Chief Minister again avoids answering the £300 million question

The GSD notes that the Chief Minister is again doing his best to avoid answering what he has done with the £300 million raised by mortgaging the six housing estates.

Roy Clinton the shadow minister for public finance said:

“I am becoming accustomed to the Chief Minister avoiding answering any simple questions in respect of public finance such as what has he done with the net £275 million raised from the mortgage of six housing estates or even how he proposes to pay for the new schools for which only £1,000 was provided for in this years Budget.

The Chief Minister has however now conceded that the £300 million is a “structured liability” in other words a loan and thus not an “investment” as he once claimed. The Chief Minister cannot deny that if Gibraltar Capital Assets Limited defaults on its obligations the Government will defacto have to pick up the bill. This crushing debt burden will be borne by future generations thanks to this Government’s reckless thirst for borrowing none of which was mentioned in their 2015 manifesto.

The Chief Minister has also admitted that the 3% annual rent increase was part of the financial modelling underlying the financing deal. This confirms what we were told at the meeting with his technical experts on 6 February 2017. It is not insignificant because compounded over a 31 year period a 3% annual rent increase would result in £61.5 million of additional revenue to the company which would be needed to repay its debts.

I have no need to lie or pretend otherwise and I challenge the Chief Minister to make public the private placement memorandum on the issue of the company’s loan notes as well as the put option agreement.

We still do not know what has been done with this money or how much of it remains and I again ask the Chief Minister to answer the £300 million question namely what has he done with it? The people of Gibraltar deserve complete transparency on these important matters which the Chief Minister continues to refuse to provide. The Chief Minister falls well short of what we should expect of a Finance Minister and I regret we will only know the whole truth once we have a change of Government.”