam President. Was the rent-free period or peppercorn period made clear to all those who actually tendered or were considering tendering originally?

The President: Minister. 955 The Minister: Gura mie eu. I am not familiar with the exact detail of the tender process there, but what I am aware of is that there was considerable concern with regard to the possible location of Mannin Retail and clearly what they need to do there is to investigate all those options and that is why the delay is 960 in place right now. They are investigating modernised operating models and equipment that will be more efficient and effective, particularly – as I keep saying – for the customer.

The President: The Hon. Member, Mr Karran.

965 Mr Karran: Would the Shirveishagh not agree that the issue of a closed tender in the first place adds insult to the other people who were potentially wanting to go for this franchise? Would he not agree that the issue of this backdoor state subsidy is equally offensive for the Freedom to Flourish for all? And what assurances can he take, as he is not responsible for this, for making sure that lessons are learned in order that well thought-out strategic business plans 970 are developed before we have this make-it-up-as-it-goes-along in order to try to get the square peg to fit in a round hole?

The President: Minister.

975 The Minister: Gura mie eu. Yes, of course we are going back on old ground there with regard to the tender process and, whilst I obviously was not party to that, I do believe that the outcome that has actually been achieved is in the best interest of the Post Office and of course the customer. We do need to keep coming back to that and of course we will be debating this very issue as to the purpose of 980 the Post Office. And what we do need to understand is, I believe, one of the big issues that most Members in this Court will recognise and that is the social inclusion of the Post Office and what we need is there is the appropriate service model for the public. ______1191 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

The President: The Hon. Member of Council, Mr Turner.

985 Mr Turner: Thank you, Madam President. I wonder if the Minister could say whether there was any compensation given to Mannin Retail for the late start of the project. Would he not agree that this whole thing was a bit of shambles really? The Member, Mr Karran, pinched what I was going to say and that was they seem to be 990 making it up as they are going along. Shouldn’t all of these things have been sorted out before a contract was awarded, as to suitability of premises and all the various other things, and really this is just highlighting another example of doing everything on the hoof and fiddling around instead of having a proper plan in place?

995 The President: Minister to reply.

The Minister: Gura mie eu. I do not think I would call it a shambles. I would certainly say it was unfortunate that we have arrived at this particular situation. 1000 What we have here of course is an agreement that has been reached and this is, as I say, mutually beneficial – the current arrangement – as the Post Office set out on this journey in order to actually make savings; and now they are making those savings, which is a benefit, I think – to the overall wider benefit for the public purse. So we are in this position. Yes there are details, there are issues still to be resolved and 1005 hopefully those will be resolved and we will get continuity by the end of June.

The President: The Hon. Member, Mrs Beecroft.

Mrs Beecroft: Thank you, Madam President. 1010 I can understand the Minister not having all the information at his fingertips this morning because he is answering for somebody else, but could he find out and circulate to all Members whether this free rent or peppercorn rent was indeed known at the time of the closed tender process?

1015 The President: Minister.

The Minister: Gura mie eu. I do not have all the details but I believe the intention was actually to move directly into the premises of Mannin Retail. So that is obviously being revisited at this time, as they are going to 1020 consider other alternatives. The point here is what we want is really an effective sub-post office. We have moved here from a Crown post office to a sub-post office, which is of course how most of the post offices operate on the Isle of Man and for the most part they do operate in a dual capacity, where you have got other retail interest as well as the postal services. 1025 So what we are looking at here is to see if we can find a long-term solution. Whilst this is unfortunate for the short term, it does provide continuity for the business operation. So I am not aware of any arrangement that was set out prior, but if there is I will come back to this Hon. Court.

1030 The President: Final supplementary, Mr Joughin.

Mr Joughin: Thank you, Madam President. It was a closed tender – a bit of an old boys’ tender; only one applicant could apply – (A Member: Hear, hear.) but the same rules govern everybody that applies for a post office – (Mr ______1192 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

1035 Karran: You’ll learn!) well – and as a former co-owner of a post office, I know the criteria that you have to have to have a sub-post office, and the first –

The President: Could you come to a question, sir, please.

1040 Mr Joughin: I will do, yes. (Interjections) As I said at the beginning, the first criterion is to supply premises. (Mr Houghton: Hear, hear.) They submitted premises and it was accepted. It was accepted in the Spar shop in Strand Street. It was put in the paper where it was going to be, the plans were put out to the public for consultation, and it was accepted.

1045 Mr Corkish: Address to the Chair.

Mr Joughin: Since then, the special tender arrangement that we have with the old boys’ club here, they have decided to renegotiate –

1050 Mr Corkish: Oh dear, dear! Tut-tut! (Interjections)

The President: Hon. Member, would you address the Chair and –

Mr Joughin: I do apologise, Madam President. 1055 The President: – and would you put a question, please. It is not a debate; it is a Question Time!

Mr Joughin: Why were they allowed to renegotiate the tender and move the premises to 1060 somewhere else? Thank you, Madam President.

The President: Minister to reply.

1065 Mr Joughin: At our cost!

The Minister: Gura mie eu. Yes, the Hon. Member asked the same question as previously: part of the tender process was to supply suitable premises. I think that was agreed but is it suitable premises and I think there 1070 were a lot of questions actually in this place and another place as to the suitability of that. So whilst it may be unfortunate that we actually had this delay in transferring, I believe it is appropriate to investigate all options though that there will be suitable premises for the long term and not just for the short term.

OFFICE OF FAIR TRADING

10. Manx Telecom – Additional charge for paper bills

The Hon. Member for Douglas North (Mr Houghton) to ask the Chairman of the Office of Fair Trading:

What action he will take to deter Manx Telecom from charging an additional £1.50 for a paper version of a telephone bill? ______1193 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

The President: Question 10, the Hon. Member for Douglas North, Mr Houghton. 1075 Mr Houghton: Thank you, Madam President. I beg leave to ask the Chairman of the Office of Fair Trading what action he will take to deter Manx Telecom from charging an additional £1.50 for a paper version of a telephone bill?

1080 A Member: Hear, hear.

The President: The Chairman to reply.

The Chairman of the Office of Fair Trading (Mr Quirk): Thank you, Madam President. 1085 The OFT would not normally deal with this matter where there is a specialist regulator. Whilst this Question relates to the Communications Commission’s licence holder, it is actually about billing practices, which is something the Office of Fair Trading would tend to look at across the sector (A Member: Hear, hear.) (A Member: Absolutely.) of a telecom operator … are obliged to meet more stringent standards than other sectors. 1090 The OFT encourages firms to try to be as efficient as possible and of course it passes on the benefits to the customers of lower prices. It is widely accepted that electronic billing and online automatic payment represent a most effective, cost-effective, environmentally-friendly method of collecting payment. Many firms, including the MUA, use discounts as a means of encouraging customers to use 1095 this method. Manx Telecom has chosen to do the same but has expressed it the other way round. Rather than saying, ‘Use online billing to get the discount’, they are giving everyone a discount and saying, ‘If you want a paper bill, the bill is extra.’ This is the same outcome. This approach is common in the wider telecoms market, such as the UK, but different from the approach taken by some other local utilities. However, it is not misleading, which is the test 1100 that the OFT would use in dealing whether to make representation or take enforcement action. Ultimately, the decision to charge less for the electronic billing online payment or a direct debit payment is a commercial decision. What the OFT does expect is that the firm makes it clear to the consumer what the charges are, and in this case it is clear.

1105 The President: Supplementary, Mr Houghton.

Mr Houghton: Thank you, Madam President. In view of the fact that elderly people are still paying their bills by paper or manual fashion, and also the additional losses at post office counters that receive these moneys – 1110 A Member: I am not elderly.

Mr Houghton: – can the Chairman of the OFT advise whether he actually morally supports this going ahead? 1115 The President: Chairman to reply.

The Chairman: Can I say, Madam President, this is a commercial decision taken by one of the operators. It is a universal one. In fact, if I quote to Hon. Members here today that the billing for 1120 BT in the UK is £1.70. Actually there are additional charges if you want a full breakdown of your bill. This does not prevent persons using the Post Office to pay their bills at all. Also there is an opportunity for those families and friends of those who are not fortunate to have internet action to have their bills accessed by somebody else and have those payments explained.

______1194 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

1125 There is a choice but I believe the two operators on the Isle of Man currently operate the same principle.

The President: The Hon. Member, Mrs Beecroft.

1130 Mrs Beecroft: Thank you, Madam President. The Chairman of the OFT just said, I think it was, in his first answer that Manx Telecom are giving everybody a discount. Would he kindly clarify what discount they are giving to us all?

A Member: How generous of them! 1135 The President: Chairman to reply.

The Chairman: Thank you, Madam President. What I was indicating there was there is an opportunity that if people want or do not want a 1140 bill … if they want an electronic version and are getting it from the internet, they will not be charged the £1.50. But if a consumer makes that choice to have a bill in paper form, the charge is clearly £1.50.

Mrs Beecroft: It is not a discount though, is it? (Interjection) 1145 The President: The Hon. Member, Mr Karran.

Mr Karran: Eaghtyrane, can the Caairliagh tell us exactly what dues the taxpayer actually gets from the Office of Fair Trading (Several Members: Hear, hear.) as far as the money that is 1150 supposed to be there to protect the consumers? Allowing for the fact of the 10% extra you get courtesy of the patronage of the Chief Minister, what actually does the Office of Fair Trading do? What view has the Office of Fair Trading taken, allowing for the fact that we allowed the madness of a venture capital firm to buy it and now they sold it on …? It is all right his little mate across there telling him to pass the buck onto his Department. Would he not agree that the fact 1155 is because of the lack over here, just like the Steam Packet, we end up with a situation where charges are made because money has been taken out at a false level because it is a protected monopoly?

The President: Chairman. 1160 The Chairman: Madam President, I am quite taken aback by the Hon. Member for Onchan there. (Interjection by Mr Karran) How is it a protected monopoly? There are two operators there. There is another operator there – Manx Telecom and Sure.

1165 Mr Turner: They own the copper in the ground.

The Chairman: There is choice to be taken. How can this Government say to a legitimate company that trades on the market there that somebody cannot buy them? If Members of this Court want to buy another utility like Manx 1170 Telecom or Sure that is up to this Court or another place to decide, but we have a free market force in the Isle of Man here. We do not buy everything, Mr Karran. And can I say to you there is consumer choice – there is! If the consumer does not want the bill they can do it electronically; there is an opportunity to do that. It is a consumer choice, Members. The consumer has the right to make that choice.

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1175 I am quite amazed, when we received Royal Assent here today for the Consumer Protection Bill. (Two Members: Hear, hear.) We all signed this document! And I will be making sure you have actually signed it, because it protects the consumer out there from individuals –

The President: Hon. Members, let’s not – 1180 Mr Karran: Can I get an answer? I know he is part of the executive club (Laughter) but can I get an answer to what the Office of Fair Trading actually … what the taxpayers get (The President: Hon. Member!) apart from a rubber stamp –

1185 The President: Hon. Member, that question does not relate to the Question on the Order Paper in any case. (Mr Karran: It does!) (A Member: Ohh!) But we will move onto the next supplementary, which I hope will be related to the written Question. The Hon. Member, Mr Houghton.

1190 Mr Houghton: Thank you, Madam President. May I ask the Chairman of the Office of Fair Trading once again if he will give me an answer to the question that I asked him earlier, which he did not answer: does he morally support this being done at the additional cost for elderly people, who he appears to support in Onchan – sometimes! – and if he does support what I am saying, what is he going to do about it? 1195 The President: It is a repetition but Chairman, do you want to reply?

The Chairman: Yes, Madam President. I am quite amazed at the Hon. Member for North Douglas there. I wonder what 1200 representation he has made to the telecom industry itself, to both the telecoms, or to the Minister for Home Affairs, Mr Watterson, asking him about the issue there.

Mr Houghton: Answer the question!

1205 The Chairman: It is a regulatory issue. The consumer protection issue is actually covered. (Interjection by Mr Houghton)

The President: Final supplementary, the Hon. Member, Mrs Beecroft.

1210 Mrs Beecroft: Thank you, Madam President. I am just wondering if we can get some clarity on this discount issue. (A Member: Yes.) It seems very strange that when you are not being charged for something it is being classed as giving you a discount, (A Member: Yes.) and I am wondering if that is how the Office of Fair Trading actually look at all the other cases where people are maybe going to charge and then 1215 decide they are not going to – is it classed as a discount? Or for certain sections of society where they do not charge, is it going to be classed as a discount? Because it just seems to me to be a nonsense (A Member: Hear, hear.) and if that is what the Office of Fair Trading think, I would think it wide open for abuse for all sorts of companies (A Member: Hear, hear.) to claim they are giving everybody a discount because they are not going to charge them for something. 1220 Mr Houghton: They just bat it off.

The President: Chairman.

1225 The Chairman: Once again, Madam President, I have to remind the Member there that it is a consumer choice. The consumer, like yourself, has a choice – ______1196 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mrs Beecroft: Office of Fair Trading’s point of view.

The Chairman: – to have the bill electronically or in paper version. If the consumer does not 1230 want a choice they will obviously get a bill a lot cheaper.

Mrs Beecroft: Yes, we know.

The Chairman: If they want the paper version they will be charged £1.50. 1235 Mr Karran: Don’t expect an answer!

ACTING ATTORNEY GENERAL

11. Grant monies – Legal obligation to pursue recovery

The Hon. Member for Onchan (Mr Karran) to ask Her Majesty’s Acting Attorney General:

Whether the Departments of Government in the Isle of Man have a legal obligation to pursue recovery of grant monies to an Isle of Man company when it has been proved that the grant has been paid in error, or because of deception or fraud on the part of the applicant company?

The President: Question 11, the Hon. Member for Onchan, Mr Karran.

Mr Karran: Eaghtyrane, I ask the Acting Attorney General whether the Departments of 1240 Government in the Isle of Man have a legal obligation to pursue recovery of grant monies to an Isle of Man company when it has been proved that the grant has been paid in error, or because of deception or fraud on the part of the applicant company?

The President: The learned Acting Attorney General to reply. 1245 The Acting Attorney General: Madam President, I thank the Hon. Member for his Question. Departments of Government, like Statutory Boards and other bodies designated for the purposes of the application of the financial regulations, are subject to such regulations. The recently updated April 2016 version of those financial regulations continues to make particular 1250 provision relevant to debtors through FD5, FG5 and FD11. Compliance with financial regulations is a legal obligation and that obligation is provided by section 3 of the Treasury Act 1985. In summary, accounting officers must make every effort to recover any outstanding debt. As to the particular factual and evidential elements which go towards establishing or proving any error, deception or fraud which might found the basis for a claim in law that repayment is due, 1255 these factual and evidential elements will vary on a case-by-case basis. Ordinarily, absent at admission, it will be a question of proof on the balance of probabilities before the civil law courts, which might have to determine whether recovery of those monies is due or not. I would expect any entity subject to the financial regulations to seek appropriate advice from 1260 Chambers prior to the commencement of any civil legal proceedings to recover grant monies. In particular, should the circumstances be, as the Hon. Member for Onchan’s Question mentions, such to give rise to potential criminality then owing to issues surrounding potential self-

______1197 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

incrimination of any defendant, the usual course would be for any criminal proceedings to be progressed ahead of a civil claim. 1265 Whilst noting the duty of accounting officers to make every effort to recover debts, the financial regulations also provide for the Department and other entities with the ability to write off debts, reflecting, no doubt, the reality the debts may prove irrecoverable or uneconomical to pursue.

1270 The President: Supplementary question, Mr Karran.

Mr Karran: So it is permissible under financial regulations and law not to take action to recover public money wrongly paid to a company simply for political considerations … is not legal? 1275 The President: Learned Acting Attorney General.

The Acting Attorney General: Madam President, I have answered the position with reference to the legal obligation to comply with the financial regulations. I am not commenting as to any 1280 political considerations here. Essentially, what I have also brought to Hon. Members’ attention is the fact of that legal obligation to pursue and to seek to recover outstanding debts, but I have also brought to Hon. Members’ attention that the financial regulations also provide for the Department and other entities with the ability to write off debts. They would obviously have to justify that under the 1285 financial regulations, but those powers exist.

The President: Supplementary question, Mrs Beecroft.

Mrs Beecroft: Thank you, Madam President. 1290 If I may repeat my supplementary from earlier: if a Minister makes a decision not to take action in reclaiming public money from a company not lawfully entitled to have it, is that Minister accountable for that decision and, if so, who is the Minister accountable to?

The President: Learned Acting Attorney General. 1295 The Acting Attorney General: Madam President, the Minister of course is acting for the Department and in its name, and it will be the Department that is accountable to Treasury for compliance with the financial regulations.

1300 The President: Supplementary, Mr Karran.

Mr Karran: So, Acting Attorney General, in the case where it would be lawful or not to take action to recover public money wrongly paid to a company, if taking action for recovering would cause political or Civil Service embarrassment, where do we go as Members of parliament in 1305 order to address these issues if there was a structure to do so?

The President: Learned Acting Attorney General.

The Acting Attorney General: Madam President, I cannot venture to comment with 1310 reference to political considerations. As I have already said in answer to the supplementary question posed by the Hon. Member, Mrs Beecroft, the Minister and the Department are accountable to Treasury for the decisions that they make.

The President: Supplementary, Mrs Beecroft. ______1198 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

1315 Mrs Beecroft: Thank you, Madam President. Could the Acting Attorney General tell us where evidence of a conspiracy to defraud the creditors of a company has been established in this jurisdiction and revealed to a Department, if it does not act on the evidence, could it lead to the Department becoming part of a conspiracy to defraud? 1320 The President: Learned Acting Attorney General.

The Acting Attorney General: Madam President, certainly if there was evidence that a Department acting by its officers had taken the decision to so conspire, then of course it would 1325 be part of that conspiracy.

The President: Supplementary, Mr Karran.

Mr Karran: Can the Acting Attorney General tell us: would the consequences of public 1330 confidence in the law, if it was proved that the Attorney General's department was being directed in the decision to prosecute or not by Ministers …? Does the Acting Attorney General have that unilateral action to be able to take action, even if it is not directed by a Minister?

The President: Learned Acting Attorney General. 1335 The Acting Attorney General: Madam President, all the Members can be reassured that the Attorney General or the Solicitor General or whoever would not accept any direction from a Minister or anyone else in Government as to a prosecution decision.

1340 Several Members: Hear, hear.

Mr Karran: Further supplementary, Eaghtyrane. Allowing for the Acting Attorney General and these are issues that are not since his period, but if it was proved that an Attorney General has acted or not acted in the matter of instructions 1345 of a Minister, would it be unlawful conduct by the individual involved – in order to stop such a prosecution happening, if you can only be directed to do such things, as far as this is concerned?

The President: Learned Acting Attorney General.

1350 The Acting Attorney General: Madam President, I have got to make it clear, I am not under instruction from any part or any arm of Government as to prosecution decisions, and I never will be. Thank you.

1355 Two Members: Hear, hear.

Mr Karran: That will be a first!

The President: Hon. Members, that concludes consideration of the Oral Questions. The 1360 remaining Questions are for Written Answer.

______1199 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Questions for Written Answer

CHIEF MINISTER

12. Register of beneficial ownership – Reason not a public document

The Hon. Member of the Council, the Lord Bishop, to ask the Chief Minister:

Why the register of beneficial ownership is not to be a public document; and who is likely to benefit from this privacy?

The Chief Minister (Mr Bell): The Isle of Man central register of beneficial ownership will be 1365 fully compliant with the European Union’s fourth Anti-Money Laundering Directive being applied across all EU Member States which does not require registers to be public. During the consultation on the sharing of beneficial ownership information it was noted that investors in companies have a reasonable and entirely legitimate expectation that their interests will be kept private. It is a fundamental principle of Isle of Man (and English) law and natural 1370 justice that people should be entitled to privacy, unless there is an overriding public interest issue that requires otherwise. Examples of persons who might be affected adversely by a loss of privacy would include investors in companies which carry out activities which are legitimate, but may be controversial; wealthy individuals who might be targeted for extortion or other criminal purposes; companies 1375 seeking to invest in competitors or potential acquisition targets; investors concerned that their interest in a company may trigger market speculation; and family corporate vehicles. There would also be a risk of increased criminal activity in other areas, such as identity theft and blackmail.

TREASURY

13. Pinewood shares – Number still held; number sold; price

The Hon. Member for Douglas South (Mrs Beecroft) to ask the Minister for the Treasury:

Since the original purchase of Pinewood shares by the Treasury how many are still held; and how many have been sold; when; and for what price?

1380 The Minister for the Treasury (Mr Teare): The details of the Pinewood share transactions are outlined in Table 13.1 as follows:

______1200 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Table 13.1

Pinewood holding and activity Date Number of Price Comment shares 4,891,582 Original Holding 13-04-2015 -2,026,827 £3.75 Sale 2,864,755 Outstanding Holding 12-08-2015 -50,000 £4.40 Sale 2,814,755 Outstanding Holding 09-10-2015 -12,500 £4.20 Sale 2,802,255 Outstanding Holding 22-12-2015 -25,000 £4.30 Sale 2,777,255 Outstanding Holding 11-01-2016 -50,000 £4.25 Sale 2,727,255 Outstanding Holding 01-02-2016 -425,000 £4.20 Sale 2,302,255 Outstanding Holding 08-02-2016 -250,000 £4.45 Sale 2,052,255 CURRENT BALANCE

14. Government contracts – Number let which are still in operation; value

The Hon. Member for Onchan (Mr Quirk) to ask the Minister for the Treasury:

How many Government contracts have been let which are still in operation; what their value is; and which Departments have outstanding retention of money under the contracts?

The Minister for the Treasury (Mr Teare): Unfortunately the information requested cannot be easily gathered and collated within the normal timescale. 1385 I can assure the Hon. Member that once the information is to hand I will of course make this available.

______1201 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

ACTING ATTORNEY GENERAL

15. Double Taxation Agreement – Legal basis for amending; procedure and timetable

The Hon. Member for Douglas South (Mrs Beecroft) to ask Her Majesty’s Acting Attorney General:

What the legal basis is for the arrangement between HM Government and the Chief Minister amending the 1955 arrangement between the two governments for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income which is effective from 16th March 2016; and what the procedure and timetable for the bringing into force of this arrangement in the UK and in the Isle of Man are?

The Acting Attorney General: The Double Taxation Agreement (DTA) between the United Kingdom and the Isle of Man (known more formally as the Arrangement between Her Majesty’s 1390 Government and the Government of the Isle of Man for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income) was signed on 29th July 1955 and was ratified in the Isle of Man by the Double Taxation Relief (Taxes on Income)(United Kingdom) Order 1955 (GC 55/55) under section 1 of the then applicable Income Tax Act 1955 (an Act of Tynwald). 1395 In line with many other double taxation agreements negotiated internationally, the objective is to afford relief from double taxation in separate jurisdictions in respect of the same income tax or taxes of a similar character. The DTA has subsequently been amended by:

1400  the Double Taxation Relief (Territorial Sea)(Consequential Provisions) (No. 2) Order 1991 (GC 420/91);  the Double Taxation Relief (Amendment) Order 1994 (SD 112/94);  the Double Taxation Relief (United Kingdom)(Amendment) Order 2008 (SD 824/08); and  the Double Taxation Arrangement (United Kingdom)(Amendment) Order 2013 (SD 1405 360/13).

Each of these amendments has been in consequence of revised arrangements being agreed between the Isle of Man and the UK through a formal exchange of letters, as is standard international practice. 1410 The latest amendment to the DTA by way of a Protocol has been agreed by an exchange of letters between the Chief Minister and HM Treasury. In line with previous amendments to the DTA, an order to amend the DTA by ratification of the Protocol has been drafted under what are currently the relevant legislative provisions, sections 104B and 104C of the Income Tax Act 1970, and the Treasury Minister plans to move this item on behalf of the Council of Ministers at the 1415 May sitting of Tynwald. Section 104B(6) of the Income Tax 1970 provides that an order under this section must be approved by Tynwald before coming into operation. If Tynwald approves the order, the legal formalities required by the Island for the Protocol to enter into force will have been completed and the Chief Minister will notify HM Government accordingly. The UK will undertake a similar 1420 procedure and the amendment will enter into force, in accordance with Paragraph 4 of the Protocol, on the date of the later of these notifications and will have effect from 16th March 2016.

______1202 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

HEALTH AND SOCIAL CARE

16. Health care assistants – Training and qualifications required

The Hon. Member for Douglas South (Mrs Beecroft) to ask the Minister for Health and Social Care:

What training and qualifications health care assistants need?

1425 The Minister for Health and Social Care (Mr Quayle): Health care assistants (HCAs) are recruited to work throughout the DHSC in Noble’s Hospital, Mental Health Services, Community Health Services and Ramsey and District Cottage Hospital. The person specification details the level of training and qualifications HCAs should have, namely: 1430 Band 2: Desirable – National Vocational Qualification (NVQ) level 2 and previous experience of caring for ill people. Band 3 (Senior HCA): Essential – Level 2 NVQ, plus two years’ experience in a health care setting. Desirable – NVQ level 3. However, a planned review and update of these qualifications is underway for the end of 1435 May 2016. Induction and training programmes have always been in place for newly appointed health care assistants; but these were recently reviewed and revised and re-launched in February 2016 as a three-day programme, plus the requirement to complete mandatory training. This programme runs monthly and was developed for Noble’s Hospital staff and has been extended 1440 to include places for HCA’s from other areas of the Department. Additionally, the care certificate has been introduced for all new to care healthcare assistants. The care certificate workbook covers 15 fundamental standards of care which must be achieved to enable issuing of the certificate, and there is a requirement to complete this within three months for permanent staff and six months for part-time bank staff. 1445 The care certificate is the first step in the HCAs vocational training which leads onto the Qualifications and Credit Framework (QCF) levels II and III (formerly NVQ) through Keyll Darree. A new initiative that has been developed and launched is formal training for senior HCAs to become mentors. This new mentorship training programme means that they will be able to mentor other HCAs through both the Care Certificate and the competency packages, with formal 1450 sign off by a registered nurse. The programme empowers Senior health care assistants to develop in their own role and be able to support others to do the same. A Health Care Assistant Forum has been established and is organised and run by HCAs for HCAs, meeting bi-monthly the HCA forum is made up of health care assistants from every sector including private nursing and residential homes, reinforcing the message that, ‘Together we can 1455 make a difference.’ The forum exists to give HCAs a voice on topics that affect them in their role, recent agenda items have included the code of conduct, the care certificate, the HCA induction programme, The HCA competencies and the proposed nursing associate role. A revised code of conduct has been prepared by the HCA Forum and approved by the Nursing 1460 and Midwifery Advisory Council, to be adopted in all areas of the Department and launched on 25th April 2016. This will allow patients/service users to have continuity in the care standards delivered by all HCAs. The HCA Forum has recognised that each HCA deserves recognition for their handwork and commitment to developing and providing high quality standards. The forum has designed a 1465 badge recognition system that will be awarded to HCAs as they move through the development

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opportunities, as approved by the Chief Nurse. These badges are set to be launched in September of 2016.

This badge will be awarded to HCAs who have completed the care certificate and the relevant competency package for their area.

This badge will be awarded to HCAs who have completed a QCF/NVQ level II

This badge will be awarded to HCAs who have completed a QCF/NVQ level III

This badge will be awarded to HCAs who have completed The HCA Mentorship programme and who actively mentor, support and educate other HCAs.

1470 The badge recognition system is hoped to be a way of celebrating achievement, increasing morale and having a visual recognition for other colleagues as to the level each HCA is at. It is hoped that this will improve care standards by giving a morale boost to HCAs but also encourage them to develop their skills and work towards the higher badge. All of the programmes of education that have been developed with and for HCAs and provide 1475 a clear strategic approach for their introduction into the health care setting and additionally contribute to retention of staff who are advising they feel valued. Training for health care assistants within care homes and domiciliary care agencies are set within the specific standards. For adult care homes HCAs this is covered in standard 6, which covers the requirements for induction and the ongoing training. For Domiciliary Care Agencies 1480 this is covered in standard 20.

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Order of the Day

3. Public Sector Pension Reforms – Motion not moved

The Vice-Chairman of the Public Sector Pensions Authority to move:

That Tynwald: a) Receives the report of the Public Sector Pensions Authority entitled “Fairness and Sustainability of Public Sector Pension Schemes – Revised Proposals” [GD No 2016/0017]; b) Endorses the proposals for reform of the Government Unified Scheme (parts 4.1 and 4.2 of the report); c) Endorses the continued process for negotiating reforms of the Teachers and Police Schemes with a view to consulting on detailed scheme changes and thereafter, preparing formal amendments to be laid before Tynwald for approval no later than November 2016 (parts 5.2 and 5.3 of the report); d) Endorses the proposals for reform of the Tynwald Members Scheme (part 5.1 of the report); e) Requests the PSPA to commence reform negotiations with members of the Judicial Pension Scheme once the outcome of the UK judicial review is known (part 5.4 of the report); f) Requests the Public Sector Pensions Authority to consult on detailed scheme changes with a view to formal amendments to all schemes being laid before Tynwald for approval by no later than November 2016; g) Receives the report of the Cabinet Office entitled “Public Sector Pensions – Addressing the Legacy Funding Gap” [GD No 2016/0018]; h) Notes that the Medium Term Financial Strategy has identified that the Public Sector Pension Reserve will soon be depleted and by controlling expenditure on public services, Treasury has accommodated the legacy funding requirements within the revenue account; and i) Notes that as part of future budget setting processes, the PSPA and Treasury has identified options for managing the issue in the long term, through managed allocation of income growth together with exploration of other options for reform.

The President: We turn now to our Order Paper once again. Item 3 will not be moved.

4. Isle of Man Post Office – Governance structure – Debate commenced

The Minister for Economic Development to move:

That Tynwald receives the Report on the Governance Structure for the Isle of Man Post Office [GD No 2016/0008] and approves the six recommendations therein:

Recommendation 1 That the Isle of Man Post Office be created as a company owned by the Government of the Isle of Man and established under Isle of Man company law.

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Recommendation 2 That the purpose, aims and objectives of the Post be documented in a Memorandum of Understanding approved by Tynwald.

Recommendation 3 Treasury and Economic Development together draft a proposed Memorandum of Understanding.

Recommendation 4 That the Shareholder is the Treasury Minister.

Recommendation 5 That a shareholder executive based in Treasury is appointed as the departmental liaison officer with the Post Company.

Recommendation 6 That a non-political board is established to operate within the ambit of the corporate governance code, with a chairman appointed by the shareholder, and including on the board, in principle, the CEO.

The President: We come to Item 4: the Governance Structure for the Isle of Man Post Office. 1485 Mr Karran: Point of order, Eaghtyrane. Can we have the recommendations voted separately, please. I reserve my remarks to comment, but I think the items should be voted separately.

1490 The President: I note the Hon. Member’s comment. It is usual to do that after it has been moved, but would the Court accept that when we get to that stage … Well, I will come back to you then. The Minister for Economic Development to move.

1495 The Minister for Economic Development (Mr Skelly): Gura mie eu, Eaghtyrane. The concept to convert the Post Office into a limited company is not new and has been discussed since 2003 with further proposals made again in the 2006 and 2012 Scope of Government reports. The current board of the Post Office have consistently supported the recommendations of 1500 the Scope of Government report and have submitted papers to the Council of Ministers in support of this position. In July 2015, the Council of Ministers agreed to commission an independent report into the concept and engaged Elmar Toime – a business leader with global experience in the postal industry – to review the position and make recommendations on the most appropriate 1505 corporate structure and governance model for a modern-day Post Office. It is his Report that Tynwald is being asked to consider today. One of the fundamental questions that needs to be answered today is, ‘What is the purpose of the Post?’ The report offers a view:

To summarise, the Post is part of national infrastructure with social obligations. It is defined as a national communications and delivery system for letters and parcels with an expectation both of universal pricing and of universal service. Further through the post office network it is also a community asset, bringing financial and Government services to citizens.

The principal recommendation of the Toime Report is that the Isle of Man Post be created as 1510 a company owned by the . It is the responsibility of this Hon. Court to ______1206 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

provide the correct operating environment and support the Post Office to enable it to remain successful. The Report concludes that:

The main argument for incorporation is to distance Government from the commercial activities of the Post. The role of Government in the case of Post is twofold. It is to determine the set of social or community obligations required from the postal operator and it is to act as a shareholder which has a significant investment in the assets and business of the Post.

There are risks associated with these proposals and it is essential that the appropriate 1515 governance arrangements are put in place. However, there are greater risks, I believe, in not following the recommendations of the Report. The alternative is to retain its Statutory Board status. As outlined in the Report, there are several disadvantages for not changing, and the Report concludes that retaining the status quo will not support the transformation of the organisation to one that is appropriate in the business 1520 environment today, namely a customer service, financial stability, business growth and competitive markets. By approving the Report’s recommendations, the Post Office will have the capacity and capability to grow its international business quicker. This in turn will generate additional income to support local service, including community Post Offices, maintain competitive pricing of public 1525 services and dividend to the shareholder, the Government. To mitigate the risks of following the recommendations, it is recommended there be a memorandum of understanding between the Treasury and the company, which will address the public service safeguards and the behaviours of both the shareholder and the company. A policy of ‘no surprises’ would be adopted and clear, open and honest communications established. It is 1530 proposed that the memorandum of understanding be approved by Tynwald. In conclusion, Eaghtyrane, I welcome this Report and recommendations. The board of the Post Office have long-supported this action and I urge the Hon. Court to do the same.

The President: Hon. Member of Council, Mr Wild. 1535 Mr Wild: Thank you, Madam President. I beg to second and reserve my remarks.

The President: The Hon. Member, Mr Robertshaw. 1540 Mr Robertshaw: Thank you, Madam President. I would like to thank Mr Toime for his presentation the other day which was clear and concise and very helpful. I only had one question for him – just one – and it was this: how does this fix in terms of 1545 future competition? His answer, as I recall, was that it was up to us, the politicians. I am not sure whether I am comfortable with that because we have just recently had a situation where the previous Chair of the Post Office, who was uncomfortable with the proposals, was actually dismissed by the Treasury Minister. Now, the point about this is the Treasury Minister, whoever he or she may be in the future, is going to be the single shareholder. 1550 A Member: Hear, hear.

A Member: Absolutely!

1555 Mr Robertshaw: So the question has to be asked, how much influence and control did this Hon. Court have over such a fundamental decision? It was simply the will and wish of the Treasury Minister and presumably the Council of Ministers to dispose of a Chair of the Post ______1207 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Office, who I understood was carrying the will of the Court at that particular time. So my argument is, therefore, that the Treasury Minister, whoever he or she may be, with that single 1560 shareholding, seems to be adopting a pretty dominant position. I also understood from that presentation that it would be possible for the new structure to start buying businesses. Now, this concept of smaller, smarter Government just seems to be disappearing in the mists over the hills as far as I am concerned, because if we are placing the shareholding in the hands of the Treasury Minister and this organisation can buy businesses, 1565 then that, to my mind, is a growth in Government, not a contraction. It is exactly the reverse of what we are trying to achieve, and that makes me really, really uncomfortable. I spent a couple of days last week doing a little bit of due diligence, which I hope we have all done and I hope the Minister for DED has been doing. I hope he has been round and spoken to all the businesses who will potentially be affected in the future by a protected and nurtured 1570 competitor in the market who cannot go bust. Frankly, it was about seven, eight, nine conversations I had with the private sector, and I was appalled by the outcome and the lack of confidence that they have in this proposal. I just wonder what is in the mind of the Treasury Minister here in supporting this. Treasury, that looks for an environment where there is no such thing as corporation tax, but if the 1575 Treasury Minister as the shareholder draws in more ownership, then presumably he is going to draw a dividend from those companies. It is backdoor corporation tax. This whole thing leaves me really, really uncomfortable and I certainly cannot support it. And this business about, ‘Well, we will do this and we will do that and we will promise this’, let us do all that first, before we consider whether in principle we should be doing it – this is 1580 completely back to front. We all know how much confidence we have got in the OFT. It has been effusive in our support this morning and I am sure we can look to them in the future to deal with this satisfactorily – I think not! Then there is the issue of Post Office counters. Now, in my world, in the model I have in my head as regard to the future of Government, elements of retail Post Office counters have a 1585 special place in the community, and we are going to lose this opportunity to enable that to actually happen if we just let them go out. Most other places separate their retail counters off from the postal services before they take this action. This is clumsy; this is inappropriate; this is going to be unfair; it is going to be uncertain. I recommend to Hon. Members that they vote the whole thing down. (A Member: Hear, hear.) 1590 Thank you, Madam President.

A Member: Hear, hear.

The President: Hon. Member, Mr Turner. 1595 Mr Turner: Thank you, Madam President. The issue of corporatisation was one of the reasons I stood down as Vice-Chairman of the Post Office. Having seen the presentation last week and having heard the Minister’s speeches to all the great things that can be done, all of those things can be done under the present structure. 1600 (A Member: Hear, hear.) There was nothing that they were saying that they wanted to do – grow and expand and look for new business and new markets – that cannot be done under the present structure. I am really struggling to understand how a limited company structure is going to suddenly be the magic golden bullet here to start winning all this new business. They can do it now, Madam 1605 President, and they have been very successful in doing so. In fact, I think I have said before in this place that the Isle of Man Post Office is probably the one successful area of Government’s trading operations under its current system.

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I think what is most disappointing is we do not appear to have learnt the lessons of when we removed all oversight and we ended up with huge doorstep reports on the MEA. (A Member: 1610 Hear, hear.) They removed the political head. Now, I know under this proposal it is going to go into the Treasury, but we see other Treasury-owned businesses where there is just complete lack of accountability and it is all dealt with by officers. There is a bottomless pit of money in some of these areas and no accountability. We are told that, ‘No. This has to be at arm’s length from Tynwald.’ – we cannot 1615 discuss this and we cannot do that. This is another area, and this to me I think it is highly suspicious as to why this is required. Now, one of the issues I had when appointed as the Vice-Chairman: you were there to undertake the role under the current statute that the Post Office is established under; that was our remit from this place. Then to be told that the board had decided that corporatisation was 1620 going to be what they wanted to do and I would have to vote that way in Tynwald – well, my remit from Tynwald was to act under the current situation. As Mr Robertshaw says, this is putting the cart before the horse, completely. The presentation we had last week was all very good; it was interesting and there were lots of things they can do. But I repeat again, all of those things can be done under the current 1625 structure. (Interjection) One of the things that I was told when I was Vice-Chairman was, ‘Ah, yes, but you know, if we want to do something, we have to jump through certain hoops and DED are involved somewhere along the lines; the Treasury are then involved with Financial Regulations.’ They were just excuses! None of those things are barriers, with proper channels of communication. 1630 They are excuses and they were all reasons to try and get out of the whole process of accountability. I do not think there has ever been any interference in winning the contracts that they have had. They have won some, they have lost some. They are trading in the current environment with all these others. We have heard all the big brands. Well, the Post Office are able to take 1635 some of those contracts on and some of them have been a great success, but they have to work at that. This is about reduced oversight and this will be severely reduced oversight, no doubt about it. We will have a completely – well, not completely, but virtually unaccountable business here, when at the moment it is a statutory authority. 1640 I think there are many businesses that would give their right arm to have such a special status as what the Post Office has under its current constitution, and I think we should look at that. Now, if it was losing lots of money and was not performing, then there may be an argument for a corporatised model, but the fact is it is greatly successful. The reduction in revenue: we all know that the £2 million payment that it has to make, 1645 regardless of how well it does, is a ball and chain around the ankles of the authority. So there is something that can be quite easily solved: Treasury needs to look at that mechanism as to what exactly the dividend payment is going to be. I am not convinced at all, Madam President. There were also desires at the time for the Post Office to start buying up local companies. I did not agree with that because what you could have 1650 is a situation where, if you were to buy out a business which has a load of contracts with the various operators that do haulage and logistics, there is nothing to stop those contracts then going. We have seen it before where a business has been taken over and key members of staff in those businesses who are not involved in the shareholding leave, start up themselves and take all the business with them. It happens all around the world. So that was an extremely risky 1655 venture, and I do not know whether that is still live or what, but (Mr Cregeen: Yes.) we are talking about a couple years ago. So we have that; that is obviously bubbling away in the background, and as a corporatised business, obviously, it would be the green light to go off and do that.

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I think it has been said before that, if there are specific projects that wish to be undertaken, 1660 then there is the ability to start subsidiary companies, but again it would have oversight from the Statutory Board that is put in place. I really think that this is not the right time, and I speak as somebody who supports privatisation and corporatisation. In small communities, certain key utilities like the MUA, Water and an important service such as the Post Office have to remain firmly in public ownership – 1665 which a corporatised model will, but the Statutory Board status for this, I believe, is the right model. I am certainly not convinced … There has not been a shred of evidence as to why that model has prevented them from doing anything they wish to do in commercially going out for business. They are able to do it. They do do it. They go all over the world to various meetings and seminars and have been very successful in doing so. 1670 I think that this is not the right model for it and it should remain as a Statutory Board.

The President: The Hon. Member for Ayre, Mr Teare.

The Minister for the Treasury (Mr Teare): Thank you, Madam President. 1675 Just before I start, I would like to make one point clear. I did not sack the previous Chair of the Post Office. That decision was made by the Council of Ministers. In the absence of the Chief Minister, I actually sat down with the Hon. Member for Malew and Santon and (A Member: Sacked him!) (Laughter) gave him the letter –

1680 A Member: ‘Would you leave!’ (Laughter)

The Minister for the Treasury: – which was signed on behalf of the Council of Ministers – not by me, I have to add. (Mr Cregeen: Will Greenhow.) Thank you for clarifying that. At least I had the common decency to sit down with him. 1685 The Hon. Member of Council, Mr Turner, made a point that everything that they are looking for could be dealt with through a subsidiary company. Just look what happened at the Manx Electricity Authority which was set up on the same basis as a Statutory Board: they had subsidiary companies. I can tell you, from personal experience, the challenges – putting it politely – we had, dealing with the fallout from what they had done. There was no control. What 1690 we are looking at now is something which will have a robust control mechanism in place. The Hon. Member of Council also made the point about the £2 million dividend. Now, that was originally agreed for a three-year cycle and Treasury have currently reviewed it, but that sets a problem elsewhere. When our income falls, coming into Treasury, then that is going to have impact on other Departments’ budgets as well. So it is not easy. 1695 He also said that Treasury owns business where there is a lack of accountability. It is an easy statement to make, but it would help me to do some investigations if he would like to come and see me and back it up with facts. Now, Madam President, the original Scope and Structure reports in 2006 and its successor in 2012 both specifically named the Post Office as a candidate for corporatisation. In January 2013, 1700 the Council of Ministers moved its response and recommendations to the 2012 Scope of Government report in Tynwald. Recommendation 1, Principle 1, of the Government's report stated that the most suitable option for service delivery should be chosen based on a sound business case. This recommendation was unanimously approved by Tynwald. In fact, during the debate, the Post Office was only mentioned by one Member, the Hon. 1705 Member of Council, Mr Corkish, who was Chairman of the Post Office at that time. He stated that both he and the board welcomed the report and were in favour of the corporatisation of the Post Office within the framework outlined. Beyond that, there was not a single other reference to the Post Office. The Hon. Member for Malew and Santon, Mr Cregeen, did not speak during the debate, 1710 although he was a member of the Council at that time, so may have been acting in accordance ______1210 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

with collective responsibility. Generally agreed: the principle that all decisions about the future delivery of Government services should be taken only with a sufficient assessment of the risks, benefits and disbenefits. In this case, the assessment has been undertaken by a most competent person, Elmar Toime, 1715 commissioned by the Council of Ministers. He has been chief executive of New Zealand Post and deputy chairman of the Royal Mail group. He currently sits as a supervisory member on the board of Deutsche Post DHL, the largest courier company in the world. Yet, we do not seem to agree with him. Quoting from the Report:

The international trend is to protect the universal social obligations, or reduce them slowly, while encouraging business growth in new areas. This is not diversification at all costs. It is sound commercial focus.

1720 The Report is saying it is possible to protect the social obligations of the Post Office but only if it is allowed to change and flourish commercially. The Report says that a commercially competitive Post Office can contribute to the Island’s economy. They cite examples in Guernsey and Jersey where the move to a more commercial approach has paid dividends. It creates a more innovative culture which is able to respond and 1725 adapt more quickly to the changing external environment. So why is there still a reluctance to let this happen? If I could give some more clarity on the governance arrangements the Treasury would plan to put in place, Madam President, I feel that it may help to assuage some Hon. Members’ reservations about the motion now before this Hon. Court. 1730 The activities that the company could undertake would be contained in a memorandum of understanding between the Post Office and the Treasury. We would propose to make this document public in the interests of transparency. Using this mechanism, Treasury, as the shareholder, can act to protect the interests of the taxpayer, and any person dealing with the company will be put on notice of the powers and duties of the directors. Any proposed major 1735 transactions would need to be referred to and agreed by Treasury, as the shareholder. Secondly, Hon. Members, non-executive directors of the new company will be appointed following an open recruitment exercise. This is the same as when the FSA and the IPA were merged last year. The terms and conditions appertaining to the directors would also need to be decided by Treasury. 1740 With that, Madam President, I trust that Hon. Members will be reassured that we have considered the options and that robust controls will be in place to protect the taxpayer and the business. Finally, I was reassured to learn that the employees’ union are in favour of corporatisation. (A Member: Hear, hear.) They are responding to the needs of the 21st century. Madam President, 1745 let us do the same.

The President: The Hon. Member for Onchan, Mr Karran. Right, the Hon. Member, Mrs Beecroft.

1750 Mrs Beecroft: Thank you, Madam President. I think, had this been presented to us in a different format, I might have been able to support it today, because the principle, I am not going to argue with. As has been said, it has been in both Scope and Structure reports and has actually been agreed as a principle. However, I am glad that we can vote on different recommendations separately because what 1755 we have not got is anything to really hang our hat on. It is so vague and it should not be; something as serious as this should actually be before us properly with all the details. For instance, the first one says:

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the Isle of Man Post Office [should] be created as a company owned by the Government of the Isle of Man and established under Isle of Man company law.

It does not say whether it is the 1931 Companies Act or the 2006 (A Member: Hear, hear.) and that is very important, Madam President. It has to be the 1931 Companies Act and the structure 1760 should be included in the memorandum and articles of association. This should actually be what we are voting on: the whole structure, the whole process. For example, recommendation 2 says:

That the purpose, aims and objectives of the Post be documented in an MOU approved by Tynwald.

That is not good enough. The purpose of a company has to be in its legal documentation, its memorandum and articles of association. Those are the things that we should be given to have a 1765 look at, debate and decide if we are happy with that, if we agree that it is a principle that we want to take. It is sloppy. If Recommendation 1 was tightened up a bit and said, ‘as a principle’, I could support it, but all the other recommendations, they are just premature, Madam President. We have not been given the detail that we need to support this matter today. I think it is actually 1770 treating us almost with contempt to expect us to vote on things when we have not got the information to vote on it. It is the detail; it is the clarity of legislation that we need to be actually looking at, and we are not being given it. I certainly agree with Mr Robertshaw regarding the role of the OFT. If it is going to be left to them to police this, well God help us all! (A Member: Absolutely!) (A Member: Hear, hear.) 1775 I do have a query on this and I am hoping the Acting Attorney General could clarify it for me. Because we know that a dividend of £2 million is asked for by the Treasury; the Post Office has to pay this at the moment, I would have thought – and I could be wrong – that if it was corporatised under the 1931 Companies Act, once the revenue reserve has run out, by the way of payments of dividends, then the shareholder, which would be the Treasury acting for 1780 Government, cannot force the Post Office then to possibly sell any assets or anything else to carry on paying that dividend. So in effect, corporatisation under the 1931 Act, I would have thought, would actually give the Post Office protection from Treasury insisting that they sell an asset or something to carry on making this payment to them. I hope that can be clarified for me, because that is my understanding, brief though it is, of company law. The dividend is paid out of 1785 revenue reserve and a shareholder cannot force a company to sell assets to carry on making payments. I think that would be an important protection for the Post Office, if it is structured correctly. This is why I am saying we have not been given the legal structure that we are being asked to vote for. 1790 I have serious reservations about – well, about all of it really – but particularly anything after Recommendation 1, I could not possibly support. Thank you, Madam President.

The President: The Hon. Member for Onchan, Mr Quirk 1795 The Chairman of the Office of Fair Trading (Mr Quirk): Thank you, Madam President. At the outset, as an individual Member from Onchan, I will not be supporting this particular issue here today. Can I say to Hon. Members here that, like us all, we received this Report a couple of weeks 1800 ago. I was quite taken aback at the 42 pages. I give every credence to the guy who did the Report, but the major element I see in here for us, as parliamentarians and representatives of our constituents, was that one group of parliament knew what was happening and the other group did not.

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When we have seen the Report we have had maybe about 10 days to examine it, and as we 1805 have digested it and looked at it we have found … well, I have found, personally, issues which I cannot support. They actually come to decisions. They say there will be one shareholder, and that is Treasury, whoever he or she may be in the future. That role, I think, circumvents the will of this Court, because at the end of the day the Post Office, as it says in the Report, still wants to be ‘community involvement’ and all those necessities that the Post Office do in its trading 1810 position, which actually makes money at the minute and the projections still say is going to be making money. I believe, personally, that the public out there, whom we do represent, are not in favour of this particular proposal, although there is a substantial amount in it. There are implications in it. There are … like it says in the Report at page 8:

It is recommended that the purpose, aims and objectives of the Post be documented in an MOU approved by Tynwald.

Well, like Hon. Members have already said at the beginning, where is it? 1815 And one thing we do learn – I have learned – in this Court is that the devil is always in the detail, and unless you get everything in the piece of paper, you cross those ‘t’s and dot those ‘i’s, you are voting on something which you are giving a promise to, or an account change – although Hon. Members are honourable to each other, but sometimes things or circumstances do change. Since the Report – only the Treasury Minister has mentioned the 2006 report regarding … 1820 And Mr Teare’s normal thing, ‘the lower hanging fruit’ … I wonder whether the Council itself has not looked at other things. I will give you a couple of examples on that, which we could have done, and being a smaller, smarter Government, like my newfound friend Mr Robertshaw is … Housing is a typical example on that and it will come later on. Why aren’t we doing something on that? Why is Government operating housing under the DOI? Why isn’t that shoved out? That 1825 was one of the easiest things we could have done. Minister and Members of that Department, why haven’t you been doing something on that? Waste is another: why are we getting involved in that?

The President: Hon. Member, we are not into a debate on the wider issues. 1830 Mr Quirk: I am sorry, Madam President, I am just giving the flavour, because the basis of this was the 2006 report, which the Minister has indicated we all signed up to. We all signed up to all sorts of elements in that, but my view on this one … I never signed up to this. I just would ask particular Members to look at it hard and fast: the community obligation that 1835 is in the Report to those workers who are there; the union … I think the Treasury Minister got it quite wrong. The union have not had this discussed with them. We would normally do a consultation with the public. If we were doing legislation, our great ethos now is we consult with the public and get those views: (a) we have missed out the union itself to have consultation; and (b) is the rest of parliament. You did not have the confidence to come to us to explain the 1840 reasons why you thought this was a great idea. Members could have kept confidence. Despite what does happen and what it says in the media, Members do have confidence in reports we are given and we keep them online. Now, an interesting twist, and this could be a first for the parliament, or definitely me. My role as the Chairman of the Office of Fair Trading … That is why I have had it circulated, so I do 1845 not miss anything out and it gives you it in black and white – although my colour is yellow; it is easier to read. Madam President, I actually now stand to speak on behalf of the OFT. The OFT met about 10 days ago – that was me, Mr Corkish and the board members – and looked at this. As a result – and there was no pressure at all from the political Members, I can guarantee that; I am sure 1850 Mr Corkish will indicate that – the members did have concerns. It was debated for, I think, nearly

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an hour and a half – the Report was actually given to me when it was publicly available – and we do have concerns. And despite Hon. Members there and their aspirations towards the OFT … That is why I have put it down in black and white for you, so whoever is the Chairman in the future, there will be something to look back on and Members will know what commitment was 1855 made. I have to read this out, Hon. Members, although it can be found in Hansard:

Up to now I have been speaking as the Member for Onchan. I would, however, now like to address the issue from the perspective of my role as Chairman of the OFT. As Hon. Members will be aware the OFT has a key role under Part 2 of the Fair Trading Act 1996. We are the guardians of competition law. The OFT Board has considered the Post Office corporatisation proposals and has asked me to convey those views to this Hon. Court. Firstly I must make it clear that the OFT has no view on the principle of corporatisation of the Post Office. However if the Post Office is going to compete with the private sector it must compete fairly. The law requires that. There is a real danger that in corporatising the Post Office we create an organisation which is able to use public subsidy to compete unfairly with private sector businesses. Firstly we would have a business which potentially has major capital assets which have been funded by the Government. This would leave the Post Office competing with private sector businesses who have to fund those assets themselves. This would be competition on a very unlevel playing field which would risk being anti- competitive in terms of section 8 of the Fair Trading Act. This is not an insurmountable problem. For example if the corporatised Post Office actually buys the capital assets from Government at their market value there is no hidden subsidy and the new business can compete fairly. Secondly we need to address the issue of the business which Government gives to the Post Office. Items such as benefit payments and licensing not only create profit streams they also create footfall which assists with other commercial ventures. Whilst the Post Office is firmly in the public sector that is generally OK. Once the Post Office is corporatised it should be required to compete for the Government business against its private sector competitors. And that competition must be fair. Thirdly we need to be clear that when a corporatised Post Office receives financial or other support from Government to enable it to fulfil community obligations that are desirable, but otherwise non-viable, that support is economically justified. The risk is that support for community obligations ends up cross-supporting commercial operations. That is potentially unfair competition. Madam President, it is clear that if, today, the Court supports the proposals these are issues which can be addressed through the proposed corporate structure and Memorandum of Understanding. I raise them in order to ensure that the Treasury and the Department of Economic Development are aware that they need to address them. I acknowledge that in preparing the Report the author has recognised the competition issues

– I must say I got a shock when I saw the slides; it was the first time I had seen that –

arising from a corporatised Post Office. If the corporatisation is going ahead the OFT would be happy to assist those progressing the issue. It is far better for the OFT to help avoid the pitfalls of competition law than to end up dealing with the outcomes of failure.

Thank you, Hon. Members.

1860 The President: The Hon. Member for Malew and Santon, Mr Cregeen.

Mr Cregeen: Thank you, Madam President. I would first like to give a brief history of the proposals to corporatise the Post Office. When I was in the Council of Ministers, the then Chairman of the Post Office, my friend and 1865 colleague the Hon. Member of Council, Mr Corkish, and the Chief Executive presented proposals regarding corporatisation to the Council of Ministers which did not give any identified details of benefits of corporatisation to the Post Office. Council agreed that they go away and work up a case. At that time, I voted against the proposals. When I was appointed Chairman of the Post Office by this Hon. Court two years ago, I went 1870 to the Post Office with the objective to ensure survival of the public service and a hope to help grow the business and what would help balance the Government’s Budget.

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Shortly after, a number of issues arose which showed a disconnect between the board members at the executive and the staff regarding operation of the postal business. I will not go over the grounds of the changeover of the Crown offices but to say it surprised me that the Chief 1875 Executive did not consider that a member of staff who was going to work for Mannin Retail after the Crown office conversions was part of the Post Office team trying to come to arrangements with the Ramsey Postal Co-operative. He did not see this as a conflict and, as I became aware of this, I requested that this officer take no further part in the negotiations. Before my appointment as Chairman of the Post Office, the Post Office had already started negotiations to 1880 acquire two local businesses, and as previously said, the previous Vice-Chairman, Mr Turner and I expressed concerns about these moves as it would unbalance the local market. Now if I turn to the Toime Report, this was undertaken by the Cabinet Office. During my conversation with Mr Toime I expressed my concerns regarding the expertise of the board and the executive to run a corporatised business and the risk of the business moving outside 1885 Government, as the Post Office already has the ability to work in a commercial arena. In Mr Toime’s Report it does mention political interference, and during my conversations with the Chief Executive he mentioned that prior to my arrival at the Post Office, he had been contacted by a Minister requesting that the Post Office did not compete for a piece of work, as the Minister wanted another local company to get this work. Madam President, I think that is 1890 totally inappropriate, for a Minister to phone up and request the Post Office does not take part in a tender process. (A Member: Hear, hear.) Later, I was advised that the Report from Mr Toime had been to Council of Ministers. I expressed my concern to a number of Ministers that I had not seen the Report or been asked to make comment on the Report before Council considered it. I was advised that I should write to 1895 the Chief Minister and express my concerns. This I did on 22nd February. In that letter I also requested that the Chief Minister consider issuing a direction to the board of the Post Office not to allow the executive pay bill to go above that of last year, after one of the members of the executive team was given a significant pay increase for moving into a new role which was not advertised. The Post Office did not receive any direction from the Chief Minister or the Council 1900 of Ministers on this matter. On 16th March I had a meeting with the Chief Minister and the Chief Secretary to discuss the Toime Report. This meeting lasted over an hour, in which the Chief Minister shared my concerns regarding the abilities of the executive and the board. At the end of the meeting the Chief Minister and the Chief Secretary asked if I would consider a new Vice-Chairman and gave me 1905 two names to go away and consider. I was also advised to meet with the Treasury officers, who would reassure me on the protection I requested regarding the corporatisation of the Post Office. At no time during that meeting did the Chief Minister or the Chief Secretary indicate that my position as Chairman of the Post Office was compromised or I should consider my position. On 23rd March the Report was considered by the Department of Economic Development. I 1910 offered to leave the meeting but was advised by the Chief Executive that I could stay at the meeting as I had already declared my position. At that meeting, all Members of the Department voted not to support the recommendations of the Toime Report to corporatise the Post Office. The following day, Minister Skelly reported to the Council of Ministers that there was no support from the Department regarding this matter. It transpires it was agreed later at that 1915 meeting that they should remove me from the Post Office. I believe this was because I dared to protect a public service and dared to try and protect the public interest. (Several Members: Hear, hear.) (Interjection by Mr Malarkey) On reading the Toime Report, I do not think he fully understands the Post Office on the Isle of Man or its legislation, or has any idea how the Isle of Man works. I was regularly told at board 1920 meetings, by both the board and the executive, that private companies do not like dealing with Government. I asked them to give me examples. They could not give me one example of this. Yet the Toime Report repeats their point without evidence. I have personally found business does like to interact with politicians at the Post Office. (Interjection) ______1215 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mr Toime’s comment that the Post Office remains in the cycle of Government budgeting 1925 both from capital and employment numbers: this has not been the case and shows lack of knowledge of his subject area. It is clear, reading through this Report, that both independent board members and the executive consider they should be paid more, yet question the level of pay of those who are actually making the business work and the profit it generates, which would suggest a level of self-interest on their behalf. 1930 Madam President, the Isle of Man Post Office has been more profitable than Jersey or Guernsey Post. (A Member: Hear, hear.) It even makes more profit – three times more profit – than New Zealand Post, and this is the postal business that Mr Toime worked at. New Zealand Post has a bank which generates most of its profit, but it only makes £½ million on its postal side. 1935 If we move over to Jersey Post, Jersey Post’s executive directors in 2014 were paid £645,000. That is four members. (Mr Houghton: Crazy!) The Isle of Man Post Office executive team, four members, is in the region of £350,000. If we look at what would be … the board of the Post Office is paid in the region of £19,000 in total, plus a £3,500 region for the Chair. In Jersey, the board gets paid £94,000. 1940 Madam President, why do you think the board and the executive are looking to actually change (Laughter) the Post Office? (A Member: Hear, hear.) It is clear the benefit to those at the top. These are figures easily available on the internet. It is in their published accounts, and if you look through their accounts they actually had a turnover of £60-odd million back in 2011 and still 1945 did not produce the profit that the Isle of Man Post Office does. In Jersey, after they took away the low value consignments, to try and rebalance the budget they actually reduced from a six-day delivery to a five-day delivery to cut costs, with the loss of approximately 30 jobs. They also closed two sub-post offices. In 2014, the reported profit for appropriation at Isle of Man Post Office was £1,970,324. We also have an ex-member of the Isle 1950 of Man Post Office actually working as a consultant to Jersey Post Office. Does that give you any confidence that the model that we should look at is actually Jersey? They do not make the money that we do, they do not have the services that we do, and now they are employing our ex-staff as consultants to them. (A Member: Hear, hear.) Madam President, all the way through Mr Toime’s Report he talks about how we should 1955 change and how it works in the greater world. We are doing very well on the Isle of Man, so why should we want to change it? It has been mentioned that Mr Toime works for Deutsche Post DHL. DHL have a business on the Isle of Man. Mr Toime is also on the board of Qatar Post. What I do not understand … when he looks at this – and he has looked across the business – we are more profitable, our cost is not 1960 as much, yet we should change to the model that he has been used to. The point that I picked up from his presentation was he has done this before. This is what he has gone out … He is a consultant to the Post Office and he has done this before. He is a one-trick pony. (A Member: Hear, hear.) Madam President, it is clear from this Report the only benefit is an increase of pay for the 1965 executive and the board. The losers would be the public of the Isle of Man and the Post Office staff. (Mr Robertshaw: The private sector.) I would like to ask the Acting Attorney General, Madam President, if the Post Office were to be corporatised and to become a limited company and then go into loss, who would actually have to pick up that debt of these board members? My understanding is that Tynwald would 1970 have to pick up from their mismanagement (Interjections) – or, as Hon. Members say, close it down. There will be no politician on the board; it will be a Treasury officer, who will not have a vote. After my removal from the Post Office I was thinking back through the MEA, and we went through this. They removed the political Member from the MEA and then the board went feral. I 1975 expressed my concerns regarding the corporatisation of the Post Office to the Chief Minister and ______1216 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

to the Chief Secretary, then I was removed. If I had been the political chair of the MEA and had expressed a concern about £200 million-worth of illegal borrowings, does it mean that he would have removed that political chair for advising him about the dangers that the MEA was going into? 1980 Madam President, before I carry on, could I just ask the Acting Attorney if he could give clarification on who would actually pick up the debt on any corporatised Post Office going into debt, please?

The President: Can you respond, sir? 1985 The Acting Attorney General: Yes, thank you, Madam President. If the Post Office was a limited liability company, then it would have the same potential outcome as any other Manx limited liability company. That is, if it fell on hard times it could have to enter into liquidation and it would be afforded the same protection that any limited liability 1990 company would have – which is why it is a limited liability company. Whether or not – this is moving into your realm, Hon. Members – it was felt politically that Government, as the sole shareholder of a limited liability company, would not want a situation where creditors were left unpaid, then I would have thought perhaps the sole shareholder may wish to consider stepping in to ensure that those creditors were met. 1995 However, the same applies to a Statutory Board. The Statutory Board could similarly fall on hard times, and that liability would rest with Government.

Mr Cregeen: I would like to thank the Acting Attorney General for his advice. Madam President, whilst still Chairman at the Post Office we were advised that the new levy 2000 on the Post Office would be about £1.5 million plus 50% of any additional profit. When you look at Jersey Post, which we are getting compared to, in 2014, when the Isle of Man Post Office gave £1.97 million plus it took £30,000 out of reserves to make it £2 million up to the Treasury, Jersey Post, with their £230,000 profit, only gave £117,000 to the States of Jersey. The report in 2006 is 10 years old. (Mr Quirk: Hear, hear.) The world has changed. We all 2005 know how it changed: we have had the change in the VAT, we have had the banking crisis, we have had oil changes. And it said a sound business case has to be produced. It has not been produced. There is no sound business case in this Report which will actually say how we are going to protect the services, how the deliveries are going to be … There is just nothing there. I would put an analogy that the Treasury Minister and all the Ministers will probably get up 2010 and say, ‘The memorandum of understanding is going to tell us how it is going to protect our interests.’ But we are being asked, or told, to jump out of an aircraft. Then we are going to be told, as we are falling to the ground, what type of parachute we are going to get and if it will work. Madam President, this is ill-conceived. It is premature. It sounds like a desperate Government 2015 looking to try and prove they are still working. I would urge Hon. Members to think long and think hard on what you are doing today. (Several Members: Hear, hear.) In the presentation it said there is no legislation in place, there is no memorandum of understanding in place, that this move to corporatise the Post Office will be coming back to the next administration. As we have just seen with the pensions, it is going to come back. Why move 2020 now when you do not know what you are going to get? I would urge Members that … I did think about putting an amendment to this, but the only thing the amendment would do would be … I would be accused of kicking it into the long grass. I am not opposed to change at the Post Office, but I believe a business case must demonstrate benefit to the Post Office and to the public service and the public we represent. 2025 This motion does neither. I believe this motion is very premature, it is rushed, and without a clear legislative structure in place I would ask Hon. Members to vote against this motion at this time. ______1217 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Thank you, Madam President.

2030 Several Members: Hear, hear.

The President: Hon. Members, the Court will now adjourn and the adjournment will be until 2.30.

The Court adjourned at 1.01 p.m. and resumed its sitting at 2.30 p.m.

Isle of Man Post Office – Debate concluded – Amended motion carried

The President: Please be seated, Hon. Members. 2035 We continue with the Post Office debate and I call on the Hon. Member for Onchan, Mr Karran.

Mr Karran: Eaghtyrane, firstly, as I have already said, I do hope that these recommendations will be voted on separately. I think it is important. 2040 I have got an amendment to be circulated to Hon. Members, if that can be done, in order to try and be helpful as far as the Council of Ministers is concerned over this issue. The situation is that maybe if they had taken some assistance they might not have got so many things – It’s all right people laughing in here: go and read your Hansard. I have found this quite a perplexing debate, where I find the right wing now fighting against 2045 corporatisation, and the left wing fighting for it. (Interjections) It is positively schizophrenic. All I want is fairness. I have never said that everything right is wrong and left is right. I believe that there are new challenges for the next administration. They are not going to have the luxury of the way they have been allowed to get away with murder in the past – maybe not literal murder, but certainly the demise of fiscal security in the future. 2050 What concerns me about this debate is … It is a number of things. Some things they have managed to reveal what action we have to take as far as the Office of Fair Trading actually getting out of its coffin and taking action to protect the interests of the consumer with the fact that we see the former Chairman’s demise. But the point is I think the Office of Fair Trading has got points as far as the document that is in front of us today. 2055 I just hope that we have a more sound sort of rationale of how we work out our strategic voting, I just think we have got to get out of the personalities as far as this issue is concerned. I have to say that I found it quite amusing that the Minister for the Treasury did not sack him but did give him the letter. And when he talks about the open way that anyone can become members of these things … 2060 Well, I have talked to some people, as far as the FSA is concerned, and they were very surprised at the way people were selected. And I have to be honest with you, when I have had people make representations to me I thought it was quite concerning, and to be perfectly honest with you, if the track record of selection as far as this ministerial domain of being able to do the grace and favour bit … It fills me full of absolute horror, and if it is going to be extended to the Post 2065 Office it worries me even more. So I think there are issues that need to be addressed, and the issue that I feel needs to be addressed is about making sure that we get something that actually reflects the reality of the Isle of Man and what we talk about – a fair, level playing field and a freedom to flourish for all, not the way it seems too often to many in this society. ______1218 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

2070 The reason why I propose this amendment and the proposal for the recommendations is I can just about support recommendation 1, but it has to have that the articles of association of a new company must be approved by Tynwald before it takes effect. If that is in that motion, I can support recommendation 1. And maybe I am adding to the situation about the corporatisation, because I think that is so 2075 important. And the Hon. Member for South Douglas is so right – we have the absurdity that we have another utility in the private sector, namely the Steam Packet Company, where their accounts are private and we cannot get anywhere near them, and any issue as far as a utility, whether public or private, the articles of association should be a 1931 Companies Act and not a 2006. Without that, we have got a farce here, Eaghtyrane, and I would hope and I have 2080 confidence in the people of the Isle of Man that they will make sure they get people in here who will start the reform and get the good governance that they deserve. So I think it is important that Hon. Members need to support this amendment in order to put some sort of safeguard that you are not ending up being disenfranchised and you end up, once again, with the most … To be perfectly honest with you, Eaghtyrane, I believe that the majority of Ministers do it 2085 with the best of intentions, but the problem is that what happens far too often is that deals and meetings are done behind closed doors, and then the problem we have is that we do not end up with what they actually want to have, but what we end up with generally is the fact that the Civil Service or other parties end up in a situation where the common good is not done. So I do hope Hon. Members will support that. 2090 I have to say that I have a lot of sympathy with the points as far as the Member for Malew and Santon about my concerns about making sure that the freedom to flourish does work on the right basis. I have to say also, as far as the presentation that was there from the person, he is simply living in a different environment to the Isle of Man as far as that presentation was concerned, 2095 because after seeing that presentation with the structure of Government and the Isle of Man Post Office, I really do think that my nephew outside here, at nine years of age, would see the pitfalls as far as that proposal in that presentation. It just is not reflecting reality in the Isle of Man, the political situation in the Isle of Man, and I have to say that I just see it as another waste of public money because I do not see the Report as being of any relevance as far as the reality as 2100 far as the Isle of Man is concerned. And yes, I understand certain basic requirements, but I really think that it was another report with the emperor with no clothes. What I want to see, Eaghtyrane, is some sort of sensible business plan within this Chamber. I know that I am supposed to be the leftie around here, but the problem we have got is that we have got a proposal in here that is all things to all people or all things against all people, so we 2105 end up with a situation where the detail will end up being done behind closed doors at a later date. We have only got to look at the situation on our Order Paper today to do with Question 9 over the issue of the privatisation of the Post Office facilities as far as the state is concerned. Firstly, it was not a level playing field; secondly, it was not an open tender, because only a few 2110 were able to do it; and then we have a nice sweetener afterwards that they get a free rental on a situation that more likely was not aware … of the other tenderers who were lucky enough to know the right people; and then we find out that the people who actually made the agenda for it are working for these people now, I am led to believe. (A Member: Hear, hear.) I will stand to be corrected on that. I have not … If ever there is a conflict of interest and if ever there is … 2115 The thing that I want to do is leave this place with good governance, and this is a glaring example to anybody outside this Chamber to say this is yet another situation of the freedom to flourish for the few to fleece the rest of us, and I think that is something that is very sad to say. So, when we look at the track record, you can understand why some of us, who maybe are more cynical than others in this Court, will have to say look at the track record. 2120 So I hope Hon. Members will support that issue, because I do have to say that I look at the issues of the governance as far as the structure of the Post Office and I just see a situation where ______1219 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

we will end up seeing big pay rises for the executives of the new organisation, of the management, and we will see a situation where the weak, the poor and the sick – or the poor and the low paid – will end up being worse off under this new corporate set-up if it is not set up 2125 on the right basis. I am absolutely sure of that. I must say, Eaghtyrane, I applaud the Chief Minister and his colleagues on the issue of the statistical information which they released not so long ago that actually highlighted the concern about the rich getting richer and the poor getting poorer when it comes to workers, when we see that the manual workers’ wages have gone down … not gone down, but have not gone up at 2130 the same rate as the civil servant workers’, and I just think that these are issues and elements that this Court needs to address before it signs on the dotted line. I have heard somebody mention the MEA and the situation of how we had this ‘rogue’ body that came in and took over the good arms of Government. Sorry, Eaghtyrane, it was bad governance. It was the fact that the Treasury Minister did not do his job right and the Minister 2135 for Industry did not do his job right, and they were all cheek by jowl with these people, and people like us were put under horrendous pressure and considerable pressure with threats of all sorts of things happening to us – not by Members in this Court, like people say about that … They can talk to some of the lawyers I had to deal with for trying to do the honest thing. And what is worse, Eaghtyrane – I really do think that we have got to start the game changer. 2140 If we are going to go corporatised, then let’s have it as it should be – not as , not as capitalism that everybody wants. They are the things we either want one way or the other. But we end up with is these fiefdoms, and I remind Hon. Members – you new Members of this Court – that when we talk about the MEA it was this Court that legalised the illegal debt, because only two of us would – (Interjection) Two of us when it started, as far as the issue is concerned … 2145 issue started … who would not go along. And the Hon. Member is right that there were about four or five of us who would not legalise an illegal act. So, what we have got here, Eaghtyrane, is we want to give confidence and we want to give a green light to the Hon. Members in the Council of Ministers, but I just think that will need to look at the reality and the record of what has happened in the past, because it does concern me 2150 that when we look at whether we corporatise or we have Statutory Boards it depends on the structure and the membership of a Statutory Board as much as it does on a corporate entity. In the case of the Water Authority, we went about it the proper way – the proper capitalist way, the fair … the freedom to flourish for everyone to be able to … And then we find the situation where we offered the £25 million increase in our bond requirements to help the MEA, 2155 but because of the situation of a lack of good governance, and maybe rogue people as well, we ended up with a £400 million debt. So I am not decrying Statutory Boards or corporatisation; it is all about good structures of Government, good structures and well thought out articles of association. It can be done, it will be done, if there is a political will and there is parliament actually holding the executive to 2160 account, which has been wilfully inadequate for years. I am not going to go on about the issues of the MEA, but I think it is important that we do not forget the reality and the truth as far as what really happened, and unfortunately, with the cosy situation with the media and the lack of resources for the media, too often the real story does not get out as far as the people of the Isle of Man, and too often people are frightened because 2165 they will get sued, even though it will be vexatious litigation. So, Hon. Members, I cannot support the proposal as it is. I am happy to go down the road to see corporatisation. There are good points about that if it is under the Companies Act 1931 and not the Companies Act 2006. Public money: the public have a right to know where it is. Public decisions: the public has the right to know who made decisions and why they made decisions, 2170 and far too often in the past, in this and the previous administration, that has not been clear. I find myself wanting to allow CoMin the opportunity to explore the opportunity of corporatisation if they can actually come up with something that is sensible and good arguments

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for that. We are in a changing environment; we understand that. I can argue either way as far as a Statutory Board or corporatisation. It is all in the good systems of Government. 2175 One of the things I hope that the Minister will take on board is that we will not have this Louis XIV patronage of Ministers picking who they want, and that actually, as part of those articles of association they have got to come back to this Court for approval as far as that corporate entity is concerned, because I think it is important that that happens. I understand there will be difficult times, but I think it is important. 2180 The only other thing that I would like to say is that if we can have some sort of guarantee that the articles of association of any new company must be approved before they take effect, have to come back to Tynwald, I think that we should allow work in progress as far as this is concerned, but I am very concerned that … I hope that the newer Members of the Council of Ministers are going to change the situation 2185 that we have had to inflict on the people, and some of us in here with lone voices have had to put up with. So I do hope that the amendment will be supported by Hon. Members on both sides of the House. I beg to move:

To add at the end of recommendation 1 the words ‘; but that the Articles of Association of the new company must be approved by Tynwald before they take effect’.

The President: The Hon. Member, Mr Watterson. 2190 Mr Watterson: Thank you, Madam President. I am perhaps going to surprise the Hon. Member for Onchan, and I am happy to second his amendment. One of the few things that the Hon. Member for Onchan, Mr Karran, and I will agree on is the 2195 importance of good systems: good systems of government and good systems of corporate governance. We might not always agree about how that is done, but on this occasion I think he has hit on a good opportunity to improve the motion. I do not see any problem. I have been discussing with my colleagues here from the Council of Ministers and there is no problem with the articles of association coming back and getting that 2200 Tynwald approval. I think when this has been put forward, this has been put forward as this first step: the first step on an exploratory journey to find out whether the corporatisation of the Post Office will deliver the results that many believe it will. I appreciate that Mr Cregeen, Hon. Member for Malew and Santon, has had a bad experience 2205 with this journey with the Post Office –

Mr Cregeen: No, with the Council of Ministers.

Mr Watterson: – but I think we do need to look at the whole issue dispassionately and look 2210 at this from a commercial perspective for the good of the taxpayer and the consumer of postal services on the Isle of Man, and make sure that it is quite clear that the messages are that the front-facing services will be protected, that there is a requirement for a retail network out there for the good of the Manx taxpayer, for that accessibility. I think we should also take some comfort from the fact that the unions are supporting the 2215 move and the motion that is here before us, in that I believe there was a very positive meeting with Mr Pullinger on that, and I am grateful for the union’s pragmatism in this outlook. We have heard some dichotomies, haven’t we? We have heard how the board are self- interested and rubbish, and yet look how successful the Post Office is. I think it is important to try and rise above some of these dichotomies and look at the business case and see how, by 2220 moving that next step, we can explore it further. That is why, in terms of the amendment, in ______1221 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

terms of making the articles of association approved by Tynwald, in recommendations 2 and 3 the Treasury and Economic Development Departments will draft the memorandum of understanding and bring that also to Tynwald. So, for those who are perhaps uncertain at this stage, as I believe Mr Karran might have 2225 been, but are willing to see where it takes us, then I would suggest yes, go with the amendment and go with the resolution that is down here. We have the opportunity to take it that next step further and we, the Council of Ministers, will have to come back to this Court for that next set of approvals. So I commend both the recommendations and the amendment to the Court. 2230 The President: The Hon. Member, Mr Joughin.

Mr Joughin: Thank you, Madam President. I just want to put a few things in perspective, especially regarding the Toime Report, which is 2235 basically what it is all based around. Mr Toime has only ever done a report on post offices that are losing money. He has never dealt with a successful post office. I put that down to the staff and the management of the Isle of Man Post Office, who have never ever made a loss since 1973 when they were set up – ever. All they have ever done is contribute to the Treasury, for services and goods around the Isle of Man, in various amounts. 2240 They have never had any debt, never borrowed any money – because they cannot. They have got a fully funded pension scheme, which is the envy of every Government Department, because it has all been paid for, and they have not been allowed to borrow, which is a very important factor – they cannot borrow. Once you have made them a corporate company, then they can borrow. 2245 Moving on from that, it is a bit … Mr Cregeen, the Hon. Member for Malew and Santon, has had this rough ride … and report back to 2006 … It seems very strange to me that in 2006 and 2016 we have two strong political personalities, and all of a sudden we want corporatisation each year. In the years in between it was forgotten about. I just thought I would point that out to you. 2250 The main thing is that it is a service provider and has social obligations, and all of those things it has done, all of those boxes it has ticked, and maintained a profit. In the case of Mr Toime and his New Zealand Post Office – which is barely making a profit, by the way (Interjection) – the first thing he did was close 432 post offices, and then he made 560 people redundant. That is how he started to make a small profit, how he did it. The next thing he 2255 did was the six-day service, he reduced it to three days. So you only get a delivery every other day in New Zealand, and they are still making just a small profit. For us to use his example as a model … I am not shouting from the rooftops let’s have this model, because it is not a very good model, to me. (Mr Cretney: Hear, hear.) The first thing he says in his Report is that we have a six-day delivery on the Isle of Man and it is not sustainable; it 2260 will have to stop shortly. If you do that, I would imagine you would be laying off about 40 members of the postal workers. At a rough calculation I would say about 40 members of staff. And then, of course, the Ministers have highlighted in the Report that they think the labour costs are too high, but at the same time they want to double the board’s salaries. (Interjection) I cannot understand that – you want to double the board’s salaries but you want to cut the labour 2265 costs, (Interjection) surely by laying off 40 members of staff. And then they say that you should reduce the costs and change their employment conditions. They want to bring in a two-tier workforce. They want to bring in a postal rate and somebody who gets paid a lot less for doing the same work. That is Mr Toime’s recommendation. So, obviously we are going to make some more money and probably service some more debt. 2270 And then the next thing he says is he would reduce the size of the network. This is the Toime Report, the one that you have all agreed to. He is going to reduce the size of the network. So we

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are going to reduce the size of the network either in sorting offices or post offices. That is his recommendation that you are reading here. He said a good way of increasing our revenue is to put the price up 10 pence – let’s make the 2275 Treasury £½ million straight away. You will find the next thing that Toime did in New Zealand was he had a two-tier stamp system. He had a 45 pence stamp, here I think it is; or if you lived in Abbeylands or Bride then you had to pay 65 pence because it was uneconomical to deliver there. They had a two-tier stamp system, so that was another way he managed to make a small profit. 2280 He also set his own employment terms. As the Member for Malew and Santon said, the Post Office has constantly outperformed Jersey and Guernsey. And of course all the Channel Islands have been on a five-day week now for a long time, with sizeable redundancies. To keep the old board and stay as a profitable Statutory Board is not impossible. I have 2285 worked with board members, the unions and sub-post masters – I have worked with all of them – and they are quite a pragmatic bunch. They realise they have to have change. They want to change; they want to deliver a better product. I think the staff want to do it, I think the management want to do it and I think the network want to do it. But why do they have to change to a corporate company? It is not going to make any difference. Those people want to do 2290 it. It is just going to cost you more money to do it. Even those labour problems you can address through the same system you have at the moment. The bit that really gets me is we had … The Chair disagreed with the board and it is alluded to in the paper that the Vice-Chair disagreed with them. I know he is seconding this today, but it also says the Vice-Chair had no input into the Report whatsoever. And all the Members of the 2295 DED did not agree with it. So all the political Members did not agree with it, and yet we are still going ahead with it. I cannot understand. I am not against corporatisation if there is a reason for it. When you have got a tried and tested way of running a business which is a role model for all other post offices in the UK and the world, which is successful and more profitable than all the other ones, why are we changing 2300 it? (Mr Houghton: Hear, hear.) The only firm to have a fully funded pension. The only firm – none of them had it. When they sold Royal Mail they had to give away Royal Mail so they could pay off the pension debt. It was massive. So I cannot see it. And then – I will just finish off – we have the thing about the unions. The unions read this Report last week about an hour before us. Before they had that presentation we had that 2305 presentation. They did not say that they objected to corporatisation; they wanted to see the memorandum of understanding first, which we all want to see. Like Mr Robertshaw says, it is the cart before the horse. We need to see the detail first. There is no detail in this. We do not know what we are voting for, so it needs to be done properly and that is why I will be voting against it. 2310 Several Members: Hear, hear.

The President: The Hon. Member for Garff, Mr Speaker.

2315 The Speaker: Madam President, the policy before us has hardly come out of the blue. As long as 15 years ago, when the former Member for Ayre, Mr Quine, was Post Office Chairman, it was a serious proposal then. It has been in the public domain certainly since the Scope of Government report of 2006. So it is not a new notion. Notwithstanding that, it has received a very lukewarm reception at best, very lukewarm, and 2320 even those who are basically in favour, to a degree, of the principle of corporatisation are themselves lukewarm. We have had a number of interesting points brought out in the debate. The Hon. Member for Douglas East, Mr Robertshaw, I think in particular has highlighted the possible impact this ______1223 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

proposal might have on existing providers. The Hon. Member of Council, Mr Turner, I think 2325 made a very good case as to how the existing structure of a Statutory Board has the powers that are advocated to be put in place within this new structure – how those powers may well be sufficient to realise a lot of the things we would like to see. The Report, perhaps surprisingly, says that it is the Isle of Man Post Office and the US Postal Service which alone in the world are run as government-run operations, which makes them 2330 unique; and, being against the recent trend in the way these things are run, the time is therefore ripe for a reform for the Isle of Man. It just seems to me that whether this is the right model … And by all means vote on the recommendations separately, but they all hang together, actually. If you knock one of them out, I think you have undermined the whole thing. Be careful of that. 2335 It just seems to me that the Report could perhaps usefully consider another option, which is to refer the policy and the Report to the exercise of parliamentary scrutiny, so I have tabled an amendment to refer this to the Economic Policy Review Committee of Tynwald to take evidence on the merits of the policy to test some of the claims that have been made for the policy and some of the counterclaims that have been made for the existing structure. 2340 I simply leave it to the Court to consider this as an alternative way forward, given the lack of enthusiasm for what is on the Order Paper. You might, instead, care to vote down what is on the Order Paper, or you may care to have the very valuable exercise of parliamentary examination, which I believe is increasingly proving its worth, as an alternative way forward. And that report, of course, as we know, will come back and there will have to be a Government response to that 2345 in two months so one can consider both things together. You may feel that that is a better way forward than voting down what is on the Order Paper, or even an amended form going forward with it, given the amount of reservation that Hon. Members have expressed. I beg to move the amendment, Madam President:

To leave out all the words after [GD No 2016/0008] and insert the words ‘; and refers the Report to the Economic Policy Review Committee for consideration and report’.

2350 The President: The Hon. Member, Mr Singer.

Mr Singer: Thank you, Madam President. I would like to second the amendment from Mr Speaker. I think it is a very suitable compromise. 2355 I did have quite a lot to say, but most of it has been said. I think what has been proven today is that a business case has not been shown. There are things also in Toime’s Report which seem to be a one size fits all regardless of the situation, and that is totally unacceptable. I think if the Economic Policy Review Committee do then look at all the matters, not only the 2360 memorandum of understanding and is there a case for corporatisation but also from a business and political point of view as regards Tynwald and the Isle of Man, then I think that is a very useful way to go about it. Therefore, I would urge Members to support the amendment by Mr Speaker.

2365 The President: The Hon. Member of Council, Mr Corkish.

Mr Corkish: Thank you, Madam President. I speak as the immediate former Chairman of the Post Office prior to the appointment of the Member for Malew and Santon, my good friend Mr Cregeen. 2370 It was during my tenure of office that I, on behalf of the board and executives of the Post Office, brought to the Council of Ministers the proposition that corporatisation was a way ______1224 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

forward for the business, and that was in accordance with the Scope and Structure Report and principle behind it, and not only because 10 years ago it was thought a good way forward by forward-thinking and visionary Members in this place being bold and wanting to seize 2375 opportunities. Following three presentations to the Council of Ministers on this matter, our last meeting ended up with my pleading for a decision to be taken to save time, effort and money on the Post Office’s behalf. Like many decisions in this place, I will agree that it was not an easy one to make. There were 2380 and remain many good arguments for and against corporatisation and, I stress, no sureties on either side. Perhaps, if I can use the analogy but in a much bigger scenario, a little bit like a decision that has got to be taken by other people about whether to remain in or opt out of the EU, nobody knows whether it is good or bad. For a small Island and jurisdiction like ours, such lengthy deliberations cost time, money and, 2385 importantly, opportunities, and I was in the end disappointed by the disparate deliberations, really, of the Council of Ministers being neither bold nor worthy in their understanding of what we were trying to do at that time regarding the issues facing the Post Office. Madam President, I feel for the dispatched former Chairman of the Post Office, Mr Cregeen, in the way in which he was removed and the manner in which he was removed. He has his views 2390 on the operations and future of the Post Office, which I respect, and in the light of his being a former employee had valuable insider knowledge of its workings and business, and I do not think we are too far apart in wanting the best way forward for the success of the Isle of Man Post Office. However, as an outsider, but Chairman of this important company with 400 employees, I had 2395 to understand its position and likely future and be guided by its executive and board members. The facts remain as we saw then, and they cannot have changed, albeit more challenging now with the progress of time. We needed help and consideration from Government: there were and remain big and real risks for the Post Office network. Madam President, the Post Office remains faced with declining revenues in long-time decline, 2400 with 45% of mail posted lost in 10 years. Digital migration, as we all know, is tremendous across all its services, and all services. A need for regeneration of income to fight decreasing profits was obvious, and they were and continue to be in almost full competition in all its business. I could cite many other reasons why the Post Office were concerned as to their future revenue generation in changing times, and those changes were being made very fast, as they 2405 continue to be. Treasury, despite the mounting problems faced by the company, demanded, without discussion … and I take a little bit of difference with my good friend the Treasury Minister when he said we agreed. We did not, but we were told that we were to give £2 million per year from our profit status – and that, Hon. Members, ate into our reserves. 2410 Madam President, Hon. Members, something had to be done. And I, like many others here today, attended a presentation from the Isle of Man Post Office to listen to Mr Elmar Toime. Lots has been said about the presentation by Mr Toime today; however, he was and remains a strong independent source of knowledge as a world leader in the postal industry. He told us that the Isle of Man Post Office is falling behind the rest of the world in that respect, and of the post 2415 office operation, and I think was most open and fair in his answers to Members’ queries and questions. It is becoming harder and harder, and it was certainly in my tenure in office there, to increase profits and business within the Isle of Man. The company needs to be more fleet of foot – nothing new there; every company in this modern age needs to be fleet of foot – and it needs to 2420 look outside the Island also. In this, the board and the executive were, and obviously still are, passionate, as they should be, regarding increasing profitability and sustainability through extra business opportunities.

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I am sad that Mr Cregeen is convinced that the board are driven by the thought of a vastly increased remuneration. I know the board, I worked with the board and shared and went 2425 through a lot of angst with the board, and I know their commitment to the furtherance and succession of the Post Office. The subject of remuneration, however, surely would be subject to the shareholder and not the board, so I think we should ignore that reference. I note also today that Mr Terry Pullinger of the CWU has come out in support too of what he shares, and he sat on the board with me whilst I was on the Post Office. 2430 I note some of the references made by Mr Joughin regarding what is good, what could happen. I would just remind Mr Joughin that the board fought against the issues mentioned by him and the Post Office want to maintain those services, not reduce them. This is the point of where the Post Office is trying to go. In closing, Madam President, can I refer to the MEA as it was and its situation at the time 2435 prior to its merger. The control structure as recommended in this Report before us today is well tested around the world and it has safeguards in place to avoid past experiences. This gives me comfort over and above my earlier discussions three years ago with the Council of Ministers and any concerns that they may have offered then are acceptable now to the Council of Ministers. However, I look at recommendation 2 and indeed I would be happier to await the memo of 2440 understanding to further content myself that the purpose, aims and objectives of the Post Office are known and approved by Tynwald. Further to that, I take on board the references and explanation today provided by the Treasury Minister, which further gives me additional comfort. With regard to the amendments here today, I rather like both of them, although I would have to say, quickly looking at them, that whilst I respect the review committees that we have and the 2445 effectiveness of them as Vice-Chairman of the Public Accounts Committee, referring the Report to the Economic Policy Review Committee for consideration and report would indeed take some considerable time. Thank you, Madam President.

2450 The President: The Hon. Member for Douglas South, Mrs Beecroft.

Mrs Beecroft: Thank you, Madam President. I would have seconded –

2455 The President: No, you would not, Madam, because you are not allowed to, under Standing Orders, having already spoken.

Mrs Beecroft: No, I know I am not. I said I would have seconded it had it not been for … [Inaudible] because I do think that Mr Karran’s amendment is eminently sensible and is actually 2460 what I was referring to this morning when I was talking about it. What I cannot understand is why Minister Watterson thinks that all the other recommendations should just go ahead as they are stated, because it says that the purpose, aims and objectives should be in this memorandum of understanding. Why? It should be in the articles of association. 2465 Mr Watterson: It is getting Tynwald approval either way – that is my point.

Mrs Beecroft: They both need Tynwald approval, but one is a statutory resolution and one is a legal document. You cannot just change the memorandum and articles of incorporation 2470 without it being lodged at the Registry, without it actually having … A statutory resolution is what we do if we say this is what we think at the moment; but a legally binding document, which is what the memorandum and articles of association are, is a very different matter, very different, and that is where all these other things should go. The shareholder is the Treasury Minister: if that is what Hon. Members want, it should be in the ______1226 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

2475 memorandum and articles of association, because then it is legally binding. Otherwise, it is just a statutory resolution.

Mr Robertshaw: It is a declaratory resolution.

2480 Mrs Beecroft: Thank you, a declaratory resolution – wrong word, but same sentiment. One is legally binding; this other is just a resolution of this Court today. To change the memorandum and articles of association, yes, it could be decided that we would change … but they have to be lodged at the Companies Registry should we do so, because then again, until that point, the original ones would stand. So why we want all these different 2485 recommendations I really do not know. If there is anything that is of a shall we say less important nature that wants to go into a memorandum of understanding as a declaratory resolution – get the right word this time – then that is fine, but the main principles should be in a legally binding document, because this is important. I think it should be circulated to Members in draft and I think we should all be able to 2490 have an input into it, such as Mr Joughin said that at the moment it cannot borrow because it is a Statutory Board, but as a company they can. Well, as a company they cannot if we decide to put that in the M and As. Whatever the terms are, we put it in the M and As from the start, and that is the legally binding bit. If things want to change, then it has to be decided they change and that has to be lodged at the Companies Registry. So there is nothing that can happen that can 2495 slip below the radar and nobody be aware, or if you are off sick you do not know about it, or anything else, because it is there, it is lodged and it is accessible at any point to anybody. I think that is why, to me, it has to go in that framework. These other recommendations … Well, they are not needed, because the important bits should be in that.

2500 Mr Watterson: They give a steer, don’t they?

Mrs Beecroft: I think that is all I have got to say. I do hope that Members will think about this and support Mr Karran’s amendment, because I think it is very sensible, but I do hope the Acting Attorney General will clarify the point that I 2505 asked him this morning about the assets of the company. Because of Treasury being able to say they want a dividend, once the revenue reserve has run out those assets would actually be protected in a company – is my understanding – because a shareholder cannot, unless it is put into the M and As, instruct the company to sell assets so that they get a dividend, and I think that would be a protection for the company. I am not 100% sure and I would like clarification on 2510 that point. Thank you, Madam President.

The President: Do you want to respond to that now?

2515 The Acting Attorney General: Yes, thank you, Madam President. Yes, I am quite happy to confirm the position with reference to a shareholder’s powers with reference to the issue of dividends. If I may, I will also touch upon the issue of the memorandum of understanding by making this reference. A memorandum of understanding is a legally binding document. It is legally binding 2520 between the parties to that memorandum, which in this case, if it were to proceed, would be Treasury as the sole shareholder and the company; and the directors of the company would be bound by that agreement. That memorandum of understanding quite often, as would be akin to a … [Inaudible] would set out an agreement between those parties with reference to dividend policy. What that 2525 agreement cannot do is to require the company to pay out money which, crudely, it does not have. So, effectively, it can only pay out dividends from, firstly, its available funding, and ______1227 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

secondly, as the Hon. Member Mrs Beecroft has mentioned, from those reserves which it is able by law to resort to, to pay dividends. I hope that assists. 2530 The President: The Hon. Member for Douglas West, Mr Shimmin.

Mr Shimmin: Thank you, Madam President. I firstly declare an interest. Like the Member of Council, I am a former Chair of the Isle of Man 2535 Post Office. I believe, although they did not state it, that Mr Cregeen and Mr Joughin, two of the fiercest critics of this Report today, are former employees and members of the union at the Post Office. I think that the mover of the motion got this wrong, in my understanding – Mr Skelly, the Member for Rushen – because when I was Chair between 1999 and 2001, one of the highest 2540 issues on the agenda was the corporatisation of the Post Office, even pre-dating the 2003 he refers to, and I found myself during that time, as a relatively inexperienced politician, in a similar situation to that of my good friend from Malew and Santon, Mr Cregeen, inasmuch as on numerous occasions I was outvoted by the board – and the board members, those who are still on the Island, will back that up, that on many occasions they outvoted me three to one. But, as a 2545 chairman of a board, I understood that my responsibility was to carry out and follow the actions of that board. We then move to what was always, and is always going to be, an emotive subject: the Post Office. I agree with the Member of Council, Mr Turner, when he talks about one of the successes in Government being the Post Office. It is one of those few areas of Government that is 2550 genuinely trusted and loved by the people of our Island. Despite everything that we in this Chamber have done over the years, the people still tend to trust and believe in the Isle of Man Post Office. I was a little surprised at the way it started, and the Member for Onchan says the same thing about some of the strange bedfellows in this debate, because some of the right-leaning 2555 Members – my good friend Mr Robertshaw and others; Mr Turner waving at me there … whereas to some people I am an old leftie, I am a trade unionist, a teacher trade unionist for many years. And yet, from my point of view, when I hear Mr Robertshaw talking about his concerns about prematurity and about there not being enough details, I do not think that is what we are here for. This stage now is about the principle, and as the Chair of Planning at the 2560 moment he must understand the difference between somebody coming for planning in detail and planning in principle. So why do we do it that way around in planning terms, or indeed the Post Office? (Interjection by Mr Quirk) Because we will spend so much time on the details that we are not here necessarily to do at this stage. That comes later. The reality is this is approval in principle 2565 and the safeguards are already locked in. It then needs legislation – political; it then needs an MOU – political; Tynwald approval – political. But the principle is that, as we are seeing once again today, the Post Office, whenever we talk about it, becomes highly emotive and highly political. We have had those who are critical of Mr Toime’s Report. Some of these are the same people 2570 who are saying that we should send off the pensions to an expert to adjudicate and give us guidance on how that works. We could not have gone to anybody more expert than … [Inaudible] (Mr Corkish: Hear, hear.) but because the gentleman has said stuff that some people do not agree with, we have rubbished him in a way that I find quite unpleasant, to be honest. (A Member: Hear, hear.) His reputation is international, and we, with our own vested interests in 2575 here, are (Mr Corkish: No better.) capable of dissing somebody I believe who did a very professional job. I am one of the politicians in this room today who lost a sub-post office. The one in West Douglas went – we fought it and we lost it. And anybody who has got constituents will realise ______1228 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

that many of our sub-post offices are under pressure – they have been for years; the business is 2580 not there – so when people retire, the danger is we are going to lose them. I think it was Mr Joughin, the Member for East Douglas, who talked about the Report saying we would go from six days to five days. I’ll tell you what, Members – the reality is that could happen anyway, and one of the more serious issues about this is if we do not bite the bullet and do something, by failure to act we will continue to erode and risk … [Inaudible] some of those 2585 public services which can be protected under this motion by the MOU by setting a standard that the Post Office must aspire to and achieve. The issue brought up by the Member for Ayre, Mr Teare: this Court said we look for the most suitable option with a sound business case. I agree entirely with Mr Corkish. I was in the Council of Ministers when he was coming, and indeed I was in his seat when I was trying to take the 2590 Council of Ministers down corporatisation. Why hasn’t it happened? Why hasn’t it happened for so long? It is because the Post Office is successful. The Member of Council, Mr Turner, says they can do it anyway. They have shown that over many years. The same management and the same board that have been repeatedly insulted and criticised in here for being so poor have actually continued to post profit year after year, as 2595 Mr Joughin says: last year, £2 million profit; this year the Treasury is still looking for £15 million plus 50%. The reality is the Post Office is good; it has been for years. Despite all the changes to the postal service, all the changes to the letters … we have kept the prices down much lower than the UK in competition, and we are still making a profit. So do we need to do this? No, we do not. We have never needed to do this. 2600 Mr Henderson: You’re talking yourself out of it.

Mr Shimmin: I am not talking myself out of it, Hon. Member of Council!

2605 Mr Corkish: He’ll come round.

Mr Shimmin: The reality is that we come into this place to make decisions, (Mr Gawne: Hear, hear.) and most people, when they were frustrated with the size and scale of Government and they looked at the Scope and Structure of Government in 2006, I and many others put our 2610 names to that and said that we want a smaller, smarter Government, we want to make changes, and one of the easiest changes would be to look at this. That Report was not written by me; it was written by a number of worthies, some political – former Chief Minister Miles Walker, former leader of the quasi opposition – and a number of individuals from the private sector, and they said that this is something we should 2615 look at. And we have looked at it, and we have not been convinced, because it is such an emotive subject for the Island. But actually, when you then go out … and my good friend to my left, Mr Thomas, talks about evidence-based decision making. When you talk about how we come to the conclusion: we bring somebody in who gives a report. And that was sufficient for Council of Ministers to consider that 2620 this was worthy of progression. The whole principle is to try and actually move things forward to be smarter and more efficient. The Member for East Douglas, Mr Robertshaw, talks about the smaller size and this might make the Post Office larger, yet his colleague says if we do this it might make the Post Office smaller. Mr Toime covers this: if you are looking for smarter Government, that does not 2625 mean you reduce down those profitable areas; it means you embrace those profitable areas because that money comes back in to be used for other services. I can understand the fact that you do not need to this, but you should. The Hon. Member for Malew and Santon – there has been some sympathy for him here regarding the way in which he was dismissed, but I am sure, as an honest man, he will 2630 remember that no more than 12 feet away from where I am standing now, on the day that he ______1229 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

was appointed Chairman of the Post Office I had a conversation with him in the Court before we were in sitting, talking about the very issue of whether or not we should corporatise the Post Office, because the Council of Ministers were looking at that as an option. I said to him at that time, ‘If you don’t agree with it, then don’t put your name forward, because you are going to be 2635 in conflict.’ And that has happened. Over the last two years he has been in conflict with the board, with the management. That is understandable – we are here to do a job that we believe in passionately, but as a Chairman of a Statutory Board, if you disagree with the board you have choices: you walk or you stay and fight your corner. I believe, when he had lost the support of the board, he should have walked at that stage, 2640 but he did not. He was not sacked for having a position which was against the Council of Ministers. The reality is, as many Members in here know, he was talking about this issue and he has done it again today under the protection of Tynwald Court, where I believe he has made some absolutely scurrilous types of allegations, (A Member: Hear, hear.) repeated by others, where he seems to see his justification of this decision by the board and management that they 2645 want to feather their own beds, that they want to enhance their own wages. He has spread that around repeatedly and it has been repeated again today in here. I find that disgraceful, Hon. Members. (Several Members: Hear, hear.) I think the way in which … The Hon. Member for East Douglas is waving the papers of Mr Toime, saying that that is something this can do. We have all the protections we need with the MOU and the legislation, 2650 and to make allegations against those who cannot defend themselves (A Member: Hear, hear.) that this is in order to feather their own beds, double their salaries and some of the other allegations, repeated and regurgitated to try and turn us off this motion, I find disgraceful. (A Member: Hear, hear.) Those same people, then, as part of their argument, talk about how successful the Post Office 2655 is. You cannot have it both ways, Hon. Members. If the board and management are this bad, how can we praise them as being so great that they should stay as they are? There is, dare I say, an imbalance between the logic of that argument. To allege the self-interest of members of the management or board I believe has been satisfactorily addressed by the Member of Council, Mr Corkish, who worked with these people 2660 and defended their position, and I am grateful for it. Hon. Members will come to their own conclusions. This is not something that is critical, but it is right. It is not the vying sound of a Government going out of office. Now is the time – we have got the Report – that we should be actually accountable for doing it, so I therefore cannot agree with the Speaker in saying that we should put this off to a Committee, because here and now 2665 you have got the options, you have got the Report. You have got an expert telling you what you should do. You have had ten years or more of thinking about this. So who is it that we are trying to protect if we vote against the motion? Well, normally, if it is a political decision, we want expert advice: we have had that. We put in place a board at the Post Office, we know their view is supportive of it, and a management that is very good also 2670 supports it. So we then look at the public. Well, the MOU and the mechanism of doing this protects the public better than anything, because we will have enshrined within the MOU and the legislation the powers and the role of the Isle of Man Post Office clearer for everybody to see than it has ever been, and that is the best way of protecting the public assets that we have for the Post 2675 Office. You then look at the workers. The CWU – Terry Pullinger – came out this morning and was saying, ‘We want to talk about this further.’ The principle he is accepting. The detail for all of us comes afterwards. That detail is not available now because we could spend months with all this detail and then get thrown out at the eleventh hour. So you go down the road of the principle. If 2680 you accept that, you then do the detailed work with the safeguard that it will always come back to Tynwald for approval.

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Only last week in the , my good friend Mr Thomas was looking at corporatisation, the principle established and accepted by most of us, and he was saying that we should have a policy to look at all the corporatisation. 2685 My even better friend, Mr Karran, who is going to speak in a few minutes and probably disagree with me, stood up at that debate and said, ‘All corporatisation is slightly different.’ Exactly! That is the point about this. The reality of corporatisation I think most people agree with – certainly many of the right-wingers in here – is they are all different; we need to look at them in isolation. You are being asked to do that with the Post Office now, and it has been on the 2690 table for well over 10 years. If we push it in the long grass … please, Hon. Members, I think you are just delaying things. If you fundamentally do not agree that the Post Office should progress and have a future, then vote against. Alternatively, I would go with Mr Karran’s amendment and just say that that gives you all the safeguards. The safeguard that you have in place there is Tynwald Court, and nothing 2695 happens without Tynwald approval. If anything, that is the lesson that has been learned over the last few years, and Mr Karran and myself, as we say goodbye to Tynwald … He can turn around now and say that the approval of Tynwald is one of the safeguards that you have fought long and hard for, and that is enshrined within this motion. So I really would urge Hon. Members to consider … Despite what they thought up to today, 2700 the safeguards are here. The decision is not today. The detail is not here, because it does not need to be here. What needs to be here now is the principle that we should move forward, looking to see if we can safeguard the future and the profitability of the Post Office for the good of the people. I believe the Report is good. I believe it is worth supporting with Mr Karran’s amendments. 2705 Please, Hon. Members, make the decision today, but try and support the motion if you can.

A Member: Hear, hear.

The President: The Hon. Member for Onchan, Mr Karran. 2710 Mr Karran: Eaghtyrane, talking to the amendment by Mr Speaker, I really think that this proposal is premature. (A Member: Hear, hear.) We actually need to have some meat on the bone. I have to say that, whilst I can empathise with the Hon. Member for West Douglas as far as 2715 the assertions of the chief executive and the present board as far as the issue of their wages going up, the situation … To be fair, the Hon. Member for East Douglas has pointed out in the Report that that is one of the things that will happen. (A Member: No!) Eaghtyrane, it is fundamental that we know what we are talking about. I am amazed at my good friend from West Douglas, about the detail is not important. 2720 Mr Shimmin: Not at this stage!

Mr Karran: The point is, Eaghtyrane, the detail is important. I am sure that when only two of us voted against the MEA because it was just platitudes, they 2725 never thought, the other 30 in this Court, that they were going to run up a £400 million debt; or, I am sure, that when we decided we were going to do a User Agreement, they would cash in a piece of paper called a ‘User Agreement’ for £140 million, making several millions for the directors of the company. That is the detail that we need to make sure we have, so we cannot afford the luxury of allowing another scandal to happen. 2730 So I have to say that I think you would be far better not supporting this, because I believe this is premature. When we get the detail, or when the next Court gets the detail, then you need to do that.

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Far too often, we have heard this … and I am really pleased to see that we are having a sensible debate in this Court, not a one-sided debate on this issue, because we need the input 2735 from both. But this amendment is fundamentally flawed in the fact that we have not got the detail. We do not want it on the hoof. We do not want a repeat of what we have seen in the past. I have to say, Eaghtyrane, I just think the Member for West Douglas needs to realise when some of us were trying to hold the executive and the MEA to account in this place we were 2740 attacked on the lines of ‘How dare we do it’, but we never got any apologies for the fact it was wrong. Hon. Members, we have got to start changing our game in this place. Your game has got to be that you are going to start properly scrutinising stuff, not being a rubber stamp, and a situation as far as holding them to account. 2745 Hon. Members, do not support the amendment for the Scrutiny Committee, because it is premature. You really need to have the detail. If you are not happy with the detail when it comes back from executive Government at a later date, then send it to the Scrutiny Committee, but please … Obviously, with 20 years in here, he has not learned that fundamental issue: detail is 2750 important.

Mr Shimmin: And signing! At the right time!

Mr Karran: Eaghtyrane, I am not arguing about the time … but if we are supposed to be given 2755 a green light, we need to know what green light we are doing, what road we are going on, what vehicle we are driving and what side of the street we are. At the moment we do not know that. I hope that Members will not support the proposal. There is only one way forward: we need to see these articles of association before we do anything, and if you are not happy then, then support the Speaker’s proposal. Then is the right time. 2760 But detail is important, because I am sure, as I stand on this side on this Court … And the Hon. Member for West Douglas, he never thought, by voting for the User Agreement or for the MEA, that we would end up with the sort of mess we ended up with. I do not question the integrity as far as that is concerned, but detail is important and we need to know before we hand over the steering wheel of this issue and find that maybe the Hon. Members for East Douglas and Malew 2765 find that what they have said is what happens. One of the concerns I have, as far as this amendment is concerned, is if we do not get the detail it creates more patronage in this system. Some of us have paid dearly in our hip pockets over the years of being a Member of this Court for being able to say what we want to say, and I am concerned about that. So please do not support the amendment. We need the detail first. 2770 I hope Hon. Members will support what we have got, and only recommendation 1.

The President: The Hon. Member for Michael, Mr Cannan.

Mr Cannan: Thank you, Madam President. 2775 Corporatisation in two easy steps: step one, knife the Chairman; step two, ask Tynwald to sign a blank cheque and fill in the details. (Several Members: Hear, hear.) With regard to step one, I wanted to say, actually, that I think the Chairman of the Post Office has been given a very rough ride (Mr Cretney: Hear, hear.) and a very unfair ride. We, at this precise moment in time, at 3.45 p.m. on 19th April 2016, currently conduct our business in the 2780 Isle of Man Post Office as a Statutory Board. Tynwald has not given authorisation for the Isle of Man Post Office to act in a corporatised manner. That decision is not the decision of the board. It is not the decision of the Council of Ministers. That decision is the decision of Tynwald and Tynwald alone, (Two Members: Hear, hear.) and to have sacked a Chairman who has been conducting business as requested by Tynwald, in and under the structure that Tynwald has ______1232 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

2785 requested him to conduct business, is extremely harsh. And, of course, to have issued that kind of press release, talking about lack of corporate governance, coming from the Council of Ministers is extremely rich. The second point that I have just raised is about writing blank cheques. Allegedly, the two biggest lies in the world by civilised man are ‘I love you’ and ‘the cheque is in the post’, 2790 (Laughter) and quite frankly, I would not trust the Council of Ministers to deliver either. (A Member: Hear, hear.) They cannot even be trusted to negotiate an amendment to a motion with integrity. So how can we possibly trust them here to deliver us what they say that they are going to deliver us? (A Member: Hear, hear.) I wanted to quickly just pick up on a couple of points. We have indeed approved the principle 2795 of smaller, smarter Government, and indeed we have approved the principle in many ways, potentially, of corporatisation. But we have approved that principle across a huge number of activities and services, none of which, as far as I am aware, have been conducted or brought forward to this Hon. Chamber as we were told or indeed expected them to be. Indeed, in the Scope of Government report, in the Council of Ministers’ response, we talk about:

A high-level business case; A cost benefit analysis; Assessment of risk/reward factors; Assessment of political factors; External Scrutiny/support (where necessary)

2800 none of which have been produced in detail along with the request by the board and the Council of Ministers to support corporatisation of the Post Office. I want to just quickly move on to the Report that was written by Mr Toime. There were a couple of very interesting paragraphs in that Report. First of all, Mr Toime says, at the bottom of page 20, ‘Isle of Man Government Policy for the Post’. His concluding paragraph in that 2805 particular point, 5.3:

There are several public policy areas that need clarification even before recommendations for the corporate structure can be made.

None of that, Madam President, appears to be accompanying the recommendations that we have received, other than ‘It will be drawn up at some future point’. We appear to have no reference to the legislative requirements at all in terms of what is actually going to be 2810 formulated. We have no idea of what this proposed memorandum of understanding is going to read, and we have no real concept of what policy is going to be in place to protect those businesses in the private sector who may come under direct challenge from a newly corporatised Post Office. Nor do we understand exactly what will and will not be acceptable, other than the fact that we may have some kind of clue or allowance to feed that through by the 2815 fact that the shareholder is the Treasury Minister and that we have a liaison officer on the board. But nevertheless, they will have no real impact in terms of direction of that board once it is established. I think that is, by itself, a vital point – and I may just come back to that in one or two moments. The other point that I just wanted to raise from Mr Toime’s Report – which, by the way, was 2820 accompanied by, I think, a fairly reasonable presentation from Mr Toime – is he says:

In summary, good governance is about clear expectations and clear expressions of intent, as in a business plan for example. A company structure with a good MOU will ensure proper management of risk. And good communications between company and government will preserve the integrity of both sides.

And yet we are now being asked to sign up to this without the memorandum of understanding. Actually, the vital document that we really need to understand how this is going to operate is not even here and presented to us. This is the blank cheque that I am talking about, because we

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are being given a business case without the detail. In fact, we are not even being delivered a 2825 business case; we are simply being delivered a recommendation. Indeed, that theme has just been expressed by the Hon. Minister for the Cabinet Office, who has just sat down, who has basically said, ‘Well, we do not need this, but we are going to do it anyway because it is the right thing to do.’ Well, it may well be the right thing to do, but we do need to understand why do we need to do this and what it is going to achieve. We really have no 2830 detail around that whatsoever, other than hearing on the grapevine that the business wants to act with commercial freedom and appears to want to acquire some local companies to add to its productivity. Now, Hon. Members will know, of course, that we had an email yesterday from a very worried logistics managing director who said, ‘I will be extremely concerned if the Post Office is 2835 given freedom to grow and develop its logistics business.’ I can understand those sentiments. I hear, possibly – rumour says it, but even if it is just rumour – what if the Post Office was to go and acquire a printing company? How do you feel that other hardworking individuals, who have spent a lifetime, potentially, building up those businesses, are going to feel when that type of level of competition comes into the market backed by the taxpayer? 2840 We simply do not know, because we do not have the memorandum of understanding to give us those kinds of safeguards and we do not understand the detail. It almost strikes me as a kind of waste of time: putting this through without a detailed business case. In fact, I would question why we have even got this in front of us today without that detailed business case and specifically without that memorandum of understanding. You would not bring it to a private 2845 company, to a board of directors in the current state because the board of directors would laugh it out. If I took this kind of thing through to the Manx Utilities Authority, I would hope that the board of directors would simply look at me as if I was some sort of alien, because you would not do it. It has got to have some credibility here in terms of what we are doing, and we do not have that credibility because we do not understand what the memorandum of understanding is. It is 2850 something we are going to receive at some point in the future. The other point I wanted to make is I do hope the Post Office know which sort of routes they are taking. I might add, and I cannot provide too much detail around this but some weeks ago the Manx Utilities Authority informed me – or executives informed me – that Swiss Post had been on the phone to them informing them that they could save them thousands of pounds by 2855 taking control of our direct mailings and our invoicing; a suggestion that I told the executive at the time to put back in the box, because for me it was vital that we supported local businesses (A Member: Hear, hear.) and the Post Office. I will be interested to know, if the Post Office takes this new route of its corporatisation, of its competitive nature in the private sector, whether we will be able to justify taking that kind of stance when it no longer really becomes a public service 2860 as such but a corporatised entity. An interesting point which I would seek to understand further – if this gets rejected today and indeed comes back, I would like to know what Government policy will be in respect of the Post Office and whether we will be seeking to tender contracts that exist with the Post Office back out to the private sector and potentially with companies in the United Kingdom? It may 2865 well be justified in terms of cost saving and smaller, smarter Government, that we should be following that route. That is not really very clear today in terms of what we have received. Madam President, on that basis, on the basis that we have been given an incomplete business plan, that we do not understand fundamentally what the Post Office seeks to achieve other than seeks to wrest itself away from some political control … In other words, we do not 2870 understand what new business the Post Office can get that it cannot already successfully go out and get, and that has not been justified to us. We do not understand what the impact will be on the private sector and that any moves to acquire businesses locally will need to be very carefully thought out because we do not want state-backed organisations interfering in the private sector and competing on an unfair playing field.

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2875 Much of this information will be contained in the memorandum of understanding and we have not seen that memorandum of understanding. We are being asked today to sign an approval without the detail. We are being asked to sign a blank cheque which will be filled in later. Madam President, on that basis, until we get some proper detail and a proper business case 2880 put together, I will not be supporting this motion.

Two Members: Hear, hear.

The President: The Hon. Member for Douglas West, Mr Thomas. 2885 Mr Thomas: Thank you, Madam President. It is hard to speak at this stage of the debate, with lots of things having been said, but I would like to think that I have got some high-level principle things which I can add to help us make up our minds finally. 2890 The first point is when you are an evidence-based policy maker you like to make sure that what is presented from history is actually being presented honestly and completely, and although corporatisation has been around a long time, in 2006 when the Scope and Structure of Government Committee reported about the Post Office they were quite clear that their recommendation was for privatisation, not corporatisation – or at least they said ‘a 2895 competitively neutral form of business’. Their recommendation was for ‘light touch regulation’ if there was no competition in the market. So it is very important for me, as somebody who has resigned from the board of the Office of Fair Trading on a matter of principle to do with the way that light touch regulation is provided for in law and in contract, that we actually get this right first time if we are going ahead down 2900 the corporatisation route, so that we do not make the mistakes that I perceive have just been made in Manx Gas and were made with the User Agreement. Therefore, my basic point is let’s get corporatisation right first time, and that is why I was pleased that this House gave me a chance last week to work with officers, I hope, and certainly political colleagues and stakeholders, to actually put together something around that. 2905 In that context I welcome the helpful statement from the Office of Fair Trading Chair, on behalf of the Office of Fair Trading board, about the issues of competition and the potential or risk of unfair competition. I am also not surprised that the OFT raised this issue at this minute, given that the Post Office does have form, given the Council of Ministers/Office of Fair Trading investigation in 2012-13. 2910 We had a report. It was a preliminary investigation under section 9 of the Fair Trading Act 1996 into the supply of print services and plain paper and envelopes to Isle of Man Government, and the Council of Ministers, inside that process, found anti-competitive practice. So my question to the Minister as he is summing up is: at the time it was reported that the Post Office and the Treasury were working together to review working practices and 2915 responsibilities to address the concerns that had been raised in that report, so can the Minister advise this Hon. Court what happened next, specifically? How has procurement been affected? How has a fair trading regime developed to be able to deal with that real threat that has been identified for us today all over the place? This is especially important, given that in Jersey and Guernsey, where they have had 2920 corporatised entities since 2001, they still have a regulatory regime. I note in this context the 2014 information note prepared by the Channel Islands Competition and Regulatory Authorities entitled ‘Future Regulation of Postal Sector in the Channel Islands’. Admittedly, it is no longer price regulation; admittedly, it is very much light touch regulation; but the conclusion of the Channel Islands regulator about the postal sector very recently was that although it will:

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… keep under review the options to reduce further the regulatory burden on postal operators … Until competition is more widespread, [CIRCA is of the view it will need to] … maintain regulatory constraints via licence conditions that mimic the incentive effects of competition.

2925 So it is not just about a memorandum of understanding or a contract. This is about licence conditions, a light touch regulatory regime with a legal backing to it, which is what the situation is in the Channel Islands. Although last week we had that Fawlty Towers debate – I never mentioned the Post Office; I did once, in fact, but I got away with it (Laughter) – now we really do need to actually think what 2930 the context is for the Post Office and corporatisation. I was very hesitant to overpromise, but I am glad … the way this debate is going, it seems to me that it is accepted that it is necessary that officers and Government support a private Member to actually put in place that context that is becoming more and more obviously necessary. Another issue – which was hinted at by Mr Robertshaw on a different nerve, in an off-the- 2935 cuff remark – which I was actually able to discuss with Mr Toime in the last week, is the relevance of the utilities tax on regulated activity, because in Guernsey and in Jersey the Post Offices pay 20% tax. This is not corporation tax by the back door, which is what Mr Robertshaw suggested, but to me we have to start thinking about the application of utilities tax, whether there is an OECD dimension to it, given that we are going into a competitive world. So it might 2940 be that there are international tax aspects to all of this. Mr Toime, I believe, if he was asked about this, would say that his point of view was that a tax plus dividend return to Government was the way that you had to look at it in terms of the Post Office, because that is the way that every other post office is considered when the government has a shareholding in it. I have got a few more questions for the Minister, he will be pleased to note. The first one, 2945 building on the points made by Mrs Beecroft in particular about the corporate association documents, but also on the Minister’s own opening remarks that the MOU would lay down the purpose of the Post Office, and Mr Joughin’s comments about borrowing – which I do not believe … A Statutory Board can obviously borrow, because the MUA has got so much debt, so I think it is more likely to be in the law rather than in the Statutory Board law, but my question to 2950 the Minister is to explain … In actual fact, the powers and duties of the Post Office are already enshrined in the Post Office Act, aren’t they? Beyond that, can the Minister explain how and to what extent the Post Office has taken advantage of the full range of commercial opportunities made available to it when the Post Office Act was amended in 2013? I am now quoting from Mr Ronan’s speech when moving the Second Reading of this 2955 amendment Bill, which at that time was to reverse the trend where workers migrated to the UK as multinational businesses rationalised their operations. Mr Ronan at that time said quite explicitly that the powers were being clarified:

to take into account technologies introduced over the last 20 years including such areas as digital communication and data management, hybrid mail solutions to production management of physical mail from electronic data and vice versa and other similar services and products

– and remove –

uncertainty over the Post Office’s ability to seek revenue outside the Isle of Man. It enables the board to access much larger markets to retain and bring the work to the Island.

So, building on that, does this legislation in actual fact constrain the Post Office any more? Do 2960 we already have a fully commercialised Post Office? If it does, has the board felt the need to bring secondary legislation to update duties and powers, because the Act quite clearly gives the Post Office board the power to work with DED to bring powers to enhance and give further commercial options to the Post Office? And if so, what is missing exactly? What is constraining the operation expanding into new areas? And if not, if there are not any constraints in law, if it is

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2965 only an issue of governance, what is it about Treasury, the Council of Ministers, the civil servants intervening that is holding back the Post Office? Rather than talking in generalities be very specific, because we are trying to make an important decision here, and as a man of detail who likes evidence-based policy decisions I want to be told why it is not working – because if that is the case, we should be looking at 2970 corporatising or doing something else with all of our Statutory Boards, surely, in the way that we have laid down a route map, conceivably, and we have had that laid down for us for 20 years and we are adding to it with things that are happening at the minute. Is the Minister concerned that the MOU which, as currently proposed, would not be bound by inclusion in postal legislation or any other legislation, so it could be amended at will without 2975 the knowledge of Tynwald … is he concerned that competitors and the public will find that unacceptable and petitions of doleance and the like will result, as is happening in other areas where we pay scant regard to legal constraints? Another question for the Minister: has a company limited by guarantee been considered, with the people of the Island rather than the Government as the members of that in another 2980 context? That might be a way forward to separate out Government in various roles to avoid conflicts of interest. Another question to the Minister: have there been discussions about removing the Post Office’s cash pile from the company before corporatisation to avoid any of the misunderstanding that has been sketched and hinted might happen later? That way would remove the possibility 2985 that the cash could be run off with or it could be used to the detriment of competitors. All in all, I am looking for answers. I am actually looking for evidence. I am not going to get too hung up about the detail of whether we need detail at this stage or whether we just need to get the principles –

2990 A Member: You just said you are a man of detail.

Mr Thomas: – because those are important issues of principle. I can see that a stamp costs 20% more in Jersey and Guernsey than it does in the Isle of Man. That is straightforward. I can see that the business has actually collapsed in Jersey and Guernsey, 2995 if you take a five-year view. But there are all sorts of other facts that I do not know about. I just want to be persuaded that we are going down the right route. I have got serious questions, and at the very least we should be very constrained in what we actually vote for today. The closest I am prepared to support, I believe, at this stage, unless persuaded otherwise, will be Mr Karran’s amendment. 3000 The President: The Hon. Member for Douglas South, Mr Malarkey.

Mr Malarkey: Thank you, Madam President. I have not been swayed in any way towards corporatisation today (A Member: Hear, hear.) 3005 or by any presentation; in fact, far from it, to be perfectly honest. I do feel I have been slightly manipulated over the last week or two. A lot of emphasis today has gone on the presentation we were given by Elmar Toime – a very nice gentleman, a highly experienced gentleman in his field. But I liken it, Madam President, to the Council of Ministers bringing a motion across next month that after the next Election we will have only party politics 3010 and then appointing Mr Karran to give us the report on it. Because, basically, that is what has happened here: ‘I want this answer, so I will go out and find the man who will give me the answer that I want’, which is exactly what has happened here. I am not sure whether anybody has seen this gentleman’s CV. He is obviously very experienced around the world. Some of the boards: he is a member of the Supervisory Board for 3015 the Dutch Post; non-executive director of Qatar General Post; non-executive director of Malta Post; executive Deputy Chairman, Royal Mail Group; CEO, New Zealand Post. That is not ______1237 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

counting the other non-post positions he holds. Obviously he likes it, because he gets to sit on the board afterwards. With the greatest respect, I wonder whether part of the deal, going forward, if we have corporatisation … Is he going to be part of Isle of Man Post? I really do not 3020 know.

Mr Corkish: Oh come on! (Interjections)

Mr Malarkey: I really do think he was the wrong man to try and convince us to go down the 3025 road of corporatisation. I really do.

Mr Corkish: Who would you get?

Mr Malarkey: I can hear mutterings in the background. I am entitled, Mr Corkish, to my 3030 opinion and that was the opinion I got after the presentation.

Mr Corkish: Absolutely! I could not agree more.

Mr Malarkey: He said we were failing, we were falling behind. Yes, we are falling behind, 3035 because we are making money – right? The other ones he came up with to show us were Jersey and Guernsey. I think we could have got officers to look at Jersey and Guernsey and put it together, I really do. Again, I would like to know just how much we paid this gentleman to come forward and give us this today. 3040 So not only do I feel slightly manipulated by the fact that the expert they brought in was somebody to give us the answer they wanted, but then we hear, just before the presentation, that the Chairman has been sacked because he did not agree with the Council of Ministers. Again, a Chairman that Tynwald appointed the Council of Ministers taketh away. Tynwald ratified the appointment of the Chairman of the Post Office. Madam President, at least the 3045 Chairman should have been given a chance to have his own views and stand here today, as Chairman, and argue the case. Had it gone through today he could have resigned, and if it had not have gone through today he could have carried on with his chairmanship. He was only putting his views: political views – not just his own political views but also the political views, I am sure, of several Members of this Hon. Court. 3050 Madam President, I just feel somewhat bullied in several ways. The Council of Ministers have gone on a mission that ‘this is what we are going to do and if you do not like what we are going to do, we are going to sack you – you can do what you want, but we are going to railroad this through today.’ I honestly urge Members not to vote for this today. A lot has been said. There is absolutely 3055 no meat on the bone here. We are going down a road which is going to start bringing in, I believe, unfair competition for local business in a lot of different ways. I am going to bring up the MEA again, because I just do not want to see another board with no political Member on it. I really do not want to see any boards with no political Members on. That one mistake with the MEA board has cost this Island hundreds of millions of pounds. I want 3060 to know what is going on. For a group that has made lots of money every year and is doing nothing wrong and – I think the Chief Executive is here – is doing a great job, why are we tinkering with it? Why are we trying to change it in such a way, Madam President? I believe that today you should reject the whole issue going forward, but I will make a couple 3065 of other recommendations, because we have got, obviously, two amendments in front of us here today. I would presume, Madam President, that you will be taking Mr Speaker’s amendment first, because if that then holds up there will be no point in going further with any other ______1238 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

recommendations. I would firstly urge people to vote for Mr Speaker’s amendment and send 3070 this off to the Policy Review Committee so that it can be looked at in greater detail and with a little less bias – would be my view on the subject. If that fails, Madam President, I would then urge Members, just in case recommendation 1 does succeed, to vote for Mr Karran’s amendment, going forward –

3075 Mr Cregeen: And nothing else!

Mr Malarkey: – because what I would hate to see is for the two amendments to be successful today and then recommendation 1 to succeed going forward, because I think that would probably be the biggest mistake we could make today. 3080 So I would urge Members to think long and hard. Obviously, this Court is very split on what we should do going forward. I have a lot of faith in the Post Office and the board at the Post Office. I think they are doing a great job. I just do not think this is the time that we should be tinkering with this. I think we should move forward, let them get on with the job, get rid of the corporatisation idea for the time being … 3085 I will leave it at that, Madam President.

The President: The Hon. Member for Malew and Santon, Mr Cregeen, speaking to the amendments.

3090 Mr Cregeen: Thank you, Madam President. Speaking to the amendment from the Hon. Member for Onchan, Mr Karran, that the Articles of Association of the new company must be approved by Tynwald before they take effect, that is what I was fighting for before the Council of Ministers sacked me from my job. Anybody supporting Mr Karran’s amendment, including the Ministers, watch out, because you could be 3095 sacked for doing exactly the same as what I was trying to do: get a bit of clarity of what this was actually going to do! Unfortunately, when we look at this amendment and we look at the motion, none of it is really making much sense. Hon. Members, I am not against corporatisation; I am looking at where the sureties are. There is nothing in this report that actually gives you what you think you are going to get. 3100 I made it quite clear to Minister Skelly beforehand: I said that I would resign my post as Chairman of the Post Office if I did not believe that the corporatisation was right for the Post Office and it came to Tynwald. I gave that undertaking.

The President: The Hon. Member, Mr Ronan. 3105 Mr Ronan: Thank you, Madam President. Again, a lot has been said; I am not going to try and go over old ground. Members will be aware I served under Mr Corkish from 2011-14 and in that time supported the progression of the Post Office to a more commercial footing and, as Mr Thomas quite rightly pointed out, 3110 brought a Bill forward to give it a little bit more freedom. I think what we have in front of us today is we want to have more commercial freedom and follow other examples around the world. I remember a lot of the presentations that were given to the Post at the time: lots of different areas and scenarios of how corporatisation and more freedom could work. I think one 3115 of the things that has come up today … I cannot remember who said it. It was Mr Cregeen, actually: ‘The Isle of Man is different. It is running a successful entity now.’ But in an ever- changing world … I think the Isle of Man is not different. I remember when I stood, Madam President, in 2011, saying one of the things I think the Isle of Man is going to be in serious danger of is what I 3120 described as ‘hiding behind a bush and hoping everything would go away’. Well, the world, as ______1239 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

we said, has changed. The winds are blowing and we do not know which way they are going to land. I slightly disagree with Minister Shimmin here. I do see this as fundamental. I will tell you for why, Madam President. It really is that when I stood and when many Members stood, I think 3125 one of the burning issues in the 2011 General Election was the Scope of Government report: the Scope and Structure reports. Now, the previous Government took on the structure – which was the easy pickings, I think – but shied away from the big scope of Government. Really, I think we have fundamentally failed in this. I remember in January 2012 when it came through, I went home absolutely elated. I thought, ‘We have done it! This is it now. We agreed 3130 the recommendations.’ Maybe I was a little bit green around the gills, but we agreed the recommendations and I just thought, ‘Here we go.’ Now, here we are in 2016, a few months before a General Election, at the point of a decision – and this is what I struggle with. We really cannot make a decision. We can make recommendations until we are blue in the face. There was very little said on this. 3135 A Member: These are recommendations!

Mr Ronan: It was a ticket to crack on, and here we are. It is something for the outside. Maybe the politics of this has just overtaken me, but this to me is a simple decision on a step change to 3140 where we need to be. Just reading through the news this morning, the CWU – which I thought, ‘We are going to meet real resistance from this.’ We do hear that they did not have long enough to read it. Well, they did read it and they came back and said, ‘Absolutely, we agree with this, because we see it as the right way to go.’ 3145 I think, really, today we have got to be careful here that we are not suffocating in our own personal agendas. I think what we have – a great little comment – people on the left, people on the right, and I do not understand where actually we stand on this as political Members. I think a lot of it is to be said … We have got an ex-Post Office Chairman here, we have got an ex-postman here. It is like a postmasters’ convention. (Interjection by Mr Joughin) Yes, it does. Thank you, 3150 John. I do think, Madam President, this is the right way to go. This is a step change into giving more freedom to Isle of Man Post. I can see the feeling in here is very mixed. But, please, cast your mind back to, I think, January 2012 when we all gave the green light to real progress. Let’s just make a decision. 3155 Mr Thomas said, ‘I am a man of detail.’ Well, yes, we all want to see the detail on the point of completion, but it is about principle and it is about decision and it is about direction of travel. I think we are failing ourselves if we do not do this today. Thank you, Madam President.

3160 The President: The Hon. Member, Mr Peake.

Mr Peake: Thank you, Madam President. A few comments about the presentation last week by Mr Toime: sometimes, when people are able to explain themselves very clearly and very concisely and simply, it is confused that they 3165 do not know what they talking about, but that gentleman did know what he was talking about and did get the message across very clearly indeed. It is that it is not the normal Government Department; it is a body which actually contributes to Government. That is the big difference: there is a contribution into Government. So to give more opportunity to them to actually look at all the opportunities that are 3170 available, I believe is the right way to go. I do think the amendment of Mr Karran is the one to support. I do not think the amendment by the Speaker is quite the one to support just at this time. ______1240 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

I will be supporting the amendment. Thank you very much.

3175 The President: The Minister to reply.

The Minister: Gura mie eu, Eaghtyrane. There is no doubt about it, it was going to be a passionate debate and I think we have certainly had that. 3180 We have heard just about every particular view, I think, in this. I think it has actually been a rather healthy debate to be quite frank. It is probably 10-plus years in the making, by the sounds of it, and it is about time it came to the floor of Tynwald. Mr Ronan just coined it for me: time for a decision. It is long, long overdue, without a doubt. It has been recommended several times by various different bodies and here we are to make 3185 that decision. Let us really go back to the beginning. What are you being asked to do here? You are actually being asked to accept principle recommendations that have been conducted by an industry expert. A lot has been said about that expert. Most people seem to think it was a clear and concise report. I could not agree more; it is exactly what we need. Whenever we have difference 3190 of opinion, we always go and get independent advice and that is very appropriate, absolutely. You want expert advice – very appropriate. I think we have had that. So what are we left with? A very clear decision: do we support corporatisation or not? Let us think about what the purpose of the Post is. We are all very passionate about it. I think we all recognise the value to it. It is a national infrastructure with social obligations. 3195 Mr Shimmin talked about a sub-post office that was closed in his constituency. I had two and they are dotted around the Isle of Man. Mr Teare, Mr Cannan: I think they had five. They are extremely valuable and I am sure we all would recognise that. (A Member: Hear, hear.) We are probably under-utilising it. Mr Robertshaw talked about, in his previous role, rolling out more Government services 3200 through this very valuable network. We have not realised that. But it is a valuable network; it is part of our social fabric. That must, in my view, be part of the memorandum of understanding: that they must be retained and they must be subsidised. Because there is one thing for sure … I heard about the success of this Post Office, which is great; they are still turning a profit. But the underlying issue – Mr Corkish highlighted it: a former postman – is their business 3205 model is unsustainable. That is a word we use a lot, isn’t it? ‘Sustainability’. The business model is unsustainable. Core products are going down by 5% to 10%. What does that mean? That means £500,000 to £1 million that the Post Office is actually losing year on year because of the digital trend, more than anything else. We, as Government, are actually more of a threat to the Post Office. We have made decisions 3210 that have impacted their income dramatically. We have had those debates; we have had those issues raised. It is not corporatisation that they need to fear, it is actually Government, because what happens more often than not is we get driven by policy through physical demands. We have to be careful about that, which is why what you are being asked today is about the principle recommendations. 3215 I heard Mr Robertshaw talk about a smaller Government. We do have to be careful with that term, don’t we? ‘Smarter, more efficient, leaner Government’: yes. But, ‘smaller Government’? Wait until we have a debate about the pensions’ issue: the impact of losing 600, 700 people contributing to the pension scheme and what impact that has had because we have driven towards a smaller Government. The Post Office is a commercial entity. Do you want that to 3220 contract? Do you want that to be smaller? A lot has been said about the competitive issues. Mr Quirk has made, I think, a very valid statement on behalf of the OFT. (A Member: Hear, hear.) I know we have argued the point as to whether they have sufficient teeth to actually conduct real action, particularly in this area of anti-competitive nature. ______1241 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

3225 Mr Thomas asked a lot of questions, which I am afraid I cannot answer those questions at this time, because that is part of the detail. What I would say is – and I welcome what you did in the House of Keys last week and that is the leave to introduce the appropriate legislation around corporatisation and if the OFT does not have sufficient powers, to give them sufficient powers. So what are they doing already in the Post Office? Talk about competitive issues! They are 3230 already competing with logistics; they are already competing with banks with regard to foreign currency. So they are already in a competitive market place – that is without a shadow of a doubt. I heard the MEA being mentioned a few times. Of course we do not want to go back there. But let’s face it, if you move to a corporatised Post Office, you are actually going to move 3235 towards corporate law. I think there are enough directors in this Court that would recognise the increased liability that those board members would have if they are a director of a corporate body – actually greater liability than a Statutory Board. Moving towards that will actually be more valuable for the board members that we want to be fit for purpose, fit for the future of the Post Office. 3240 Governance safeguards, detailed proposals, business case: if you want to vote against that, that is just long grass, let’s face it! ‘You do not have enough information’ – that is why we are going to have an MOU: a memorandum of understanding. That will be a policy of ‘no surprises’. That will provide the safeguards; that will provide the vetoes; that will provide the business plans. 3245 We have also got legislation, which must be consulted with all stakeholders, public, unions. You have heard Terry Pullinger today. He wants corporatisation. He certainly wants it over privatisation, because it puts them on a firmer ground in terms of a corporate body to actually secure jobs. That is his interest. There are union people in this Court here. We want those jobs secured, but they need a successful business model, successful business environment in order to 3250 operate. The amendments: I would say I would support Mr Karran’s amendment. I think it is fair, it is reasonable and the articles are another safeguard that you do have. Mr Speaker’s amendment, I cannot support, simply because that would put it out so far that we would not be able to make the necessary changes. 3255 The reason why it is at this particular time … They talk about urgency. It has been talked about for donkey’s years, but now here is the urgency! If this is approved today, this allows the legislation to begin; this allows the consultation to begin; this allows the memorandum of understanding to be put together. This allows you – particularly you as stakeholders – to contribute to that what you want to see in that memorandum of understanding. 3260 Let us not forget: a General Election in September, October, then there is the decision about a new board, a corporate board, a board that is going to be fit for the future. So really, is there any risk here to making this decision? Actually very little because of those extra safeguards and I just highlight it. Where have we come to? We have seen two Scope of Government reports. At least the 3265 Members of the House of Keys, most of them have talked about ‘inaction’ about Scope of Government. Here is your chance: make a statement, make a decision. This is your big opportunity. The board have supported this. We have had an independent expert – sadly, it has been tried to rubbish him, which just beggars belief really. We try to bring in an independent expert but he 3270 says the same thing. We have had the unions come out and actually support it. So the question is: do you support it? With that, Madam President, I beg to move.

The President: Hon. Members, the motion before the Court is set out in Item 4 on your Order 3275 Paper. The Standing Order has been invoked that I put the recommendations separately.

______1242 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

To the motion, we have two amendments. The first I shall put is in the name of Mr Speaker, which removes all the recommendations and refers only the report to the Economic Policy Review Committee. I put the amendment in the name of Mr Speaker to you first, Hon. Members. Those in favour, please says aye; against, no. The noes have it. 3280 A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 9, Noes 15

FOR AGAINST Mr Boot Mrs Beecroft Mr Cregeen Mr Bell Mr Hall Mr Cannan Mr Houghton Mr Gawne Mr Malarkey Mr Harmer Mr Quirk Mr Joughin Mr Robertshaw Mr Karran Mr Singer Mr Peake The Speaker Mr Quayle Mr Ronan Mr Shimmin Mr Skelly Mr Teare Mr Thomas Mr Watterson

The Speaker: Madam President, in the Keys, 9 votes for, 15 against.

In the Council – Ayes 1, Noes 8

FOR AGAINST Mr Turner Mr Anderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Henderson The Lord Bishop Mr Wild

The President: In the Council, 1 vote for and 8 against. The amendment therefore fails to carry, Hon. Members. 3285 We now move to the resolution as printed and I take, first of all, Recommendation 1 to which we have an amendment in the name of the Hon. Member, Mr Karran. I put to you that amendment, Hon. Members. Those in favour, please say aye; against, no. The ayes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 22, Noes 2

FOR AGAINST Mrs Beecroft Mr Cannan Mr Bell Mr Robertshaw Mr Boot Mr Cregeen Mr Gawne Mr Hall ______1243 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mr Harmer Mr Houghton Mr Joughin Mr Karran Mr Malarkey Mr Peake Mr Quayle Mr Quirk Mr Ronan Mr Shimmin Mr Singer Mr Skelly Mr Teare The Speaker Mr Thomas Mr Watterson

The Speaker: Madam President, in the Keys, 22 for, 2 against.

In the Council – Ayes 7, Noes 2

FOR AGAINST Mr Anderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Henderson The Lord Bishop Mr Turner Mr Wild 3290 The President: In the Council, 7 votes for, 2 against. The amendment therefore carries, Hon. Members. I now put to you Recommendation 1, as amended. Those in favour, please say aye; against, no. The ayes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 19, Noes 5

FOR AGAINST Mrs Beecroft Mr Cannan Mr Bell Mr Joughin Mr Boot Mr Malarkey Mr Cregeen Mr Quirk Mr Gawne Mr Robertshaw Mr Hall Mr Harmer Mr Houghton Mr Karran Mr Peake Mr Quayle Mr Ronan Mr Shimmin Mr Singer Mr Skelly Mr Teare The Speaker Mr Thomas Mr Watterson

______1244 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

The Speaker: Madam President, in the Keys, 19 for, 5 against.

In the Council – Ayes 6, Noes 3

FOR AGAINST Mr Anderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Turner Mr Henderson The Lord Bishop Mr Wild 3295 The President: In the Council, 6 votes for and 3 against. Recommendation 1, as amended, becomes part of the motion. Recommendation 2, Hon. Members: those in favour, please say aye; against, no. The noes have it. 3300 A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 12, Noes 12

FOR AGAINST Mr Bell Mrs Beecroft Mr Boot Mr Cregeen Mr Cannan Mr Hall Mr Gawne Mr Houghton Mr Harmer Mr Joughin Mr Quayle Mr Karran Mr Ronan Mr Malarkey Mr Shimmin Mr Peake Mr Skelly Mr Quirk Mr Teare Mr Robertshaw The Speaker Mr Singer Mr Watterson Mr Thomas

The Speaker: Madam President, in the Keys, 12 votes for, 12 against. The motion therefore fails to carry.

In the Council – Ayes 6, Noes 3

FOR AGAINST Mr Anderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Turner Mr Henderson The Lord Bishop Mr Wild

The President: In the Council, 6 for and 3 against, Hon. Members. The motion fails to carry. 3305 Mr Skelly: Request a combined vote!

The President: Sorry, Hon. Member.

3310 Mr Skelly: I request a combined vote next month.

The President: The mover of that … Sorry … ______1245 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

The Clerk: You cannot have a combined at the –

3315 The President: Oh no, I am sorry. It has failed in the Keys, Hon. Members, so it cannot come back for a combined vote, notwithstanding your desire to do so.

A Member: Unless Mr Thomas gets his way later!

3320 The President: We come then to Recommendation 3, Hon. Members. Those in favour, please say aye; against, no. The noes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 12, Noes 12

FOR AGAINST Mr Bell Mrs Beecroft Mr Boot Mr Cregeen Mr Cannan Mr Hall Mr Gawne Mr Houghton Mr Harmer Mr Joughin Mr Quayle Mr Karran Mr Ronan Mr Malarkey Mr Shimmin Mr Peake Mr Skelly Mr Quirk Mr Teare Mr Robertshaw The Speaker Mr Singer Mr Watterson Mr Thomas

The Speaker: Madam President, in the Keys, 12 votes for, 12 against. The motion fails to carry.

In the Council – Ayes 6, Noes 3

FOR AGAINST Mr Anderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Turner Mr Henderson The Lord Bishop Mr Wild

The President: In the Council, 6 for and 3 against. It carries in the Council, but fails because of 3325 a disagreement between the Branches, Hon. Members. That element fails. Recommendation 4: those in favour, please say aye; against, no. The noes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 10, Noes 14

FOR AGAINST Mr Bell Mrs Beecroft Mr Boot Mr Cannan Mr Gawne Mr Cregeen Mr Harmer Mr Hall Mr Quayle Mr Houghton Mr Ronan Mr Joughin Mr Shimmin Mr Karran

______1246 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mr Skelly Mr Malarkey Mr Teare Mr Peake Mr Watterson Mr Quirk Mr Robertshaw Mr Singer The Speaker Mr Thomas

The Speaker: There are 10 votes for in the Keys, 14 against. The motion fails to carry.

In the Council – Ayes 6, Noes 3

FOR AGAINST Mr Anderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Turner Mr Henderson The Lord Bishop Mr Wild

3330 The President: There are 6 for and 3 against in the Council. The motion carries in the Council. The Branches are in disagreement. The motion fails, Hon. Members. Recommendation 5. Those in favour, please say aye; against, no. The noes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 9, Noes 15

FOR AGAINST Mr Bell Mrs Beecroft Mr Gawne Mr Boot Mr Harmer Mr Cannan Mr Quayle Mr Cregeen Mr Ronan Mr Hall Mr Shimmin Mr Houghton Mr Skelly Mr Joughin Mr Teare Mr Karran Mr Watterson Mr Malarkey Mr Peake Mr Quirk Mr Robertshaw Mr Singer The Speaker Mr Thomas

The Speaker: Madam President, in the Keys, 9 votes for, 15 against.

In the Council – Ayes 6, Noes 3

FOR AGAINST Mr Anderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Turner Mr Henderson The Lord Bishop Mr Wild

The President: In the Council, 6 for and 3 against. The Branches are in disagreement, Hon. Members. That recommendation fails to carry.

______1247 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

3335 Recommendation 6. Those in favour, please say aye; against, no. The noes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 9, Noes 15

FOR AGAINST Mr Bell Mrs Beecroft Mr Gawne Mr Boot Mr Harmer Mr Cannan Mr Quayle Mr Cregeen Mr Ronan Mr Hall Mr Shimmin Mr Houghton Mr Skelly Mr Joughin Mr Teare Mr Karran Mr Watterson Mr Malarkey Mr Peake Mr Quirk Mr Robertshaw Mr Singer The Speaker Mr Thomas

The Speaker: Madam President, in the Keys, 9 votes for, 15 against.

In the Council – Ayes 6, Noes 3

FOR AGAINST Mr Anderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Turner Mr Henderson The Lord Bishop Mr Wild

The President: In the Council, 6 for and 3 against. The Branches are in disagreement. The motion fails to carry. I now put to you the motion in its entirety, as amended, as a substantive motion. Those in 3340 favour, please say aye; against, no. The ayes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 15, Noes 9

FOR AGAINST Mrs Beecroft Mr Boot Mr Bell Mr Cannan Mr Gawne Mr Cregeen Mr Hall Mr Houghton Mr Harmer Mr Joughin Mr Karran Mr Malarkey Mr Peake Mr Quirk Mr Quayle Mr Robertshaw Mr Ronan The Speaker Mr Shimmin Mr Singer Mr Skelly Mr Teare Mr Thomas

______1248 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mr Watterson

The Speaker: Madam President, in the Keys, 15 for, 9 against.

In the Council – Ayes 6, Noes 3

FOR AGAINST Mr Anderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Turner Mr Henderson The Lord Bishop Mr Wild

The President: In the Council, 6 votes for, 3 votes against. The motion therefore carries, Hon. Members.

5. Standards and Members’ Interests Committee – First Report 2015-16 – Standards of Behaviour for Members – Debate commenced

The Chairman of the Standards and Members’ Interests Committee (Mr Speaker) to move:

That the First Report of the Standards and Members’ Interests Committee for the Session 2015/16 – Standards of Behaviour for Members [PP No 2016/0052] be received and that the following recommendation be approved: That the following principles for Members’ conduct be adopted: (1) Members of Tynwald accept and are bound by the principles set out in the seven principles of public life, namely: (i) Selflessness: Holders of public office should act solely in terms of the public interest. (ii) Integrity: Holders of public office must avoid placing themselves under any obligation to people or organisations that might try inappropriately to influence them in their work. They should not act or take decisions in order to gain financial or other material benefits for themselves, their family, or their friends. They must declare and resolve any interests and relationships. (iii) Objectivity: Holders of public office must act and take decisions impartially, fairly and on merit, using the best evidence and without discrimination or bias. (iv) Accountability: Holders of public office are accountable to the public for their decisions and actions and must submit themselves to the scrutiny necessary to ensure this. (v) Openness: Holders of public office should act and take decisions in an open and transparent manner. Information should not be withheld from the public unless there are clear and lawful reasons for so doing. (vi) Honesty: Holders of public office should be truthful. (vi) Leadership: Holders of public office should exhibit these principles in their own behaviour. They should actively promote and robustly support the principles and be willing to challenge poor behaviour wherever it occurs. (2) Members of Tynwald accept and are bound by the principles for conduct in their working relationships as set out in the Annex of this Report. (3) The principles set out in the Annex to this Report shall be included in the Standing Orders of Tynwald and any breach of them shall be taken to be a serious failure of a Member’s duty.

______1249 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

3345 The President: We now move on to Item 5 and I call on the Chairman of the Standards and Members’ Interests Committee, Mr Speaker.

The Chairman of the Standards and Members’ Interests Committee (Mr Speaker): Madam President, this Report for the Court is about the general rules for the standards of behaviour of 3350 Members of Tynwald. It focuses on the duty which Members of Tynwald have to Tynwald as an institution and to the public of the Isle of Man which they serve. The privileges of Members of Tynwald are of vital importance as they allow Members to carry out their public duties. In the same way, this Committee’s work is to protect those privileges, which are the rights of Tynwald that are necessary to allow it to transact its business by ensuring 3355 that they are never misused. We reported previously on the standards of conduct to be expected of Members of Tynwald in November 2014. This Report builds on the decisions of Tynwald following debate on that Report. We thought that it would be of benefit to Members and the public to set out more clearly the expectations to be placed on Members of Tynwald in relation to their conduct. We 3360 noted that the Nolan Principles were a useful framework for setting out how Members should behave and decided that they should be part of the commitment by Members to observe good practice. We would like to acknowledge the advice given by the Acting Attorney General and the work done by the Commonwealth Parliamentary Association. We therefore recommend that the 3365 Nolan Principles be adopted by Tynwald as a basis for ensuring that Members’ conduct is above reproach. It is worth remembering that other parliaments have taken similar steps and that, by adopting these principles, we will be ensuring that Tynwald is in tune with modern thinking about the conduct to be expected of Members. It is of vital importance, as never before, that 3370 the governing institutions of the Island are seen to comply with all the standards expected in developed jurisdictions across the world. By adopting these standards and principles, we are demonstrating our commitment to ethical standards for those in public life that are the equal of anywhere in the world. We would also like to acknowledge the contribution of Mr Watterson who has again written 3375 to us about the need for proper standards of conduct to be defined. In doing so, he referred to the work of the CPA and Prof. Ken Coghill. In the past there have been regrettable incidents where Members have not behaved with sufficient consideration for public servants. (A Member: Hear, hear.) It would not be appropriate for me to comment on individual cases. 3380 In the work modern workplace, we all, quite rightly, expect the highest standards of treatment of staff. The recommendations in this Report are a further contribution to ensuring that all Members comply with modern standards of employment practice and that as a group we are seen to do so. We also set out detailed guidance for Members and the public about the expected standards 3385 for Members and their working relationships with staff, public, each other and the presiding officers. Finally, the Report announces a minor amendment to the procedure for references to the Standards Committee. In future, any Member who refers a matter to this Committee should do so in writing with reasons and that Member should be ready to give oral evidence as to why the 3390 matter should be investigated. I beg to move that the Report be received and that the conclusions be approved as set out in the Report.

The President: The Hon. Member, Mr Robertshaw. 3395 Mr Robertshaw: Madam President, I beg to second and reserve my remarks. ______1250 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

The President: The learned Acting Attorney General.

The Acting Attorney General: Madam President, it may assist Hon. Members if I comment in 3400 general terms in relation to an aspect of the general principles set out in the annex to the Report of the Standards and Members’ Interests Committee. I limit myself to the principle relating to Members’ relations with the public and when representing their constituents. Members need to have regard to the fact that being Members of Tynwald affords them no personal protection from liability in their actions if they should seek 3405 to interfere in private disputes between citizens as an active advocate or in giving advice to one side of a dispute against the other. Nor is there any protection should they seek to use the status of membership of Tynwald as an advantage in circumstances which may be perceived as creating an unfair advantage or should they ever give legal advice to the public or to individual citizens. 3410 It is never wise, Members of Tynwald, whether a Member or a member of the public, for anyone to advise on, or endeavour to advise on, any matters unless a person has the necessary degree of competency to give that advice. If a person holds themselves out as competent to advise, they owe a duty of care to the person they are advising and this duty could leave them open to a claim if, in acting upon what proved to be wrong advice, the person suffers loss or 3415 damage. That is not to say Members cannot offer general guidance or indeed seek to mediate between parties, and if necessary, point a person in the direction of any necessary professional experts, including a lawyer. Members must be particularly careful as if they get it wrong, they will not have the benefit of 3420 any indemnity insurance if they face a claim for damages. A Member’s action in assisting their constituent can become more of a risk if they agree to act on behalf of a constituent in writing or indeed write on their behalf to third parties, for example, in a dispute. They need to ask themselves whether they do so anticipating that the weight of their letter as a Member of Tynwald may assist their constituents to gain an advantage. If so, this is not, in my view, 3425 appropriate and leaves their actions open to challenge, in particular by those who are perhaps more vulnerable in our society, who might be more likely to succumb to such pressure. It is the role of the courts to resolve disputes between people, not the role of Members. Members may also need to be particularly cautious when holding themselves out as acting as an advocate in relation to any civil or to any criminal matter on behalf of a person. Under 3430 section 9 of the Advocates Act 1976, it is an offence for any person to so act as an advocate or to issue any process or commence, prosecute or defend any action, suit or other proceedings in any court of civil or criminal jurisdiction, unless the Member holds an advocate’s commission. This prohibition extends to drawing up or preparing an instrument relating to any legal proceedings. In some circumstances, even a letter could fall into the description of an 3435 instrument relating to legal proceedings, and Members need to be particularly careful that they do not perhaps unwittingly breach the Advocates Act 1976. There is no question, Hon. Members, that it is legitimate for you to assist members of the public with their problems. It is, in fact, an important part of Members’ role. (A Member: Hear, hear.) Members are likely to have a wide range of skills and experience that they can call upon 3440 to help them. It is important, however, that Members, when they do give advice, remain within their own personal level of competency and therefore do not try to give legal advice, property advice and matters which require specialist knowledge, as in doing so Members could leave themselves open to personal liability if they get it wrong.

3445 The President: The Hon. Member, Mr Houghton.

Mr Houghton: Thank you, Madam President, and I cannot say how grateful I am to the Hon. learned Acting Attorney for the advice that he has given because, having taken the words out of ______1251 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

my mouth as such, I was going to ask if he would indeed make some comment on this, which he 3450 has. If I might further ask, in relation to the Speaker, if perhaps the information that he has given could be appended to this document, because in relation to the paragraph at the bottom of page 10, which the Acting Attorney has referred to, it refers to this – but it is rather brief in the way it has been written:

Relations with the public. Members of Tynwald are frequently asked ...

3455 – as the Acting Attorney has stated –

... to assist members of the public in matters which are of concern. In doing so,

– it just simply says –

Members of Tynwald: must not interfere in private disputes between citizens as an active advocate or adviser for one side; settling disputes is the prerogative of the courts ...

– it goes on. What the Attorney has done is he has added a bit more meat on the bones of this rather than this document. But my concern, Madam President, is the document says you cannot interfere with anything to do with anything, in offering, yourself, advocacy to your constituents. 3460 The problem with the word ‘advocate’ is that it can be used in an awful lot of terms and we all understand under the Advocates Act precisely what a professional person – an advocate who is sworn or brought to the Bar of the High Court – actually does. The issue, Madam President, is that many Members of Tynwald – I being one of them – have been involved in assisting people with many – very, very many – disputes from one thing and 3465 another. Of course, I thank the hon. learned Attorney for the very point and the advice that he has given at Tynwald Committee about this very matter; and it was appropriate advice that he has given, but the advice that the Acting Attorney has given now, by putting some meat on the bones, where he has made suggestions – very helpful suggestions – whereby we can act ... when I say as a friend, in the case of mediation, for instance. 3470 By the fact of mediation – and of course mediation would be between two parties, say in a case where one party is chasing money off another and they are both willing to come together – you are still interfering in that element in that area, which – correct me if I am wrong, Mr learned Attorney, Madam President – the advice is that we can do those things. So I return back to the bottom paragraph on page 10 that I have already read out, that the 3475 wording in that is far too critically final, that we must not do anything with anyone. Well, that is just totally impossible within our work! It is quite obvious that we are not going to be charging for our services, passing ourselves off as advocates under the Advocate Act etc. I have been doing this now, Madam President, as you know – helping constituents in lots of issues where there are disputes and of course assisting them to go to an appropriate advocate, 3480 and helping them within the advocates’ for them to understand what the issue particularly is. So there are a number of issues that I think the learned Attorney has said – if you like, given leave to – that I feel really need to be composed in this document in order to give us a clear and more accurate, rather than just the fact – as this has been, no doubt, drafted by the Clerk of Tynwald – just to say you cannot be involved in anything. 3485 I will just go back through it. This is critical, Madam President, Hon. Members – I am sure all Hon. Members will agree with it. It is stating, if this is approved, ‘A Member of Tynwald must not interfere in private disputes between citizens’. ‘Not interfere’ – well, that means ... The learned Attorney very helpfully has said that we can act as ‘giving them general guidance’ – mediator, general guidance, assist them, help them with things, go to advocates, whatever – and I support 3490 him in that because that is a lot of bread-and-butter work that is done by Members of Tynwald

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for their constituents in lots of areas. There may be an issue over a hedge or money or anything whatsoever. So the issue is, as I am saying, that writing in the annex to this Report is just simply to ... the learned Attorney has loosened it out. I do feel I am repeating myself, (A Member: Yes.) but the 3495 point is this is not appropriate and what the learned Attorney has given us in his advice to the Court this afternoon very much is. So, Madam President, if I can ask perhaps whether the Speaker would be willing to withdraw this document and have it worded with the Attorney’s input into it and then approved again next month, because this is going to be then our working document. So, if I am to help someone 3500 in general guidance, as the learned Attorney just said – it is on Hansard – assisting them with an issue and helping them with various points as a non-advocate, but as the Member who is assisting a constituent, then according to this document I am acting ultra vires to the document itself. It is a critical point, Madam President, and I do hope the Speaker will take this on board because I know the Speaker would have an issue about this – he will agree with this himself – 3505 where he has assisted his constituents; we have both discussed that on an odd occasion in the past. So it is an issue that we all come into being with and after this is put on a shelf and forgotten about, somebody goes out and assists someone and then there is a vexatious complaint made about that person, what happens then is of course he is hauled up before the Tynwald Standards 3510 Committee and then of course if there is legal advice taken from the likes of the Attorney, then ... and as I say, I am aware of his legal advice in the previous issue, the advice – the correct advice – differs from that which the Committee may be pursuing that Member for. Madam President, perhaps if the learned Attorney could make some comment, but it is for the Speaker to see if he would give due diligence again on this very important point, to which I 3515 am very grateful. Thank you.

Mr Karran: Point of order, Eaghtyrane. Is it possible to have this voted on separate issues, (Mr Houghton: Yes.) on separate items on 3520 the agenda, because I think it is very important?

Mr Houghton: Yes. Hear, hear.

Mr Karran: I so move. 3525 The President: Noted, Hon. Member. The Hon. Member of Council, Mr Henderson.

Mr Henderson: Gura mie eu, Eaghtyrane. 3530 This is a particularly important and sensitive issue that is before Hon. Members this afternoon and I have to say, Hon. Members, as Mr Houghton has just indicated, there are some very important principles at stake here and issues, if you read the guidance as issued by the Standards Committee, which you and me could fall foul of, quite quickly, in a genuine attempt to help constituents. 3535 I think Hon. Members need to be very careful with this. It is too much – as Mr Houghton has said – of a finite comment or observation, and it needs to be teased out with proper descriptors and criteria so we know exactly where we stand when dealing with constituency enquiries. I would put a call, Eaghtyrane, with Mr Houghton’s, that the advice just given by the Acting Attorney General is either incorporated, or there is an agreement to have it incorporated, into 3540 the appropriate paragraph or paragraphs that Mr Houghton has just indicated, or it comes as a code of guidance to the next sitting for approval, to be used as an adjunct with those Standing Orders. ______1253 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

I do not say this lightly, because then the Attorney General has pointed out issues of indemnity and liability. So now I am left wondering ... I know Members have some indemnity 3545 that was put through a few years ago. There was quite an uproar or backroom work done to get Members’ indemnity cover put in place. I am now uncertain as to what that may actually cover. So I think we need now to have a note to Members on what our indemnity, such as it is, covers and does not cover. That is very important because we had long hours of work spent, meetings, confrontation almost, Eaghtyrane, as to, ‘Should Members have this when acting on 3550 constituency issues?’ as I recall. That needs to be clarified and I think it is something so important, if we cannot, I may have to work in the background to ensure that we do have some advice notes on this coupled up to these Standing Orders. I would ask, Eaghtyrane, a question to Mr Speaker. I would ask a question to Mr Speaker, who is not listening. Eaghtyrane, I would ask a question to Mr Speaker, in bringing this move 3555 forward, is this from now, moving forward into the future, or in approving this, does this have any element of retrospectivity with it? I think we need to make that very clear. If there is an element of any retrospectivity with it, then I think, if there are any ongoing issues, shall we say, in the background, is that going to affect those ongoing issues, or is it a case of we approve this now and it is for issues going forward? I think I have made that fairly clear, 3560 Eaghtyrane. Given what the Attorney General has said, Eaghtyrane, in relation to acting on behalf of constituents, I need to know now where I stand with all the cases and probably new cases that come across my desk even as a Member of Legislative Council. For instance, I have just asked permission of two constituents to have me named as their 3565 agent to act on their behalf in certain matters. (Mr Houghton: Hear, hear.) I cannot help them unless I have a letter to say I can act on their behalf as a general adviser. They know I am not providing legal advice, and I always tell constituents that. But, nevertheless, I have had to get this letter of permission so private details can be shared to me electronically or in hard copy etc. and I can enter into talks and negotiations on their behalf. Where do I stand with that? Maybe 3570 the learned Attorney General may have to come back and give us some clarification, Eaghtyrane. To be quite honest, this is a very serious point and every Member of the House of Keys is going to come across this on a regular daily basis, no doubt, and we need to know – including LegCo – where we stand on it. I have represented people in small claims courts, I have represented people in industrial 3575 tribunals, I have represented people at disciplinary procedure hearings. I have tried to help where I can in a genuine, honest way and everyone I have helped or represented or acted as a ... I forget what it is called if you end up in court with somebody; a Dickensian friend or Machiavellian friend or whatever (Interjection) – a McKenzie friend. Thank you. Where do we stand doing that? I always point out, ‘I cannot give legal advice but I will try my best to help you 3580 in my best endeavours’. Disputes is a very interesting one, Eaghtyrane, and again, back to what the Attorney General said with regard to that, monetary disputes – moneys owing – were mentioned. I could not count the number of times over the years I have helped constituents try to settle something like that; and it is the disadvantaged folk that you usually end up helping because they do not know 3585 how to go about constructing a letter, making a telephone call in a certain way, where to go to get additional information, how to make contact with the person that they feel they are aggrieved against and so on. I have set up meetings, acted as mediator in those kinds of things, and in some cases I have – I will not say overstepped the mark in my language in a letter, but I have had to do a formal 3590 letter of some description to try and energise some sort of action within a dispute, especially if it is moneys owed, to show the person who is withholding that money, shall I say, or not paying up or whatever it is, that we mean business and that it will be on the way to the small claims court or it will be on the way to the High Court, to try and engender some sort of process to get things

______1254 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

moving. And in some cases, yes, a letter like that, written as professionally as I can, if I can put it 3595 that way, does assist and cause two parties to get together or moneys owed. There are planning disputes – where do we stand in that? – which can become quite vicious in the communications – not with myself, as such, but you do have to write a robust letter, professionally again, Eaghtyrane, but you cannot just write something that says, ‘Dear so-and-so, I am very sorry to impinge on your daily routine, but I would love to hear from you with regard 3600 to ...’ That kind of letter does not work. That is going to be ripped up and put in the bin – especially if you are talking to somebody who is robust enough in life themselves and is handling daily disputes with tenants or planning actions and so on. I note the Speaker is shaking his head but I think now, with what the Attorney General has alluded to in more detail, I would like some more detail, Eaghtyrane, or certainly for the AG to 3605 agree to append that or as a code of practice. I am particularly worried about the Members’ liability issue and the retrospectivity of what is happening here, and we certainly need those cleared up. And certainly what the Hon. Member for North Douglas has indicated and indeed my own views and there may well be other views of Hon. Members too to feed into this process, Eaghtyrane ... 3610 Gura mie eu.

The President: The Hon. Member of Council, Mr Cretney.

Mr Cretney: Yes, thank you. 3615 I just want to, as a member of the Committee, support Mr Speaker here in relation to moving this matter – in particular, the part which I am most happy about is about the Nolan Principles of conduct in public life. The , for example, has that in our written constitution which is lodged now with the central registries. I think it is a very important thing and I am delighted that that has 3620 been extended to all Members of Tynwald. What I would say in relation to the annex which has been referred to, I think with experience you learn to know the areas which you should get involved in and the areas which you should not. In particular, if I could just mention one element, there is no place for bullying of staff and we all know that that has gone on in the past – 3625 Mr Corkish: Hear, hear.

Mr Cretney: – and really that is –

3630 Mr Henderson: We are all in agreement with that.

Mr Cretney: – something which should not exist in today’s (Mr Henderson: Hear, hear.) (Interjection) setting where we are supposed to be representing ... Well, I used to represent the public, now I am elected on their behalf by the Members of the Keys, but I still believe we have 3635 to act in an appropriate way (Two Members: Hear, hear.) and do hope we can, with this, move onto that on a permanent basis.

The President: The Hon. Member for Rushen, Mr Watterson.

3640 Mr Watterson: Thank you, Madam President. There is an amendment which I have, which I would appreciate it if it was circulated. The Nolan Principles which form the first part of the recommendation are absolutely to be welcomed. They do, in my view, represent the bare minimum of standards in public life and they are of course already enshrined in the Government Code, which anybody who takes on a 3645 Government job is obliged to uphold. That is Ministers and Members, Departments and I would ______1255 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

be surprised if it did not apply to the other bodies, such as being Chairman of a Statutory Board etc. Of course that does not cover everybody and it is important parliamentarians are held to a high standard. So I do welcome that. However, where I am concerned is that this remains a toothless tiger, it 3650 remains a statement of broad principle with very few teeth. I will come back to the comments of the Attorney General a bit later on, but I would like to add a fourth recommendation for the consideration of Hon. Members and that is to add:

That a Code of Conduct be drawn up outlining its purpose, benchmarks and enforcement provisions, including penalties and appeals.

This gives the Report teeth. The Speaker referred to the work of the Commonwealth Parliamentary Association and I was delighted to meet Prof. Coghill and take part in the 3655 discussions around that. I think it is one of the many valuable pieces of work that the Commonwealth Parliamentary Association has done. I think we need a code, I think we need a document, rather than just the statements of principles, which I have no objection to, by the way, and they should be incorporated in the code. The code itself should affect the conduct of individual Members of Tynwald, encourage 3660 ethical conduct, reduce risks to the integrity of Tynwald as the paramount political institution, enable it to perform its functions more effectively, enhance propriety and strengthen the community’s trust in Tynwald. I especially welcome the comments made about bullying and harassment. When we come to looking at what should go in a code, the Nolan Principles sit at the top of it – they are the 3665 principles which go in parallel with acting in good conscience, respecting the intrinsic dignity of all, acting so as to merit the trust and respect of the community, and give effect to the ideals of democratic government, abide by the letter and spirit of the law, uphold the separation of powers, behold ourselves accountable for conduct for which we are responsible, and exercise the privileges and discharge the duties of public office diligently with civility, dignity, care and 3670 honour. I do not think that any of that should be considered lightly and I think it would be worth actually writing down and signing up to for every Member of Tynwald when they are sworn in. The Commonwealth Parliamentary Association work goes on then to talk about the benchmarks for codes of conduct for parliamentarians, and we already have Standing Orders about disclosure and public interests; and, again, I think these should be codified in a code of 3675 conduct. It should add into that how public property should be used, what we are and we are not allowed to use our offices for. Again, I believe there have been allegations of abuses over the years as to what people have used parliamentary offices for. Again, whilst no-one would want to curtail people’s benevolent or charitable activities, it is important that we set out clear guidance 3680 as to what we use taxpayers’ money, taxpayers’ resources for. It is also worth noting that we should not have inducements, we should not accept inducements, we should not engage in lobbying or receive payment for what we do in any way, shape or form. These are so obvious, Hon. Members! (Mr Cretney: Hear, hear.) But they are worth writing down and signing up to as a code of conduct. We should have our civility, behaviour, our attendance ... These are things 3685 that again are fundamental parts of the job, are worthy of consideration in putting in the code. One of the things the CPA came up with, which is an interesting one, is an ethics adviser – somebody to act as a person you can go to in confidence and seek ethical advice. Needless to say, we are not going to go and have a paid post for this, but I wondered whether that is a job that if we set it out perhaps the Clerk could undertake – to give that advice. Certainly, we are 3690 used to going, on occasion, for legal advice. The other thing I think that this fails to address and which I would like to have seen in a code of conduct are actually enforcement provisions. I know there is always a danger about personal politics getting in the way of a dispassionate assessment of the behaviour of peers, but there has

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to be a proper mechanism, and that proper mechanism includes setting out a process as to how 3695 complaints should be dealt with and also how an appeals system should work, because it is so easy in a small parliament, where we all know each other and there is a significant amount of personal history, that serious enforcement penalties be handed down without a form of appeal to somebody who is appropriately qualified and sufficiently independent, (Interjection) and they absolutely cannot be part of the executive – absolutely. They have got to have – (Interjection) It 3700 would have to be – (Interjection by Mr Karran) It would have to be appointed by parliament and it would have to have the sort of conditions attached to it that we are talking about for the Tynwald Auditor General, that we are talking about for the Tynwald Commissioner for Administration. It is something that I would hope would never be used, but there has to be a provision there so that we have teeth. 3705 A number of countries have different sanctions available to their parliaments (Interjection) and they consist of a warning, a remark, formal reprimand, removal from chairmanship of a (A Member: Post Office!) Select or Standing Committee, a fine even, in some ... that is an interesting one – I do not think I would go that far, but certainly that was one that comes from the United States of America – forfeiture of a Member’s salary for a specified period, as is the 3710 case in the House of Commons and so on. But I think it is important that these are considered so that these are not just well-meaning words on a page, which is what we have at the moment, but this is a living, breathing document that sets out how we deal with standards, how we assess standards. That is why I would like to add the additional words. 3715 Just to go onto the comments of the Attorney General, which came as a bit of a surprise to me actually because I was sitting there, listening to them and thinking that on at least one occasion over the last nine and a half years I must have fallen foul of at least one of them – and I think that is the danger. I can certainly appreciate that the Attorney General’s comments were meant in absolute 3720 good faith and are there to protect Members from acting inappropriately, and to that extent they are generally welcome. I think it is easy to react quickly and say that they seem very restrictive. However, I would welcome the Members’ Standards and Interests Committee to pick them apart a little bit more perhaps and just lighten it up by examples, to give areas where it would be deemed to be going 3725 too far and, whilst it cannot be authoritative, just to make it a little bit clearer for Members so that a Member coming into this Court for the first time would be able to pick that guidance up, read it, readily understand it. Certainly in terms of Mr Cretney’s comments, I probably agree with that: after nine and a half years you start to work out where trouble is coming from and navigate it so that you are still trying to do the best for your community, for your constituents, 3730 but without trespassing into the grounds of what is inappropriate. So I would, shall we say, send that advice back to the Committee to see if more can be put round it to make sure that Members do not get scared by it – because I think in its crude terms there it seems quite restrictive – but just to colour it with examples. I would hope that Hon. Members will give life and energy to the principles that are laid down 3735 in the document here and support the general principle that the things that I have outlined should be put out in a code of conduct applying to all Members of Tynwald. I beg to move the amendment standing in my name:

To add at the end the words ‘4. That a Code of Conduct be drawn up outlining its purpose, benchmarks and enforcement provisions, including penalties and appeals.’

The President: We are going to take a break now, Hon. Members. The break will be until 5.40 p.m. by the Court clock and the first to speak after the break will be Mr Houghton. Sorry, 3740 Mr Houghton has spoken already, so it will not be Mr Houghton. It will be Mr Karran. Thank you, Hon. Members. ______1257 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

The Court adjourned at 5.12 p.m. and resumed its sitting at 5.40 p.m.

Standards and Members’ Interests Committee – Debate continued – Motion carried

The President: Please be seated, Hon. Members. We carry on with the Hon. Member, Mr Karran, the Member for Onchan, please. 3745 Mr Karran: Eaghtyrane, I have to say that as far as I am concerned, the seven principles as far as the principles of public life, obviously everyone would support. I would hope that Hon. Members would not support the annexes. These things should be clearly put down in clear, concise ways as far as that is concerned. If you vote for them, you are 3750 actually voting against parliamentary democracy. (Mr Houghton: Hear, hear.) You are going to end up with a situation where it is going to be worse than it is now. What I have to say is that when we look at this amendment from the Hon. Member for Rushen –

3755 The President: That has not yet been seconded.

Mr Karran: Oh, right. (Interjection) Right, Eaghtyrane, I cannot speak to it then. I will speak to it when it has been seconded. But I am deeply concerned about the way this has been put out as far as the Standards 3760 Committee is concerned. I have to say that if we had a proper parliamentary democracy in this Court, then more likely the Government Ministers would be in serious problems when they can start with the honesty, trying to hide behind commercial confidentiality when that is not the case and we would see chapter and verse of the situations, as far as the:

‘Members of Tynwald accept and are bound by the principles set out in the seven principles of public life, namely: (i) Selflessness: Holders of public office should act solely in terms of the public interest.’

What I am concerned about is when you look at these issues, I question whether this 3765 document on these seven principles alone will be fairly put to this Court, especially the way that we see when we talk about ‘integrity of holders of public office’, when we have seen the way some have been treated because of the inappropriate influences there have been as far as work is concerned on Item 2, where we have seen the sort of disgraceful replies with no relevance to the Question on the Order Paper, particularly levelled at my good friend the Hon. Member for 3770 South Douglas Mrs Beecroft, for trying to bring about:

‘Holders of public office must act and take decisions impartially, fairly and on merit, using the best evidence and without discrimination or bias.’

Well, I wait for the day to see how executive Government and the Council of Ministers start on that road, especially when they can never be held to account, when we have situations as far as the question side of this document. What concerns me is the fact that – and I have asked that these items be separated; I will 3775 support the seven principles with no problem at all – no problem at all, Eaghtyrane – but I am deeply concerned that this is being used as a weapon against not just people who are bullying or whatever within this Court. I think every one of us does not condone the actions of any Member

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who bullies within this Court, but the problem you have got is you end up with false allegations against Members. 3780 We have only got to look at the Speaker’s reports – I forget what year it was – that I had to face, as far as the issue of the film studios, where there was hundreds of thousands of pounds spent on equipment that I think most people would recognise did not exist, and if it did exist, it was second-hand equipment that should never have got a grant in the first place. We end up with a situation where some of us are threatened, that they will have the House 3785 bleep off you at this time for what you do, as far as that is concerned. I really worry – because this will not affect me! This does not affect me, I am gone. So it affects other Members. What concerns me is … Support the seven principles of standards of public life. I have put an amendment to the annex as a fallback position if the majority of this Court is foolish enough to support the annex, 3790 because there are some vitally important issues on that. I think you have got to understand that if Members are bullying, then it is up to us to speak out and sort out on the basis of it is not acceptable practice. My concern is that any committee that is set up, I fear, with the way the situation is, that we will not see any sort of justice in here for any Member who is not part of the cosy arrangement. 3795 (Mr Houghton: Hear, hear.) That is what worries me. I say that if there was a situation that there was a Lib Van government in power, I think I would be one of the few who would be defending the opposition, if they had something they were being wrongly or vexatiously attacked on these issues. But I do not think the Lib Van party, or whatever political party, the party which operates in this Court now, could allow such a thing; but it would happen under what we have got at the 3800 moment. We have only seen in the previous debate, Eaghtyrane, if certain parties had not been affected, the Government would not have had to worry. That is why when we hear … It is very rare that I am actually agreeing with the Hon. Member for West Douglas, when we find these bizarre situations with it. 3805 So what I would like to say is, to start off with, I hope Hon. Members will support the seven principles. Let’s get them bedded in – and not just for the renegade or the few that are prepared to put their head above the kerb, as far as that, but actually get it working on both sides of this Court as far as that issue is concerned, because honesty and integrity are something that we need to realise whether you are in the block vote or not. 3810 What worries me is the successes from the likes of me – like my good friend, Mr Cretney said, you need to know where you can go and where you cannot go. If you do not go in the right places, that is how you have a career as a Minister or a career as a backbencher, as far as this Court is concerned. I honestly think that Hon. Members are going down a very dangerous path as far as that is 3815 concerned. I hope that Hon. Members think really seriously about that, because if we are talking about issues about bullying, then maybe we need to look at the exit of members of staff after they have left for a while, as far as bullying is concerned, and whether the bullying is from the members or it is from the management or whatever. I think we need to have that information to the Members’ Standards Committee as far as bullying is concerned. I think that is important. (Mr 3820 Houghton: Hear, hear.) And I am not condoning what I think other Members are saying about some Members in this Court, but I am saying that that is one thing that needs to be looked at. What worries me with this is where this is leading. We have already had a Speaker’s report when they tried to get rid of me 10 or 15 years ago – to fortunately no avail as far as myself is 3825 concerned. We have to be very, very careful about our peers deciding what happens. I am responsible to the people of Onchan. The people of Onchan make the decision, or whatever constituency. I may not like what you say. I might be absolutely appalled by it, but I have a right and I have a responsibility to allow you to do it. You are opening a Pandora’s box as far as that issues is concerned, and you will see people actually making things worse. ______1259 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

3830 I will keep off the amendment. What concerns me is when you look at the report. The situation is that I am concerned that this report is being accepted, but it will be majority rule – mob rule – against the minority. (Mr Houghton: Hear, hear.) And that is what worries me about this. I might not think very much of some of you who are in here, but at the end of the day, you have got a right to be in here. You 3835 are the elected representatives and the day that I have a sanction to be able to put you out of here or whatever is the day when we are in a banana republic. Now, we see situations about the procedure for reference to a committee. I have just sent two Ministers to committee, and it has had the brush-off. What I am concerned is that if somebody sent me to that committee, would those same brush-off criteria stand as far as that is 3840 concerned? (Mr Houghton: No.) I am worried that that would be the issue that people worry about. I have moved an amendment to the motion, which I am concerned about over the legal situation. Only today, I received a letter – and I totally agree with the Acting Attorney General, I am not a lawyer; I am a joiner and a youth worker. I am not an advocate. But the point is that 3845 the likes of this letter back to me from one of my ministerial colleagues today to do with legal aid, in this particular case, I have somebody who wants to take on two multi-nationals which have absolutely devastated his life, ruined his financial security, and he has got 12 hours of legal aid to take on two multi-nationals! Now if we are not careful, Eaghtyrane, I have put Questions down in this Court about bad 3850 governance, about individual people, because the problem with the legal system is that it is like the Ritz: you can all go to the Ritz and stay there, so long as you have got the money. You can all do the same when it comes to the court system as well, if you have got the money. But most people do not have the money. So what I am worried about, Hon. Members, as far as this is concerned is the fact that we 3855 need to put something as far as this that nothing in this resolution shall prevent Members from taking action to protect vulnerable members of the public. I have to be honest with you, I believe this should be put in as some sort of safety clause, even though I do not agree with the annexes at this present time, because in the real world, the problem we have is that often we are the only people they have got. That is what worries me. 3860 And what worries me even further, Eaghtyrane, is that remember your predecessor: we had a major row about questions being put down in this Court to do with a certain individual who had managed to get certain ex-individuals into very nice directorships and what happens? They were trying to stop me. How far do you go down this road before you start making it even less accountable, as far as the parliamentary process? 3865 Hon. Members, I hope you support my amendment because it will … but I hope Hon. Members, let’s get these seven principles. Let’s get the exit report as far as members of staff to the Tynwald Standards and Members’ Interests Committee, and then let’s address the issue because at the moment the evidence is not there. I hope Hon. Members would support my amendment, I ask:

To add at the end the words ‘; but that nothing in this resolution shall be taken to prevent Members from taking action to protect vulnerable members of the public.’

3870 The President: The Hon. Member, Mrs Beecroft.

Mrs Beecroft: Thank you, Madam President. I would like to second the amendment by my colleague, Mr Karran, and also – I am not sure if I need to second it – about taking the clauses separately in this. I do not know if that needs a 3875 seconder or not, but if it does, then I am happy to do so. Because similarly I am quite happy with the first bit. Who would actually vote against any of that? I think we would all be embarrassed if anybody disagrees with that first piece. ______1260 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

But certainly, I had concerns about it actually just being an annex to a report. Things that were going to be classed as a serious failure of a Member’s duty just being part of an annex – it 3880 just seemed to be a bit flimsy. I had concerns about that aspect of it as well. But certainly from what the Acting Attorney General said earlier on, it gives me even further cause for concerns, as it has with other Members. I am not sure if I heard him correctly, but I think he said that if we actually even wrote a letter, it could be classed as supporting, giving somebody an unfair advantage. He may clarify that for me, I hope, but if that is the case, then 3885 surely even accompanying people … We often get asked, ‘Will you come with me?’ – not that you are actually going to do something, but is that not giving an unfair advantage? I know people are saying no, but it is a worry, when concerns like this are being raised by experienced Members of this House. (A Member: Court.) How many years do you have to be here before you can actually start helping people then, without worrying about whether you are going to 3890 overstep the mark? I think that is a concern, and will certainly be a concern for new Members and for people who are actually going to stand for election in September, putting their head above the parapet, in that it is another concern then that they would have. So I would be happy to support the first part of this Item, number (1); but numbers (2 )and (3), I do have concerns about. But I think that Mr Karran’s amendment at least covers us when 3895 we are helping vulnerable members of the public, not just own constituents because other people come to us as well who are in other constituencies. We need to be free to be able to help them as we see fit – without pretending that we are lawyers or anything like that. It would be foolish to pretend you were a lawyer. Thank you, I think everyone has said all the other bits. Thank you very much. 3900 The President: The Hon. Member for Rushen, Mr Gawne.

Mr Gawne: Gura mie eu, Eaghtyrane. I would have happily seconded Mr Karran’s amendment, but I actually rise to second Mr 3905 Watterson’s. I do think there is some considerable merit in the amendment that Mr Karran has put forward. I do not believe that the report was suggesting in any way that we should not support the most vulnerable people in society, but there is no harm in adding that, as a cast-iron guarantee that that is what we are here for, and certainly whether you are an experienced Member or a new Member, your role is very clear, to support the public in understanding the 3910 complexity which is Government. I think if ever we got to a position where this could not happen for some reason, we would really have failed dramatically. So I think Mr Karran’s amendment makes sense and is worthy of support. I am tempted to say in relation to Mr Watterson’s amendment, the principle is fine; we just need to understand a bit more about the detail, reflecting perhaps an earlier debate that we had 3915 today. I think there are some very good points, both in favour and against what Mr Watterson is suggesting, the Hon. Member for Rushen, and I think we do have to be incredibly careful here. On the one hand, it is wholly inappropriate for my officers to end up going home in tears, to be frightened, to be stressed because they do not like to have to deal with certain Members of 3920 Tynwald, who go nowhere near any of the seven principles that are listed on the Order Paper. I think that is wholly inappropriate. But the response I have to give to them when they come to me is actually the committees responsible for policing the conduct of Members are largely toothless and have very little ability, other than perhaps making a report which says ‘so-and-so really oughtn’t to do that’ … Is that 3925 sufficient? Is it fair that members of staff should be treated in such a way and have no proper sanction? I personally do not think it is. However, on the other hand, the people get the parliament, the government, that they deserve. People turn out at general election time and they vote for the respective members. Perhaps they do not know how abusive and rude some Members can be. But ultimately, the ______1261 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

3930 people who decide whether you are fit or not to be a Member of the House of Keys are actually the general public, and it is a matter for them. So I do support the principle of what Mr Watterson’s amendment seeks to deliver. I do believe that we should make clear that there are sanctions for effectively ignoring the seven principles that are listed in the report. However, how far those sanctions could actually go, I 3935 think is always going to be the difficult one, and I would not envy the Standards and Members’ Interests Committee their task in trying to identify what those sanctions should be. But I do think sanctions should be available to the Committee. I do take the point that the Hon. Member for Onchan makes though, in relation to the perception at least that there would be an establishment party which decides that it is going to 3940 treat any rebels in a particular way. Again, that is a difficult perception to overcome. That said, I have to go back to my opening remarks: it is wholly inappropriate that members of staff in any Department should feel so threatened by a Member of Tynwald that they are in tears, that they are stressed, (Mr Cretney: Hear, hear.) that they feel unable to come to work. I think that is inappropriate, (Mr Cretney: Hear, hear.) and that behaviour does go on, and is often cheered by 3945 some members of the public who say, ‘Oh, good old so-and-so. He’s given those nasty, horrible public servants a good kicking.’ (A Member: Yes.) I think that is an unfortunate aspect of political life and hopefully the Standards and Members’ Interests Committee can find the right balance in terms of how to have sufficient sanction to stop that happening. So I certainly do support the amendments in the name of Mr Watterson. I also support Mr 3950 Karran’s amendment, and I support the Report by the Committee.

The President: The Hon. Member, Mr Houghton.

Mr Houghton: Thank you, Madam President. 3955 Just like the previous speaker, Madam President, I support both of these amendments. Actually, if you take all the circumstances to do with these amendments and what we have before us, I think actually it would be wise, after the vote, for the Speaker to withdraw this annex and come back with a composite document covering everything – because do not forget, we have got advice from the learned Attorney, which the Speaker is going to answer in his reply, 3960 hopefully, that that information will be contained in it. Then of course, I think there is very, very good reason to support the Hon. Member, Mr Karran’s mention when he states that nothing in the resolution, and when he is talking about that, he is talking really about items (2) or (3) – one or the other, item (2) or (3), or (2) and (3) – because it is unclear in either of those which one deals with the Representation Act, as far as 3965 helping people with concerns and issues where they are in conflict with other parties. So I support the Hon. Member on that, because of course it is our bread and butter to look after these people – just as the Hon. Member of Council, Mr Henderson, has made very clear in his contribution today. It might be helpful, Madam President, if I would ask … Mr Henderson made a number of 3970 points for consideration, and perhaps if the learned Acting Attorney would put those concerns of Mr Henderson into some form of an advisory guidance document or a letter to Hon. Members, that he has made, because he makes an awful lot of good points. One point that he has made – and perhaps the Speaker can answer this – was the fact that there was an indemnity policy. It might be outwith what we are talking about, but it actually is 3975 part of it. Those Members who have been around here for a considerable period of time, here around about the time when the Hon. Mr Speaker at that time was Tony Brown, and Mr Cornwell-Kelly was the Clerk of Tynwald, there was in existence at that time, and Members were written to at least once a fortnight … (Mr Watterson: Seemed like it!) at least once a year, that of course because of this indemnity policy which was in existence – and still should and must be 3980 in existence today, because Members have not been informed that such document has ever

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been closed down. Perhaps this may be news to certain Hon. Members – it will not be to some of those Members who have been here for some time –

The President: Hon. Member, you are rather straying from the allowance to speak about the 3985 amendments. You did speak earlier.

Mr Houghton: Yes, and I do apologise. But I am speaking to the amendment, because it is part of that, in what Mr Watterson is saying, and I want to go on to that. But with the indemnity policy, you had to write in and warn if there was likely to be an action 3990 against you, once a year if not sooner. So moving on to the Hon. Member, Mr Watterson’s amendment, which is very supportable, this opens a number of doors, in his wording, that a code of conduct – we have mentioned that with the learned Attorney – be drawn up. That would be rightly sitting in one single composite document, as I have mentioned, and outlining its purpose in a bit more detail, which I support 3995 the Hon. Member. Benchmarks – that is clear, and that is not in this document. And then he says, ‘enforcement provisions’. Now, Hon. Members may remember that last month, I brought an amendment to this Hon. Court to the Speaker’s motion to do with the Tynwald Standards motion, which was precisely – or along the lines anyway – of what Mr Watterson is now asking for, and I think he will get some support today. And that is the process 4000 of the hearing that Hon. Members are subject to, which can only be described as a kangaroo court, Madam President. It is wholly out of order. I made that point and I will be making it again in a very near time, and explaining how and why that witnesses should be able to be called by any side. The accused should be at all of the hearings, and then if I turn back to the fact that Mr Watterson has added in handwritten ink here, and should be subject to appeal. 4005 Now, the appellant presiding officer in that, I would say should really be someone like the High Bailiff. Let’s get the job right. (Mr Watterson: External.) External – and not external other than a lawyer – because the High Bailiff, if I may just say Madam President, does more than just reside over a criminal court. They deal – or used to deal – with issues to do with the RTLC and presiding over issues there, and they preside over other issues which are civil in nature etc. Then 4010 you have got someone who is independent, has a legal mind and also is not out as a peer to get their own back on you, etc. Actually, Madam President, that might be the better benchmark than peer review as is done now, because that, as I will point out to you at another time, is absolute rubbish and it makes us all look really silly. It really does. 4015 If I can broaden out, because obviously the Hon. Member, Mr Watterson, cannot speak any further, if I could say I fully endorse that. I would hope, and speaking on his behalf, when he is looking at the enforcement provisions and so on be dealt with I think some out-house. I think it is only appropriate. And then if you appeal, it has to be to a higher body that could be judicial. He has mentioned penalties – the Hon. Member, Mr Watterson – with reference to that. 4020 So, in all, Madam President, what we need to do with all of this is actually take it back to the drawing board and do a proper job on it. Do a proper job on it once and for all. Mr Speaker has got a bit of a muddle on his hands, because he has got advice from the Attorney that we were asking for, he has got this document that is devoid of detail and then he has got quite an additional amount work, not necessarily from the Hon. Member, Mr Karran 4025 because that would go in the document, simply as probably a one-line point, but from the Member, Mr Watterson – that is going to take a job of work on there. So I would have thought, had I been presiding over this matter, I would have withdrawn this document, bring all these points into one central document, after due diligence had been done. I thank you. 4030 The President: The Hon. Member for Malew and Santon, Mr Cregeen.

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Mr Cregeen: Thank you, Madam President. I do not think anybody in this Hon. Court would condone any type of bullying or harassment 4035 of either Members or staff of Government. Mr Karran's amendment is, I think, very supportable. I can give you a prime example, one of the incidents that came across me once was as a new Member, nine years ago, I was representing a constituent of mine. Now one thing I do not do is, I do not phone up a Department and go ‘ MHK’. It is just ‘Graham Cregeen’, and I went in to a Government Department and I asked to speak to an officer. They said, ‘Who is 4040 speaking?’ I said, ‘It’s Graham Cregeen.’

Mr Cretney: ‘Don’t you know who I am?’ (Laughter)

Mr Houghton: Don’t know who you are. 4045 Mr Cregeen: He didn’t know who I was! (Laughter) He goes upstairs and then comes down, and as he is coming down the stairs, he says to this bloke – he did not know I could hear – ‘If I had known it was an MHK, I would have told him you were busy!’ (Laughter) Hon. Members, sometimes, unfortunately, officers are very defensive so rather than answer 4050 your questions they can be obstructive. If a Member then goes back and says, ‘Excuse me, can you give me this answer?’, are you then bullying and harassing because you have not got that answer? I think some of the time most Members here will be surprised that when they contact certain Departments, with a constituent’s concern they get the answer – why do they not give that answer to the constituent in the first place? (Mr Houghton: Hear, hear.) 4055 So I think we have got a very dangerous position, where we have got all this bullying and harassment, and some people use that as a means of not giving you the answer, because they are saying that they are being harassed. (Mr Houghton: Hear, hear.) I would hope nobody would think that I have ever done that when I have gone in, because I try to be polite, and you just ask a simple question. But in Departments I have had officers come to me and say that a certain 4060 MHK has been on and on and on and on, and they are feeling harassed and I said, ‘Well, just tell them to contact me and I will deal with it.’ But one of the issues we have got is to ensure there is fairness, because Members here have been given a job to do to try and assist their constituents, to get the advice that you can so that they can be treated fairly. We have to make sure that regulation is not put in place that actually 4065 restricts us from doing our job at representing the people that put us into this Hon. Court. (Mr Houghton: Hear, hear!) I will support Mr Karran’s amendment; I think it needs to be there. There are other areas I think the Committee should actually have a look at, Mr Watterson’s amendment, because what is the use of a report coming back and saying you should not have done something but you have 4070 not actually got a sanction in there?

The President: The Hon. Member for Douglas West, Mr Thomas.

Mr Thomas: Thank you, Madam President. 4075 In my contribution I just have three questions. The first question for a new Member is just for a clear description of the differences between the procedure laid out already in the original motion of the annex and what is implied at point (3) about the action that can be taken, and what is proposed by Mr Watterson’s Code of Conduct and the procedure. So I want to invite Mr Speaker to actually lay that out very clearly, what any differences are. 4080 The second point is when I heard Mr Henderson’s very clear exposition of some of the risks that he perceived, it occurred to me that we should be asking the learned Attorney to actually identify for us activities, actions and bodies that are relevant. Is the Planning Committee included? Should we not be submitting evidence to Planning given the amount of petitions of doleance that now take place in planning? Are tribunals excluded? Should we never be actually ______1264 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

4085 going along with constituents to sit next to them in tribunals? So to me, as a new Member, it would be very helpful to have a list of bodies identified. And that leads on to the third question, which is that in paragraph 25 there is actually talk about protection of staff against bullying, not only civil servants and Tynwald staff, but also elsewhere in the public service, which can include a great number of bodies. I have got a 4090 potentially difficult situation in my role in Government at the minute, and I wanted a greater degree of clarity about exactly what that process was supposed to involve, especially when it is linked to the new requirement for the person making the complaint to actually consider taking a view on the merits of a particular case. So I would like clear guidance. That leads me on to my two conclusions. My two conclusions are it seems to me that it might 4095 well be advisable to take this report back and to bring it back once we have greater clarity on some of these issues. My second conclusion is that when there is talk about ‘High Bailiff’ and ‘an independent person’ being involved in appeals, it might be worthwhile to actually even consider having an independent member on the Tynwald Standards and Members’ Interests Committee. (A 4100 Member: Hear, hear.) For instance, Douglas Borough Council has actually had an independent member on its own standards committee for four years, under the Local Government Act, and my understanding is that has worked well and inside the Local Government Unit we are currently in dialogue with the Council to find out a testimony of the experience that they can share with us after four years of activity. 4105 The President: The Hon. Member, Mr Watterson.

Mr Watterson: Yes, just brought to my feet quickly by Mr Karran’s amendment which again I think is entirely supportable. 4110 Just to clear up one or two of the issues that did arise though, I certainly have no problem with an investigation or a report being done by an outside person. I would have no problem with lay-members on the Tynwald Standards and Members’ Interests Committee. There is absolutely no suggestion that there should be a power for other Members to deprive somebody of their seat. I want to put that one to bed pretty quickly. Those provisions only exist in law and they can 4115 only be determined by a judge. That is the way it should be, (A Member: Hear, hear.) so just to put some of these myths to bed. My big concern is that without proper process, without a proper mechanism to hold Members to account, all this is worthless. So that is why I have moved my amendment and would happily support Mr Karran’s as well. 4120 The President: The Hon. Member, Mr Quayle.

Mr Quayle: Thank you, Madam President. I was just looking for a point of clarification here. I think that everyone in this Hon. Court 4125 could support the Hon. Member for Onchan, Mr Karran, in his request to make sure we protect vulnerable members of the public, but I am concerned at the way his motion is worded. It should say, ‘As long as the behaviour is appropriate of the politician,’ because the way it is written I read that if you have civil servants who are looking after vulnerable members – my Department, the Treasury Minister’s Department, etc – that could be the get-out-of-jail card for bad and 4130 bullying behaviour of Members of this House, Madam President – the way it is written. I totally get the sincerity of what the Hon. Member is moving, but it says:

But that nothing in this resolution shall be taken to prevent Members from taking action to protect vulnerable members of the public.

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That to me is a get-out-of-jail card for bad behaviour, because you can say, ’Well, I am looking after a vulnerable member, I have got the right to.’ (Interjection) I would just like clarification: does that give a get-out-of-jail card to politicians? I know, 4135 having being an ex-civil servant, back in Treasury days, I have been at the end of a bullying politician. It is not an enjoyable experience to an 18-year-old lad. But I just wanted clarification on that point because I think the motion is well meant, but I do not think that, even if you are looking after vulnerable people, you should be excused from being … Your behaviour should be correct in dealing with people. 4140 The President: The Hon. Member for North Douglas, Mr Peake.

Mr Peake: Thank you, Madam President. It is a very positive step forward, I think, to see seven important values down here – values 4145 that MHKs can sign up to; hopefully seven values that will attract new MHKs in September. I would be very supportive of this and I think everyone could live and work by these. I think a lot of the concerns we hear about some of the amendments, I would support both amendments but I think the concerns about the detail, if you truly live and work by these seven important values, then I do not think those issues will come to pass. 4150 So I will be supporting the two amendments and these seven values. Thank you.

The President: The Hon. Member, Mr Karran.

4155 Mr Karran: Eaghtyrane, I am speaking to Mr Watterson’s amendment. I think Members need to think about this because we have battled for 20 years to get this place actually working as a parliament, not as a big club. We go back and I ask Members to reflect on the Speaker’s report in pursuance of the House of 11th July 2002. Now in that report, Hon. Members will be horrified to see that that report which … we won that battle, because 4160 they were actually trying to take away parliamentary privilege from Members of Tynwald. That was the danger of that report, and that report was to do with allegations as far as the Island’s studio was concerned. The Speaker and the executive decided to have a vote to have a report on this issue. And what upsets me, Eaghtyrane, is the fact that you think these are good ideas, and I can 4165 argue … I just get annoyed that the Committee should have the bottle to actually name the Member that is doing the bullying and get it sorted – not try and hit other people on the consequences. This was a time of a very long, sleepless night that we had this report to do with allegations about a company that had had massive amounts of money as far as that is concerned. My worry 4170 is if you go down the road of the Hon. Member for Rushen’s proposal, you can already blight your career as far as executive pay – we have proven on the issues that you have got a Public Accounts Committee that can never meet because it is always conflicted, when there are simple ways forward as far as that. Get them out of executive pay, pay them as parliamentarians the pay that they would get if they were part of the executive by making the Chairman a Minister … 4175 There are ways of dealing with these conflicts, but the point is this report, which the then Speaker, who managed to become the Chief Minister of our great nation, was almost in danger of destroying parliamentary privilege in this Court! This Report means well. I believe that you have got a wonderful step forward. You have got your seven principles, but be careful about this amendment. Because this report was about a 4180 film studio who ended up getting substantial amounts of money – (Interjection) No it is relevant.

A Member: Tell us then.

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Mr Karran: Because the fact is this was about Members’ standards within this Court, and the 4185 point is –

The President: Hon. Member, it is difficult for Members if you are referring to a report that is not in their hands (Several Members: Hear, hear.) (Interjection) and I would like you to come to the amendment if you would, please. 4190 Mr Karran: I am talking to the … The danger is, this report came out because this Member dared to question the grace and favour of the Department of Industry on two issues and they were simple issues, and the danger and what I am worried about with the Hon. Member is it is a Pandora’s box. You open a door about how you can cut pay. In this case it was to try and take 4195 away parliamentary privilege so that you could be sued. The second issue was to do with Invisimail, which had a million pounds’ worth of money. The Minister at the time was conflicted, signed a ridiculous lease when he was a director of a company that had conflict with it and we are still paying a ridiculous rent as far as Hamilton House is concerned. And this Member – because in those days for daring to take on the 4200 establishment – ended up with a Speaker’s report, had to take legal advice, as I say, as far as that issue is concerned. So just be careful about giving these powers because, to be fair, the Chief Minister more than likely on these sort of issues would want to support the same principles as myself about fairness. The Member for Rushen talks about:

That a Code of Conduct be drawn up outlining its purpose, benchmarks and enforcement provisions, including penalties and appeals.

4205 What I am concerned about is that I think we need this all in detail. (Mr Watterson: Absolutely.) He talks about the CPA and the fact is that three quarters of the CPA parliaments – unless they have changed since I was an executive member of the CPA, 10 years ago or thereabouts – are a joke. We are not a joke. I believe that I have confidence in this Court that we are going to get the changes that we 4210 need to hold executive Government to account. But the danger is with this Code of Conduct, my concern is maybe no one else will have to go through the Speaker’s report for bringing up financial scandals and almost ending up in a situation that he would have been left out to hang in the dry, by the people who actually got the money that should not have got the money, using the money to destroy an honest man in this Court. 4215 My concern is, Eaghtyrane, the issue about penalties. There are enough penalties as far as executive Government is concerned. You can lose 10%, 30%, 50%, 60% or 70% as far as executive Government is concerned. And my concern is that the people of Onchan put me in, like the people of North Douglas or South Douglas put them in, and they are the people who put people out. (Mr Watterson and another Member: Absolutely.) And the problem – yes but it is 4220 alright saying ‘absolutely’, but you are going to bring penalties in to try and stop … When I went into this House, you were supposed to make your money, you either retired, made your money out of your business interests, your side-lines or whatever. A working man with a wife and kids could not afford to be in here properly, and that is why you had the Hon. Member for Council then of Mr Lowey in the Upper House, a sad old bachelor, (A Member: 4225 Ooh!) and me in the Lower House as a sad old bachelor who –

A Member: He was quite a happy old bachelor!

Mr Karran: – did not have any business interests as far as that is concerned. It was only after 4230 we got the other things sorted out that that was sorted. The danger in my opinion is the fact that – [A mobile phone rings]

______1267 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mr Quirk: Phone’s ringing. (Laughter and interjections)

Mr Karran: The worry is what we are going to do is starve people out of this Court. And it is 4235 not up to us to starve Members out, no matter how much I find you contemptable, as I say, the fact is you have a mandate in this Court. I worry that if you support this, as it is at the moment, you will be undermining democracy. So Hon. Members, I hope that people will realise that we do not need the usual dumb blonde situation. The situation that I am referring to you, Hon. Member for Middle, who seems to be 4240 very important on the annex where it says:

Members of Tynwald are frequently asked to assist members of the public in matters which are of concern. In doing so, Members of Tynwald: - must not interfere in private disputes between citizens as an active advocate or advisor for one side; settling disputes …

as far as the courts system is concerned. The situation is, the AG has told you, we are not advocates. We should not act as advocates and if we are acting as advocates then we should be done for acting as advocates. But there is a big difference between acting as an advocate and putting the rungs on the ladder in order that people get the access to justice. And all I am saying 4245 with the other amendment is that that is what I am trying to do. Personally speaking, Eaghtyrane, I hope the Committee comes out and names the problems with people who are bullying in this House. That is what should happen. (A Member: Hear, hear.) We should have the courage to do that and say that and the people of that constituency should then be able to see that and in my opinion, I think that would be very detrimental as far 4250 as that is concerned. But the other issue with the Hon. Member’s amendment is, and what concerns me, is the fact when I was in executive Government, as Chairman of the Water Authority, as Minister of Education, as other things, when I had situations where I had chief executives almost in tears with the disgraceful way that the Department Members were working, we sorted that out. 4255 Unfortunately the Council of Ministers did not have the decency to back that up as far as that is concerned, nor did the civil servants. The point is, please do not vote for the proposal by the Member for Rushen. Think about it. Today you are talking about bullying and stuff. It is not that long ago we were talking about two multi-million pound scandals that the taxpayer, that the Hon. Member that sits here was 4260 brought to the Standards Committee for. Be very careful. Support the original seven principles. That needs to be supported if nothing else really, even allowing for my amendment, but it brings some safety for our constituents and you not to end up falsely being stopped from doing your job of holding the executive to account.

4265 The President: Mr Speaker to reply.

The Speaker: Thank you, Madam President. I thank Members for contributing to the debate. I would like to thank, first of all, the Acting Attorney General for his contribution. It had been 4270 suggested to the learned Acting Attorney that his contribution would be helpful in the debate in clarifying the report and in particular the annex, and what the learned Acting Attorney had to say was absolutely spot on. Unfortunately, Madam President, some Hon. Members have misread (Mr Cretney: Hear, hear.) what the annex actually says, and we have had a debate of about an hour and a half, 4275 much of which could have been avoided, particularly the repetitive points, had actually the Report annex been read. First of all, the Hon. Member, Mr Houghton is of the view that what we are saying is that we cannot do anything … I wrote his words down, ‘must not do anything with anyone’. The Hon. ______1268 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Member of Council, Mr Henderson was of the view that this advice is that you cannot help 4280 constituents. Nothing could be further from the truth. Madam President, it is the duty of Members of this place to act on behalf of constituents. Someone once said that the role of a member of parliament was to represent the common man – that was the archaic expression used – when engaging with the public administration, and that is absolutely correct. Our duty is to assist the citizen. 4285 What the annex is saying, and where the misunderstanding has come about, if Members will read it:

Members of Tynwald are frequently asked to assist members of the public ... In doing so, Members of Tynwald: - must not interfere in private disputes between citizens as an active advocate or advisor for one side;

This does not mean that you cease to represent individual citizens, constituents, at tribunals, Planning Committee, as McKenzie friends or any of the issues that have been referred to. That is not what it is about. 4290 It is absolutely paramount that Members have the ability to represent citizens against Government, against organisations, both public and private, i.e. against those who are more powerful than the ordinary citizen. Now where disputes between individual citizens are concerned – and this is what we are trying to be at pains to differentiate – Members of Tynwald can certainly mediate – and that word was used – between individuals and give general advice 4295 where there is a dispute between two individual parties, but should be aware of going beyond that. Because giving legal advice on behalf of one individual against another individual is very dangerous. As Mr Cretney has said, experience teaches you when to beware of falling into that trap. What the learned Acting Attorney has said quite clearly is that we must not give direct legal 4300 advice. We must, in helping a citizen, a constituent, must be careful not to be put in a position of offering legal advice, such as you would get from an advocate. Now, it is your job to assist and direct that individual to the sources of professional advice, but there is a danger in allowing yourself to be misconstrued, however inadvertently, giving legal advice in the way an advocate would, and that applies in all our dealings with constituents. 4305 But I want to make absolutely clear that this annex and the reference is ‘private disputes between citizens’. It does not affect your ability to represent a citizen or act and advocate on behalf of that citizen and represent them in their dealings with public administration or organisations, public or private. So –

4310 Mr Houghton: Madam President, will the Speaker give way just for a moment? Thank you, I am very grateful. Madam President, I am sorry, but I have read and read this, and the Speaker’s interpretation of what that is, is very similar to that given by the learned Acting Attorney, but it is not comparable with the wording set out here. 4315 The Speaker is being most helpful in what he is saying, but it does not accord with me – and I am not stupid, and many other Members are not stupid in here – it does not accord with the wording at that bullet point at the very bottom of page 10, as to what he is saying. He is giving a much wider and more welcoming version of that – and that is not going to be helpful when someone decides to run a Member into the Tynwald Standards Committee with two sets of 4320 advice.

The President: Mr Speaker.

The Speaker: Madam President, the Acting Attorney General’s advice was absolutely clear 4325 and compatible, and was invited previously because we knew it would be compatible with the

______1269 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

advice set out here – on which incidentally consultation with the Acting Attorney had taken place. Mr Houghton and others had specifically made the point that it might be helpful if the Acting Attorney’s statement – which of course will be in Hansard – could be attached and made part of 4330 the annex. I see absolutely no problem with this whatsoever. And once that has been done, you have got an annex with the note from the Acting Attorney General, all of this attached as part of Standing Orders per the resolution, and then I suggest, Hon. Members, you actually have what the Hon. Member, Mr Watterson is calling for, which is a code of conduct. You then have your code of conduct. 4335 I would argue that if you actually read the annex, you have got your code of conduct already. The title is ‘Members of Tynwald required standards of conduct’. That it is broken into sections: working relationships; relations between Members of Tynwald and staff; relations with the public; relations with colleagues; relations with Presiding Officers; policy against bullying and harassment. And as a code of conduct, the expected conduct is made quite clear. It talks about 4340 what Members of Tynwald must not do a, b, c: ‘must not interfere’; ‘must never use’; ‘should seek to maintain constructive a working relationship’; should this, that and the other. You have actually got your code of conduct. Now, the problem with Mr Watterson's resolution is that it goes beyond calling for a code of conduct, which we already have, but talks about enforcement provisions and penalties and 4345 appeals. I suggest that, at this stage, having adopted a code of conduct, that is actually at the very least premature and will actually involve potentially a prescriptive list of penalties, appeal procedures, which may involve outside persons. The matter of fines was talked about as penalties. We are immediately into changing legislation. I would say, do not support the amendment. Let the Committee monitor the operation of the 4350 code of conduct, which is now being spelled out. Legal advice as to how that code operates can be sought from the Clerk or the Acting Attorney General. I can undertake on behalf of the Committee that it will of course be keeping under review the whole matter. But to have drawn up at this stage a prescriptive list of penalties and appeal procedures, I think would be really overdoing it, tying our hands and setting up a complex apparatus and structure, which we really 4355 should not be getting … It should not be a path we ought to be going down at this stage, if at all. The amendment in the name of Mr Karran, I think was based really on the equal misunderstanding about what the annex was talking about in acting it on behalf of individuals. The matter of private disputes between citizens, I would hope that the intention is not to imply that in the name of acting on behalf of a vulnerable member of the public, you are given carte 4360 blanche to act inappropriately. I think this was Mr Quayle's point. Actually, you can act in any way you like in the name of helping a vulnerable person, because, while it is your duty to assist vulnerable persons in disputes of all sorts, you must do so in a way that is compatible with codes of conduct. The motion itself, I think is not needed anyway, because it implies that you cannot act on 4365 behalf of vulnerable people. Well, of course you can. It is your duty to do so and the circumstances and the right way to do it are set out in the code of conduct. So in other words, implementing the code of conduct is not going to top you acting on behalf of people. All it says is ‘you must do so appropriately’.

4370 A Member: Hear, hear.

Mr Karran: What is ‘appropriate’?

The Speaker: You cannot possibly say, ‘I am acting in this way – it is not within the code of 4375 conduct, but it is on behalf of a vulnerable person.’ That is nonsensical. (Mr Cretney: Hear, hear.) So please do not support the amendment. It is not required.

______1270 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

And the amendment by Mr Watterson, I would ask the Court not to support at this stage. I would invite Mr Watterson actually to write to the Committee and say a little bit more of how he sees this working. I do have great concerns that once we are in defining penalties and setting 4380 out in detail, in a very prescriptive way, procedures, we might be tying the hands of ourselves, in effect, and how we approach difficulties that arise. We do not want to set up something that could be construed as prescriptive with a tribunal system that is so tightly defined, we have tied ourselves up. I think the way it is set out in is this perfectly fair as it is. The main point I want to make though is that there is nothing in this resolution, either the 4385 Nolan Principles which seem to have general acceptance that they are now the benchmark of standards across the world in parliaments. The principles were adopted by Government itself some years ago. It is right that they are adopted by the parliament, by Tynwald, in the Isle of Man. How these principles are put into practice forms the subject of an annex, which is in effect a 4390 code of conduct, supplemented with the helpful legal advice that we have given, and I therefore beg to move that the resolution be supported as it stands.

The President: Hon. Members, the motion before the Court is set out at Item 5. That motion contains one recommendation, which is divided into three parts, and I have been asked to take 4395 those parts separately. We also have two amendments to the motion, Hon. Members: one in the name of the Hon. Member, Mr Watterson, which I shall take first, after we have dealt with parts (1), (2) and (3), as it introduces a fourth part. Then I will deal with the amendment from Mr Karran. So our first consideration, Hon. Members, is for part (1) of the recommendation. Those in 4400 favour of part (1), please say aye; against no. The ayes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 24, Noes 0

FOR AGAINST Mrs Beecroft None Mr Bell Mr Boot Mr Cannan Mr Cregeen Mr Gawne Mr Hall Mr Harmer Mr Houghton Mr Joughin Mr Karran Mr Malarkey Mr Peake Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Singer Mr Skelly Mr Teare The Speaker Mr Thomas Mr Watterson

The Speaker: Madam President, in the Keys, 24 votes for, none against.

______1271 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

In the Council – Ayes 9, Noes 0

FOR AGAINST Mr Anderson None Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Henderson The Lord Bishop Mr Turner Mr Wild

The President: In the Council, 9 votes for, no votes against. The part therefore carries, Hon. Members. Part (2): Those in favour, please say aye; against, no. The ayes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 21, Noes 3

FOR AGAINST Mr Bell Mrs Beecroft Mr Boot Mr Houghton Mr Cannan Mr Karran Mr Cregeen Mr Gawne Mr Hall Mr Harmer Mr Joughin Mr Malarkey Mr Peake Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Singer Mr Skelly Mr Teare The Speaker Mr Thomas Mr Watterson

The Speaker: Madam President, in the Keys, 21 for, 3 against.

In the Council – Ayes 8, Noes 1

FOR AGAINST Mr Anderson Mr Henderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall The Lord Bishop Mr Turner Mr Wild

______1272 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

The President: In the Council, 8 votes for and 1 against. Part (2) therefore carries, Hon. 4405 Members. Part (3): those in favour, please say aye; against, no. The ayes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 21, Noes 3

FOR AGAINST Mr Bell Mrs Beecroft Mr Boot Mr Houghton Mr Cannan Mr Karran Mr Cregeen Mr Gawne Mr Hall Mr Harmer Mr Joughin Mr Malarkey Mr Peake Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Singer Mr Skelly Mr Teare The Speaker Mr Thomas Mr Watterson

The Speaker: Madam President, in the Keys, 21 for, 3 against.

In the Council – Ayes 8, Noes 1

FOR AGAINST Mr Anderson Mr Henderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall The Lord Bishop Mr Turner Mr Wild

The President: In the Council 8 votes for and 1 against, Hon. Members. Part (3) therefore also carries. I now put to you the amendment in the name of Mr Watterson, which introduces a new part 4410 (4) to the motion. Those in favour of that amendment, please say aye; against, no. The noes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 6, Noes 18

FOR AGAINST Mr Cregeen Mrs Beecroft Mr Gawne Mr Bell

______1273 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

Mr Houghton Mr Boot Mr Peake Mr Cannan Mr Skelly Mr Hall Mr Watterson Mr Harmer Mr Joughin Mr Karran Mr Malarkey Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Singer Mr Teare The Speaker Mr Thomas

The Speaker: Madam President, in the Keys, 6 votes for, 18 against.

In the Council – Ayes 1, Noes 8

FOR AGAINST Mr Henderson Mr Anderson Mr Coleman Mr Corkish Mr Cretney Mr Crookall The Lord Bishop Mr Turner Mr Wild

The President: In the Council, 1 vote for and 8 against. The amendment therefore fails to carry. 4415 Finally, the amendment in the name Mr Karran: Those in favour, please say aye; against, no. The noes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 12, Noes 12

FOR AGAINST Mrs Beecroft Mr Bell Mr Cannan Mr Boot Mr Cregeen Mr Malarkey Mr Gawne Mr Quayle Mr Hall Mr Quirk Mr Harmer Mr Robertshaw Mr Houghton Mr Ronan Mr Joughin Mr Shimmin Mr Karran Mr Singer Mr Peake Mr Teare Mr Skelly The Speaker Mr Watterson Mr Thomas

The Speaker: Madam President, in the Keys, 12 votes for 12 against. The motion therefore fails to carry.

In the Council – Ayes 2, Noes 7

______1274 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

FOR AGAINST Mr Henderson Mr Anderson Mr Turner Mr Coleman Mr Corkish Mr Cretney Mr Crookall The Lord Bishop Mr Wild

The President: In the Council, 2 for and 7 against. It fails in both Branches, Hon. Members. The amendment therefore fails to carry. I now put to you the substantive motion. Those in favour, please say aye; against, no. The 4420 ayes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 23, Noes 1

FOR AGAINST Mrs Beecroft Mr Karran Mr Bell Mr Boot Mr Cannan Mr Cregeen Mr Gawne Mr Hall Mr Harmer Mr Houghton Mr Joughin Mr Malarkey Mr Peake Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Singer Mr Skelly Mr Teare The Speaker Mr Thomas Mr Watterson

The Speaker: Madam President, in the Keys, 23 for, 1 against.

In the Council – Ayes 9, Noes 0

FOR AGAINST Mr Anderson None Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Henderson The Lord Bishop Mr Turner Mr Wild

______1275 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

The President: In the Council, 9 votes for, no votes against. The motion therefore carries, Hon. Members and therefore passes.

Announcement of Royal Assent

The President: At this point I can announce that Royal Assent has been given to the 4425 Consumer Protection (Amendment) Act 2016; the Criminal Procedure and Investigations Act 2016; the Financial Intelligence Unit Act 2016; the Terrorism and Crime (Miscellaneous Amendments) Act 2016; and the War Memorials Act 2016.

6. Post Office Act 1993 – Chairman of the Post Office – Mr Harmer appointed

The Chief Minister to move:

That in accordance with the Post Office Act 1993, Tynwald approves the appointment by the Council of Ministers, of Mr R K Harmer MHK as Chairman of the Isle of Man Post Office.

The President: We turn now to Item 6 on your Order Paper, Hon. Members. I call on the Chief Minister. 4430 The Chief Minister (Mr Bell): Madam President, the Council of Ministers recommends that the Hon. Member for Peel, MHK, is appointed as the Chairman of the Isle of Man Post Office. Mr Harmer’s varied and extensive background brings to the post considerable experience. 4435 Mr Harmer is well aware of the commercial challenges facing the Post Office, and I am sure that as Chairman he will support the board of the Isle of Man Post through this period of strategic development. Madam President, I beg to move.

4440 Mr Henderson: I beg to second.

The President: The Hon. Member, Mr Malarkey.

Mr Malarkey: Yes, Madam President. 4445 As I explained earlier today, during the other debate, I was extremely unhappy with the way that the present Chairman of the Post Office was dismissed, and today – with no disrespect to Mr Harmer – I will not be voting for this post.

The President: Chief Minister to reply – if you wish to comment, sir. 4450 The Chief Minister: I have nothing to add.

The President: The motion before the Court is set out at Item 6, Hon. Members. In this case, Tynwald votes as one body. Those in favour of the motion, please say aye; against, no. The ayes 4455 have it.

______1276 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

A division was called for and electronic voting resulted as follows:

In Tynwald – Ayes 23, Noes 9

FOR AGAINST Mr Anderson Mr Cannan Mrs Beecroft Mr Cregeen Mr Bell Mr Houghton Mr Boot Mr Joughin Mr Coleman Mr Malarkey Mr Corkish Mr Quirk Mr Cretney Mr Singer Mr Crookall Mr Thomas Mr Gawne Mr Turner Mr Hall Mr Harmer Mr Henderson Mr Karran Mr Peake Mr Quayle Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly Mr Teare The Speaker Mr Watterson Mr Wild

The Speaker: Madam President, in …

The President: Ah, my turn! (Laughter) With 23 votes cast in favour, Hon. Members, and 9 votes against, the motion therefore 4460 carries. Item 7. Appointment of Vision Nine, the Minister for Economic Development to move.

Condolences to girlfriend, family and friends of local rider, Billy Redmayne

The Minister for Economic Development (Mr Skelly): Gura mie eu, Eaghtyrane. If I may gain the grace of the Court to acknowledge the very sad news and with deep regret I advise of the local rider, Billy Redmayne, who died this morning following an incident at Oliver’s 4465 Mount on Sunday. Billy, a local lad from Laxey, was a very promising talent and was due to take part in his first TT this year, following his win in last year's Junior Manx Grand Prix. I wish to pass on mine and the Court’s condolences at this very difficult time to his girlfriend, family and friends. Very sad indeed. 4470 Members: Hear, hear.

______1277 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

7. TT promoter – Appointment of Vision Nine – Motion carried

The Minister for Economic Development to move:

That the appointment of Vision Nine as TT Promoter for a period of up to 10 years with an option for a further five years be approved. [GD No 2016/0019 is relevant to this Item.]

The Minister for Economic Development (Mr Skelly): Moving to the business of today, the TT is a huge part of our local identity and brings the Isle of Man both recognition and visitors 4475 from around the world. In recent years, the Department has greatly improved the event’s marketing, operations and safety, as well as the economic benefits and Government income. The steps our Department and its partners have taken in recent years to enhance the TT and the Festival of Motorcycling, including the Classic TT, have substantially improved the quality of the events. Over the last five years, the number of visitors attracted to the Island has increased by 4480 43% to 57,000. The economic value has increased by 63% to £28 million, and Government income has increased 63% to £5 million. We have reached the point where we need additional expertise, networks and investment if we are to improve the visitor experience, grow our coverage and reach a wider audience, and so ensure the events continue to grow sustainably. 4485 Following a tender process and subject to Tynwald approval, Vision Nine have been selected as the Department's preferred TT partner. They will work closely with the Department and many other partners who make these exciting events possible, including Government bodies, private businesses, volunteer organisations, and riders and teams. Vision Nine will also bring valuable new partners, including the world-leading sports TV 4490 distributor, IMG who will help raise the image and awareness of the events globally. Vision Nine has industry-leading skills in developing events and will bring substantial investment to fund essential innovations that will attract more visitors and generate more spending in our economy. The Festival of Motorcycling, including the Classic TT and Manx Grand Prix, has seen considerable growth, and further development by Vision Nine provides a great opportunity for 4495 increasing visitors with the continued involvement and support of the Manx Motor Cycle Club. Our Department and our partners will be working closely with Vision Nine to increase visitors to the Island via a new, global and more diverse fan base, whilst retaining our core TT audience. The experiences TT visitors have enjoyed for many years will be maintained into the future, be that walking around the paddock for free or watching from the hedgerows for free. 4500 As well as Vision Nine increasing visitor numbers through enhanced experiences, both parties will have the option to discuss the feasibility of future TT off-Island events. No such event shall be permitted without the permission of the other party and focus for Vision Nine will be on the current domestic event. Our Department has the power of veto for an off-Island event progressing if it will damage the TT or the Department. No financial commitment has been made 4505 to support such events. Vision Nine have discussed their proposals with the current race organiser, ACU Events, which is led by Gary Thompson as Clerk of the Course. ACU Events are Vision Nine’s preferred supplier if appointed. Whilst there will be development and some changes with regard to the promotional aspects of the TT, the race organisation, the delivery of the practice and race 4510 schedules and the overall safety and marshalling of the event will not be compromised and from a race organiser’s point of view it will be ‘business as usual’. This proposal is about evolution, not revolution, by enhancing the visitor experience and growing the TT races and their coverage. In turn, this will generate increased economic activity, providing benefits for both Island businesses and Treasury. ______1278 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

4515 It was recommended in the Scope of Government Report in 2006 and reaffirmed in 2012 that Government should concentrate on its core functions and seek alternative means of delivery. This proposal is consistent with that recommendation, whilst also delivering on Government’s key strategic objectives to balance the budget and grow the economy. I recommend the motion to you and request that the appointment of Vision Nine as TT 4520 Promoter for a period of up to 10 years, with an option for a further five years, be approved. Gura mie eu.

The President: Hon. Member, Mr Cretney.

4525 Mr Cretney: I beg to second and reserve my remarks.

The President: The Hon. Member, Mr Houghton.

Mr Houghton: Thank you, Madam President. 4530 I have been in quite an amount of discussion with the Minister on this matter, certainly in relation to the due diligence factor of these companies. I have given him a little bit of correspondence on it, from research, and of course he has taken it away. I did ask him before today – actually at the start of today – as to whether he really considers this company who has got issues with other companies, behind one another, where there have been a number of 4535 resignations – in the case of one of these directors, there have been well over a hundred resignations in the companies. There seems to be little doubt, from the information that I have given to the Minister, that there does appear to be a chequered history mixed up with all of this. This does not seem to be a company that has got sufficient finance in place all in one particular place. It is provided by 4540 other companies and other associates to other companies and so on. Getting through to the background of all of these is certainly not what I would call a transparent way of moving forward. So I flag that up as a very serious issue, because we are dealing here, Madam President, obviously, with the awarding of contract for ten years with the ability for a further five years. 4545 And it gives me no pleasure whatsoever to provide this information to the Minister, and I do hope that he will take it on board. And I really am sorry that, as a result, I cannot support this motion before us this evening. There are certain other questions that I would ask the Minister in relation to the information sheet that has been provided to Hon. Members and the details that were set out on the 4550 document that we got after the presentation last week. It goes on about, in the document before us, that Vision Nine will take on over £2 million of the Department’s annual costs straight away. The presentation says, for year one, the promoter will be responsible for some £4.6 million. If the Minister could explain, why has that huge discrepancy been given to us? It is on their own Department’s paperwork. 4555 What are the costs, Minister, when they are taking on the beneficial right? Where will they derive their profits? Can he give us an undertaking on that? As we all know, at the presentation of this matter, we were told of course that one of the ‘holes’ in the areas that they wish to do is to try and fill the Steam Packet boats up with people on the quieter part of the first part of TT week, so where do the funds come from? Are they going to take a great number of hotel 4560 bedrooms over and then charge that, in order to get their profits, add to the costs of those bedrooms their profits on top? Where are they going to divide the profits? That is something that has not been clearly set out in that matter. If the Department come to cease the contract with Vision Nine, but Vision has subcontracted sponsors or parties – and if I can say the likes of … because we are going to give them carte 4565 blanche, roughly, to go out and do business and sign it all up through themselves – if they have the likes of Monster Energy or Relentless contracted to them, and you wish to cease their ______1279 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

contract, how will that actually happen, when they are already contracted – they are linked through with subcontracts with some very large companies? It is another question that does bear asking. 4570 To that, Madam President, I think I have mentioned enough. I just wish that the Minister would take this matter away before he actually signs up, even if it gets the approval of this Hon. Court today, because we have been embarrassed before, we have been embarrassed with the TT World Series – that was a complete embarrassment. We were embarrassed by another organisation, Signature Sponsorship, some years ago, and I do not wish to see the Department – 4575 I support the principle in all of this – fall flat on its back because of the lack of due diligence. That is the point that I would like to impress on the Minister this evening. I thank you, Madam President.

The President: The Hon. Member of Council, Mr Turner. 4580 Mr Turner: Thank you, Madam President. I hope the Minister and his team have a good stock of pens, because I have got quite a few concerns and questions to raise about this particular item, and indeed, there are a lot of things really that are unclear, particularly when we are going to be awarding this for 10 years (A 4585 Member: Hear, hear.) which we all know will be 15 because with these extension clauses we are always told at a later date, ‘Oh, well, we have to do that’ – like we have had with other agreements. So I think Mr Houghton raises some very good points, and personally, I can see this potentially being another Signature fiasco. 4590 I would like to ask the Minister, first of all, was this tender advertised as per the normal DED tender procedures? So maybe he could explain the process there. Why were only four days allowed in between the deadline, between the submission of expressions of interest, which I understand was 23rd November 2015, and the deadline for the submission of the pre-qualification questionnaire on 27th November, compared with the 42 4595 days allowed to the same process in the earlier TT World Series tender? I think it is important that we get an answer to what was going on here because it is well- known that Vision Nine were clients of The Sports Consultancy who were advising the Department. Indeed, The Sports Consultancy were telling us what a great thing the TT World Series was going to be, yet they had not even at that stage spoken to the ACU or the FIM, the 4600 world governing body – and here they are advising the Department; and the company which is being recommended happens to be a client of The Sports Consultancy. So I think that needs clearing up and it is quite important that that is, because it appears on the surface that with the short amount of time available, nobody could possibly get sufficient information together in such amount of time, which puts other potential bidders at a huge 4605 disadvantage. Within four days only two days were allowed to ask clarification questions, receive a response and, if necessary, amend proposals. Within four days various documents also had to be obtained – for example, bank letters if relying on unaudited or management accounts. Who did the due diligence on the applicants and what qualifications did they have to do this? Should this have been given to an independent investment appraiser, for example? 4610 The last filed accounts of Vision 9 that I have here are from 2014 and they show net liabilities, so I would like from the Minister whether he is aware of these, whether any more up-to-date accounts have been provided, because according to these ones for the period ending 31st December 2014, the liabilities were £178,235. So I wonder whether the Minister could possibly clarify if that is the case and if he has had more up-to-date documentation on that. 4615 Did the Minister become aware …? When did he become aware that Vision 9 were a client of the Sports Consultancy? And have DED’s previous two major commercial contracts with UK firms met the financial performance targets set by the DED in their contracts?

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Signature, of course, was a well-known disaster. I was on the Department of Tourism at the time, along with some other colleagues – Mr Corkish and others – and that was a right pickle to 4620 get out of, and that cost us dearly. Then there is the contract with North One Television which the Department entered. In a presentation about the TT contract to the Chamber of Commerce recently, Chris Corlett said:

The TV has not made a profit since the production company contracted … the DED since 2009, North One Television was supposed to have delivered TV revenues to DED that exceeded the production costs

– that is the profit to DED –

from 2011.

That was year 3 of the contract. So could the Minister confirm if any sanctions were applied 4625 due to the failure to meet the KPI? What was promised, I understand, was the revenue from TV sales would exceed the costs paid for by DED by year 3. The budget was agreed by Tynwald for 2009-10 and it was listed in the Pink Book as ‘TT sponsorship and TV contract’. It was £815,000, of which £750,000 was TV budget. There is no evidence that North One have charged any less since 2009, so what was 4630 actually delivered? In the figures given to Tynwald by the Minister the total revenues for 2014- 15 TV and website were £609,000. TV receipts were no more than £600,000, so the shortfall … The TV outlets have remained fairly static over the last eight years, so that is a possible subsidy of around £150,000. So there was a KPI, I understand it was missed, and that subsidised coverage of over £750,000. What has been promised has not been delivered. 4635 So that is another issue about DED’s awarding of contracts. We have got Signature and we have got the television contract. Let’s get the emotional side of how good the pictures are and all of that sort of thing, the production value … This is about the financial performance: has it met the targets that were promised; and if not, why not, and what is being done about it? 4640 The level of savings that have been announced by DED on this I think were something in the region of £20-something million over (A Member: Twenty three.) 10 years – £23 million over 10 years guaranteed. So, if not, judging on the basis of the other performance of some of the contracts, what level can the contract be terminated? What is the best-case/worst-case scenario with this? 4645 Also, I understand this promoter has no experience of motorsport, event management or promotion. Is that a wise decision? And were there any others, who do have experience of motorsport event management or promotion, in the running; or was it down to the fact that there was such a short amount of time available for them to cobble together a suitable tender document? 4650 We are promised £2½ million of investment by Vision 9: what is that to be spent on? I think we need to be clear what that is going to be spent on, because there are lots of Departments which contribute to the total outlay of what the TT costs us to put on. On the surface, what I am seeing is we still keep all the real costs – maybe not putting the race on, but the DOT and the DOI are out and about, they are doing things, they are doing one-way systems, all these things 4655 costing hundreds of thousands of pounds: the overtime bill; the Department of Health and Social Care; Home Affairs, with Police and Fire; and various other costs that are associated with this. So it is important that we look at the true costs – not just DED’s costs in putting a race meeting on, but the costs of putting the TT on – because if we are farming out all the revenue opportunities, how are those costs going to be met? I think it is important we understand that. 4660 And also, there does not appear to be anything in the document which I have here, which was all to do with the key promoter roles, about how it is going to be set up in terms of the business. Are they going to run it through a Manx entity, pay VAT here? That needs clarifying as

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well. And how much commitment to that company will there be, or is it going to be one that is just going to suck everything out of the Island? 4665 How is this going to ensure there is full oversight of where the TT is going? The Minister already stated that the ACU events will be appointed and will be on board. They have been running it now for a number of years. I did find it ironic, and I have said in other debates how the Isle of Man bought the TT off the ACU when we were running it originally because we wanted to do it ourselves, and now we are somehow contracting it back to the ACU, which I find quite 4670 remarkable when they were running it in the first place and it was their event. So that, I think, we again need clarification on, because there was a fee paid to the ACU – I think it was to take the event for 20 years. What has happened to that fee? My colleague, Mr Cretney, is shaking his head, but I understood that there was a fee paid to the ACU to buy the TT for 20 years. Is that the case? And what is happening with that fee, particularly as we are now paying them again to 4675 run what is effectively their own permitted event? If we look at the presentation slides that we were provided with, in ‘Risks and Mitigation’ the data from DED gives total costs of £4.23 million. If £4.6 million of costs are taken by Vision Nine from year 1, why is it year 4 before the DED make a zero contribution? Could we have that explained, please? And, based on the draft agreement, with DED receiving 20% of additional 4680 revenues, this suggests the event revenues would have to increase by £25 million from 2015 levels to £30 million per annum, or six times the current level. I would like to know is this a realistic assumption. The presentation also shows a minimum increase in economic benefit of £17 million and £41 million at the targeted level. How does the Minister reconcile this to the press release 4685 stating that the economic benefit will double, when the existing benefit is reported as being £28 million? That again is from the presentation slides that we have all been provided with. I have already mentioned the reported £2.5 million investment, which I think we need clarifying as to what that is exactly going to go into: is it revenue, or is it going to go into infrastructure – as in infrastructure of the event, not the Hon. Member Mr Gawne’s 4690 Department. The visitor numbers is another interesting point and incredibly optimistic. Whilst the target increase in visitor numbers is obviously something we would welcome, what are the plans going forward to actually realise that and make it happen? Because at the moment we have the Steam Packet putting on the ferries and saying, ‘We cannot get any more ferries, because look at what 4695 has happened.’ They are always telling us they cannot charter ferries that are the right size for Douglas harbour, so how are we going to get all these extra people here? And, if there is such a big market, why aren’t the airlines flying them all in every year now? This is what I cannot understand. There is demand for the racing and some people say they cannot get here, so why aren’t they coming now? Maybe the Minister could explain how that is going to be achieved. 4700 And why do we need an outside body to enable that to happen when the Department has all the expertise – along with Infrastructure, who run the Airport and the sea ports – to negotiate with new operators? They are meant to be doing it all the time. The chart in the presentation, if we go to the page where you have got the graph which shows people arriving and leaving at various times – I am just trying to find the relevant page – it 4705 shows a colossal number of people … Here it is, it is on … the page is not numbered, but anyway, it is called ‘Sustained experience and visitor growth’. It shows a substantial number of people leaving within 48 hours of Senior Race Day, so how are you going to get them all home? We will need to extend the runway and fly a couple of double-decker Airbuses in here to get them all out! It just, to me, seems all very impressive, but how is it going to work in reality, and what is 4710 provided for? We have the Steam Packet User Agreement. Any travel company that is going to be able to sell more tickets if they have got capacity on their ships or aircraft, is going to do it, but as I have said, what discussions have been taking place before we are awarding a contract that is claiming it is going to do all these things? We will need some assurance about that. ______1282 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

4715 And then we have spoken about … I have already mentioned the apparent missed KPIs with North One Television and the promises they made on revenues, which has been missed, but we then talk about live TV. The key markets are currently within a multi-year TV deal within the business case. Again, I think we were told that, if successful, North One would automatically get the contract. They look after, I understand, three major markets: the UK with the ITV deal, the 4720 USA, and also Australia. I am sure if that needs correcting the Minister will clarify. But there are other territories as well, so the live TV … We can make lots of wild promises, but how do we deliver them? Finally, Madam President, I think there are a number of issues there that concern me about this, not least the apparent time and reduction in time to actually deal with this matter, and that 4725 is why I think it is important the opening questions about the DED’s normal tendering procedures, were they followed … if the Minister could explain that, and also clarify the situation with regard to the published accounts, and bring us up to date on those issues. But I am very, very loathe to support a 10-year handing over of what is our biggest revenue generator for the economy. It may well be a big expense for the Department, but the economy 4730 of the Isle of Man in many sectors … Whether you like the TT or not, many sectors rely on that period to make their business viable. They can survive through the rest of year, but the TT period is so critical. We must also not forget that when we have tried to diversify the TT into other areas of entertainment, much of the feedback comes back from people that they are here for the racing 4735 and they will go to things that are on and general entertainment, but a lot of them do say they enjoy the racing, they go to a pub, they meet people, they meet other motorcyclist enthusiasts. So all this entertainment that is going to be put on needs to be taken in context, that you put the right entertainment on for your market that is coming.

4740 The President: The Hon. Member, Mrs Beecroft.

Mrs Beecroft: Thank you, Madam President. I am virtually coming from the same place as the previous speaker: I have deep concerns about this. When you look at the facts that are publicly available to us, you find that this is a 4745 company, as Mr Turner has pointed out, that is part of a group which had losses on a turnover of £4.4 million of some £177,500 before taxation. It has not got any experience of promoting a motorsport event, and the revenues of the TT are more than all of the group's turnover put together, so I do not know how they have got the experience financially, as well. You have the fact that Vision Nine were clients of The Sports Consultancy, and that is on The 4750 Sports Consultancy’s website. It is easily verified, if you look at them. So surely there was a least a hint of a conflict of interest there, and how did the Minister overcome that? Again, it seems to be going against standard practice to have such a short deadline between the deadline for expressions of interest and the pre-qualification questionnaire. It just feels very, very uneasy about it all and I do hope that the Minister can clarify all this because it is obviously 4755 a concern to a number of us – the same issues as are freely available on the Internet. Again, about the number of visitors, there are people being refused tickets in TT week itself. They are trying to book to come back following year, and they are told there are not tickets available, they cannot buy any, they are full up. So how do they think they are actually going to get more visitors here, and if they get more here to those numbers, where are they going to 4760 stay? I do not think that has been addressed either. Again for the period of 10 years with a further five years as an option, I am wondering why it is such a length of time, given that they have not had the experience. Again, to protect public funds, what are the get-out clauses? What are the key performance indicators that they are going to be measured against and can this contract be taken off them if they are not fulfilling 4765 that?

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I really do have most serious concerns about the way this has been handled, and the basic principles of it, Madam President. I certainly hope that the Minister will be able to come back and answer all those sufficiently. I look forward to his response.

4770 The President: The Hon. Member, Mr Harmer.

Mr Harmer: Thank you, Madam President. Just to say, I will be supporting the motion, but I do have some concerns though. I do echo the comments from Council regarding the tender process. I would like some reassurance on 4775 that. I would like reassurance on the cost and the KPIs. I think that is very important. I think this is incredibly ambitious, and that is the bit that worries me. If you take our Facebook page for the Isle of Man at the moment, for the TT, we have got 184,000. The demographic is between 25,000 and 34,000. The other site that they have only has 89,000, so where I am really coming from, what I am trying to say, is that we need to do some due diligence 4780 on their capability to do e-marketing, because I think that is the fundamental issue here. Can they join up all the different services, the hotels, the racing and all those other factors? The key element of this is that it is not about the existing people that come on Senior Race Day, etc. What we are trying to do is fill up all of the other times. (Mr Cretney: Hear, hear.) That is where we are trying to get the additional people – which I think is fantastic, it is great; I just 4785 have to say I have a slight concern. I do think there is an exercise to do on, really, can they deliver that e-business, because it is very special and technical area and can they join up all the dots? But in principle, I just see this as incredibly ambitious, and provided there are – which I am sure there will be – reassurances on those other questions, I am willing to support this. But I do 4790 think there are some concerns there. Thank you, Madam President.

The President: Hon. Member, Mr Peake.

4795 Mr Peake: Thank you, Madam President. As we are all familiar with the TT – it is the Island’s biggest brand, it is the most famous thing we have probably got – I do hope that the Minister is going into this with his eyes wide open. I think they are very exciting proposals. This events and marketing company is probably what it needs, to actually see the opportunities that are not quite as apparent to us and people 4800 before. It is an exciting time and their proposals, yes, do look very good and very exciting. It is important that we retain, I believe, the Manx Grand Prix. I believe that the DED is still going to work with the Manx Motorcycle Club around that, because that is an important feeder to the TT for riders to gain experience. It is a great opportunity and I think we have to go with it, but I just hope that the Minister 4805 does do the due diligence. There are some things raised here today which I hope he is going to look into. I will be supporting it, and I do wish him all the best with it.

The President: The Hon. Member, Mr Karran.

4810 Mr Karran: Eaghtyrane, I know that taking the way that I do things and the way that other people do things can have an effect as far as your career is concerned. We should not be asking whether they are going to do the due diligence – it should be done!

A Member: It is done. 4815 Mr Karran: It should be done, there should be no question about this!

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I have a lot of time for the Hon. Minister, but the fact is that as I say, we have been told by one successful Minister to know where to go and where not to go in 20 years of being here – or 30 years. And then we have another Minister who says, ‘Don’t worry about the detail!’ Haven’t 4820 the people of the Isle of Man suffered enough as far as that is concerned? We really should know what the detail is. And if there are concerns as far as the Member of Council about the issues of the corporate structure, we need to know – before we vote! That is what worries me. My thing is, Eaghtyrane, I am a big supporter of the TT. I recognise that many businesses pay 4825 their yearly rent on the TT fortnight, and anything that can improve that, especially in the difficult times of more and more charges from Government, is important that we do. But I just think, Hon. Members, you might go up the escalator lift to be – as far as the executive Government is concerned – a good solid, regular vote, and yet they say in their speech they are worried about due diligence, they are worried about a number of things. Well, you should really 4830 satisfy yourself that you have not got those worries. Otherwise you should not be voting for it. That is what a proper parliamentary procedure would do. What I am concerned about as far as this is concerned, is to me, my concern is that it is almost an open chequebook. I wonder if the Minister –whilst people say, ‘Oh well, it is vested interests’ – but we have to accept that I would like the observations of the copy letter that has 4835 been sent by Duke Marketing. Love them or hate them – just like I would not go to the end of the street to look at the TT – the fact is that they generate a lot of business and a lot of work here, and they do deserve a detailed response as far at the Duke Marketing letter is concerned, and I think we should know what that response is. But my concern is, we are opening up for another 10-year contract with a five-year. What will 4840 happen? It will be sold on as a commodity – just like Montagu Ltd sold it on to whoever it was – I have forgotten the name now, as far as the Steam Packet. A piece of paper that the Hon. Members voted for. If you have got concerns about the due diligence then you should not be voting for this. You should be having things copper-bottomed. Hon. Members, you new Members are going to be in a totally different environment than 4845 what we have had for the last 25 years, with low expectations by the general public as far as service is concerned, and more money than we could handle. You are going to have members of the public, Eaghtyrane, who will have high expectations and there will be no money. You should not be giving away a 10-year contract unless you are satisfied. I think Hon. Members need to think about the issue that is a simple principle: if there is a 4850 pound in your pocket and how you spend it, should not be any different than a pound in the executive pocket and how they spend. Now, if you are not satisfied with the thing, you should not be silent for a 10-year contract with a five-year option on it. What worries me in Government is not my ministerial colleagues. They are not the problem with these contracts. It is the backroom boys that worry me about 4855 these contracts. It is up to us to actually make sure that the Ministers of state for this nation are fully aware of these things – not have the situation, Eaghtyrane, as we see so often as I have seen for 30 years, where they say, ‘Well, you voted for it!’ And then we have the ridiculous situation: we see these new Members come in – ‘business sense’. You tell me how you, if you were a director of a company, say, ‘Oh, I’ve got problems with due diligence and I have got 4860 problems with this’ – and then you go and vote for it! It is La-La Land! Now, either let’s do it right, or let’s own up that we are part of a party caucus, as far as this Court is concerned: that your vote is there, you know how much you are going to get if you are part of executive Government. Now the point is, Hon. Members, I think you need to reflect on this. I do not know whether 4865 the Hon. Member of Council has some interest in this issue. I have no idea, but what I do have is the Hon. Member of Council has put forward concerns that I am concerned about. Those concerns should be fully verified before you go and sign a 10-year contract.

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I hope Hon. Members will wait to the reply from the Minister. If they do not get their concerns as far as their due diligence is concerned, they should not be voting for this. 4870 I am sick in this Court of hearing about these so-called independents! Be independents. Do it how it would be done if you were sitting around a board table of a company, rather than doing it like it is here. Hon. Members, my concern is: a 10-year thing, that is effectively three Houses away before anyone can do anything about this company. Three Houses away! That is what people should 4875 remember. What right have we got, if we have some concerns about due diligence, to then say ‘we will sign this away ‘ and then what will we do? We will send it to a rubber-stamp Public Accounts Committee or we will have a rubberstamp whatever. People of the Isle of Man deserve better, and the taxpayer deserves better. Let's listen to what the Minister has to say, and if you have 4880 not got confidence, then do not vote for it, even though it is much cosier to do that.

The President: The Hon. Member, Mr Cretney.

Mr Cretney: Yes, thank you. 4885 Can I just say, as far as I am concerned, the TT has always evolved. We had the 1907 St John’s; 1911, the Mountain Course; 1970s, the loss of the World Championship status; the mid- 2000s, a major review of safety and economic contribution think-tank was appointed. It has always evolved. There have always been changes, and I believe that this is the next step along that way. 4890 In 2006, a younger team were appointed in terms of taking the TT forward. They have much more relevant riders. They have engaged really well with the teams in terms of bringing success to the Isle of Man, and I think, despite the fact that everybody, when I left Tourism in 2006, said the TT is going to finish after the Centenary event, it has continued to go from strength to strength and bring more money to the Island. In 2011, obviously the Centenary of the Mountain 4895 Course and, as has been described by others, more revenue, more numbers, more success have come since then. One of the questions that has been raised this afternoon is what happened about the ACU in buying back in a 20-year arrangement? What happened in my time was that the event which had been operated by the ACU was also criticised – for donkey’s years it was criticised – ‘the Isle 4900 of Man can run this, why do we need to have the ACU in?’ So subject to my negotiation with the then Chairman of the Auto-Cycle Union, we got it. We got it so that it was operated on the Isle of Man by the Isle of Man. But sadly, it failed. There were internal politics, a number of local issues, and it failed. The ACU Events took over running the event again, which they have done in my opinion very successfully since, and will continue to do so in the future. 4905 One of the things that people say to me is what experience have Vision Nine of running motorsport events? Well, none. They are events specialists, but the ACU Events will continue to run the races together with the marshals, together with all the other integral parties who are so important to the success of the event. Vision Nine have met with the various organisations on an ongoing basis since they became the successful tenderer. 4910 They have a history of event delivery and other events elsewhere which have been very successful. They have engaged with a number of key partners on the Island and elsewhere, and one of the events which they run – which some people say ‘What relevance has that got at all?’ – is Boardmasters, which is a surfboard event. What happened with that was, at the time that they took that event over, there was a lot of concern amongst local community and local 4915 councils, etc, ‘Oh, this is going to cause us problems’. Nothing could be further from the truth. That event has grown from strength to strength as well – as I believe will happen here. They have grown events elsewhere. What we have here is an event which is the best in the world but, in order to ensure its future success, requires significant ongoing investment. What we are told by the transport ______1286 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

4920 providers – again in answer to some of the questions asked already – is that for example on the Steam Packet, only 10% of their sailings are sold out. So despite what was said, there is spare capacity at the moment during TT, other than the first weekend between Practice and Race Week. What has been said by the Steam Packet is that if the market demands it and I would expect this to be the case, either the Steam Packet or the air operators will put on additional 4925 capacity. That is the business they are in. That is what they will do. The Steam Packet have said that that is what they will do. We now have, for example, easyJet, with really good prices coming to the Isle of Man and going from the Island. They obviously will step up to the plate –as will others. Even this TT, we see adverts about Citywing putting on additional flights. I know they are only small aeroplanes, 4930 but others will, in my opinion, step up to the plate if we make progress here. What is going to happen is exactly as Mr Harmer, the Hon. Member for Peel, described: a proper joined-up e-marketing campaign throughout the year. They certainly have great expertise in that respect. Myself and one of the officers of the Department, when we were in London for another event recently, visited the offices of Vision Nine. We were able to meet each 4935 of the various directors of the organisation, who were able to go through in depth the other events that they are involved in which have seen success and progress. They describe exactly as Mr Harmer has spoken about. That is exactly how they would do it throughout the year, marketing the events. So I think what we are talking about here is the encouragement of a new audience to join us on the Island – a more family-based audience because we need to build upon 4940 the core audience. I am probably the core audience: somebody who is getting a bit older; somebody who has been committed to the races all my life, but we need to make sure, in order to ensure the future success, that we bring in new people. And in order to bring new people in – families, etc. – we need to have a new, attractive offering for them to come here. There are real plans over the next few years to achieve that. 4945 We are not giving away anything. If I felt for a moment that this was not going to be a successful event, I would not be standing up here. I am standing up here because I believe, when you look … We do not have an endless supply of money. When cuts are having to be made in some essential services, Treasury have made it clear that there is no more money for the TT. If we are going to take the TT forward, we need to get private money in, and the private money 4950 which is coming in, I believe, is something we should all be welcoming in here. We have had all these conversations about ‘Government doesn't have to do everything’ and that ‘we can work with other partners’. That is exactly what this is. The other thing I have seen is that ‘this event is going to be privatised’. It is not being privatised at all. We are getting involved with a new partner, just as we have ACU Events, just as 4955 we have the marshals and a number of others who are partners who work with the Government to deliver the event. That is exactly what will happen here, and their expertise is about events – all the different things and activities that will be put on, not only for them to come to visit us but also, I believe, it is something that will be really welcomed by younger people on the Isle of Man, because it will really add to the atmosphere. 4960 This plan will, in my opinion, ensure the future security of the TT by bringing in new revenues, a new audience and new events to the Island. I understand the concerns, which I am sure the Minister will address, which have been raised by Members around the financials. My principal concern is to ensure, as a lifelong fan of this event, that it is going to be there into the future. Clearly, we have upset and will upset some interests who have benefited financially in the past 4965 and who may not be in that position in the future, but sometimes you have to make difficult decisions. I believe that this constitutes the best opportunity for future success of this event: a number of partners working together to deliver the best road races in the world, and I hope that Hon. Members will take that view when they come to the vote. The only other thing I would say, in case somebody raises it in here: we always hear about 4970 the unsuccessful arrangements that happened after I left Tourism, with Signature. But what we did need to do there and what we had not done for a long time, was to try and maximise the ______1287 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

return to the economy. Crude though those were, and rushed though those decisions may have been, it certainly led to the future success that we have seen since then, in terms of maximising the return of the event to the Isle of Man, which is clear for all to see now. 4975 My final point: it has been said twice in here, a kind of a throw-away remark and I should not bite, really, but anybody who knows me knows that I am a sensitive old soul! Yes, I was a Minister for a long time, but even last night I was talking to people at 11 o’clock on the phone, so I have always tried to help people, and despite the fact that my career and Mr Karran's career took different paths, I think I have tried to do my best for the Island along the way as well as he 4980 has.

Several Members: Hear, hear.

The President: The Hon. Member, Mr Coleman. 4985 Mr Coleman: Thank you, Madam President,. I just have one question for the Minister – and it is not a trick question. Which of the corporate entities within the Vision Nine entertainment group will the contract be signed with? That is all. Thank you, Madam President. 4990 The President: The Minister to reply.

The Minister: Gura mie eu, Eaghtyrane. Thank you, everyone, for your contributions. There is absolutely no doubt at all, we all 4995 recognise the importance of TT. We understand the importance of the TT for our economy, and I think it is in-built within our DNA – if you were born here or whether you live here, you appreciate what the TT is to the Isle of Man. So very clearly, we have not made a decision very lightly to put this recommendation before you. I am sure you will all recognise – Mr Houghton highlighted it – the journey that we have 5000 been on to actually arrive at this recommendation. I say ‘that journey’, because we have been through a procurement already, with regard to the TT Series. We made a very difficult decision to say no at that particular juncture, and the reason we said no at that juncture is because we as a Department – and I will say this with the Members, the level of scrutiny has been very strong indeed – we believe there is growth in the existing TT events here already. 5005 We have seen the birth of the Classic TT and also the Festival of Motorcycling. The opportunities that that created in terms of growth in this event, in terms of local spend and benefit to the Isle of Man in terms of exposure. So this has been a journey. One of the big issues surrounding this is actually the procurement. I do need to let you know, first and foremost, we have engaged with the procurement exactly as mandated, with Treasury 5010 on board. We issued a press release – I do not know the exact date – in October, announcing what our intentions were after we did not go forward with the TT Series, which had a deadline of 25th November. Of course then it did go from expressions of interest to the pre-qualification questionnaire. There were only a few days in between that. However, once the expressions of interest were in, the pre-qualification questionnaire became secondary, and then actually, the 5015 unsuccessful candidates were communicated on 8th December, which meant that the documentation and data were released to the successful candidates on 9th December. We then had a deadline to submit the letter of financial backing, which is important for due diligence and additional financial standing information on 15th January. Then we had the contract finalisation. The bids were presented on 8th February and a bespoke promoter 5020 agreement was issued and signed by bidders on 25th February. So it is a relatively tight schedule, I would admit. The reason for that was simply to actually bring this forward to you in good time, if we were to make a decision in time for TT 2017,

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because we do need somebody in situ this year to observe and understand more of the culture, and we have been through that, obviously, already. 5025 There has been some commentary around local interest in this. I can absolutely, categorically state that we have engaged as much as we can with the local interest to ensure that they had been aware. They had the opportunity to obviously follow through with a procurement. One company, as has been mentioned, chose not to do that and that was unfortunate but that was their choice. But we have very clearly followed standard procurement process. 5030 Going back first of all to Mr Coleman: the company that has been recommended to be awarded is called Vision Nine Motorsport Ltd. A lot has been stated around the company structures and the beneficial ownership, and very clearly, this organisation is an event management company, managing a host of different events. They do set up a number of special purpose vehicles – some of you will be aware of what those are. Therefore they would have 5035 multiple directorships that would be closed down as and when those events do move on. So we are aware of the structure. We have also conducted what we would regard as satisfactory due diligence. What I can confirm to you is we are satisfied. We have got verified cash in the bank. We have actually had a verified, confirmed funding source, and we have had sight of accounts. So I can assure you that we are happy with that. 5040 The Sports Consultancy: there has been great play with regard to their involvement here. They have actually been on this journey right from 2010, if I remember correctly, on the documentation with the feasibility study regarding the TT Series. I know I have got a Question next week regarding that. I would be very happy to publish that redacted version of the TT Series, which was the start of the whole journey. 5045 The Sports Consultancy are very clearly highly specialised in this particular field. There was a statement made by Mr Turner, asking about the relationship with Vision Nine – did I know they were a client? Yes, we were made aware of it. I cannot tell you the exact date when we were made aware of it, but I can also tell you, we were also made aware that other bidders were clients of The Sports Consultancy. So it is not just Vision Nine who were clients of The Sports 5050 Consultancy. There has been great play, I think, very similar to the Post Office issue around governance safeguards, KPIs and veto rights – a sell-on clause. What I can tell you absolutely 100%, we have learnt from lessons. I am delighted to have Mr Cretney with us through this journey, because he has ‘been there and done that’ – not just from what he is as a TT fan and a rider, and his 5055 passionate experience, but he has also been through the political process, and he understands that we need to have the appropriate governance and safeguards. I can assure you, the political Members in DED have had strong probity on this to ensure that we do have that level of governance. That is the first thing we need to highlight: Many of you will remember the TT Series: we had a steering committee, and that still stands. 5060 We will actually sit on that steering committee. We have exclusive veto rights on that steering committee and that is about material changes that we will have that veto right. We have also got KPIs. There has been strong media coverage about the ‘ambitious plans’. Of course they are ambitious, because that is what we want. Do we not want ambitious growth for the TT and the 5065 local economy? God knows, we absolutely need it, given the state of our fiscal situation! So why would we not want to aspire to that? However, even at the very lowest level, we believe that these are very achievable. So we put KPIs in place and a number of those KPIs – I know various Members were asking about those – and what they actually mean. There are KPIs around the number of spectators. There are KPIs 5070 around the economic impact, which we will be measuring. There will be KPIs around the media audience, KPIs around the rider participation and KPIs around the classic TT. Failure by this organisation not to meet those two in a row, we can terminate this contract, and what does that mean? It goes back into Government. We will be back in the commercial business of running an event. ______1289 T133 TYNWALD COURT, TUESDAY, 19th APRIL 2016

5075 Mr Houghton asked the question with regard to is it £2.3 million or £2.2 million or £4.4 million that Vision Nine will be assuming? £4.5 million is the gross cost to Government, but we already generate £2.2 million income, which means that it is a net cost of £2.3 million to the Department. Mr Turner I think highlighted a very good point about the additional cost to Government, 5080 should this event grow. I can assure you, the Ministers have certainly made it very clear to me and to Treasury that should this event grow, it will require extra cost, extra infrastructure to support that. But if we just achieve the £2.3 million saving per year, that will be more money that we can utilise for Infrastructure, for Home Affairs, for Health, to actually support that infrastructure that is absolutely necessary. 5085 There was also a question I think Mr Houghton raised regarding where they see their revenue stream coming from. It is worth pointing out that Vision Nine have been around the TT since, I believe, 2002 because they brought the Relentless sponsorship to the Isle of Man. So they are very familiar with major sponsorship, and that is one of the key areas where they see revenue growth is in sponsorship. The other one, of course, is broadcast. Obviously we have seen the 5090 benefit of high-quality broadcast, but when they talk about broadcast, they talk about live streaming, and there is a way, I can assure you, that that can be done on a delayed measure so that it does not actually impact anything that might be unpleasant to see on a live stream. But here is the real catch here. They are talking about broadcast not just for the core events, but actually to be appealing to more of a wider audience. Therefore mainstream sports fans – not 5095 just TT fans, bike fans – mainstream sports events, people who might be attracted to the TT for a buck-list visit. (Mr Cretney: Hear, hear.) What about families? What about expanding the corporate hospitality – we are only just starting to see the real benefits of that, and I know several of you have been there and seen that over the last few years, the growth and the opportunity for that area. 5100 And absolutely 100%, I must make it clear that the event will still be attractive to the core audience. (Mr Cretney: Hear, hear.) It must be. It must be available for those fans to sit on the hedges, on the walls, in the gardens for free, and also have the paddock experience for free. Will there be other opportunities for other revenue prospects? Yes, there will be and it will be centred around entertainment. They are talking about spreading the capacity. They talk 5105 about Peel Day; the Ramsey Sprint; we have one in Port Erin. How can we make more of that and make it appealing to a wider audience? And this is the whole issue around capacity. In the research it was identified that the Steam Packet actually over the TT Festival have 10% of their sailings actually full. That tells you there is plenty of capacity on the Steam Packet. The airlines certainly want to participate. There is 5110 opportunity to do fly-and-drive, with your bike, where you can ship them here – lots of opportunities to actually increase and target. And that comes down to a key element – Mr Harmer picked up on it, and again Mr Cretney: the marketing. It is such an unvalued discipline is marketing, and this is one of the real skills of this particular organisation. 5115 Mr Cretney highlighted an event that this organisation took on in Cornwall, and a lot of similarities with the Isle of Man in terms of access, capacity, running at a loss by the local authority. They have managed to actually turn that event around, and it is still a free event for those hard-core surf fans. They can still go and sit on a beach and watch this event, the same as the TT, so there are a lot of similarities with that. They have shown that they do actually have a 5120 track record of actually delivering. The other point there is what do they know about motorsport? Well, that is one of the key elements, I think with regard to the ACU event. That will be business as usual, and that is very important that we do retain that particular aspect of it. It is very, very vital. So, hopefully, I have covered most of those points there that were highlighted. Mrs Beecroft, 5125 I think, highlighted the length of the contract. That quite frankly needs to be that level, because

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we are talking about a significant investment in the event. Therefore, there has to be a return on that investment over time. The reality is should it be successful? Will Vision Nine benefit? Yes, they will. Will the Government benefit? Yes, it will. Will the local economy benefit? That is the real winner, here. 5130 They will as well at the same time. That is the other point about Vision Nine in terms of their engagement. I have to say we have had such an exhaustive round of stakeholder meetings, from the marshals to the Manx Motorcycle Club, to various different organisations, to actually the Chamber of Commerce etc., to portray what this Vision really is. This is all about evolution, not revolution, and we are trying 5135 to grow this event in a very sustainable manner. So with that, Eaghtyrane, I do beg to move.

The President: The motion before the Court is set out at Item 7 on your Order Paper. Those in favour, please say aye; against, no. The ayes have it.

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 20, Noes 2

FOR AGAINST Mr Bell Mrs Beecroft Mr Boot Mr Karran Mr Cannan Mr Cregeen Mr Gawne Mr Harmer Mr Joughin Mr Malarkey Mr Peake Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Singer Mr Skelly Mr Teare The Speaker Mr Thomas Mr Watterson

The Speaker: Madam President, in the Keys, 20 votes for, 2 against.

In the Council – Ayes 7, Noes 1

FOR AGAINST Mr Anderson Mr Turner Mr Coleman Mr Corkish Mr Cretney Mr Crookall Mr Henderson Mr Wild

5140 The President: In the Council, 7 votes for and 1 against. The motion therefore carries. The Court will now adjourn, and the adjournment will be until –

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Suspension of Standing Order 1.2(2) to continue until 9 p.m. – Motion lost

The President: The Hon. Member … 5145 Mr Cregeen: Madam President, I beg to move that we sit until 9 p.m.

Several Members: No!

5150 The President: We have a proposal. Is there a seconder?

Mr Quirk: I second, Madam President.

Mr Corkish: Pointless. 5155 The President: I will put it straight to the vote, Hon. Members.

Mr Thomas: A combined vote.

5160 The President: This is a combined vote – it needs 22 votes on this one, Hon. Members.

Electronic voting resulted as follows:

In Tynwald – Ayes 11, Noes 19

FOR AGAINST Mrs Beecroft Mr Anderson Mr Cregeen Mr Bell Mr Cretney Mr Boot Mr Karran Mr Cannan Mr Malarkey Mr Coleman Mr Quirk Mr Corkish Mr Ronan Mr Crookall Mr Skelly Mr Gawne Mr Teare Mr Harmer Mr Turner Mr Henderson Mr Watterson Mr Joughin Mr Peake Mr Quayle Mr Robertshaw Mr Shimmin Mr Singer The Speaker Mr Thomas Mr Wild

The President: With 11 for, 19 against, Hon. Members, the Court will adjourn until 10.30 tomorrow morning. Thank you.

The Court adjourned at 8.04 p.m.

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