Picardo delivers ‘confident but prudent’ Brexit budget

Chief Minister Fabian Picardo delivered a “cautious” Budget yesterday as he warned of the “seismic” effects of Brexit on Gibraltar and the need for restraint in public spending.

In a two-hour speech that contained few stand-out giveaways, Mr Picardo said Gibraltar must remain “united and very alert” to protect its existing economic model and develop new business.

He reported strong economic growth over the past year, including a forecast GDP of £1.77bn for 2015/16 and a budget surplus of £38.8m, and said the “rainy day funds” stood at nearly £150m.

Mr Picardo insisted that the economic figures meant Gibraltar was well-placed to face up to Brexit “…with caution, prudence and continued investment in the right areas.”

But the GSD, while backing the Gibraltar Government in its work post-Brexit, questioned the economic figures, which it said excluded off balance sheet spending through Credit Finance Company.

“It is the huge elephant in the room,” Opposition leader Daniel Feetham said, adding there was nothing in the budget to indicate the government was reining in spending.

BREXIT

Much of the Chief Minister’s speech was centred on the fallout of the EU referendum vote and the prospects for Gibraltar as the UK negotiated its withdrawal from the EU.

And while he said Gibraltar would seek to maintain access to the European Single Market, Mr Picardo - to cheers of “hear, hear, hear” from Opposition leader Daniel Feetham - said sovereignty was not up for discussion.

“If the price of continued access to the EU or the Single Market or the price of free movement is joint sovereignty with Spain or indeed any other Spanish sovereignty price, then the people of Gibraltar will not pay it,” Mr Picardo said, adding that the only threat to cross frontier workers “comes from the current Spanish administration”.

In a rallying call to the community, Mr Picardo said Gibraltar must work together to shape its future.

This, he signalled, would require collective responsibility and for the community to “give back more than we take”.

His budget measures included hike to government housing rents – it was bite-sized, amounting to an average of 60p a week, but nevertheless the first one since 1984 – and a tax credit initiative to incentivise new businesses.

There was also a freeze, for now at least, on social insurance payments and utilities, alongside a range of reductions on import duties including on women’s sanitary products – the so-called ‘tampon tax’, which were slashed to zero.

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