GFSB urge CM to make more details on treaty public - Government says providing details now would create bigger problems

The Federation of Small Businesses has asked the Chief Minister to make public more details about what a Brexit deal could look like.

It says the small business community is "extremely concerned".

Members don't think it is possible to prepare simultaneously for both a closed border and a fully open one.

In normal times, businesses face numerous uncertainties and take steps to reduce this uncertainty. But these are not normal times. And small businesses feel there is too much uncertainty surrounding Gibraltar’s future relationship with the EU and Spain.

The Federation of Small Businesses has called on the Government to place in the public domain a comparable level of detail regarding a negotiated outcome as it has about a non-negotiated outcome.

Whilst GFSB members welcome the prospect of a treaty agreement being reached, they are “very concerned” about what that deal could contain and the implications for business – in particular the effects of an open border for goods and the imposition of a VAT equivalent or transaction tax. 
 
In a newsletter to its members, the GFSB says if such a deal is secured, the consequences for business may be huge, and there may be positives, but also many potential negatives.

For many Gibraltar businesses, the existence of a frontier for goods is an important aspect of their current business model. Any partial or full removal of a frontier for goods may have a very significant impact on their business. From wholesalers to storage providers, and retailers, businesses want to be able to adapt and deal with the challenges that a deal will present. The problem is, the GFSB doesn’t think that’s possible with the “limited” information currently in the public domain. 
 


The Federation has also expressed concern that any deal may only be for an initial period of four years, confirmed again recently by the Deputy Chief Minister Joseph Garcia in his Viewpoint interview last Thursday. Dr Garcia went on to describe the economic preparedness initiatives being promoted and overseen by the Minister for Economic Development, Sir Joe Bossano.


The GFSB says it would be a significant burden for businesses to have to prepare for a “no deal scenario” in 4 years' time, whilst simultaneously dealing with the immediate and massive challenges that a treaty agreement may bring. Put simply, the small business community feels it cannot prepare for a closed border whilst dealing with a fully open one. 

The Federation of Small Businesses have asked the Government to urgently release further information, including:


1. Whether or not the Government continues to anticipate the deal will include provision for the free movement of goods at the frontier;
 


2. In the event that it does, whether or not the Government will impose a VAT equivalent tax;
 


3. The GFSB wants details in respect of that tax: how would it be imposed on Gibraltar-based businesses and (if at all) on Spanish-based businesses trading into Gibraltar, and; whether or not a VAT equivalent tax would enable Gibraltar-based business to sell into the EU customs union without being subject to EU VAT charges;
 


4. And it calls for an update on the likely timing between the publication of an agreement and its implementation, as well as the anticipated timetable for implementation of different aspects of the agreement as they relate to business.

The Governor said this week if Spain is brave a treaty could be agreed by Christmas.

The Chief Minister has previously said he appreciates the devil is in the detail, but the details could only be made public when everything is agreed.

The Federation of Small Businesses have now effectively invited him to reconsider this position.

Government committed to full transparency but says providing details now would create bigger problems

The Government has committed to full transparency and to providing all details as soon as possible.

But it says doing so now would potentially create bigger problems for Gibraltar in the ongoing negotiations and would not be in the interests of small businesses or the wider Gibraltar public.

The Chief Minister has written to the GFSB to explain this.