Jul 02 - Minister Joe Bossano Budget 2014 Speech
Minister for Employment, Training and Enterprise, Joe Bossano today gave his Budget 2014 Speech, the entire text is as follows:
Mr Speaker,
RECORD GIBRALTARIAN FULL-TIME JOBS
I am happy to report to Parliament that the number of Gibraltarians in full time employment went up again in 2013, to reach a new record high of 9225, the highest figure since employment surveys started.
In October last year the Employment Survey Report showed 681 more Gibraltarians in full time employment than in October 2011, and I anticipate that there will be a further increase in the current year.
To put this in figure in context, I will remind the House of the performance of the Members opposite, who are so proud of their 15 years and are so critical of our 2 years in this field.
In the fifteen years between Oct 1996 and Oct 2011 the Employment Survey Report records an increase in the number of Gibraltarians in full-time employment of 4.1 %. In two years, from Oct 2011 – Oct 2013, the increase has almost doubled their fifteen year performance coming in at 8%, and as I have said, I am confident that the survey for 2014 will produce a new record high.
The GSD has always compared their performance with that of the GSLP when in
Government, provided it suited them to do so of course. Well for the record, the increase in
Gibraltarians in full time employment between Oct 1988 and Oct 1996 was also better than
the 15 years of the GSD, 5% in 8 years compared to 4.1 % in 15. We beat their
performance before Mr Speaker, and we are doing it again. And there is a very simple
reason for this. This aspect of our manifesto has always had a very high priority for us.
What is the point of a growing economy and a growing labour market, if the jobs are going
to outsiders rather than our own people?
The GSD way was to deny what was happening, and to welcome the dependence on imported labour, at least it was like that until 2011.
CONSTRUCTION CONTRACTS
In 2011, Mr Montiel explained that the Government was now distributing construction works to building contractors participating in the scheme. These approved contractors, we were told, were getting the work on condition that they co-operated with the Employment Service in securing jobs for its unemployed and that this had ensured that the jobs were available to those persons on the long term unemployment list who were willing to work in this particularly important industry.
Mr Montiel was telling the truth when he told Parliament that the conditions attached to get into Government contracts were as follows:
All labour must be duly registered prior to commencing work and throughout on terms no less favourable in any respect than CATA terms. The use of Detached Workers is not permitted.
Participants will be required to employ a certain number of workers specifically identified to them by the Employment Service from their client base. Such specifically identified workers may not be dismissed during the currency of the Construction Contract without the Governments approval.
In the case of construction and labour contractor companies, such persons (and indeed all other labour) will be engaged on terms that are at least as favourable to the employee as CATA terms on every issue covered by CATA terms. In the case of companies that participate in the Scheme (other than construction companies), pay shall be at least in accordance with the Statutory Minimum Wage, and all other terms as per law.
The use of “labour hire‟ companies will not be allowed, except with Government consent
in its absolute discretion. Without prejudice to such absolute discretion, the Government will not consent to the use of any labour contractor that is not registered to participate in this Scheme. Without prejudice to its absolute discretion (and subject to the aforesaid proportion of the work by value that the Governments contractor has to carry out using its own directly employed labour) the Government will permit the use of Labour Contractors that are registered to participate under this Scheme, but the Governments contractor will remain fully liable and responsible for their performance and compliance.
Any Contractor or sub-contractor who is found with any employee in breach of the law, unregistered for tax or social insurance, or in breach of the terms of this Scheme will be removed from this Scheme, and any outstanding, current contract may be terminated;
Any Contractor, whose subcontractor or any other sub-contractor or labour contractor, is found engaged on the Construction Project with any employee in breach of the law, unregistered for tax or social insurance or in breach of the terms of this Scheme shall be removed from the Scheme and thus excluded from the contract. The onus is thus on the Governments contractor to ensure that all labour engaged on the project, whether employed by them, the subcontractor, a labour contractor or anybody else, fully complies with all the aforementioned requirements.
These conditions continue to be the same today.
It is difficult to envisage a more comprehensive and water tight set of rules. It gives almost total control of the hiring and firing of workers by private companies, on all government contracts.
There are two points I wish to make in relation to this Mr Speaker.
Firstly, although the conditions announced on paper were very tough, the theory and the practice were two different things. This is what is known as the GSD way of doing things.
Announcing just before the Election that you are going to take very tough action to give priority in the construction sector and elsewhere, to the local unemployed and then doing little or nothing about it.
As far as I can tell from what we found from the records in December 2011, the net effect of this was that there were four Approved Construction Companies with Government building contracts amounting to several millions of pounds who had taken on between them 6 unemployed persons and given them work as labourers. It didn’t seem much of a result from such a tough policy.
At the time in 2012, I was prepared to give the previous Government the benefit of the doubt. After all, I had welcomed the initiative from the Opposition benches when it was announced as evidence that finally the Government was accepting my arguments of 15 years that action had to be taken to increase Gibraltarian participation in the construction Industry, which participation had been falling since 1996.
So perhaps only six unemployed Gibraltarians were taken on as labourers because the unemployed could not be persuaded to work in this industry since at that time the GSD was theoretically forcing employers to take on labour and Mr Montiel was telling Parliament the following:
“Many areas of employment in the private sector are not attractive enough to the local unemployed. As I have stated in the past, few if any, are clamouring to replace foreign labour in the private construction market, catering, hotels, shops, bars or restaurants. Indeed, many of the long-term unemployed, offered the opportunity of a job, under the construction or other supported schemes, have either rejected employment or simply been unable to sustain work on permanent employment”.
As we now know, it is possible to provide employment for Gibraltarians in these areas, not least because if it were not possible, as the previous Government claimed, in effect almost the whole private sector would have to be operated with imported labour.
GRADUATES
Mr Montiel as well as having such views on the employability of Gibraltarians in the local market, had an expectation that returning graduates could find job by themselves. He told the House, “the reality is that of the vast majority of graduates, those who do not immediately find employment do not register as unemployed because they seek specific professional jobs. Other graduates that register for employment constitute a very limited
number, currently there is only a handful of returning graduates registered unemployed.
Mr Caruana as Chief Minister in 2011 was even more specific than Mr Montiel. He said that there were only six graduates seeking employment and that we were trying to patronise them with unnecessary offers of employment in manufactured non-existent jobs when the economy was entirely able to absorb them into real jobs.
Well we know now that none of this was true Mr Speaker. As I have told Parliament in the past, we assumed that Parliament was being told the truth in 2011, and did not expect to find as many unemployed graduates as we did in 2012. If the Chief Minister of the day is saying that there are only six, one can assume that maybe there are 12, what you do not expect is to find 60.
In fact, we have finished up taking on over 160, in the 27 months the Graduate scheme has been in operation. All of them were unemployed when they were taken on. A hundred have now completed a period in the company. Of these 91 are currently are in other employment and 9 have left Gibraltar.
What we found in December in the local workforce is the parallel of what we found in respect of graduates.
There was a backlog of unemployed Gibraltarians, who had given up hope of finding employment. The very opposite of what the GSD was claiming in Parliament, namely that we had exhausted the supply of Gibraltarian employees and should be encouraging an increase in the number of frontier workers.
So, at the same time as they were saying that there were no unemployed graduates. They were saying that there was no unemployment in terms of other persons interested in the available jobs and trying to justify this false statement by incorrectly quoting a number of statistics.
The Parliament was told in 2011 that there had never been more jobs created for Gibraltarians than in the 15 years of the GSD. This in itself was a novelty in 15 years, because for the previous 14 years the Honourable back bencher regularly lambasted me for putting our people first, saying it was the worst type of jingoistic xenophobia, one of the very nice things he used to say about me when he was Chief Minister.
But 2011 was exceptional because it was the year of his conversion to my jingoistic preferences in wanting priority in employment for Gibraltarians.
So he claimed that there were in 2010, 1316 more Gibraltarians in jobs than there had been in 1996.
This was not true then, however it became true in October 2012 when the increase from 1996 to 2012 reached the figure of 1341. The 1341 was made up of 861 Gibraltarians in full-time jobs and 480 in part-time jobs, compared to 1996. Since then, since 1996 the numbers of jobs has increased even more to reach a figure of 1467. I can well imagine the song and dance the GSD would have been making of this figure if they had achieved it. They arrived at the figure that they quoted in the 2011 Budget Mr Speaker, by comparing the October 2010 total of 10,906 total jobs (full-time and part-time) with the equivalent in 1996 of 9,390.
But of course, as the Survey reports made clear, these are the numbers of jobs not the number of people in jobs. So we need to distinguish between full-time jobs and part-time jobs.
The 1316 quoted in the last Budget of the GSD by the then Chief Minister then turns into an increase in number of Gibraltarians in full-time employment of 260, from 8207 in 1996 to 8467 in 2010, an average increase of less than 19 a year over a 14 year period – not much of a record to boast about, Mr Speaker.
Part-time employment in the same period showed an increase from 1183 to 2239, namely 1056, however most of the so called “part-time jobs” were not jobs at all. This was because of the policy decision that Community Officers should not be limited to unemployed males over 60, but be offered to any 60 year old male still in employment provided their income from their full-time job did not exceed £20,000. When this policy was introduced in 2009 it was reflected immediately in an increase of 196 more Gibraltarian held jobs and by 2010, as I told Parliament in 2011, the figure had reached 700. So in reality the additional number of jobs in part-time employment between 1996 and 2010 was 356, or an average of 25 part-time jobs per year. The Surveys no longer include these part-time Community Officers as part of the employment market or part of the private sector, and therefore the figures that we are looking at in this year’s and last year’s reports exclude the Community Officers and provide a better and more accurate picture of the increase in Gibraltarians in employment.
THE ECONOMY
Central to the philosophy of the GSLP has been the relationship between employment and economic growth.
The party has always been committed to a high level of economic growth and as a consequence providing high levels of employment given that earnings from employment are an important contributor to the size of the GDP.
Throughout our days in Opposition the reaction of Mr Caruana was to belittle my contributions to the budget debates expressed most explicitly in 2009, when he made clear that my absence for the first time since 1972 from this Parliament in the debate on public expenditure was not something the GSD lamented since as far as they were concerned, my contribution was not something they missed. For them everything I had to say was worthless.
For Mr Caruana I was an economic illiterate not even an economist. In spite of spending longer than anyone else studying our nations finances and participating in the debates, it seems I had learned nothing.
In 2007, in the general election when we were debating the propective economic situation I predicted that the GDP in that year would come in at around £800 million and that it could grow to £1.2 billion by 2011, Figures which were included in our 2007 Manifesto.
The GSD way was reflected in their leader’s reaction sitting next to me in GBC on the eve of polling day. This was to ridicule my figures as sheer fantasy. Eventually two years or so later, the 2007 GDP was published. The figure was £804 million. Now seven years later we have the final of figure for 2011 and the result is £1.169 billion, £31 million less than what I had claimed was possible in 2007.
Not bad for an economic illiterate.
The rate of growth under the GSD between 2007 and 2011 has been 45.4 % and not the 50 % projected it our 2007 Manifesto.
In 2011 the GDP estimates made by us whilst in Opposition was that the economy would come in at £1.1 billion and the result that we now have is, as I have said £1.169 billion. We are committed to achieving a 50% growth in 4 years and the published target figure is £1.65 billion which as the Chief Minister said in his opening statement is likely to be exceeded.
This has been rubbished before, during and after the General Election. Such was the level of ignorance in such matters shown by the Honourable back bencher when he was Chief Minister, and in charge of our economy, that he kept on arguing that it was impossible to achieve annual growth of 10 %, even when it was actually happening under his very nose, as was the case in 2011.
The growth achieved by the GSD Government in the election year was 10.9 %, higher indeed, than we had suggested, but totally expected given the publicly funded public works programme and the housing construction programme in the run up to the election, that was fuelling this growth.
When I used to challenge the figures that the Honourable Mr Caruana used to quote and suggest that he might be wrong he used to get very upset with me Mr Speaker.
The idea that he could be wrong in anything he said or did was anathema to the Honourable member.
The growth in the economy was happening not by design but as an inevitable consequence of borrowing and spending on capital projects and it was highly dependent on the activity of the construction sector as I will demonstrate later on.
This was not the first time we had capital investment led economic growth. The first time was between 1988 and 1992 under the GSLP but in that period it was not financed by public debt increases and public works spending. It was much healthier, because it was the result of the largest foreign direct investment in Gibraltar’s history creating infrastructure in land, buildings, housing and telecommunications which made possible the post 92 restructure of our economy away from the MOD dependence.
Of course when this was being done by investors from the outside bringing in their money, the GSD way was to denigrate the result and call it an optical illusion. When it was done by them, by borrowing and spending money in many areas where there was little or no return, simply to create a feel good factor in advance of an election, it was an economic miracle.
The growth in the economy in 2007 to 2011 was as I have said more dependent on construction work than that of previous years. This is reflected in the share of the labour market taken up by the construction sector which was as high as 15.4 % in 2011 compared to around 11.4 % before 2007.
In the last two years, construction has accounted for 9.3 % of the labour force, although it is likely to be higher in the current year. The average over the four years, nonetheless, will eventually be less than in the period 2007 to 2011.
As I pointed out last year when the Opposition generally and the GBC particularly was making a big issue of the reduction in the number of jobs, shown in the October 2012 survey, the reduction was not because we had an economic crisis as some would have it, but because the pre-election ‘building boom’ was over. The job losses were the inevitable result of the completion of a flurry of construction projects. In 2014, we can expect a substantial increase in the construction labour force which will then be reduced after the current housing estates are completed.
So if we look at how our economy is growing by reference to where the economic activity is reflected in job creation we see the construction activity taking up a smaller share in 2012 and 2013 than it did in 2011, and the labour market was growing outside the construction sector.
Reflecting economic growth outside the industry, non-construction jobs were 18,813 in 2011 and 19,511 in 2012 and 20,774 in 2013 growing over the 2 years since Oct 2011 by 1,961 jobs, or 10.4 %.
The employers providing these jobs increased in the period by 158, and of course there was also organic growth by existing employers.
By contrast between 2010 and 2011 the jobs created outside construction were 560 or just 3 %.
If we compare the growth in the non-construction sectors of the economy by jobs created over 2 years from 2009 to 2011, the growth is 5.1 %, or less than half what was being achieved between 2011 and 2013.
Excluding construction jobs, in fact the increase in the rest of the economy of 1,961 jobs is higher in the two years 2011 to 2013, than in the four years of the GSD from 2007 to 2011, when the total was 1603.
The importance of this comparison is that it is indicative not just of higher growth but of more stable wider spread industrial coverage.
UNEMPLOYMENT
The other side of the coin in job creation is the level of unemployment.
In January 2012, when we took over, the number of persons registered unemployed was higher than in the same month in the previous year. Throughout 2012, registered unemployment was higher than in 2011, and this continued to be so till mid-2013. It is only since the third quarter of 2013 that it has fallen below the level of 2011.
This is as we expected and predicted during the election campaign given that the numbers registered as unemployed did not reflect the real number of jobless. This was admitted by the members opposite during the election when they said it would cost £11M a year to pay £1000 a month to all the job seekers unemployed implying that the numbers affected were in the 1000 range rather than the 450 range, the published figure.
The fact that they knew this to be the case in 2011 did not stop them from claiming in 2012, that I had created unemployment when I took office.
I put it to you, Mr Speaker, if members opposite behave like this, is it that they don’t realise that what they are saying cannot possibly be true?
Is it that they are so incapable of understanding simple arithmetic in opposition, that they can no longer make the same calculation that they used to make in Government?
The workforce, we used to be told, is made of those in employment and those registered as seeking employment.
So it follows that if one goes up, the other must go down.
If there is a relatively stable number of Gibraltarians available for work, then more unemployment in 2012 should have been reflected in less Gibraltarians employed, but members know that the opposite is true.
In 2012, although the number of registered unemployed Gibraltarians was higher, the number of Gibraltarians with jobs was also higher. So how can this be possible?
I remind the House of the argument used by the Honourable backbencher, when he was Chief Minister to prove it was impossible.
He told us that we must understand that in a population that is not increasing in numbers as far as Gibraltarians are concerned, and which is getting older, so that more and more of those numbers fall into retirement, it was hardly surprising that the number of Gibraltarians going into work cannot rise.
In other words, since the total available number of Gibraltarians does not rise, the numbers entering work cannot rise or can only rise very slowly. Mr Caruana informed us, it was impossible for him to increase the number of Gibraltarians in employment because in effect, he was telling us they simply did not exist.
He said, “I know they expect me to solve everything in this community, but this is something that I cannot do anything about.” And he explained why it could not be done. He said, it would require real mirages to produce more Gibraltarians of working age than the mothers and fathers had chosen to create through the procreation process.
Well, Mr Speaker, in 2012, the number of Gibraltarians of working age with full time jobs increased and the number of Gibraltarians registered as unemployed also increased ..., both increased. Unemployment did not go up because people who were working under the GSD lost their jobs in 2012, as the GSD propaganda machine immediately started claiming at the beginning of the year.
By their version, it seems as if in 2012 I achieved what the former Chief Minister admitted was impossible for him to achieve. Given that he never ever admitted to being wrong or mistaken about anything in the 15 years he was in Government, it gives me great pleasure to explain how I have done something, which he said he was not able to do.
Let me hasten to add that it is not the case that I was able, over Christmas 2011, to breach the normal procreation cycle, as he put it, and produce more newly-born Gibraltarians of working age in January, in excess of those that were already there in December.
They were already there then, and they were already there throughout 2011, but it was hidden unemployment. They were there in between 2007 and 2011 when the number of jobs in the economy was going up and the number of Gibraltarians with full-time jobs was coming down. They were there between 2010 and 2011 when Mr Caruana discovered that the cleaners in his office were frontier workers and introduced a requirement that all cleaning contractors should employ locals, who clearly already had to exist unemployed in order to be given the job and also, when the construction companies were told, if they wanted to get government contracts they had to employ Gibraltarians who were already unemployed. Or is it that these new workers were suddenly to come into existence out of nowhere.
So if I did not create a new generation of Gibraltarians of working age on the 9 December 2011, how did I manage to do what Mr Caruana said he could not?
Simple, Mr Speaker,
I will now explain how many Gibraltarians of working age there were in 2012, who presumably were not in existence in 2011, according to the then Chief Minister. And I will tell the House how I arrive at my estimate of the numbers involved.
As I have previously told this House, the practice before 2012 was to run the vocational training scheme, the so called VTS, from Bleak House and to have a quota of persons on the VTS work experience placements for up to 12 months. The opportunity to join was based on being on a waiting list until someone else finished and vacated the place. However, the numbers involved was allowed to go up in the second half of 2011 in the pre- election period, resulting, at one point, in up to around 400 VTS placements. Even then, there were still some 70 persons waiting to join in 2012. Those on these waiting lists were deemed not to be seeking employment and did not register as unemployed.
We included them in the unemployment list and offered them a placement in the Employment & Training Company after February 2012.
The VTS Scheme paid those on it between £265 and £450 a month depending on age. We started the training programmes with a salary of over £900 a month, between two and three times the salary that was previously being paid, making it much more attractive and therefore encouraging more people to come forward.
Thirdly, there was a political commitment to encourage Gibraltarians to seek employment and we had an influx of long-term unemployed who had previously given up hope of finding work, which increased the numbers registering from lapsed, in the first nine months of 2012.
In other words, the combined effect of our initiatives did not increase the numbers without a job, but the numbers available for work and registered that previously were unrecorded.
Let me show some evidence for this.
The House knows that I believe it is more accurate to monitor the labour market by reference to the numbers in full-time employment than by looking at the total number of jobs including part-time jobs. This was something that I consistently argued from the Opposition. The number of part-time jobs is misleading as an indicator.
I have given the example of how, when community officers positions were extended from the previous practice of being available only to persons registered as unemployed, and moved to being offered to those already in employment, with wages below £20,000, half the private sector workforce, it enabled the GSD Government to claim that more Gibraltarians than ever now had jobs. If anything, what was happening was that more Gibraltarians than ever now had two jobs assuming that the part-time role was accepted as employment which in fact it was not.
When the GSD was arguing that the number of Gibraltarians with jobs was going up but could go no higher because we had run out of people, the numbers in full time employment was actually going down from 2007 to 2011.
The position in 2012, clearly demonstrates that the number of Gibraltarians available for work, was being understated by about 500.
In October 2011, the Gibraltarian workforce, made up of persons registered as unemployed and persons in full-time employment was 8,907. A year later, calculated on the same basis, the workforce had grown by over 600 persons to 9,588.
One gets a slightly smaller increase if we use the less accurate, but GSD preferred statistic, and include part-time, often second, jobs.
The comparable figures go up from 10,656 to 11,251, on this basis, an increase of just under 600.
In 2013, unemployment started coming down as employment increased, showing that the unregistered supply of labour from 2011 was now considerably reduced. The total workforce still went up but now the increase was about 100 compared to the 600 or so from 2011-2012. This indicated that the 2012 increase was inflated because it included the 500 already there from 2011 but not previously recorded.
CONSTRUCTION TRAINING
Lack of training in construction skills has been an element in the shrinking share of construction jobs held by Gibraltarians between 1996 and 2011.
Although there is a cyclical element to the demand for construction skills and therefore some of that demand has to be met form outside at peak levels, the core level of work should eventually be made up fully by local labour. Historical data suggests that this core workload requires around 1500 constructions workers predominately on maintenance work.
The lack of Gibraltarians labour was established by the studies carried out in 2012 and later that year we set up a separate construction training company dedicated to providing the supply of local workers the industry required. We set out to ensure that we could fill vacancies from the local unemployed and give effect to the policy put in place for government approved contractors by the previous administration.
We needed to start by looking at was already there.
The Construction Training Centre was built with the use of the EU funding and took its first trainees in 1996. From 1996 to 2011 a total of 245 trainees were involved for example in the wet trades, where the greatest skills deficit existed. 36 of them obtained Level 1, 42 Level 2 and 6 Level 3.
As we were frequently told by the previous Government the Level 2 is considered sufficient to obtain employment and be paid the craft rate in the industry, but it was well known that employers frequently argued that the trainees were not skilled enough to be able to work alone after completion of level two.
The output of 48 at Craft Level or higher in 16 years equates to an average of 3 a year. It is hardly surprising therefore that we discovered a chronic skills shortage in this area when we did our skills audit in 2012 and found that only 7 % of the wet trades skills in the private sector was provided by Gibraltarians. Since our training is demand driven it was obvious that this was the area to encourage people to take up training in.
We also found out that employers favoured City & Guilds as the awarding body and wanted masons, that is, people who could undertake all 4 skills, brickwork, rendering, plastering and tiling, rather than just one.
A third element in the strategy adopted to improve results was to place trainees in the industry before starting in the Training Centre so that it would hopefully result in a higher numbers completing the course. This idea was like what has been done in teacher training for years where potential candidates are introduced into the school environment before they start teacher training so that they can understand what is involved in the job.
Increasing the pay for trainees to the level of the minimum wage over 3 times the level at which it was being paid to a 16 year old has also made the training more attractive.
Of course the Members opposite have criticized this just like they critise everything that has been done so far to improve skills and increase employment for Gibraltarians. In the first year I am happy to report that 73 trainees took level 1 wet trade’s City & Guilds and 60 were successful in obtaining level 1 in one module, 53 in two modules and 50 in three modules, 47 were successful in all 4 modules.
Those completing all the Level One modules will be going on this year to obtain the Level Two and enter employment on the craft rate. Those who were not successful in less than 4 of the modules have the opportunity to take again the missing modules. All the trainees are currently in employment in the construction industry.
Clearly, this is only the start of a wide ranging training programme which will progressively address the skills shortages we have identified which are not limited to the area that I have just drawn attention to. It involves other construction trades and other industry areas.
As I have said the Construction industry has had a declining number of jobs held by Gibraltarians throughout the years since 1996.
The table for all employees in the employment survey for that year showed that in the private sector 541 of the jobs in construction were held by Gibraltarians. By 2010 the Employment Survey available in the budget of 2011, when the GSD finally admitted that they had to do something and announce the requirement for Government contractors to take on and employ Gibraltarians, the figure had dropped to 479. In the year to Oct 2011 in the run up to the Election when the huge construction boom was taking place, it dropped further to reach an all-time record low of 423 jobs.
Clear evidence that their tough line with construction companies announced in the Budget was a paper tiger Mr Speaker. Little wonder they now attack us for carrying out what they promised to do but never intended to see through, because it was just a vote catching pre- election gimmick.
By October 2012 in our first ten months we started recovering the lost ground. Gibraltarian jobs went up to 452 a 6.8 % increase in ten months. In this year’s Employment survey report for Oct 2013 members will see a further increase to 486, 14.9 % higher than the level at which it was left by the GSD in 2011 and also higher than the level that it was at in 2010. Clearly we still have some way to go to get back to the 1996 level of 541 but I am confident that the 2014 survey in October this year will show a further increase getting us closer to the target.
OTHER TRAINING
Important as this area is for the reason explained above it is not the only training taking place off hand.
Mr Speaker the Hon Mr Bossino last month issued a statement which claims that there was a lack of good quality or indeed any training.
This is a matter of judgement, obviously Mr Bossino is here reflecting the GSD way, the construction training as I have spelt out is providing training and jobs on a scale that never existed before and which they previously said was not possible because Gibraltarians did not want to work in this industry.
The skills deficit that he claims exists did not come about in the last 2 years but has been the result of the previous 15 years and the facts are there to prove that, but I do not expect him to admit it.
What is however, totally unacceptable is that he should accuse me of something which is not true and he has made up. He said that he had been sharply critical of the abandonment of partnership agreements which the GSD had negotiated when in Government with some of the major companies in the private sector.
Not true, Mr Speaker.
Not true that he had been sharply critical of this, prior to last month. To my knowledge he has never made any mention of this before, so he has not been critical of it, sharply or otherwise.
Not true that I have abandoned any such agreements because I have no knowledge of any such agreement having been in existence on the 9th December 2011.
I have not seen any list of any major companies in the private sector that had entered into any such agreements.
I have not been provided with lists of the trainees in any such major private sector companies out of the 400 who were in training in November 2011.
The only training I am aware of outside of construction and engineering was that provided by Gibtelecom which was 50% state owned. This training has continued for those already there. Initially the position was that the company felt it was not able to offer employment to those completing the training, but subsequently it was agreed to offer contracts for a fixed period of time. The requirement for the skills specific to telecommunications will be kept under review in the light of the expansion that may be possible for this industry from now on. Like all training it will be linked to known job opportunities.
The old VTS, which accounted for the bulk of the 400 or so trainees in 2011 was a work- based scheme. Training included a 12 month work placement with a local company to gain hands-on experience and training in real job situations, typical placements included messenger work, manual work, retail sales, hotel and catering in the private sector, and office work in the public sector.
In 2011 there were a number of individuals in the public sector who had already spent many years on VTS gaining experience but had to compete with better qualified competition for the jobs when vacancies were advertised. A number of these individuals are still in this position. Most of the others were in areas of the private sector where Mr. Montiel had said that few if any, were likely to want to work.
The VTS was totally discredited. In our view, because employers treated trainees as ‘parked’ with them, in many instances when they had no real need for them. In other cases, employers were using them as free labour and recycling them with replacements every year. Although we had reports of this in Opposition we never came to the conclusion which Mr. Bossino has now come to namely that the employers in question did not have their names published by the then government, because they were GSD cronies subsidized by being supplied with free labour.
Mr. Montiel has admitted that there was abuse of the system by the private sector in this parliament. However his defense was that if it did not exist under the GSLP before 1996 it was because was no VTS training was then in place.
According to the GSD only 28% of this work experience trainees found employment at the end of the year. There was of course no requirement to employ nor was there a known vacancy prior to the placement being agreed.
The Employment Training Company that has replaced this has achieved to date, a much higher rate, of the order of 60% in trainees obtaining employment after the training period.
Their 28% was very high quality our 60% are dead end jobs. So what are they proposing that we go back to the old discredited system?
In addition to such placements there has been structured training provided in the following areas outside construction:
Hairdressing NVQ Level 1 Literacy, Numeracy & IT Introduction to Elderly Care & Dementia ASDAN Customer Care Health & Safety First Aid Courses Book Keeping OCR Level 1 & 2 Training courses (maritime sector) Level 1 basic carpentry at HM Prison Police Cadets Scheme
Merchant Navy Cadets – co funded by local bunkering companies
There is an important contribution to the training programmes that we ran for the unemployed which is derived from the European Social Fund (ESF), especially in areas of identified categories such as long term unemployed.
The person that has been coordinating this programme is Ms Jenny Garcia who was previously placed in Bleak House and previously to that in the Education Department and has had long experience and expertise in coordinating with United Kingdom the allocation of European Social Funds for Gibraltar, as part of this work she has to ensure that the training we are giving qualifies with EU funding requirements and meets the criteria as regards quality of content and eligibility of beneficiaries. I hope the Honourable Member opposite understands that the training programs that are offered to the unemployed are put together by professionals who were there before the 9the December 2011 and who know what they are doing and have got a lot of expertise and therefore if I have to rely on advice as to the quality of what is being provided I think I choose to be advised by the highly respected professionals in my department rather than the self-serving partisan views of the Hon Member opposite, if he would forgive me for saying so.
BUSINESS ACTIVITY
The net movement of employers registered with the Employment Service is reflected in the numbers at the end of each month.
The figures show a regular increase on a yearly basis.
In September 2011 the number of employers was 3560 and increased to 3972 a year later. There has been another increase in the year to September 2013 when it reached 4168 and a further rise to 4321 by the end of March 2014.
This is supposed to be the net effect of new businesses coming in minus the removal of the businesses no longer trading. However, I am not confident that this is the case and so we could be talking of in excess of 761 new business start-ups in two and a half from September 2011 to March 2014.
My concern about the accuracy of the data is that it is quite possible, just as it is with employees, that records may still include business activities that are no longer there, but have not been removed
Although I have been trying to get the system more up to date and accurate this has not yet been achieved to my satisfaction but I am hopeful that it will improve as we go along.
ERDF FUNDING
An important source of funds is the ERDF programmes in which we have again obtained funding for business start-ups.
The success in obtaining the allocation we have is entirely due to the efforts of the unit and in particular the accumulated expertise of the Director, Charlie Collinson who is highly respected in UK and EU by his counterparts.
The contribution that the Unit that deals with EU funding makes should not be underestimated. In the context of the level of capital and recurrent expenditure it may seem small beer, but it is quite unique.
Most Government departments spend money and a few collect taxes but the EU programme unit brings inward investment. It facilitates and enhances the attractions of Gibraltar by topping up with EU funds private or public capital investments.
They are a small self-contained unit and they get on with the job and produce results.
I want to thank them for doing so well and requiring so little of my time to do it. The results they have obtained for Gibraltar are as follows:
During the last financial year 14 EU co-funded projects were approved with a value of over £ 5.3M.
The current EU co-funded Programmes has recently finished. This Programme has resulted in:-
1. 81 EU co-funded projects.
2. 372 new jobs created.
3. 39 jobs safeguarded.
4. 41 new business start-ups &
5. £5,518,042 of private sector funds entering the economy as a direct result.
The new Programmes are currently under negotiation and envisaged to commence in September/October 2014.
SAVINGS BANK
Mr. Speaker progress with the Savings Bank continues and we hope in the current Financial Year to have in place and in operation the facility for electronic use of accounts which will permit the Government to credit payments to accounts and for account holders to withdraw cash from ATMs. I do not wish to put a date on when this will be in place because it is in the hands of the technical people whose brief is to do it as soon as possible, subject to being confident that it will work as intended.
As Members already know, the funding of the 100% commutation for Civil Service final salary pensions on terms which I recently explained in detail in answer to a Question, this is proceeding well with most people settling for a commutation level below 100%.
I do not see why something that enables Civil Servants to benefit from more than 25% commutation if they so wish, should not be supported by Members opposite, especially when at the same time it helps to fund the returns to savers available from the savings bank. 100% commutation is now available for both public and private pension arrangements and it is only Members of this Parliament that are still subject to the old limitation of 25%.
It will therefore be necessary to make provision for pensionable service in this House to be included in the new arrangements.
The GSD Government in fact at one stage announced their intention to convert the Gibraltar Savings Bank into an annuity pension’s provider. They said they would be publishing details of the scheme within a few weeks on having made the announcement. This never materialized and I recall the Honorable Mr. Caruana telling us at one stage that it could become very big business, bringing to the Savings Bank hundreds of millions of pounds. So, the idea of expanding the role of the Bank in an area related to pensions, in principle, was acceptable to GSD at the time.
COMMUNITY CARE FUNDING
The forecast outturn for the financial year 2013/2014 was estimated at £50m surplus and £45m of this, is to be transferred to the Social Assistance Fund to provide the grant to Community Care in order to increase the reserves of the charity.
I need to remind the members opposite once again this year that they were responsible for deliberately running down the reserve of this charity in the 15 years they were in Government. This was defended on the basis that once the reserves run out the work the work of the charity would be discontinued and the pensioners would receive an equivalent payment as a statory entitlement from the statory benefit fund which the GSD claimed would provide more protection for pensioners.
Although at the time it was announced I stated on behalf of the opposition that we did not believe what they were saying was possible, I confirmed we would support it if we were shown how it was to be done.
Since 2011 we have offered to proceed with the implementation of the GSD alternative if it is capable of providing the benefits to pensioners that they claim.
I have found no trace of any such plan or legislation in preparation in my department. This House was told by the then Chief Minister that there had been some slippage in the drafting of the necessary changes, which would be ready to be implemented in 2012 after the General Election.
If the House was being told the truth then I have to point out that the refusal to share with us the solution to what was described as a ticking time bomb is indefensible. If there is still a ticking time bomb time out there, then the responsibility for it rests entirely on their shoulders.
Mr Speaker I have taken note of the views expressed by the leader of the opposition when as he said yesterday I was not in the House to hear.
I hope he accepts that it was not to avoid listening to him that I was away but because I had not yet had time to put together my own contribution which I am now delivering.
He does not risk my wrath by reminding me of the fact that he used to listen to me in the past and that he still subscribes to some of the policies I advocated; on the contrary I welcome it.
I particularly welcome that he still believes in prudence in public spending and in looking after the interests of future generations by providing for a rainy day when we enjoy surpluses.
That is certainly a major departure from GSD policy whose former leader when he arrived in Government after 1996 ridiculed the concept and stated, ‘the rainy day is today’, and started spending as if there was no tomorrow.
What was a novelty in our days in the 1990’s under the GSLP has now become a norm for many countries in the world that have set up rainy day funds.
I have to say that I am sorry that his deputy who used to listen to my speeches in his youthful days does not seem to have retained any of my ideas or think them worthwhile anymore.
So I hope he keeps him firmly in check and does not allow him to drag the GSD back to the spendthrift days of the Hon back bencher.
CLOSING
In closing, Mr Speaker, there are a number of points I wish to make in relation to the areas of expenditure for which I am responsible.
The number of posts shows a reduction of 24 AA’s. This is for the reasons that I explained last year when the newly recruited AA’s were initially charged to my department pending their deployment during the course of the year. Of the 25 posts therefore only one has remained in the Employment Service, the others having been distributed to various departments and are now charged to the Personal Emoluments sub-head where they have been placed.
The two Government owned companies, Gibraltar General Support Services and Gibraltar Cleaning Services previously shown under Head 14 – Environment are in this Financial Year included under Head 24 – Employment and Labour.
All three Heads of Expenditure 23, 24 and 25 have kept within their approved budgets in 2013/14 and show little change for the year 14/15.
Mr Speaker there is a final thought I want to share with Members opposite.
I am proud of what I am doing to help people into employment and proud of the fact that we are providing ever more training opportunities to increase the number of Gibraltarians in jobs in key areas of our economy. Proud that we have given help to more mature, long- term unemployed to set up their own small business and earn a livelihood. I am grateful for the co-operation we are getting from many employers and proud of the commitment shown by the trainees and the success rate we have obtained. Though I will not be satisfied for as long as there is somebody able and willing to work and still unemployed through no fault of his or her own.
The work that I do Mr Speaker is sufficiently rewarding for me to be happy to devote seven days a week 12 hours a day to the task. This kind of commitment is the GSLP way of doing things, abandoned by the Leader of the Opposition when he converted to the GSD way. Early in 2012, when he joined me in a television debate, he was still talking the GSLP way, when he said that he wanted what we were doing to succeed and that he would be the first one to welcome it.
I am still waiting for this to happen.
I can tell members opposite that if they cared for our country and our people half as much as I do, they would be happy to see success. They would be happy to see our efforts succeeding and get as much satisfaction as I do. Every day with one single Gibraltarian less on the dole and one single Gibraltarian more in employment, irrespective of his or her political views, should be a source of satisfaction to all members on both sides of this House.
Let me therefore share one final statistic with members. Last Friday was one of my happiest days in Government since the 9th December 2011.
On Friday, 3 Gibraltarians registered as unemployed and 20 registered their terms of engagement as employees. This means more than a drop in unemployment.
To me this is more than a statistic. This means there are 20 fellow citizens who will be taking home a pay packet at the end of this month and 3 whom I have to do my best to find a job for.
Even though it is abundantly clear that more is being done now than has ever been done before, the only thing members opposite do is try and find fault. Well, I have to say to them that if they put partisan political interests before what is in the best interest of our people it does them no credit, and it does not say much for them, Mr Speaker as sons and daughters of our nation.
