The GSD has noted the decision by the Financial Action Task Force to place Gibraltar on its ‘grey list’ pending the resolution of outstanding action points with deep concern. The GSD is fully supportive of a diversified and high quality, well-regulated finance centre. It is critical to ensure that financial services remain a strong and robust pillar of our economy. The GSD are entirely committed to this goal.
Roy Clinton the GSD Shadow Minster for Financial Services and Gaming stated the following:
“For a very long time Gibraltar’s finance centre has fought to maintain and be recognised as having the required international standard of measures for the prevention of money laundering and the financing of terrorism.
It is thus disappointing to find Gibraltar as being grey listed in the two areas of the pursuit of regulatory sanctions and confiscation judgements. The comments by the President of the FAFT Dr Marcus Pleyer who in his press conference singled out gate keepers to the financial system in our legal profession and gambling industry can only be described as troubling and seems to provide an insight into the FATF thinking. Questions will inevitably be asked as to what more Government could and should have done to deal with any mistaken assumptions and perceptions of the FATF that led to this grey-listing. It is therefore a real blow that despite all the hard work Gibraltar now sees itself grey-listed with a range of countries with whom it would not wish to be compared in the financial services world. It is unclear what practical damage this will do on the ground while we are grey-listed.
Given the seriousness of this outcome, the GSD feels that it is only right that the Minister for Financial Services and Gaming, the Hon Albert Isola MP should make a Ministerial Statement to Parliament this week. This would enable the Opposition and Gibraltar to learn more about how the Government intends to resolve these action points within the one year timeframe. It is particularly important to understand how the demonstration of court judgements can be achieved given this is necessarily outside political control. It is not clear whether capacity building or new legislation is required to try to meet this objective, and thus, we would welcome further clarification from the Minister in Parliament this week.”
The GSD notes the 100% increase to the public of the cost of prescriptions and the calculated reduction in the number of people who can access free prescriptions.
The GSD have long been very concerned about identifying, and weeding out waste and reviewing procurement policies to increase efficiencies across the board so that the taxpayer can get the very best out of our medical services. However, this measure is not about that and at a time of marked cost of living increases threatens to affect the vulnerable or low-income families worst of all.
The recent emergence of the Government as the flag bearers of economic prudence is wearing very thin indeed – they have done very little in the last 10 years to control spending. Since 2015, we have warned the Government of their insatiable appetite for spending like there was no tomorrow. Tomorrow has well and truly arrived and instead of focusing on improving efficiencies and health care to our community, the Government demonstrate that they are hell bent on targeting those who are most affected by this measure, namely, the elderly and the health vulnerable.
Shadow Health Minister Elliott Phillips MP said:
“It is well known that a significant majority of people in need of prescriptions are the elderly and the health vulnerable as well as young children. The hike in prescriptions cost will likely hit these groups of people more. We are living through a cost-of-living crisis and this measure will hit the pockets of those people most in need. I called on the Government to publish the Reset, Restart and Recover strategy so that the Government could explain to the public in detail what measures it intends to take to restore our health service. The drip feeding of measures in the context of the health care crisis is likely to significantly impact on public confidence in the ability of the Government to do so especially when these measures do not deal with the issues of concern on patient services and simply layer more financial burdens on patients.”
The Chief Minister, in publishing the appropriation bill for 2022/3, disclosed certain financial information which is normally kept confidential until the Budget debate. Using only financial information that is now in the public domain, namely the Covid-19 Response Fund to 31 March 2022, and the details revealed by the Chief Minster, the GSD arrives at a very different analysis of financial performance for 2021/22
Shadow Minister for Public FinanceRoy Clinton MP stated the following:
“First of all let us consider the Chief Minister’s statement that the Budget deficit for 2021/22 is £55 million versus last year’s estimate of £51 million. This begs the question as to whether Sir Joe Bossano’s warning of a potential additional £40 million overspend was wrong?
“The answer is to be found in the Covid-19 Response Fund movements to 31 March 2022 that clearly shows it exceeded its 2021/22 budget by £67.5 million in supporting Government Revenue and expenditure.
“The Chief Minister gave the figure of net borrowing of £652 million after cash reserves of £120 million implying an aggregate debt of £ 772 million at 31 March 2022. The estimated aggregate debt for 2021/22 at 31 March 2022 was £722 million which already included provision for £50 million new borrowing. This means that the Government has had to borrow an additional £50 million (to £772 million) taking total new borrowing in 2021/22 to £100 million.
“This unbudgeted extra borrowing of £50 million is a number the Chief Minister has conveniently failed to highlight in his own press release and shows that the financial picture is far from that he is trying to pretend. The truer picture of the real deficit is in fact far worse than Sir Joe Bossano predicted when you consider the Covid-19 overspend of £67.5 million. Sir Joe of course was correct in pointing out that any Budget overspend would have to be met by more borrowing.
This is the stark reality of the financial position Gibraltar is in and I look forward to being able to debate this and the estimates for 2022/23 more fully in the forthcoming Budget debate.”
Mr Picardo’s administration simply cannot be trusted to deliver on an agenda of cracking down on waste or abuse or to deliver governance reforms, accountability or transparency. They cannot be trusted to deliver because they have flip-flopped on reforms and made empty promises. They are now the problem and obstacle to proper reform.
What is disgraceful is Mr Picardo’s desperate attempt to cover his Government’s tracks. That will be transparent to everyone. It beggars belief that Mr Picardo should have the gall to seek to point fingers at the GSD. His administration has awarded contracts to persons close to his Government including entities related to family members of Ministers and persons politically close to him. His administration awarded a tender to a company said to be the highest bidder in a process that had closed two years before the company even existed. His Government has awarded contracts to a company in which the Chief Minister has an indirect beneficial interest. He has made systematic promises of reform and of meetings of committees that are set up and never meet. That has been the case with the parliamentary reform process where promise after promise has been made. These promises now ring completely hollow. Many of the GSLP manifesto commitments have been breached. It is under his watch that hundreds of millions of pounds of the people’s money are not properly accounted for. All these are reasons why his Government is now the problem and not the cure.
He presides over an administration where there are conflicts of interest left, right and centre and where the truth is buried. There have been big failures in standards, transparency and accountability. His narrative that he is the great reformer and things have never been better is just a hollow fiction built on false premises and promises.
Leader of the Opposition, Keith Azopardi said: “We stand by the assertion that there needs to be a systems overhaul to attack waste abuse and corruption and that the GSLP aren’t the ones to do it.
As usual when we hit a raw nerve the Government’s knee-jerk reaction is to say it is a disservice to Gibraltar to talk about it. But people see through that self-serving protestation. We won’t shut up because the truth is inconvenient. This is a Government that is now so adept at spin that it cannot be believed and that regularly resorts to spin and outright lies.
There are many reasons that show why his Government is now the problem and not the cure. That is why the GSD will not agree to bury the issues into yet another committee that doesn’t meet so that reform is held back.”
Letter to the Chief Minister
It is simply not true that Mr Azopardi and Mr Clinton “did not show up at a meeting [to discuss reform] and sent a letter afterward.” Mr Picardo had the GSD response to his invitation before the time he had suggested for the meeting. In fact, he had also seen it as is clear from the electronic transmission receipt. In this and as always Mr Picardo gets overtaken by his own enthusiasm to make cheap points and resorts to lies to make them because the truth is less attractive than his fictional story. Mr Picardo knows full well why we refuse to be taken in by his false agenda of promises on reform. Our letter to him of 20 April is attached to this PR. In our letter I invited him to respond with clear proposals. Predictably we have not had a response and still less proposals.
Download the letter from the Leader of the Opposition to the Chief Minister: https://docdro.id/eekgt2j
Any proposed treaty text between the EU and UK on a future relationship should be published before it is entered into so that there can be a clear public debate on the proposals. Any agreement of principles leading to that draft treaty language should also be published.
The BREXIT referendum happened nearly 6 years ago. Despite the fact that the transition period ended on 31 December 2020 Gibraltar still has no agreement on a permanent relationship. The UK agreed its own deal on a new relationship with the EU before the end of the transition period. Gibraltar still faces uncertainty. To compound the lack of clarity all that has been published so far is a vague 8-page framework on 31 December 2020. In contrast the UK’s own Treaty with the EU is an agreement that extends to more than 1000 pages. The GSD has not seen any document since then and have only had one informal briefing since the end of 2020 (in November 2021).
Momentum was clearly lost in the negotiations for Gibraltar as soon as the opportunity was missed to land a safe and beneficial agreement in tandem with the UK. 17 months on Gibraltar has still not seen any new agreement emerge and suffers an increasing backdrop of uncertainty with a fragile status quo depending on Spanish goodwill. This is clearly an undesirable state of affairs. Gibraltar needs legal certainty. Delays not only cause political and economic uncertainty but also affect people on the ground as we have been seeing in recent weeks. It is assumed that there must now be proposals in writing circulating among the delegations although tentative agreements may not, yet, have been reached. People should not be kept in the dark once a settled proposal emerges that is, in principle, acceptable to those negotiating.
Leader of the Opposition, Keith Azopardi said: “It is important to appreciate that we are at a significant moment in our affairs. We have made clear that we want a safe and beneficial agreement with the EU. But people also need to know what deals are being negotiated in their name and what specifically is on the table before this is entered into given the importance of this moment for Gibraltar’s future. This is essential so that there is clarity instead of speculation on the elements and consequences of any deal. This speculation needs to be dispelled and the draft of any Treaty text published before it is entered into so that everyone knows what’s on the table and can judge that against the prospect of no deal and its consequences. The Government should reassure people that the draft Treaty will be published for public evaluation and debate before it is signed up to.”
What is happening now in the British Virgin Islands is a stark reminder of how abuses of power, corruption and lack of transparency can be corrosive to democracy.
A report following an Inquiry into financial & contractual abuses, transparency and corruption was published last week in the British Virgin Islands (BVI). It has recommended the temporary suspension of parts of its constitution, the dissolution of Parliament, suspension of Ministerial Government and the assumption of control of the Government by the Governor with open talk of direct rule from London.
In the wide-ranging 900-page Report there are recommendations that highlight how Ministers were involved in direct and unaccountable decisions without the prospect of any come-back or criticism, that contracts were adjudicated without transparent processes, that corrupt financial benefits from contracts were obtained and how the system in the BVI has been exposed.
The report highlights how some members of the public were afraid to share information because they feared reprisals. It concluded that there were clear deficiencies and “the principles of good governance, openness, transparency and even the rule of law are ignored. In many important areas of government – including the procurement of contracts, grants of assistance, appointments to statutory boards, the disposal of Crown land and the grant of residence and belonger status – discretionary decisions are made by elected officials (usually Ministers) on the basis of no criteria or patently inadequate or unpublished criteria or criteria which are, as often as not, simply ignored. They can and do make decisions – which expend huge sums of public money and affect the lives if all those who live in the BVI – as they wish, without applying any objective criteria, without giving any reasons and without fearing any comeback.”
Leader of the Opposition, Keith Azopardi said: “What is happening in the BVI is an example of the effects that financial or contractual abuses, lack of transparency, the wielding of unchecked Executive power by Ministers and failures in accountability can have on a small territory. It emphasises the importance of having sufficient democratic checks and balances in a small territory, clear processes that are followed and independent watchdogs over the use of financial and administrative power so that the possibility of abuses are minimised and value for money enhanced.
It starkly brings home the serious threats to a democracy if such checks are absent or if power is misused. This not only impoverishes the quality of individual decisions but it threatens to take away the enjoyment of self-government and democratic institutions from the citizens themselves as is now happening in the BVI who face the risk of being placed under direct rule.
This is not what we want for Gibraltar. We cherish our self-government and our democracy. This reinforces the need for clear changes to deliver transparency, standards, anti-abuse protections and democratic checks and balances in Gibraltar. Independent and precise controls, financial oversight, transparency in decision-making, the objective justification of decisions taken are all key elements in any set of changes.
We have been talking about reforms like these for years to curb the abuses and deficiencies in our current system. In our view these cannot be tackled by the present GSLP Government who have presided over some of the worst excesses in lack of transparency or standards and have paid lip service to reform over the last 11 years.
We had a strong programme for democratic and financial reforms to governance in our 2019 manifesto and will have a robust set of reforms in our next manifesto. Only a few weeks ago we set out our Back on Track policy to ensure greater value for money, transparency and standards and to curb waste, abuse and corruption. These policies need to be combined with other measures to entrench controls and reforms in our constitutional architecture.
A future GSD Government will deliver a strong and comprehensive programme of reforms to ensure that our laws, processes and systems are changed so that our democracy is protected. That will require big changes to ensure Anti- Abuse and anti-corruption measures, securing transparency and independence in decision-making and making sure that persons close to the Government of the day have to declare their interests and do not benefit from their political associations. Our people deserve that our systems and laws are changed so that there are no opportunities for waste, abuse and corruption. We need to ensure value for money and democratic integrity and transparency at all levels. Gibraltar deserves better and the GSD will deliver that and these reforms.”
Shadow Finance Minister Roy Clinton said:
“The report released last week by the commission of inquiry makes for sober reading. Its 45 recommendations talk to the very heart of financial and good governance in which the BVI Government appears to have failed. In this respect the GSD has for years been clamouring for greater transparency and accountability by Government. All the GSD’s ‘Back on Track’ policies launch last month are designed to reinforce and deliver on financial transparency, accountability and value for money. Whereas the factors and situation in the BVI are not those of Gibraltar we cannot afford the mere suggestion that we do not take these matters seriously and thus it is in our collective interest to ensure we meet the highest standards in this respect.”
We commemorate Worker’s Memorial Day on Thursday and May Day on Sunday. These are two important dates in the calendar. They mark the struggle for workers’ rights and the need to reaffirm a commitment to safe, dignified working practices and good quality terms and conditions. This affects us all whether you work in the private or public sectors. At a wider level the success of our economy and of the environment for business is key to job security and to workers’ rights and the prospect of more money in your pocket.
12 months ago I lamented how the state of the public finances could affect and bring pressure on the income of workers and business and workers’ rights and aspirations. I also regretted that we still did not have a safe and beneficial agreement with the EU on a new relationship.
12 months on the Government has still failed in obtaining a safe and beneficial new relationship with the EU for Gibraltar and its residents with the consequent economic uncertainty this produces. Despite assurances given a year ago by the Government that residents would continue to have freedom of movement while the negotiations were ongoing residents who are Blue ID Card holders are not only facing discriminatory treatment at the border but are now being turned back. Measures such as those should have been pre-empted. It is no good for the Government to point fingers when it was obvious that problems could arise at the border if things lay unresolved for so long. This again can indirectly affect the economy, consumer and investor confidence and the prospect of inward investment or jobs. The only parties so far guaranteed enduring freedom of movement across the border are frontier workers who were guaranteed those rights in previous legal agreements entered into with the consent of the Government. We have, often, observed that Mr Picardo should have obtained enduring rights for residents in exchange at the same time. Our forecast that this would come back to haunt the Government is being coldly seen in the restrictions now faced by some residents. This has been a painfully slow and mishandled negotiation so far.
12 months on the state of our public finances is still bad and all indications are that the Government has not even been able to keep to the deficit it announced last year of approximately £50 Million. From public statements made it is likely that the deficit by 31 March will have been a figure in excess of a whopping £90 Million last year. We will have to see the detail when it is published. In any event the state of our public finances is dire and worsened by a reckless mismanagement of public finances over the last 10 years. This will have a further knock-on effect as to how much money there is for wage increases, tax breaks, benefits or investment in public services. How can people be seriously asked to trust Mr Picardo with that kind of record over our public finances. How can the Government ask people to tighten their belts when it cannot do so and continues to misspend the people’s money? Why should people and workers continue to bail out or trust Mr Picardo and his Government after so many failed promises?
These things are important because it affects workers, jobs, prospects, terms and conditions, salary aspirations and pension aspirations for retirement. It can affect people at all levels and of all ages. Whether they are youngsters looking for a job or people looking to retire after decades of working. It affects people and businesses in all sectors. That is why the twin issues of our finances and negotiations with the EU are so important and why trust is increasingly being lost in this Government. There is a need to put the safe management of our economy and public finances in different hands. That is the best way of protecting workers and families in the future.