Gloves off as Picardo slams ‘reckless’ GSD in budget showdown

Four GSD MPs voted against the Appropriation Bill yesterday, in an unprecedented political move that drew a blistering response from Chief Minister Fabian Picardo and prompted one opposition MP, Lawrence Llamas, to break ranks from the party line.

GSD leader Daniel Feetham announced on Monday that his party would vote against the bill because the government’s approach to public finance – with much spending channelled off balance sheet through government-owned companies – had turned the budget into “a dangerous farce”.

But Mr Llamas, a former civil servant in the tax department, said he had not been consulted on the move beforehand and was unable to back it.

While he shared GSD concerns about public finances, he said he was unable “in all conscience” to vote against the expenditure estimates before parliament.

“That off-balance sheet spending will be a black mark on [the government’s] record,” he told the Chronicle.?“But we’re approving the expenditure that is before us, not what they are spending elsewhere.”

Mr Llamas insisted his decision was not indicative of a deeper rift within the GSD, which last night admitted there had been “a breakdown in communication” in the party.

Mr Feetham and three of his MPs – Roy Clinton, Trevor Hammond and Elliot Phillips – voted against the budget bill. A sixth GSD MP, Edwin Reyes, was not present at the session for personal reasons.

In his closing reply before the vote, Mr Picardo left no doubt as to what he felt about the GSD’s “politically irresponsible” decision.

In a speech that was littered with Hansard references spanning four decades of Gibraltarian politics, Mr Picardo said opposition politicians had made similar arguments about public spending, transparency and accountability throughout the years.

He quoted Hansard extracts citing Adolfo Canepa, Joe Bossano and Sir Peter Caruana, all of whom had in the past made similar points in similar language to the ones made by the GSD this week.

In some parts of Mr Picardo’s address, it was difficult to keep track of which opposition quotes belonged to the current session and which ones had been plucked from the past.

The difference, he insisted, was that no past opposition leaders had championed a vote against the appropriation bill. The closest anyone got to that was when Sir Peter led GSD MPs out of the chamber ahead of a vote in 1995.

“We’ve heard this all before, robust debate on the same sorts of issues, but there was never a vote against,” Mr Picardo said.

The GSD’s decision was, he later added, “…the most reckless parliamentary act in the modern history of Gibraltar.”

Yesterday during the course of a four-hour reply, Mr Picardo urged the GSD MPs to change their plan and either vote for the bill or abstain.

He said they had forcefully made their political points about concerns over government spending, but that voting against the Appropriation Bill would set a damaging precedent for Gibraltarian politics.

Ultimately, he said, the GSD MPs who voted against the bill would in effect be voting against the money that pays civil service bills and keeps Gibraltar running.

“They must understand the lunacy of putting at risk the salaries of civil servants in Gibraltar,” he said.

“They are risking Gibraltar becoming a failed state.”

“It would be government shutdown led by Daniel Feetham and Roy Clinton.”

Mr Feetham later rejected that suggestion and said the government could have simply added a schedule explaining how it was spending money in government-owned companies that was not already documented in the budget estimates.

“It’s nonsense to say that civil servants would have been without their pay,” he told the Chronicle.

The Chief Minister said that the core of the GSD’s criticism – that money was being spent through government-owned companies and not included in the government books – was a continuation of the practices of previous administrations.

The last GSD administration, he said, had been poised to rack up £2.1bn in direct and indirect debt had it won the 2011 election, largely due to its Lathbury power station project.

In great detail and with numerous references to past GSD practices and projects, he set out to deconstruct the criticism levelled by the GSD about transparency and accountability, insisting that the government made more information available now than previous administrations ever had.

GSD administrations had used government-owned companies to fund projects, he said, but they had not filed public accounts. In contrast, the GSLP/Liberals regularly filed accounts for government-controlled companies.

Mr Picardo also reflected on the government’s policy of investing Gibraltar Savings Bank funds in Credit Finance, comparing it to the GSD administration, which had paid 5% interest on government debentures from the taxpayer’s purse.

“We think it’s more prudent to try and get the money to work for that 5%,” he said, adding that the GSD had done “everything in their power” to persuade people to lose confidence in the bank, but had failed.

Mr Picardo said the GSD had been quick to criticise delays in major projects such as the Bluewater scheme and the Rooke development.

But it had likewise failed to applaud progress with investments such as the World Trade Center, the Mid Town project and other similar projects.

“There is no failure of transparency, there is a failure of humility,” he said.

Focusing the bulk of his budget reply on Mr Feetham and Mr Clinton, the Chief Minister said it was “almost as if they wanted Gibraltar to fail” and to use that as a ticket to power.

“It is clear that the hopes and dreams of the Opposition are not for Gibraltar’s success, they are for Gibraltar’s failure,” the Chief Minister said.

The GSD, he added, was suggesting that Gibraltar was effectively bankrupt, something that would be picked up and reported outside Gibraltar “with glee”, even though it was “utter nonsense”.

“How do we grow financial services in Gibraltar with the support of the opposition via an allegation that we’re cooking the books?” he asked.

“How do we create the environment for people to come and set up more banks here by saying that Gibraltar is bankrupt?”

“That is not the route to prudence, to caution and to helping the government to grow the financial services sector. That is the route to liquidation and destruction.”

And while the GSD was questioning spending that was not included in the budget estimates book, its MPs had barely asked any questions about the spending plans it actually contained.

“There is no artificial income in this book, our accounts are not flattered, the surplus is real and tangible and is reflected in the available cash reserves,” the Chief Minister told Parliament.

Mr Picardo said that in questioning the credibility of the budget and describing it as “a dangerous farce”, the GSD was not just attacking the government.

“They are attacking the Treasury, the civil servants in the Treasury, the civil servants in the Income Tax Department, the civil servants in the Customs Department,” he said.

“They are challenging the credibility of the Financial Secretary and the people who work with him.”

These civil servants “…are the most dedicated, stalwart defenders of the veracity and credibility of the numbers that go into that book that one could imagine.”

Mr Picardo made a number of observations about contributions from other MPs on the opposition bench, but they were short and relatively restrained in tone.

He cheered Mr Llamas for voting in favour of the Appropriation Bill, a decision that “will define him politically”.

As for Independent MP Marlene Hassan Nahon, he said that while she had shared many of the GSD’s criticisms on public finance, “the tone was different” as evidenced by her decision to support the bill.

But time and again he returned to Mr Feetham and Mr Clinton.

Mr Picardo said the GSD had painted a picture of a bankrupt Gibraltar rife with “absolute and utter” nepotism, where the media was controlled and the Opposition “can’t get a word in edgeways”.

“They’re not just insulting me in a debate, they’re insulting Gibraltar, they’re insulting the media, they’re insulting the civil servants, they’re insulting all of the people of Gibraltar who go to work every day to deliver these magnificent results…” Mr Picardo said.

“But it is true that a bad workman always blames his tools, so I guess that is why they blame Gibraltar for their own political undoing.”

The Leader of the Opposition has “the reverse Midas touch” and “must consider his position”, the Chief Minister said.

“He’s taken a party that was an election-winning machine and turned it into a machine that can’t even vote together,” he added, describing Mr Feetham as “a lamb in wolf’s clothing”.

“He’s so ineffective, he’s not able to keep his team together and get them to vote the way he wants them to,” he said.

Having approved the second reading of the bill by 12 votes in favour and four against, Parliament went on to the committee stage to consider the bill clause by clause.

Mr Picardo expressed surprise to be subjected to detailed questions on spending by some of the four GSD MPs who had voted against the bill earlier in the day.

Having passed the committee stage without amendment in little more than two hours, the Appropriation Bill was read for a third time.

Mr Feetham, Mr Clinton, Mr Hammond and Mr Phillips voted against, with the remaining MPs voting in favour to approve the bill.

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It was ‘a communication breakdown’, GSD says

The GSD last night said “a breakdown in communication” had led to a situation where one of its MPs felt compelled by his conscience to take a different stance in the budget vote.
The GSD said it had taken a stand by voting against the Budget because of the lack of transparency it perceived in public finances and the “exponential growth” in indirect borrowing of £722m, which according to the party takes total gross debt to £1.2bn.
“The GSD encourages independent thinking and understands Lawrence Llamas' decision to vote according to his personal views,” the party said.
“The Budget book and process was discussed at length at a meeting on 1 June 2017 of all MPs prior to the Budget debate at GSD HQ.”
“Having spoken with Lawrence it is now believed that he was temporarily absent from that meeting when the issue of voting intention was discussed and agreed as the collective position of the parliamentary party.”
“It is evident that there has been a breakdown of communication with Lawrence and therefore Lawrence remained unaware of the GSD's intention to vote against the Bill.”
“The idea of merely voting on a Bill according to past convention goes against the purpose of having a debate in Parliament and today the GSD departed from that convention in the interests of transparency and accountability.”