Since it emerged four months ago that the £300m SeaDragon project was to be pulled from the region, both the Government and Lloyds TSB have been heavily criticised for their lack of action. Deputy Business Editor Deborah Johnson reports.

AS the people who elect the British Government and pay taxes into the British system, it does not seem unreasonable that we should ask questions over our investments, and seek to hold accountable the very people we put in place.

Such is the case with the SeaDragon 1 oil and gas platform. The contract for the work, having been given to the North-East in 2006, was pulled in January this year in favour of construction in Singapore.

The only explanation offered by Cayman Islandsbased SeaDragon, the company behind the rig, was that it acted on the recommendation of its financier, Lloyds TSB. The only explanation from the 43 per cent taxpayer-owned bank was that the project was “too risky” to be completed in the region.

But that does not go nearly far enough in justifying the demise of what was the biggest project of its kind in the UK for more than a generation, and the unceremonious termination of a contract in favour of a Far Eastern competitor when the rig was already over a quarter completed by skilled workers at the Haverton Hill shipyard, on Teesside.

The Northern Echo has been inundated with questions as to why the prospect of 1,000 jobs – 200 of which had already been created – and £300m of investment have been lost to overseas, when the project in question is financed by a bank we have helped to prop up?

Why exactly is it, we have been asked, that the Government has stood back and watched while Lloyds TSB has agreed to finance the SeaDragon oil and gas rig overseas, when it will cost at least £110m more to do so?

Asking those very questions is what we have done – actually getting answers, however, has proved to be the hard part.

Despite numerous attempts by The Northern Echo to get answers from Lloyds TSB – which could be as much as 77 per cent taxpayer-owned depending on how many shares the Government is left to take up after a £4bn shares issue – each time we have been told that the bank “cannot comment on individual commercial decisions”.

When pressed over the issue of the £110m extra cost of the project in Singapore – a fact exclusively revealed by The Northern Echo – we were told “no comment”.

The Government too seem to be little more willing to help provide answers now, although initially seemed far more forthcoming.

In February, after SeaDragon had pulled the contract from the Tees Alliance Group (TAG) and the Tyne Tees Rigs (TTR) consortium stepped in with an alternative bid to keep the project in the North-East, Lord Mandelson and his Department for Business, Enterprise and Regulatory Reform (BERR) pledged to offer “every practical assistance” to helping with the rescue efforts.

However, TTR quickly discovered that such words of support and “practical assistance” did not translate into actions, and certainly did not extend to helping to convince Lloyds TSB that the rig was a suitable project to be built in the North-East – even two independent advisors appointed by SeaDragon, who analysed every aspect of the TTR bid, agreed that was so.

BERR insisted, through written statements, that it could not become involved with a commercial decision taken by a bank because of “legal and state aid rules”.

Despite repeated requests from The Northern Echo for that to be elaborated upon, and repeated inquiries about speaking to someone from the department to provide an explanation, nothing has been forthcoming.

It seems only right that it should be asked why this is the case – and today, The Northern Echo does so. With the support of regional Labour MPs, the opposition, unions and consumer groups, we aim to highlight the fact that, despite it being us who elects the people who make the decisions and us who have been forced to bail out a failing bank, we are seemingly entitled to no answers over such a vital issue in the North-East and wider UK.

Our attempts so far have met with little response – today, we seek to ensure that changes, and that the Government, which we have helped to put in place, and Lloyds TSB, which we help to finance, become accountable for their lack of actions to preserve vital jobs and investment into our region.


● JANUARY 24: SeaDragon announces it is pulling its SeaDragon 1 oil and gas platform from the Tees Alliance Group (TAG), and reveals Lloyds TSB is behind its decision by refusing to continue to finance the project. The Northern Echo asks why the partnationalised bank deems the region “too risky” – Lloyds TSB said it cannot comment on individual commercial decisions.

● FEBRUARY 27: Joint venture Tyne Tees Rigs (TTR) steps in with a rescue bid to try and keep the SeaDragon project in the North-East. Lord Mandelson, head of the Department for Business, Enterprise and Regulatory Reform (BERR) pledges “every practical assistance” with the bid.

Again, Lloyds TSB said it could not comment on individual commercial decisions.

● MARCH 20: The Northern Echo reveals how an email recommending the refusal of the TTR bid is sent in error by John Darlington, executive chairman of SeaDragon, to Jon Dale, TTR director. In the email, he recommends rejection to avoid delays in tying up a deal in Jurong. The Northern Echo asks Lloyds TSB why it seems the rig is on its way out of the UK – the bank said it cannot comment on individual commercial decisions.

● MARCH 25: The TTR bid is formally rejected by SeaDragon. Jon Dale calls on the Government to intervene to ensure Lloyds TSB finances the project in the UK, instead of using UK taxpayers’ money to create jobs abroad. BERR said that due to “legal and state aid rules” it cannot intervene, and cannot comment further.

Lloyds TSB said it cannot comment on individual commercial decisions.

● APRIL 4: The Northern Echo exclusively reveals that the SeaDragon project will cost £110m more to build in Jurong than in the North- East, due to increased capital costs and penalties incurred for time delays.

Lloyds TSB, as financiers of the project, will be responsible for providing the loans to SeaDragon. The bank said it cannot comment on our story.

● APRIL 7: SeaDragon signs a deal with the SembCorp shipyard in Jurong to complete the rig, marking an end to any chance to rescue its future in the North-East.

Criticism mounts on the Government for failing to step in – BERR maintains it could not intervene due to “legal and state aid” rules.

Despite The Northern Echo’s attempts to gain an explanation of what that means, no response has been received. Lloyds TSB said it could not comment on individual commercial decisions.

‘They’re trying to run away from the public’

PAUL KENNY, general secretary of the GMB union: “We fully support The Northern Echo in demanding answers. The Government and Lloyds TSB can try to run away from the public, but they will not succeed. We are working alongside GMB MPs to try and get some answers as to what has happened, and we will not rest until we have achieved that.”

FRANK COOK, MP for Stockton North, who led efforts to bring SeaDragon to Teesside in 2006: “I wish The Northern Echo well in trying to get these answers. But is it really any surprise that the Government should offer no comment? If the truth was laid out, we would see the level of embarrassment over this, and how, despite owning 43 per cent of this company, they stood back and did absolutely nothing about it, it’s absolutely crazy.

They would be found to be the baby bear with his hand in the honey pot.

“As for Lloyds TSB, they know nothing about the industry and its intricacies.

They are making judgements on the basis of accountancy – they know the cost of everything but the value of nothing.”

MARK WALLACE, campaigns manager for the Taxpayers’ Alliance: “What The Northern Echo is doing is admirable. Given the huge amounts of taxpayers’ money put into Lloyds TSB, it is quite shocking they do not seem willing to talk to the public.

“The Government decided, without consulting us, that they would forcibly make us all shareholders in this bank.

In that situation, there should be an obligation to listen to the public, and not to give us the silent treatment.”

GREG CLARK, Shadow Minister for Teesside: “I remain highly concerned at the loss of the SeaDragon project from Teesside, and the wall of silence and confusion around the bidding process.

“Local people need to understand why this project had to go to Singapore and what further can be done.”

THE questions The Northern Echo is asking the Government and Lloyds TSB


Did the Government fail to intervene to stop 1,000 jobs and £300m of investment from being exported to Asia?


Has Lloyds TSB been allowed to recommend that the SeaDragon project is pulled from the UK, and then finances it abroad, when it is 43 per cent owned by the British taxpayer?


Is the project being financed in Singapore instead of in the North-East when it will cost at least £110m more to build the rig overseas?


Was the contract to build the SeaDragon 1 rig given to the North-East if it was deemed to be “too risky” only a year later?


Is Lloyds TSB’s response to any questions asked over the SeaDragon issue ‘No comment’?


Has no one from the Government been willing to comment on the issue, and why have numerous requests for interviews been declined?


Does the Department for Business, Enterprise and Regulatory Reform refuse to elaborate on its claim it could not intervene in the campaign to keep SeaDragon in the UK due to “legal and state aid rules”?


Has the Government decreed that no Freedom of Information requests can be made to nationalised or part-nationalised banks, even though taxpayers should be entitled to answers to their questions?


Is it that, despite widespread outcry, a bank part-financed by the British taxpayer and a Government installed by the British electorate can avoid answering pertinent questions over this issue?