Feetham denounces ‘dangerous farce that undermines parliamentary governance’

Opposition leader Daniel Feetham delivered a scathing assessment of the Gibraltar Government’s handling of public finances yesterday, insisting it was undermining parliamentary governance in Gibraltar.
Responding to Chief Minister Fabian Picardo’s budget speech, Mr Feetham restated in tough terms the GSD’s long-standing concerns about transparency and accountability.
Denouncing the government’s approach as “a dangerous farce”, he accused ministers of refusing to properly answer Opposition questions on public finances.
“It is about the ability of this parliament, and therefore this community, to identify potential financial problems before they arise,” Mr Feetham said.
“And it is self-evident that never has there been a need for that scrutiny like there is today, where we are heading out of Europe and, whether we like it or not, that will involve considerable re-adjustment of business and social attitudes.”
“This book, these estimates of revenue and expenditure, is only half of the picture of what the government has directly or indirectly spent, at what cost, and how much it has directly or indirectly borrowed to pay for it all.”
Mr Feetham rejected the government’s official debt figures and said the money owed by the public purse was far higher, estimating gross public debt at £1.2bn.
At the core of his criticism was the fact that the government does not include as public debt money borrowed through government-owned or controlled companies.
“The Government has borrowed some £772m - that we know of - through [these] companies, which it has used and continues to use to fund its expenditure,” Mr Feetham said.
“And none of that is reflected in this book.”
Mr Feetham was also critical of the government’s running of the Gibraltar Savings Bank, adding that the government had simply shifted government debentures to the GSB where they were not counted as debt.
He said this had been “a premeditated plan” to allow the Gibraltar Government to use savers money for public expenses without the need to increase public debt.
Funds channelled through Credit Finance Company and Gibraltar Investments Holdings were being used to pay government spending, he said, adding that this should be properly accounted for as public debt and subjected to parliamentary scrutiny.
“It is not an answer to say that the debts of Government owned companies are not the debts of the Government,” he said.
“That may or may not be so from a purely technical legal stand point, but it is still the overall debt of Gibraltar plc.”
“Are we seriously suggesting that if Gibraltar Investments Holdings, a government-owned company, ever defaulted, for example, on its debt of £330m to Credit Finance, that the government would refuse to step in?”
“And if those listening to this debate think that I am right and that it is inconceivable that a government would not step in, should we not be scrutinizing how the government is spending that money, which ultimately is an exposure to the taxpayer?”
Mr Feetham quoted statements made by the Chief Minister in 2011 in the run-up to the election, when as Opposition leader Mr Picardo had raised concerns about public debt of £500.2m, including £20m in government-owned company debt.
Those statements were in sharp contrast to what Mr Picardo was saying today, Mr Feetham said, adding: “Only he can stand up in this Parliament and maintain a poker face when he says the things he has said today about public debt.”
The GSD leader also renewed his criticism of the £300m “borrowed mortgaged” on government housing estates, adding that the GSD was not clear how Gibraltar Capital Assets would pay the annual £23.3m in capital and interest payments.
“If a GSD Government had done that, members opposite led by the Father of the House would be calling for our collective political heads,” Mr Feetham said.
“They would be incandescent.”
“I can just see it: ‘Poor working class tenants having their homes hocked by a wicked right wing Government’.”
“Instead, we have a Socialist government, a Socialist government, borrowing yet more money on the security of people’s homes and to boot saying to the people we do not owe that money because it’s owed by a government-owned company.”
Mr Feetham said that as at March 31, 2017, some 68 % of all assets in the Gibraltar Savings Bank was invested directly or indirectly in government debt, composed of a loan directly to the government of £251.4m and to government-owned or controlled companies of £556.1m.
“There is not a bank in the world, that has so many of its eggs in one basket and if the answer is that the Government is solvent and guarantees the money anyway, what on earth are we doing excluding the sums the Gibraltar Savings Bank has invested in government owned companies from any calculation of public debt or expenditure,” he added.
On health issues – which he shadows – the GSD leader said there was no doubt that there were “huge morale issues” in the GHA and the Care Agency and that “labour issues lie at the heart of the discontent”.
He highlighted concerns about the government’s use of recruitment consultants and subcontracted workers, adding that “…we are creating a parallel public service on significantly poorer terms than their permanent cousins.”
Mr Feetham urged the government to prioritise spending on education and training.
“These are uncertain times and I foresee difficult moments ahead and it is important that in the same way as wealth has to be spread evenly when it is created, where the government is looking for efficiencies, it should not be allowed to affect the quality of services, the disadvantaged or create unfairness in the work place,” he said.
“Other than that our spending has to be carefully targeted: no more pharaonic projects; no more suspension bridges; no more building palaces at No. 6 Convent Place; less and less traveling around with hordes of officials and politicians; and lets invest in what really matters, training, education and the creation of jobs for our people.”