Former CEO of the Shell Company of Bermuda, Robert Stewart, criticised Government's Hotel Concessions Act as "the height of folly'' yesterday.

Mr. Stewart spoke at the weekly Hamilton Rotarians meeting and examined various aspects of Bermuda's economic prosperity and future.

He said Tourism Minister David Allen had described the Hotel Concessions Act as a means "to drive significant developments that are in the broad national economic interest''.

However, Mr. Stewart said: "I find it difficult to understand why it is in the interests of Bermudians to donate the money they pay in taxes to the coffers of well-heeled foreign corporations or to a Saudi prince.

"The official rationale is, of course, that without that subsidy places like the Castle Harbour Hotel might never again open its doors and more jobs in the tourist industry will disappear forever.

"Who could possibly be against the preservation of Bermudian jobs and this `innovative' way of restructuring a moribund industry.'' Mr. Stewart said: "All subsidies are simply mechanisms for robbing Peter to pay Paul.

"Government has nothing to give to anyone without taking it from someone else -- the taxpayer, and that just in case you are wondering that is you and me.

"It is futile to pretend that we can protect jobs rendered obsolete by foreign competition or our own record of stupidity.

"Ask yourself this question: `If Government does not excel at its basic tasks -- delivery of mail, prosecuting murderers, keeping drugs off the streets and out of prisons, providing universal literacy, catching burglars and so on -- how on earth is it going to divine what will or will not be profitable in the hotel industry?' "Specialists like Marriott were not able to do it.

"Do you really believe David Allen, who has never been successful at anything in his life, can make a success of this malarkey? Please! If the payoff from investing in the hotel industry is so clear to the Minister, why on earth will businessmen not pursue it with their own money? "Surely the answer is clear -- if a government is dumb enough to give away the public's money, any investor would be equally dumb not to take it.

"Frankly the Minister is throwing money down a rat hole.'' Mr. Stewart said the question that needs to be asked is: "Why would the promoters of any hotel project need a Bermuda Government subsidy if the project was financially sound? "If it is required because the project would not go ahead under its own steam, it means quite simply that professional investors are not prepared to commit the necessary funds.

"If prospective investors are reluctant to invest it means that there is some question about the viability of the project.

"Sound investment projects do not require Government subsidies -- they stand on their own two feet.'' Mr. Stewart said Bermuda hotels have not made money for years, and there is no reason to believe that operations supported by taxpayers' money would do any better than the Marriott Corporation, one of the most successful hotel companies in the world.

Mr. Stewart outlined three important points against the new initiatives: Firstly, there are many Bermudian taxpayers who cannot afford to support the treasuries of foreign companies.

He said: "The $100 million being talked about could be used by taxpayers to pay the rent, help with the children or even buy a few groceries.'' Secondly, Mr. Stewart said the narcotic of Government subsidy is more deadly than crack cocaine. If a business operation cannot make a profit it means that it is not providing what its customers want.

What the hotel industry needs to do is to improve its efficiency, and become more responsive to the market.

Thirdly, if some hotel operations receive a handout from taxpayers, it will only be a matter of time before other hotels seek an audience with the Premier to plead their case.

Mr. Stewart said: "Fairness, after all, suggests a subsidy for one means a subsidy for all. If hotels receive a subvention, why not retailers, Joe the plumber or Paul the taxi driver.

"Once a subsidy is given to any group, it is soon regarded as a right.'' Mr. Stewart said: "In 1964, president Lyndon Johnson in a rare moment of frankness (and bad grammar) stated in connection with his great society programme that `we are going to try to take all of the money that we think is unnecessarily being spent and take it from the haves and give it to the have nots that need it so much'.

"David Allen, a man who when he stands up does not know what he is going to say, and when he sits down has no idea of what he has said, has updated this policy in 2000 by stating in effect that, `we are going to take some of the money that every Bermudian tax payer wishes to spend on rent, education of his children, and groceries and give it to sophisticated rich foreign-owned corporations to build new hotels in the hope that they will make profits -- but don't worry folks I will look after your interests between my trips to everywhere under the sun'.'' Mr. Stewart ended with a warning saying: "With several of the new Government policies to which I have referred we could undermine our long-standing successful economic environment as well as be contrary to the lessons of economic freedom which the Heritage Foundation is preaching.

"What Government is beginning to say to Bermudians is that `you do not have to get up in the morning' to work hard in the new Bermuda because we, the Government, will look after you'.''