First of all debt to GDP ratios are pretty meaningless in small jurisdictions such as Gibraltar since as Sir Joe Bossano explained recently, GDP growth does not necessarily mean a proportionate increase in Government revenue and thus it should not be viewed as a crude credit limit. In the past our official debt limits were linked to recurrent revenue but this limit was abolished by the GSLP/Liberals in 2016 and now only linked to GDP. This is dangerous since it allows too much borrowing, and other overseas territories such as Bermuda now only consider recurrent revenue as a metric for affordability of debt.

So what is our debt? I split Gibraltar’s gross debt into two parts the Direct and the Indirect as follows:

The official gross direct debt of the Government of Gibraltar is £447.7 million pounds which is made up of £ 247.7 million of Gibraltar of Government debentures held by the Savings Bank with no fixed maturity and £200 million of bank borrowing. The Bank borrowing from the last information available to me is provided £50 million by NatWest maturing in March 2020 and £150 million by Barclays maturing in a tranche of £ 100 million in October 2019 and £ 50 million in June 2020.

Our indirect gross debt consists of the following: Credit Finance - £400 million borrowed from Savings Bank; Gibraltar Capital Assets Limited - £300 million – Loan notes secured on 6 Housing estates by way of mortgage. That adds to £700 million.

The Government then this year borrowed a new amount of £164.7 million using the 50/50 equity that the Government held in affordable housing. That then takes total indirect debt to a new level of £ 864.7 million. When you add the direct and indirect levels of gross debt together we arrive at a staggering £ 1.3 billion!

The Government cannot dispute these numbers but simply asks you to disregard the indirect debt since that has been raised through companies.

We are faced with an uncertain financial future given the harsh realities of Brexit. Our public finances should be crystal clear and not distorted by financial alchemy. We are now in the midst of a General Election campaign and the rhetoric and spin will only intensify. You deserve better, I can personally guarantee that a GSD Government, if elected on 17 October will have at its core the principles of fairness, transparency and accountability so you will always know what is being borrowed and why, how we are spending your money and whether we are spending it well and wisely.

11-10-2019 PANORAMAdailyGIBRALTAR