Chamber response to Budget measures

The Chamber of Commerce is broadly pleased with the measures which were announced in this year’s budget. It is gratifying to see that many of the measures which the Chamber has been continuously lobbying the government to address for several years have now been adopted. The continued growth in the economy, the budget surplus, the GDP per capita figures, the growth in employment and tax take are all good news. The Chamber welcomes the desire of Government to support a vibrant private sector as the engine of the economy. The Chamber aspires to a growing private sector which is supported by a decreasing size of public sector to the extent that it is possible for e-government initiatives to provide efficiencies.

It is heartening that the economy continues to perform so well at the macro level.  The concern amongst our members is the fear of a growing disparity between the terms, conditions and salaries offered to public sector employees in comparison to the SME’s in the private sector.  Even well established companies have lost valuable staff to the public sector.  Many companies in the private sector simply cannot compete with the terms, conditions and increasing salaries offered by the civil service. We commented on this last year but it seems that this trend is still continuing.

There were a number of changes which the government announced that the Chamber believes will be helpful to many local businesses. The ongoing plea by the Chamber not to increase business costs has started to be addressed and we are pleased to note that there have been no increases to Social Insurance, electricity and water: Similarly, the Chamber has actively lobbied Government to abolish employers’ social insurance contributions in respect of an employee’s second employment and we are pleased that this has happened. The introduction of a £100 social insurance credit for companies with ten employees or less will also help a significant number of local businesses. The 150% training allowance is a novel way to encourage staff development and also help companies raise their profit levels although we note that this is for training leading to a professional qualification.  The Chamber is currently working on its pre-election wish list which will address the concern of many members who believe that whilst academic advancement is government funded, and now professional qualifications have some support, the cost of vocational training attracts little attention.  Furthermore, given the disparity between the terms offered to staff of public owned businesses and those offered by the private sector, staff trained by the private sector all too often move to the public sector to better their terms and conditions.  The Chamber will address this later in the year following further consultation with its members.

The Chamber also welcomes the initiatives to encourage new businesses such as the social insurance credit for start ups. This will be extended to firms employing up to 20 people in their first year of operation.

Levelling the playing field

For years the Chamber has banged the drum about having a level playing field for local businesses. This is especially the case when it comes to competing with unregistered and unlicensed traders who cross the frontier to work in Gibraltar but pay no taxes or social insurance. The Chamber will monitor with great interest the new pre-notification system to the Collector of Customs and hopes that this initiative functions well and genuinely levels the playing field for local businesses and consumers alike.

Once again the Chamber is concerned with ever increasing recurrent expenditure and questions whether there really is a need to give above inflation pay rises to the civil service given the many other benefits the public sector enjoys such as non-contributory pensions, year round family friendly hours and in many departments retirement at 55. This will only increase the polarisation between workers in the public and private sectors.