Budget measures including pension equalisation need ‘honest scrutiny’, Sacarello tells Parliament

GSD MP Craig Sacarello said that while the equalisation of the pension age at 60 would be welcomed by some, the change required “honest scrutiny” as to its cost.

In a budget address last week, Mr Sacarello the same applied to the increase in the minimum wage, which he acknowledged would be welcomed by low-paid workers.

“Welcome measures still require honest scrutiny for their effect across the board,” he said.

“If the pensionable age is lowered for men to 60, then the full recurring cost must be published. Not just the headline cost. The full cost.”

“Not only the additional pension payments of £8m per annum to the current £54m per annum, but also the loss of PAYE, the loss of social insurance and the long-term impact on the Treasury.”

“This is not a one-off decision. It is a recurring commitment year after year.”

“The public are entitled to know how it will be funded.”

“Likewise, raising the minimum wage cannot be viewed in isolation while tax thresholds remain frozen.”

“When thresholds do not move with inflation, workers are pushed into higher tax burdens more quickly.”

“That is fiscal drag. And fiscal drag is a tax increase by another name.”

“For low and middle-income earners, particularly those under £64,000, this matters.”

“In an economy where the cost of living is high, rent is high, food is high and wages in parts of the private sector remain modest, people need to feel that work pays.”

BUSINESS AND TREATY

Mr Sacarello also referred to the Government’s preparations for business ahead of implementation of the UK/EU treaty, arguing that firms had too often been given information and guidance late and were being expected to adapt to significant operational changes without enough clarity.

He said businesses needed sector-specific guidance, training on customs systems and procedures and clearer information on issues including customs requirements.

“Business needed early clarity,” he said.

“It needed sector-specific guidance. It needed proper consultation with those who understand the operational detail.”

“Instead, too many businesses have faced late guidance, moving interpretations and uncertainty.”

Mr Sacarello said the Government should treat concerns raised by retailers, clearing agents, hauliers and other businesses as evidence of the practical challenges they faced rather than dismissing them.

He said meetings, town halls and published FAQs were useful but did not amount to detailed operational preparation, particularly for sectors directly involved in the movement of goods.

“Businesses cannot operate on ‘very shortly’,” he said.

“They cannot prepare on the basis of ‘guidance to follow’. They cannot absorb every shock simply because they have always shown resilience.”

Mr Sacarello welcomed plans for a central application process for business licensing, registration and tax, but said the support measures announced for firms affected by the transition lacked sufficient detail on eligibility, deadlines and funding.

On residency, Mr Sacarello said he accepted the need to protect public services from abuse but argued the new criteria risked making it harder for businesses to recruit young British workers and entry-level staff.

He said the £37,500 salary threshold was too high for many graduates and trainees and called for special provision for people under the age of 26.

“The £37,500 salary threshold is simply too high for many entry-level roles,” he said.

“Young graduates and trainees will not usually start at that level. That is why there is a strong case for special provision for under-26s, including a reduced threshold for that cohort.”

Mr Sacarello also questioned what he described as a contradiction between efforts to attract entrepreneurs and businesses to Gibraltar and residency rules that could require firms to pay a year’s PAYE upfront where employees fell below the salary threshold.

“That is not a welcoming signal to start-ups. It is a barrier,” he said.

He added that businesses needed published and transparent rules on any discretionary exceptions to the residency requirements.

“If the exceptions exist, publish them,” he said.

“If their criteria are settled, show them. If businesses are expected to rely on them, make them clear and available to all.”

UTILITIES

On utilities, Mr Sacarello criticised the Government over recent power cuts, questioning whether the electricity system had sufficient protection, isolation and redundancy despite significant investment in the North Mole Power Station, the LNG plant, the BESS battery system and upgrades to the grid.

He pointed in particular to the Rock-wide outage on June 26, when an earth fault in the Ocean Village area affected operations at the power station, and argued that the wider issue was whether a localised fault should still be capable of causing disruption across Gibraltar.

He also noted that the Government had acknowledged seven power cuts in the first six months of the year and highlighted concerns from businesses over the losses caused by outages.

Mr Sacarello called for an independent technical review of the power station, the BESS system and the distribution network, alongside stronger oversight of works near electrical infrastructure, a plan for senior engineering capacity at the Gibraltar Electricity Authority and greater transparency on the cause and impact of power cuts.

TONE

Mr Sacarello also reflected on the tone of political debate, arguing that personal attacks and repeated accusations risked weakening public trust.

He said Parliament should be a place where difficult questions were answered with evidence and criticism met with argument, with disagreements conducted firmly but respectfully.

Mr Sacarello said political exchanges that generated short-term advantage could have a longer-term effect on confidence in public institutions and called for higher standards in public life.

Mr Sacarello also underlined the importance of transparency in politics as a key element of ensuring public trust, adding “democracy must not only be clean, it must be seen to be clean”.

“People do not expect politics to be perfect,” he said.

“They do not expect Government to get every decision right.”

“They know that governing is difficult, that choices are hard, and that not every problem can be solved overnight.”

“But they do expect honesty. They expect transparency. They expect competence. They expect humility.”

“And they expect that when things go wrong, those in authority accept responsibility and put them right.”