TOGETHER GIBRALTAR REACTS TO THE ANNOUNCEMENT OF THE UK £500 MILLION SOVEREIGN LOAN GUARANTEE

Together Gibraltar welcomes the news that the UK government has provided the Government of Gibraltar with a loan guarantee for a borrowing facility of up to £500 million. The party believes that the ability to borrow with favourable conditions at this time of international crisis is undoubtedly a positive step, and does not agree with the illogical and opportunistic criticism that has been levelled at the Government from elsewhere within the Opposition. Bringing down Gibraltar’s cost of borrowing will benefit our economy and finances, as well as provide us with a measure of financial security during the ongoing pandemic. Together Gibraltar hopes that Government will be cautious with its spending and curb its predisposition for vanity projects and uncontrolled spending.

If it is to be believed that the state of our public finances was healthy and robust before the last election, with a rainy-day fund in place for any eventuality, as claimed at the time by the GSLP-Liberals, then it should not be necessary to borrow a further £500million of fresh debt at this time. Together Gibraltar favours using the new borrowing towards refinancing existing debt rather than incurring additional debt where possible, as even cheap borrowing will one day need to be repaid by future generations. However, considering that we are currently in the midst of an international crisis which requires the state to protect the health of our people and our economy, it is good news that the loan guarantee has been made available should we need it.

Together Gibraltar is happy that this new borrowing will appear on the Government books, rather than obscured through a web of Government owned companies as is the case with other Government debt. However, we continue to be concerned about the state of Gibraltar’s public finances and, in particular, about the lack of transparency that surrounds them. It is also worth noting that in recent legislatures, large financings have taken place, including those collateralised over government owned estates and housing. While it is comforting to know that we may now borrow a further £500 million at rates likely to be close to those of UK government borrowing, it would also be reassuring to be able to properly assess the status of public spending and borrowing. Unfortunately, this is not possible due to the lack of transparency in relation to the public purse which is increasingly the hallmark of the current administration.

Together Gibraltar encourages the Government to release a detailed account of Covid related expenditure, as well as the formalised budget, and reminds government that the opacity of government finances is one of the most significant failings of our democracy - one that needs to be immediately corrected if this administration is to have any credibility on this matter.