Examination of Witnesses (Questions 220-239)|
MOTTRAM KCB AND
MONDAY 4 MARCH 2002
220. I was going to refer to the Report on the
termination of the Leeds and Bristol Corporations, which clearly
indicated that such documents should not be lost. It does seem
to me that the Accounting Officer of the Development Corporation
was responsible for that Mr Hall, do you accept that?
(Mr Hall) Ultimately I am responsible.
221. For the fact that files have gone missing,
you are responsible for those files which have gone missing?
(Mr Hall) Ultimately in relation to that.
222. That is fine. There are questions spinning
in my mind in all kind of directions, this requires a yes or a
no answer, were there times when you refused to meet Members of
(Mr Hall) No.
223. You never, ever refused to meet a Member
of Parliament who asked to meet you?
(Mr Hall) Not so far as I am aware.
224. You are required to tell the truth here,
you know that, do you not? Do you want to reflect on that answer?
(Mr Hall) I like to believe I am sat here telling
the truth, and I am saying to you not so far as I am aware.
225. Let me go on to Case B, the Corporation's
office accommodation. You had 12 years existence, why did you
sign a 125 year lease?
(Mr Hall) In the first instance we considered that
we wished to take the equivalent of the freehold of that property.
226. Why did you sign a 125 year lease when
you had a 12 year existence?
(Mr Hall) Because we were taking the equivalent of
the freehold of the property.
227. That is £1 million. Why did you leave
that building empty for well over a year?
(Mr Hall) Which building?
228. The building where you signed the lease,
was it Stevenson House? The building was left empty. Have you
forgotten that as well? You have a convenient memory it seems
(Mr Hall) I am trying hard to remember.
229. Page 24.
(Mr Hall) Right.
230. Do you not remember leaving the office
building and moving to another office building and it was left
empty. Presumably you were paying the lease all that time. This
was the one that had 125 odd years still to run.
(Mr Hall) When we moved to Dunedin House.
231. Why did you leave it empty?
(Mr Hall) For two reasons actually. The first reason
was, not deliberately because we were looking for other tenants
if we could find them. The second reason was we thought there
could be an opportunity for temporary tenants in those buildings.
232. You presumably continued to pay rent on
an empty building?
(Mr Hall) That is correct.
233. Why did the business case fail to recognise
the fact that the rent which you had agreed to pay was twice the
market average on the 20-year under-lease which you then signed?
Why were you paying twice the market average?
(Mr Hall) Basically we were again looking to see if
we could stimulate a market in relation to that part of the world
having regard to the fact at that time we thought the Middlesbrough
Dock scheme had a chance to go ahead. In other words, we would
see a revival in that area. That is totally parallel to the approach
the Corporation took in relation to the new office block at Dunedin
234. The record will say that you agreed to
pay a 20-year under-lease at twice the market average.
(Mr Hall) We did.
235. Why did you agree to pay a penalty at the
end of that? There was a disengagement from the agreement.
(Mr Hall) By English Partnerships?
236. It was clear you were not going to be in
existence in 20 years and you were happily signing blank cheques
for the successor bodies, presumably the DETR or whatever it then
was, to pick up.
(Mr Hall) Everything would of course depend on what
was happening by the end of the life of the Corporation.
237. Why did you fail to report these matters
to the Corporation?
(Mr Hall) I am sorry, I do not understand that point.
238. "The Corporation's financial appraisals
and business case to support the decision to sell the leases failed
to recognise . . ." and then it goes on to talk about the
20 years, the twice the average and the penalty clause which was
due to be paid. Why did the financial appraisals and business
case fail to recognise those, effectively, hidden penalties and
twice the market average of rents? Why did you fail to inform
the decision-makers that was the case?
(Mr Hall) Again, as I said earlier, I cannot refer
to the detail of that matter at this stage.
(Mr Hall) Because I do not have the papers or the
files, but the reality of the situation we had at that time was
that we were looking to see, in terms of an uplift in that area,
if we could achieve one, with an overall revival of rents.