Fears have been raised that Sark could be sold by the backdoor if it accepts terms attached to a controversial loan deal with Guernsey.

The £1.5 million loan is intended to help Sark acquire its long-disputed power supplier, Sark Electricity Limited (SEL) – but Conseiller Chris Kennedy-Barnard has expressed deep concern over what he described as unreasonable strings attached to the deal, and the potential consequences for Sark’s autonomy.

Due to be debated by Guernsey’s States Members this week, the deal includes a condition that Chief Pleas – Sark’s government – reviews the island’s tax regime.

Duties made on the sale of tobacco, alcohol and fuel could also be withheld by Guernsey’s Treasury if Sark does not meet is repayments.

More unusual – and of greater concern to Mr Kennedy-Barnard – is another condition that the island should undergo a constitutional review.

“Why would Guernsey like to change Sark’s constitution?”

“The last I knew is that the conditions of this £1.5m loan were that Guernsey would secure it against impôt revenues, which was slightly more palatable. However, to our shock, the Guernsey government is suddenly requesting conditions such as a taxation review and a constitutional review,” Mr Kennedy-Barnard wrote in an opinion piece for Express.

“If the excise duties service the 5-6% loan offered as claimed, why would the States of Guernsey need further securities? Why would this loan agreement be contingent on constitutional or taxation reviews for Sark? Terms can often seem benign or confusing, but they always serve a distinct purpose. Why would Guernsey like to change Sark’s constitution or tax system?”

“The conditions attached to this loan are unacceptable to an informed, educated public,” he wrote in a detailed opinion piece. “Guernsey is not the IMF, but they are seeking very unreasonable terms. These conditions attached reach far beyond the guaranteed repayment of the borrowed funds. Residents should ask why they are needed.”

The opinion piece, published last week, raises the spectre of Sark following the same path as other small jurisdictions that have taken loans with far-reaching caveats.

Drawing parallels to international examples, he warned: “Those of you who pay attention to international affairs will understand how the IMF (International Monetary Fund) has given loans to many vulnerable, smaller, or struggling nations with conditions that are less than fair; they often undermine the democratic sovereignty or decision-making capacity of the smaller entities.” He referenced countries such as Greece, Jamaica, Argentina, Zambia and Tunisia as examples.

Mr Kennedy-Barnard also criticised the handling of the energy situation on Sark more broadly, arguing that Chief Pleas has lacked transparency, accountability, and leadership throughout the process.

“Sark’s Chief Pleas has had a very difficult relationship with its electricity provider, SEL,” he said, noting the cost to the taxpayer of unresolved issues. “It’s been a real shame that we can’t get the head of Policy & Finance, Conseiller John Guille, in the same room as the SEL director, Alan Whitney-Price. The feud is really costing the taxpayer. It’s a tragedy when personalities and a lack of negotiation skills get in the way of what is good for Sark.”

He added that he and other members of the government had not been fully informed about the terms of the proposed loan. “Serving on the Sark government’s Policy & Finance committee, I have not been kept fully appraised or updated on this loan tentatively offered by Guernsey’s Policy & Resources committee, nor have other conseillers. A lack of transparency, openness, democratic values and good governance has caused divides,” he said.

Mr Kennedy-Barnard is concerned that the current focus on acquiring SEL – particularly if pursued through a compulsory purchase order – could result in a protracted and expensive legal battle, potentially without resolution.

“Sark can ill afford to be in protracted litigation with an uncertain conclusion. The whole situation presents a huge risk,” he said.

“Will it stop there?”

He also questioned the shift away from a previous £12 million renewable energy plan, which he said had lacked realistic financial assumptions and would have placed a significant burden on Sark residents.

“This renewable plan now seems to have been shelved, with the focus switching to only buying SEL and doing some upgrades and maintenance with the £1.5m loan.

“My question for Guernsey and Sark residents is: will it stop there? Or will this credit facility be added to, either for the rest of the £12 million or other Sark expenditure?”

“Sark doesn’t need to become another Alderney”

Referring to a previous episode in 2023, when a proposal was made for Sark’s chief civil servant to report to Guernsey’s civil service, Mr Kennedy-Barnard said that islanders had already come close to losing their independence.

“Sark came that close to losing its self-governing status and ending up a vassal state like Alderney,” he said.

“Guernsey taxpayers do not need another Alderney, and Sark doesn’t need to become another Alderney.”

“We deserve better”

In his concluding remarks, Kennedy-Barnard appealed to both Sark and Guernsey residents to pay close attention to the implications of the loan deal.

“Sark people love Guernsey, and Guernsey people love Sark. We must unite in questioning our political representatives and their decision making.

“These special islands have a unique history and culture. We all want a brighter future for our children, and that starts with us becoming interested in the decisions being made on our behalf by our elected and unelected officials. We deserve better.”

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