By Gabriella Peralta and Nathan Barcio
A Budget measure to introduce a pollution tax for older vehicles was reversed within hours on Monday amid public outrage that culminated in a loud impromptu protest outside No.6 Convent Place in the evening.
The measure sought to introduce a £10 weekly levy on vehicles older than 10 years – more for commercial vehicles – and channel that money into the climate change fund.
But the prospect of a £520 annual tax sparked anger amid concern it would hit older people and those less well-off who could not afford a new car or motorbike and relied on their vehicles.
A Facebook page was set up shortly after the measure was announced and had attracted nearly 4,000 followers within four hours.
By 7pm, there was a mass protest outside No.6 Convent Place that brought traffic to a standstill as people took to the street to express their anger.
According to the Royal Gibraltar Police, around 500 people were present at one point, with access to Main Street temporarily restricted for vehicles.
Although the anger was directed in most part at the proposed pollution levy, this was described by many people present as a tipping point alongside other concerns including increases to utilities and other charges.
There was anger too at a comment by the Chief Minister on GBC’s Gibraltar Today – prior to the decision to back off the measure - during which he said he too would be paying the levy having bought a second-hand Porsche.
Many people interpreted that comment as being “out of touch” with the reality for many people in the community.
One of the protestors, Dean Penfold, urged the Chief Minister not to “brag” about wealth and find alternative ways to resolve the challenges faced by Gibraltar’s public finances.
“Find a different way to fix it but don’t rob us,” he said.
“We are not the problem.”
Earlier in the afternoon, the Chief Minister had in fact confirmed a Government U-turn on the measure, which he said would not be introduced following the public’s “legitimate concerns” and would now be put to consultation.
Mr Picardo said the Government would seek feedback and look at the possibility of taxing cars over 10 years old only when they are sold and the ownership has been transferred, or when there are two or three such vehicles per household.
The Government said it would look to reduce Gibraltar’s pollution levels from motor vehicles “in a different way after deeper examination” and that discussion would also take place on potential exemptions from the tax, or whether the levy should be on a sliding scale depending on the age of the vehicle.
“The full consultation paper will be issued after the summer so that more people are in Gibraltar and able to respond,” the Government said.
“The levy will not progress as announced [on Monday] morning.”
But Keith Azopardi, the Leader of the Opposition, echoed the sentiment of many present at the protest when he said the measure was “a shambles” that “should be declared dead and not go to consultation”.
“Our view is that the announced new levy of £10 per week of vehicles over 10 years amounted to a new and significant tax of £520 per year,” Mr Azopardi said.
“This move was far more likely to penalise those on lower incomes than anyone else…”
“Lower income people can't buy a car just like that.”
Mr Azopardi, who was one of several GSD MPs present at the protest, said the tax was “ill thought through”.
“We think this measure should be withdrawn unequivocally, not go to consultation.”
“The Chief Minister may be able to keep an old car, a Porsche, but…this is unfair and an unfair penalty on those lower income families.”
The GSD followed-up with a press statement describing the afternoon’s developments as a “record-breaking U-turn” that breaks “previous backtracking”.
The party pointed to past measures Mr Picardo has backtracked such as the company levy in a recent budget and the pedestrianisation of Line Wall Road.
“The pollution levy was bad policy and it was obvious on any interpretation of it,” the GSD said.
The party that the public were “therefore absolutely right to immediately react negatively to a measure which was bad” for working people, especially those on low incomes.
“This begs the glaringly pertinent question: how can a Government have once again failed to think through a revenue raising measure before announcing it?” GSD MP Damon Bossino said.
“The public will justifiably ask itself the question as to how such a measure could have had the support of the entire, supposedly socialist government, which had no regard to its effect on ordinary citizens particularly those on low incomes, young people and the elderly.”
Mr Bossino said the Chief Minister is “out of touch with reality” as was the entire Government.
“For a man to refer, in support of the policy on GBC following his budget speech that he had bought himself a Porsche in order to lift his spirits speaks to this in a very pointed way and will not be forgotten or lost on people,” Mr Bossino said.
“It is important to note that the Government has not wholly abandoned the policy and has kicked it into the long grass subjecting it to ‘consultation’.”
The GSD said it will press the government for answers.
Together Gibraltar also waded into the row and labelled the tax “disastrous”, hitting out that the proposed levy was “clearly done without consultation or professional input”.
“The immediate backtracking, within hours of the policy’s announcement, shows that there is no strategy to improve Gibraltar’s traffic situation and keep up with the rest of the world,” Together Gibraltar said.
“This policy would have hurt the worst off Gibraltarians most, while doing nothing to safeguard our environment, tackle pollution, or to improve transport options on the rock.”
The group called this a “direct, regressive tax” on working Gibraltarians, “aimed squarely at those who are least able to pay” and do not have the financial means to buy a newer car.
“This policy would also have made things worse for the environmental cause it purportedly supported,” TG said.
“For those who could afford it, they would have been encouraged to rush out and buy a new car, just as the import duty waiver did in 2020.”
“Due to the greenhouse gases used in manufacturing cars, this often has a bigger environmental impact than continuing to use an existing vehicle.”
“This policy showed that the government continues to insist on making broad changes that will affect thousands of Gibraltarians, with no consultation, stakeholder management, or awareness of life on a tight budget.”
“There are plenty of options for discouraging car use in Gibraltar that would actually improve people’s quality of life, and could be funded by those who have been raking in money from Gibraltar, rather than those struggling to make ends meet.”
“We call on the government to recuse themselves from this consultation and to give civil servants a proper mandate to improve transport options on the rock, in a realistic and fair way.”