Sefton Council – So was it avoiding tax or not when buying Bootle Strand Shopping Centre?

Following the revelations in The Times newspaper of Wednesday this week a rather odd situation seems to be developing as Bootle Labour Party run around trying to deal with the fallout.

The Times article says:-

An email seen by The Times from the Labour leader of Sefton council confirmed that the structure of its purchase of the Bootle shopping centre helped to avoid tax. It said: “It is true that one of the important considerations for purchasing the company rather than the asset is that the council would not have to pay stamp duty land tax. This is a widely accepted tax-efficient way of completing the purchase.”

Yet since that article appeared a spokesman for Sefton Council has said this to the Liverpool Echo:-

A spokesman for Sefton council said: “In no way has there been any avoidance of tax relating to the purchase of the Strand Shopping Centre.

So which is it? Was Stamp Duty tax avoided or not avoided?

And another thing, when the matter was covered by BBC North West Tonight on Wednesday evening it was claimed by the BBC that the purchase of Bootle Strand Shopping Centre had all party support [on Sefton Council] or words to that effect. But that is not the case, the purchase was agreed by the Labour Party only Cabinet of Labour controlled Sefton Council. Why did the BBC say otherwise?

The bottom line here seems to be that a secretive process to purchase the shopping centre has taken place and dragging any detailed information out of the Council has required a Freedom of Information request. What little information was made available to opposition parties on Sefton Council clearly did not address the full picture, indeed opposition Lib Dem members of the Council were thrown out of a cabinet meeting, which they were observing, when the matter was under discussion by the Labour only Cabinet.

If there was nothing to hide why has it taken The Times newspaper and Cllr. John Pugh’s efforts to drag this out into the open?

Lydiate – Southport Road trenches finally filled in

A couple of days ago contractors working for Sefton Council turned up and the ‘dropped’ trenches across Southport Road adjacent Astor Court were finally filled in.

The trenches had been caused quite some time ago and probably at differing times as utility contractors had dug up the road surface. Trouble has been that the filled in trenches had dropped down and the noise and vibrations caused by vehicles hitting them was disturbing Southport Road residents.

My previous posting from August 2017 refers as Cllr. Edie Pope had been chasing this matter up:-

tonyrobertson.mycouncillor.org.uk/2017/08/28/lydiate-the-condition-of-southport-road-surface/

Sefton Council hits the headlines for all the wrong reasons!

From The Times edition of 8th November

Labour-run councils in £12m tax avoidance

Labour councils are using offshore companies to avoid paying millions of pounds in tax, The Times can reveal.

Jeremy Corbyn was accused of hypocrisy yesterday after an investigation found that two authorities controlled by his party avoided paying more than £12 million in stamp duty on the purchase of commercial properties.

On Monday Mr Corbyn hinted that the Queen should apologise if the offshore investment of £10 million of her personal wealth — as revealed in the leaked Paradise Papers — was designed to avoid tax. Yet in May Sefton council in Merseyside bought the New Strand shopping centre in Bootle via a Luxembourg-registered company for £32.5 million, saving £1.6 million in stamp duty. The council also bought insurance against the possibility that the taxman might chase it for payment.

In July Warrington council agreed to pay more than £200 million for Birchwood Park, a business centre in Cheshire, via an offshore company, saving almost £10.5 million in stamp duty. By agreeing to the purchases, the councils may also have helped the sellers to avoid capital gains tax.

In June John McDonnell, the shadow chancellor, said that corporations were “morally obscene” for ducking out of obligations that “the rest of us fulfil”. Such action “corrodes the functioning of democracy”, he added.

An email seen by The Times from the Labour leader of Sefton council confirmed that the structure of its purchase of the Bootle shopping centre helped to avoid tax. It said: “It is true that one of the important considerations for purchasing the company rather than the asset is that the council would not have to pay stamp duty land tax. This is a widely accepted tax-efficient way of completing the purchase.”

In 2013 George Osborne introduced a levy to stop residential property being held in offshore companies, describing the practice as an abuse of the tax system. It was not extended to commercial property, however, leaving owners of business parks and shopping centres free to hold these assets in companies registered in low-tax jurisdictions, a structure that facilitates the avoidance of corporation and capital gains tax and stamp duty.

Sir Vince Cable, leader of the Liberal Democrats, said yesterday: “The Labour leadership has spoken loudly about stamping out tax avoidance yet Labour-run local authorities have avoided stamp duty through complicated tax structures when speculating in commercial property. The . . . stance appears somewhat hypocritical until they have their own house in order.”

Sefton council, which borrowed money from the Treasury to fund the purchase, declined last night to reveal how much it had paid its tax advisers on the transaction. One of the advisers is understood to be PWC, the accountancy firm that Labour has previously accused of “complicity in tax avoidance”.

There is no suggestion that the structure is illegal and yesterday the council insisted that it had not intended to avoid stamp duty. A spokesman said that the vendor was willing to sell only the holding company that owned the shopping centre rather than the shopping centre itself, giving it no choice but to avoid the tax. He added that it had unwound the offshore structure.

John Pugh, the former Lib Dem MP for Southport who is now a councillor at Sefton, said: “No one has to speculatively buy a shopping centre or take advantage of a tax loophole in doing so. For a Labour council to do so in considerable secrecy looks utterly hypocritical.”

In a letter to Warrington council Helen Jones, Labour MP for Warrington North, said that using an offshore structure was “morally questionable [and] contrary to Labour policy”. She wrote that Labour councillors believe the cash is “better in the borough’s pocket than the government’s” but no one should decide not to pay tax because they disliked the party in power.

Sefton council said: “We paid all the tax due and will continue to do so. The council bought the company that owned the asset as this was the corporate structure that was marketed for sale. We acquired the shopping centre primarily to deliver a new revenue stream to help pay for vital services that have been reduced as a result of government cuts. The purchase also supports regeneration in Bootle.”

Warrington council, which still holds Birchwood Park in an offshore company, said: “The only tax not being paid . . . is a one-off payment of stamp duty land tax. This position was discussed in detail and followed extensive due diligence and external advice to the council. To complete the acquisition in a timely manner the council agreed to leave the business offshore as trying to complete the deal and bring it onshore would have delayed the purchase.”

Labour said: “We’re committed to changing the current tax environment and to tackling tax avoidance.”

Southport – John Pugh takes 55% of votes cast to win Dukes ward by-election

Lib Dem (John Pugh) 1680 55.96%
Conservative 790 26.32%
Labour 417 13.89%
UKIP 69 2.30%
Green 45 1.50%

Lib Dem gain from Conservative

Wow this was some result indeed last night, especially because of the collapse of the Conservative vote and Labour’s really poor showing.

This old political warhorse went to assist John and what was really noticeable was the number of young people involved in the campaign to get John elected. So often middle aged and old folk are involved in politics so it was great to see a new generation of Lib Dem campaigners pounding the streets.

As for John, I have known him for many years as a Sefton Councillor (for of course he has previously been one in the time before he became an MP), as a really effective MP for Southport, and now back on the council again.

My guess is that Labour-run Sefton Council will have wanted John back like a hole in the head. He’s already exposed Labour to some publicity they would rather not have had with regard to the them buying Bootle Strand Shopping Centre and there’s probably more to come on that front before he gets his teeth into other things Sefton’s Labour leaders would rather he did not.

Well done John, happy to have done my small bit to help you get back on Sefton Council.

John and his supporters celebrate after the count

Switch Island & A59 – Have you seen the mess that litter chucked out of vehicle windows causes?

Litter chucked from vehicles can now be seen beside many main roads at at junctions*.

www.bbc.co.uk/news/uk-politics-41748005

The BBC has the story on its web site – see link above

I also blogged about this subject back in 2014 and here’s a link back to that posting:-

tonyrobertson.mycouncillor.org.uk/2014/11/28/switch-island-a59-come-to-mind-drivers-who-litter-targeted/

It seems to be becoming almost a fashionable thing to do, an ‘acceptable’ way to dispose of unwanted wrappings and general junk within a vehicle. I bet most of us have seen it happen. A window winds down in front of us in a queue of traffic and some rubbish gets thrown out onto the pavement or grass verge.

I may have related this story before but a few years back I was walking along Green Lane in Thornton, here on Merseyside, and there was a queue of traffic at the traffic lights. A few yards ahead of me was a lady walking in the same direction as me. Just in front of her a car window opened and a nappy was chucked out onto the pavement. The lady picked it up and with some force threw it against the back window of the car it came from. It made quite a mess on that car and the occupants looked as surprised as I did. Direct action got a message home on that occasion I suspect.

*(This is a general illustrative shot of litter)

Maghull – The narrowest cyclepath/footway you can imagine – A59 – Northway

Cycling or indeed walking around Switch Island to go to say Aintree Village or ASDA from Maghull is a bit of a performance because you have to go around the island in an anti-clockwise direction and out of your way.

This huge vehicle junction where 3 dual carriageways, 1 single carriageway road and 2 motorways join has evolved over time rather than been planned or so it seems. It’s far from being pedestrian or cyclist friendly, indeed its a dangerous place altogether as the numerous weekly vehicle accidents prove. Highways England are you listening?

However, if you know your way around it you can just about survive walking, cycling or driving but one odd quirk of the planning of the pedestrian/cycling route is on the A59/Northway as you leave Maghull heading for Switch Island.

A cycle/pedestrian crossing was installed over both separate carriageways of the A59 some years back so that you are taken to a path alongside the northbound traffic flow. Trouble is this path is very narrow, yet it is supposed to be for pedestrians and cyclists. It is not possible for one cyclist and one pedestrian to pass each other without one standing aside.

I have raised this matter with Sefton Council and have noted that in recent weeks all kinds of spray painted makings have been placed along the path which seem to indicate that some work is going to take place. Not sure what the work is but I hope this completely inadequate path is going to be widened.

Here’s a shot of the crossing and a view towards Switch Island. The path in question runs alongside the northbound carriageway where you can see the dog walker. The narrowness of the path can also be seen:-

Click on the photo to enlarge it