Mackay: SNP ‘open-minded’ on housing debt solution

SNP local government minister Derek Mackay has echoed SIC political leader Gary Robinson’s criticism of the UK government’s inaction over the council’s historic £40 million housing debt.

Mr Mackay was presented with evidence of the community’s strength of feeling by <i>The Shetland Times</i> and Shetland Tenants’ Forum worker Joann Johnson on a visit to the isles on Wednesday afternoon.

This newspaper’s petition, calling on Westminster and Holyrood to address the debt, has been signed by more than 2,250 people – equivalent to a tenth of the Shetland population.

Joann Johnson of the tenants' forum  provides SNP minister Derek Mackay with evidence that islanders want action on housing debt, as Shetland Times reporter Neil Riddell looks on. Photo: Stephen Gordon
Joann Johnson of the tenants’ forum  provides SNP minister Derek Mackay with evidence that islanders want action on housing debt, as Shetland Times reporter Neil Riddell looks on. Photo: Stephen Gordon

Ms Johnson explained the issue, in a frank, forthright but cordial manner, to Mr Mackay. The debt, she reminded him, was incurred building houses to assist the UK state’s desire to get North Sea oil and gas up and running.

Past ministers from both sides of the border have acknowledged the state’s moral responsibility to pay off the debt.

After meeting Mr Robinson in Lerwick to discuss the matter, Mr Mackay said the SNP remained “open-minded” about the potential for a “package” whereby the debt is paid off by a combination of Lerwick, Edinburgh and London.

It is understood Mr Robinson put before him a proposal that would see each of the three stump up £10 million. The remaining debt would be “externalised” to ensure a more favourable deal with the banks for repayments on the much smaller sum left over.

Mr Mackay said he would be writing to chief secretary to the UK Treasury Danny Alexander to find out why the promised three-way talks aimed at finding a solution have not materialised.

He said: “Westminster absolutely has to be called to account for the commitments they have made at meetings the council has been at – and much longer ago.”

Ms Johnson provided figures from a survey of tenants showing nearly 60 per cent shared Mr Robinson’s view that it is primarily Westminster’s responsibility to deal with the debt.

Last year the SNP announced it was abolishing a housing support grant paid to help the SIC service the debt.

First Minister Alex Salmond said he “thought we had come to a settlement on the issue earlier this year when an ex gratia payment was made” by his government.

But that agreement only covers the current financial year, and the council has warned tenants’ rent may have to rise by 10 per cent or more in 2014 if the problem remains outstanding.

Figures within the Westminster coalition contend that a sum is still paid to Holyrood for the purpose of servicing the debt each year. They say the SNP is simply choosing not to hand that money on to Shetland.

On that point, Mr Mackay said local government finance was “incredibly complex, but the only way we’ll have full access to all the historic debts [and] economic powers is as an independent country with access to all our resources”.

One senior SIC source said it was clear that one of the two governments was being “at the very least a little bit elusive”. That is why getting all three parties round the table is viewed as crucial.

Mr Mackay said: “We will continue to talk to the council about any proposition that they might present around the options for Shetland and for council tenants.

“We’d be very receptive to a… tripartite meeting. Indeed I will write to the UK government to encourage their participation in that – especially acknowledging the debt was a historic issue. Most of the debt was created and accrued before even the Scottish Parliament came into being, and I think the UK government has to recognise that.”

But Mr Mackay repeated housing minister Margaret Burgess’s suggestion that the existence of the SIC’s oil reserves meant the council “has within its gift to resolve some” of the debt.

Gary Robinson: SNP response "quite positive"
Gary Robinson: this week’s talks with SNP “quite positive”.

Mr Robinson said he was pleased the SNP government was “showing willingness” to discuss the situation.

“The difficulty has been getting Westminster to also come to the table,” he said. “Derek is going to support us in trying to get [them] back around the table, as was Danny Alexander’s original proposal.”

This newspaper has, on numerous occasions in the past two months, tried without success to set up an interview with Mr Alexander to discuss the Tory-Lib Dem coalition’s position on the housing debt.


Add Your Comment
  • John Tulloch

    • July 25th, 2013 8:04

    £10m from SIC is more than either of the governments deserve however at least the SNP is showing signs of movement on this issue which, after all, they precipitated by stopping the housing support grant.

    The ball is now in Westminster’s court as ultimately, they caused the debt to be incurred and no further oil housing should be built by SIC until this is satisfactorily resolved and we have visibility of where the money for the new housing will come from.

    Congratulations to Neil Riddell and ST on their campaign so far.

    Many more signatures to come I trust!

  • Derick Tulloch

    • July 25th, 2013 19:05

    Fully support this campaign and would point people towards the inevitable end of year capital underspend. Last year this was £179m – which is peanuts in the context of the overall Scottish budget, but not such a small sum in the context of the housing debt.

    Yes, Westminster and the former Scottish Office (an arm of Westminster) has reneged on previous vague promises. In my view the Scottish Government should step into the breach. Not least in the context of 2014, but also because it would be the right thing to do.


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