Picardo balances ‘caution and optimism’ in Brexit budget

Chief Minister Fabian Picardo delivered “a Brexit budget” yesterday that sought to balance “caution with optimism and prudence with investment” as Gibraltar prepares to leave the European Union next year.

In a wide-ranging two-hour speech that provided a snapshot of current political and economic developments, the Chief Minister said his government’s plans for the year ahead would require “no cuts and no austerity” thanks to solid growth across all key areas of the economy.

He reported strong economic results and a budget surplus of just over £36m, while insisting public debt was low and under control at 15% of GDP for 2017/18 of £2.18 billion.

The Chief Minister said unemployment stood at a record low of 45 people, while the number of jobs in Gibraltar’s economy had increased to 28,029, driven mostly by the private sector even as public sector jobs dropped by 1%, or 54 posts.

There were no tax increases in the budget, which was littered with incentives at the lower end of the employment spectrum including a 30p hike to the minimum wage to £6.75 and increases to allowances.

But Social Insurance payments were hiked by 10% to help cover the cost of caring for an ageing population.

Likewise public sector pay will be increased by the lower of 2.5% of the individual’s pay rate or 60p an hour, a move that will deliver pay increases above average inflation even while starting to contain the cost of the public sector payroll.

Mr Picardo also announced an external review of public sector salaries to close the gap with the private sector.

There were also measures that signalled “a deeper and wholesale change” to Gibraltar’s economic reliance on tobacco, alongside incentives across a broad range of products and activities to stimulate and underpin environmental sustainability.

Mr Picardo’s speech was immediately slapped down by GSD MP Elliott Phillips, the Leader of the Position, who signalled his party would not be supporting the budget over concerns the government’s figures did not represent the true state of Gibraltar’s public finances.

Mr Phillips accused the Chief Minister of being “a spin doctor” and dismissed his address as “the big lie budget”, insisting the government was “parking most of its debt off balance sheet” and that its figures were “fundamentally opaque”.

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