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Unions fear budget impact on lower paid workers

Photo by Eyleen Gomez.

Gibraltar’s unions have raised concerns over a rising cost of living crisis and the impact the Chief Minister’s budget will have on working people and their families.  

While some parts of the speech were welcome, the key sentiment from Unite the Union, the GGCA and NASUWT was concern over rising costs to the individual.  

For Unite the Union, there were key “headline positives” such as the public acquisition of AquaGib, the purchase of St Bernard’s Hospital and inflationary increases in the minimum wage, old age pension and disability benefit.  

“This was never going to be an easy budget however the Chief Minister’s budget delivery was punctuated with positive economic indicators pointing to a strong economic recovery and an eventual return to surplus,” Unite the Union said in a statement.  

“These are the points that Unite have repeatedly made in terms of a long-term economic plan.” 

“However we have witnessed a budget that heaps the majority of the burden to repair the public finances on working people.” 

“The last cost of living increase announced was during the pre-Covid 2019 budget.”  

“Aside from a commitment to address any parity issues with UK public sector workers, who themselves have experienced over a decade of wage austerity, there is no cost of living rise within the 2022 budget.” 

“The cost of living increase not only drives salary increases in the public sector, it also acts as a benchmark measure for private sector pay rises.” 

“Instead we have seen an effective and further real terms pay cut when taking account of inflation, coupled with further increases in the cost of utilities.” 

The union said the Chief Minister confirmed that the Gross Trading Profits of Companies grew by 10.5% over the year, with real average annual earning falling by 4.6%, indicators that would point to “inflation being driven upwards by company profits, not workers’ wages”.  

In addition to increasing the cost of utilities and applying wage restraint by announcing no cost of living increase there is also the announcement of increased personal tax for two years, an effective triple whammy for workers, the union added.  

 “Whilst workers face increased personal tax, against a drop in real average earnings, employers enjoying a double digit percentage increase in profits are presented with a £25 per week Covid Recovery Charge,” the union said.  

“This is a payment that is applied equally regardless of the size of employer and regardless of whether profits are thousands or hundreds of thousands.” 

“The additional tax paid by workers in both the public and private sectors via the increase in personal tax will dwarf the £25 per week Covid Recovery Charge paid by employers.” 

 “Unite actively supported measures through Covid that both protected workers and businesses to ensure that there was an economy to rebuild post-Covid, but this budget appears to be asking workers to dig deep and for employers that record profits in the hundreds of thousand or greater to pay an additional £1,300 a year as a Covid Recovery Charge.” 

“Workers kept Gibraltar going during Covid and now they are being asked to pay for the crisis.”  

“Unite submitted a public sector pay claim which Government have not responded to, the outcomes of this budget and the impacts on working people will be discussed and debated with our shop stewards and workplace representatives to consider the collective union response to this escalating cost of living crisis.”  

The GGCA also expressed concern over the increase in the cost of living and the impact this would have for entry-level public sector workers.  

Wendy Cumming, President of the GGCA, said the union has already received calls from its members who are worried about the impact this budget will have on their personal finances, especially those at entry grade levels.  

These are people who are looking to buy a house or start a family or have young families who are “earning at the lower end of the scales”.  

The unions got together and made representations to the Chief Minister and the Government when social insurance and utility bills began to increase some 18 months ago.  

“There has been no cost of living, we are seeing another 2% increase in tax and a further 8% increase in water and electricity in this budget,” Ms Cumming said.  

“Our members are telling us they are worried about making ends meet, specifically those in AA and AO positions.”  

“But there are positives as well where they are not cutting down on posts and not cutting down on progression on scales.”  

“But on the other hand this is the third year and the cost of living is exponential, and this year we will be earning less, so it is going to be a difficult year for many members.”  

Though the GGCA only has a small membership in the private sector, the union is glad that the minimum wage has gone up but it is not sure it will be able to face rising costs in inflation and other costs.  

Teachers’ union, NASUWT Gibraltar, told the Chronicle that it too is concerned over this year’s budget, but welcomed the news that no cuts will be made to public sector staffing levels.  

“Life is clearly going to get tougher for most people but particularly for those on low incomes or those who have recently began their careers,” a NASUWT Gibraltar spokesman said.  

“Fortunately, we negotiated a pay adjustment a few years ago, but unfortunately any advantages will be eradicated by the cost of living increase.” 

“Recovery of the economy, if we do not get a Brexit deal, will be even harder.” 

“Cutting staffing levels is not something we want to see.”  

“In fact, we have consistently argued that many teachers had been in post permanently for years but did not have permanent contracts and were evidently needed.”  

“This, we are happy to say, is being addressed.” 

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