*Ruin is faced, without direction to avoid the crash by any political force
*Deficits continue as do increased debts
*Recurrent expenditure is not reigned in by the GSLP-Liberal budget *Who benefits from rents paid to private landlords
*Borrowing for capital projects still incur increased recurring cost
*Pensions likely to be a huge hole
*’No deal’ scenario makes matters worse
*Difficulty of gaining economic independence from Spain,
*Economic dependence on others is inevitable


Sir Joe Bossano and Roy Clinton agree that ruin beckons for Gibraltar, although each argues the end destination across a different journey.

Sir Joe centres his concerns on the inability of our social security system to sustain pension payment liabilities in future. Roy Clinton centres his arguments on increasing recurring expenses, annual deficits, and unaffordable public borrowing.

Neither of them provides a clear way forward.


The current budget deficit is £55.3 million, and current public debt with “hidden, indirect debt”, brought into account, stands at an estimate of £1.79 billion. £350 million of that was due to the response to the Covid pandemic.

The result is that, according to those figures provided by Mr. Clinton, before the pandemic the public debt, largely incurred by GSLP-Liberal Chief Minister Fabian Picardo, already stood at an unaffordable £1.44 billion.

Mr. Clinton says of this, “This Government has truly buried Gibraltar in a mountain of debt, and it should be ashamed of itself.”


On recurrent expenditure Mr. Clinton highlights the example of the huge hike in rentals payable by the government to private landlords.

Mr Clinton neatly summarises the position, “The cost of rental of office space by the Treasury department has rocketed from £2 million in 2011/12 to £10.5 million in 2021/22”. It is an increase of £8.5 million pounds.

It would be interesting to analyse which individuals are behind the various landlord companies benefiting from those rentals, and to boot not paying income tax due to benefitting from Development Aid licences issued to the relevant developers.


Sir Joe continually emphasises the difference between recurrent expenditure and capital investment. He admits that the GSLP’s had breached its ‘golden rule’ by borrowing to fund recurring expenditure during the pandemic.

He says that the aim is to reverse that as soon as possible, which may be so, but he sets no limit dates for that to happen. Instead, we know that deficits are projected for a few more years. Those will have to be met from public borrowings.

What he does not say is that even if public borrowings are, overall, for capital investment, the interest payments on them must be funded, as do any capital payments, especially if fresh borrowings are not available.

At least interest payments make a significant dent into recurring expenditure. It is a dent that will increase sharply over the next years due to interest rates going up.

What is most frightening about Sir Joe’s budget contribution is what he has to say about the social security fund.


Sir Joe says it in straightforward terms, “It is a matter of simple arithmetic, that if currently we have 30,000 insured workers, and their payments barely cover 6,000 pensioner payments, and the ratios of contributions to benefits are not dramatically altered, then with the passage of time every additional pensioner added to the 6,000 requires five additional workers added to the contributors.

He adds, So, when the 30,000 become pensioners, the work force would have to be 150,000, which is not going to happen.” In short, we will not be able to pay the pensions of those entitled by having contributed.

Sir Joe goes on to disclose that he will be working on a plan to reform the system, but that the Gibexit ‘deal’ rules that may come into play if a ‘deal’ is reached. Those, he says, are made to encourage cross-border worker mobility.

The implication is that absent a ‘deal’ the solution may be to disentitle non-Gibraltarian workers from a pension, although over time he speaks of altering the economy to one that is not so reliant on a cross-border workforce, by attracting inward investment and companies that will be here to invest elsewhere.

He highlights, “The problem we have and no one else has is in relation to our size and … that the Gibraltarian work force is outnumbered by workers from other countries … and this is exceptional.”


Sir Joe goes on to make clear that Gibraltar must prepare for the possibility (looking more and more like a probability) of no Gibexit ‘deal’ being reached. He describes this as, “this is just one more negative element in the background to the most uncertain and volatile global situation in economic terms since the end of WWII.”

The scenario he paints is one in which Gibraltar “should increase … self-sufficiency and the ability in a hard Brexit non-treaty situation to continue to maintain and deliver the benefits of a sound economy …”.

That irrespective of whether there is a Gibexit ‘deal’, because even if there is one, it will disappear in or before four years as “Gibraltar’s vital interests … is its economic independence from Spain, so that our economic relationship with our neighbour remains because it is mutually beneficial and not because we are dependent on them.”


How economic independence from Spain will be achieved remains unclear and is unsaid by Sir Joe, beyond the vague concept of attracting inward investment and companies that will be here to invest elsewhere.

Will that not make us dependent on those, which creates a similar volatile environment, as they can leave just as easily as they came were circumstances to change?

The only certainties are the economic issues and the uncertainty that Brexit has brought to Gibraltar. Solutions are not obvious, and none are being preferred by either the GSLP-Liberal Government or the GSD opposition.

Indeed, none is offered by anyone else, be it the Chamber of Commerce, the GFSB, the Trade Unions or any new political party. Could it be that we are where we are because there is an element of inevitability, fuelled by the greed that we have been allowed to enjoy by successive governments for decades?