The State of the economy
|Chief Ministers Budget Speech - In Full
1. Introduction & Summary
It is an honour to present my twelfth successive budget of Government revenue and expenditure, and to report to this House on the state of the economy and of public finances.
Mr Speaker, following the introduction of the New Constitution, this is the first time that the Estimates of Revenue and Expenditure were laid, under Section 69 of the Constitution, by the Minister for Finance and not by the Financial and Development Secretary, as has been the case Constitutionally until now. Furthermore, this is also the first time that the Governor?s consent is not required to proceed upon the Appropriation Bill under Section 35. The House now proceeds Constitutionally on the Appropriation Bill upon the recommendation of the Minister for Finance which, as the holder of that office I am pleased to signify.
Once again, Mr Speaker, I am able to report to this House that in terms both of public finances and of the economy as a whole, Gibraltar?s overall economic position is excellent and has never been better.
Record Budget Surplus
(1) A new all time record overall budget surplus has been achieved in the year just ended: ?24.8 million. The narrower Consolidated Fund Surplus was even higher at ?25.1 million.
(2) The Government?s capital reserves stand at a new all time record of ?100 million. This compares with ?40 million in 1996.
(3) The number of jobs in our economy stands at an all time record high of 18,485, up 1600 jobs or 9.5% over last year.
(4) Effective tax rates down to record low levels; economic measure of public debt at record low level; economy continues to grow at between 7 to 10% p.a.
By any and every known measurement of economies, the economy of Gibraltar is very strong and growing well.
Economic Development ? benefits every Gibraltarian
This economic growth is what enables the Government to lower taxes, for everyone; to eliminate taxes for our pensioners, to improve and expand our health and social services, for everyone; to build new public amenities, to improve public housing, to pay higher wages, in short to improve the standard of living of every Gibraltarian and to make every Gibraltarian financially better off. Without growing the economic cake it cannot be shared out in thicker slices to every citizen. Indeed, without this economic development, growth and success, the Government could not afford the budget measures that I shall be announcing today.
And so, Mr Speaker, every Gibraltarian has a stake in our economy ? whether he works in the private or public sectors, or whether he works or not. Every Gibraltarian has a stake in the finance centre, and in the gambling industry and in real estate developments, whether luxury or affordable homes, or mid-market price range homes or office developments. Everyone in Gibraltar, not least the Government, wants to see Gibraltar?s developments take place in a balanced way: sympathetic with the environment and surroundings; providing open and green spaces and new roads and parking spaces ? and schools and public amenities ? growing Gibraltar, but in a way that enhances the quality of life, as well as the economy.
Balanced Property Development
Some of the Government?s political detractors have taken to inaccurate criticism of the government?s policy in this respect. During the next few months we will show that no Government before this Government has ever taken the care that we have taken to ensure this balanced approach to development.
We will also show that this Government has taken to record levels the maximisation of sale proceeds that it has been able to obtain for the sale of public assets (and, in the process the transparency with which it does so) ? thus maximising the benefit to taxpayers, and maximising the public amenities that we have been able to build ? for all Gibraltarians ? with those sale proceeds.
Mr Speaker ? suggestions that the Government undersells assets or allows a ?free for all? for developers, or does not ensure balanced development will be shown to be the opposite of the truth. We are proud of our record, and of the massive benefits and improvements that is has brought to Gibraltar and to every Gibraltarian.
Gibraltar must continue to grow, develop and modernise if we are to retain regional leadership and if our future generations are to be able to afford the things and standard of living that we take for granted and enjoy today. Development and success on this scale, which guarantees our future prosperity, certainly result in disruption and inconvenience while it is taking place. But what is at stake is our economic and social legacy to our children and grandchildren. We will continue to deliver both that legacy and improved quality of life and environment for the citizen of today.
MOD Contractorisation Agreement
Mr Speaker, during this last year the Government has taken the initiative to resolve the MOD Contractorisation dispute that threatened the livelihoods of hundreds of families in Gibraltar and the peace of mind during coming years of hundred more. In doing so, we have not only lifted the threat of job losses and job insecurity from hundreds of families, but we have been able to deliver stability of employment within the MOD for hundreds more for many years to come. These agreements also represent the first time ever that a Gibraltar Government shapes the way the MOD does things in Gibraltar and thus its social and economic impact on Gibraltarians. It has required a huge effort of time and ideas. But it has been worthwhile just to see the sense of sheer relief that the result has brought to 1000 Gibraltar families.
As is known,the agreements have several elements. Firstly, those who wish to take early retirement or voluntary redundancy will be able to do so on enhanced terms; secondly, the threat of future job security to ISP workers has been removed by the innovative ?GOG company Secondment Model? that the Government has provided; thirdly, the Government will take over the running of various MOD services, thus protecting the job security of staff in those areas as well as allowing for rationalisation and consolidation with GOG?s own services; fourthly, jobs have been preserved within the MOD for the future; and finally Government has provided an employment safety net for anyone who loses their job as a result of these ground-breaking agreements.
Mr Speaker, contrary to what some of the Government?s well known critics have said, these Agreements do not make it easier for the MOD to leave in the future. Infact, the opposite is true ? they make it easier and more likely that they will stay for longer. Failure to have resolved the ISP dispute, indeed, is what would have hastened MOD?s departure from Gibraltar ? as well as risk a humiliation of hundreds of Gibraltarian workers and the financial destabilisation of hundreds of local families.
And contrary to what these same critics say, the Government is not subsidising or underwriting the cost of any service to the MOD. Under the agreements the MOD will pay to the Government the full capital and operational costs that the Government incurs, now and in the future, of providing the services to the MOD. This is a model that suits everyone ? it suits Gibraltar and it suits the MOD, but most importantly it suits many hundreds of MOD workers and their families. We believe that these agreements will bring a stability and consensus to MOD activities in Gibraltar in the future from which all three Constituencies will be big winners.
Airport Commercial Operations
Recent public disputes about the level of landing charges and the sudden MOD decisions to increase charges to airlines without regard to the commercial implications to airlines, and thus without regard to the economic and social implications to Gibraltar, served to show that, in modern Gibraltar it is inappropriate for the MOD to be in control of commercial relations with civilian users of Gibraltar Airport.
By the same token we accept that in modern, economically prosperous Gibraltar it is nolonger easy to justify that a reducing and under strain defence budget, should continue to subsidise and bear the cost of purely commercial, civilian air operations at Gibraltar airport.
Accordingly, the Government of Gibraltar and the MOD have agreed the terms of an agreement whereby the Gibraltar Government will assume responsibility for commercial relations with civil users of the airport, and for the economic aspects of civilian use. Accordingly, GOG will assume the conduct of all commercial interface with airlines and other civilian users, including capacity management and commercial flight scheduling. GOG will also establish the level of, collect and keep for its own account, landing charges, aircraft parking fees and all other fees payable by civilian aircraft using the airfield;
In return for control over the commercial aspects of civilian use of the airfield, and GOG retaining landing and parking fees (which previously have been paid to MOD) GOG and MOD will share on a 50/50 basis the cost to the MOD of providing airfield services used by both civilian and military aircraft. GOG will pay the whole of any other costs caused exclusively by civilian aircraft useage, e.g. extension of airfield opening hours.
The MOD retains ownership of and operational responsibility for the aviation aspects of the Airfield, and will continue to provide all the aerodrome and air traffic control services that it now provides to commercial and other civilian aircraft.
This agreement will enable the Government to set airline operating costs to Gibraltar (i.e. landing & parking fees) and to deal with airlines in a commercially appropriate way, in the economic and social interests of Gibraltar, and the airlines and passengers that use our airport.
New Air Terminal
Mr Speaker, the Government has also recently announced plans for a magnificent new Gibraltar Air Terminal, which will be situated entirely in Gibraltar. This terminal will provide Gibraltar with a modern, attractive air terminal which will reflect the economic success of Gibraltar, and our economic and social aspirations for the future as well as meeting our future air travel needs in a way more like is done in the rest of Europe.
The location and internal design of the new terminal will reflect the commitments entered into by the Government with Spain in Cordoba. But, as I have said many times, the terminal and all activities within it will remain in Gibraltar, under the exclusive jurisdiction and control of the Gibraltar Government. No Spanish authority will have any role whatsoever in the running of the Airport.
Mr Speaker, this excellent agreement is hugely in Gibraltar?s social and economic interests. We fully expect it to provide a further boost to the economy, in addition to the boost to the economy and to confidence provided by the mere fact of having reached a good political agreement with Spain on the matter.
The Government is ofcourse fully committed to implementing the whole of this excellent agreement. Indeed, only the whole agreement can be implemented, since clearly the agreement will collapse if anyone tries to cherry pick it, that is to pick and choose the bits that should be implemented.
The tender process for this project is already underway. The Government has not yet made a final decision on the precise financial model for the execution of the project. EU Funding will be sought, and it is probable that the Government will use some form of Private Finance Initiative model as it did in the case of the new hospital. The Government expects the Air Terminal to be economically self financing.
Allied to the Terminal project, the airfield underpass tunnel and the new Devil?s Tower Road/Eastern Beach dual carriage way and related multi-storey car parks will hugely decongest traffic, eliminate airport related traffic delays, significantly improve free parking facilities for nearby residents and enable the Government to operate ?park n ride? facilities for visitors ? thus further decongesting traffic flow and parking facilities throughout Gibraltar. These projects are key elements of the Government?s projects for Gibraltar?s continuing success well into the future.
Mr Speaker, the Government is convinced that Gibraltar?s present and future housing needs are best met by a combination of affordable home ownership AND new Government rental estates. Affordable home ownership by itself is not enough ? many people cannot comfortably afford even what others call ?affordable? housing. Hence the Government?s decision to build a new Government rental housing estate in the Mid harbour reclamation, which will be one of Government?s largest housing estates. Plans of this estate will be revealed soon.
As part of this commitment to building new rental homes for the future, the Government will very soon offer eligible, existing Government tenants the right to buy their homes. The capital raised will be used by Government only on building more Government rental housing. By unlocking this ?sleeping capital? in this way more Gibraltarian families can be housed in a way that is affordable to them. The overall housing stock available will be increased.
Corporate Tax Reform
Mr Speaker, the Tax Exempt Company has been the backbone of the development and growth of both our finance centre and the online gambling industry, and thus of a very significant part of our economy. It continues to underpin thousands of jobs in Gibraltar and large amounts of Government revenue.
In order to comply with EU law we must phase out the tax exempt company in 2010. However, in order to sustain our successful economic model we must retain a commitment to a very competitive corporate tax model. Since it is nolonger legally acceptable to have one tax model for ?local? companies and a different one for ?foreign? companies it is necessary to have a low tax system for all companies because without a low tax system for overseas companies they will leave, and our economy will suffer hugely. Thousands of jobs would be lost, as well as significant Government revenue. I have therefore already said, and I reaffirm now, that the Gibraltar Government is irrevocably committed to the principle of ?low tax? for our economic operators.
By mid-2010 the Government will have introduced an across the board flat, low corporate tax rate. This will most probably be set at 10%, but in any event not higher than 12%. This will be similar to arrangements that already exist in Ireland, Cyprus, Malta and other EU Countries.
In the intervening period, the Government will engage in an intensive, detailed and lengthy process of consultation with the different economic sectors.
In order to signal the Government?s seriousness of purpose in this respect I am today taking the first step in the process of reducing corporate tax rates in Gibraltar, by 2% for the year of assessment 07/08 from 35% to 33%, and with effect from the year of assessment 2008/09 by a further 3% from 33% to 30%. I would also signal the intention of a further reduction the year after that to 27%, in anticipation of the introduction of the flat low tax rate in 2010.
Mr Speaker, public finances remain in a healthy and robust state. As I have said, public reserves stand at a record high level and public borrowing stands as very low economic levels. By way of comparison, our public debt, which has been static at ?93 million for several years, now represents less than 15% of GDP. This reflects a very low level of Government borrowing when compared, for example, to the UK?s public debt which currently stands at 43% of GDP, or to the EU maximum benchmark which is 60% under the convergence criteria establishing in the Maastrucht Treaty.
The ?Overall? revenue and expenditure budget was in surplus in the year just ended (March ?07) by an all time high of ?24.8 million, an increase of ?2.7 million over last year?s record surplus. The Consolidated Fund budget surplus by itself stood at ?25.1 million. This ?24.8 million ?overall? surplus was ?7.5 million higher that we estimated last year.
The Consolidated Fund surplus of ?25.1 million reconciles with the ?overall? surplus of ?24.8 million after account is taken of the ?0.4 million of exceptional expenditure and the small net surplus of ?0.1 million from the Non-Consolidated Fund Reserve Balances. ?Overall? Revenue and expenditure figures exclude inter-account contributions in order to avoid double counting.
?Overall? Government Revenue stood as ?260.7 million last year, which breaks down as follows:-
Consolidated Fund 212.1 198.3
Gibraltar Health Authority (GHA) 27.2 26.2
Gibraltar Electricity Authority (GEA) 17.9 16.6
Elderly Care Agency (ECA) 0.6 0.6
Gibraltar Development Corporation (GDC) 2.9 4.3
This represents an increase in overall revenue of ?14.7 million or 6%. Of this ?14.7 million, ?13.8 million is represented by an increase in revenue in the Consolidated Fund, which actually saw a 7% increase in revenue over the previous year, derived mainly from income tax (mainly due to higher levels of employment - and despite last year?s tax cuts) and higher revenue from import duty.
?Overall? Government Expenditure stood at ?235.9 million last year, which breaks down as follows:-
Consolidated Fund 134.5 131.4
(Gibraltar Health Authority (GHA) 55.4 50.5
Gibraltar Electricity Authority (GEA) 24.5 21.6
Elderly Care Agency (ECA) 6.2 5.7
Gibraltar Development Corporation (GDC) 6.0 5.8
Social Services Agency (SSA) 4.1 3.8
Gibraltar Sports and Leasure Authority (GSLA) 1.3 0.9
Social Assistance Fund (SAF) 3.5 3.6
?223.3mConsolidated Fund Exceptional 0.4 0.6
This represents an increase in overall expenditure of ?12 million or 5.4%.
The main contributors were as follows:-
Consolidated Fund Charges -1.6
Departmental Payroll Costs +0.8
Contracted-Out Services +2.2
Departmental Other Charges +1.7
Gibraltar Health Authority (GHA) +4.9
Gibraltar Electricity Authority (GEA) +2.9
Elderly Care Agency (ECA) +0.5
Gibraltar Development Corporation (GDC) +0.2
Social Services Agency (SSA) +0.3
Gibraltar Sports and Leasure Authority (GSLA) +0.4
Social Assistance Fund (SAF) -0.1
Less Exceptional expenditure funded from Reserve -0.2
Mr Speaker, even though overall expenditure grew by 5.4%, expenditure on social care services grew by more than that, in keeping with Government?s stated policy of ploughing back part of the fruits of our economic success into improved and expanded public services. And so, recurrent expenditure on our health service increased to ?55.4 million, by ?4.9 million or 10%. Social Services Agency increased by ?0.3 million to ?4.1 million or 8% and Elderly Care by ?0.5 million to ?6.2 million or 9%. I will be announcing later in this address further expenditure increases in these caring services.
Mr Speaker, the Government is proud not just of the success of the economy, and of its own finances, but also about how the fruits of that success have been spread throughout the community. So, during the last 10 years annual spending on our health service has increased by 139%, education by 69%, social services by 111%, environment by 53% and sport by 260%. These are incontrovertible indicators of the Government?s profound commitment to improving and expanding those public services that are most important to every person and family in Gibraltar.
Estimates for Current Year
Mr Speaker, for the current year to March 2008, the Government is estimating an overall surplus of ?16.3 million compared to the ?24.8 million we achieved last year.
The Consolidated Fund projected surplus of ?15.8 million reconciles with the ?overall? projected surplus of ?16.3 million after account is taken of the net surplus of ?0.5 million from the Non-Consolidated Fund Reserve Balances.
Mr Speaker, let me hasten to add that this year we are paying out of the Consolidated Fund budget the sum of ?10 million to pay the 65.2% increase in old age pension that we introduced with effect from 1 April 2007. This is reflected in the estimated surplus for the current year. However, this year?s budget measures have a substantial net cost to the budget (which are not reflected in this budget). When these things are netted against estimated increases in revenue from other sources, such as higher employment, gambling fees etc, the Government estimates that it will remain in surplus by around ?7 million.
Mr Speaker, we are estimating Consolidated Fund revenue increases of ?11.3 million or 5.3% from ?212.1 million to ?223.4 million.
Consolidated Fund departmental expenditure is estimated to increase by ?9.9 million or 6.3% from ?157.7 million to ?167.6 million and Consolidated Fund charges by a small amount (around ?650,000). In addition, the Consolidated Fund will also contribute ?10 million to the Social Insurance Fund for the pensions increase, thereby increasing estimated total Consolidated Fund expenditure to ?207.5 million, compared to ?187 million last year.
?Overall? expenditure for 2007/08 is estimated at ?257.1 million. This represents an increase over last year of ?21.2 million, or 8.9%. Without the ?10 million for pensions increase, it would be ?11.2 million, or 4.7%. ?Overall? Revenue is being estimated at ?273.4 million, compared to last year?s ?260.7 million, an increase of ?13 million, or 5%. This produces the overall estimated surplus of ?16.3 million for 2007/08.
Capital Investment Programme
Mr Speaker, another of the ways in which Government distributes the benefit of our economic success, is through our capital investment programme. In last year?s budget address I gave the House a list of the major projects comprising of this huge programme. I am pleased to be able to report that in most of the projects there has been significant progress during the last year. Indeed, last year we spent a record ?28 million through the Improvement and Development Fund and ?18 million through the Companies, in connection with this capital investment programme. This year, we are estimating to spend in excess of ?40 million through the Improvement and Development Fund.
In the area of housing, very significant progress has been made in the construction of the Waterport Terraces Estate, including the 140 houses for the elderly; in repairs to Brymton and in the refurbishment of Government housing estates. The reclamation works for the new Government Rental Estate at Mid harbour is advanced and construction will proceed this year. Also underway is the redevelopment of three old properties in the Upper Town by Government for sale as affordable housing.
We have also made very good progress in our new roads and street beautification programme. Engineer Lane has been completed. The new road through Chatham Counterguard is now in use. The beautification of Orange Bastion, Chatham Counterguard, Fish Market Road and Plaza del Reloj are complete (some phases) and/or at a very advanced stage (latter phases). This has resulted in a wonderful recovery of our heritage and in a transformation of a whole area of Gibraltar. The replacement of pavements and balustrades along Europa Road continues. The new Upper Town relief road is very advanced.
In our Parking programme, works are at an advanced stage on the building of car parks at Willis? Road, Sandpits and New Harbour Deck.
The Cemetery path replacement is complete, as is the replacement of the Frontier fence.
In the area of Sports and Leisure, the new Swimming Pool for the elderly has been duly completed, as has the magnificent Bayside Sports Complex. The King?s Bastion Leisure Centre is now almost complete. Apart from providing Gibraltar with a magnificent Leisure Centre, it has also wonderfully recovered and restored one of our most important heritage assets.
Other projects under way include the beautification of Camp Bay and Little Bay, the Retrenchment Block refurbishment for Clubs and Associations, the new Prison and a women?s hostel.
Mr Speaker, our capital investment programme, and the investment that it represents in our urban fabric and environment, heritage and public amenities, is one of the purposes to which we have put the fruits of our economic success during the last 10 years. This has transformed Gibraltar, and will continue to do so. The Government will continue to invest in the Gibraltar of the present and future.
And so, as some projects are completed, others replace them. The new rental housing estate; a new air terminal; a new dual carriage road leading to North Front and tunnel under the Runway; multi-storey parking in Devil?s Tower Road; the refurbishment of the public market; the beautification of Europa Point; the large scale project to safely re-open Dudley Ward Tunnel; further street refurbishment projects; the conversion of the Old John Mackintosh Wing into a second old people?s home and the remainder of the Old St Bernard?s hospital historical buildings into a new first and middle school for the Upper Town; All these projects get under way soon.
On the environment front too, projects in the pipeline will address some of our longstanding environmental concerns. A new refuse incinerator, and an urban waste water treatment plant. But perhaps of most significance to thousands of people who live nearby existing power stations, a new, modern, environmentally friendly power station in a non-residential area to replace altogether the Waterport Power Station, the MoD Power Station and the OESCO Power Station. An end to the noise and to the pollution in people?s homes. Construction begins next year, and the new power station is expected to be ready in 2 years.
Mr Speaker, one area that has benefited hugely from this Government?s investment and modernisation programme is our Health Service. In reality practically the whole of our health infrastructure has been replaced in ten years. We have already delivered a new professional ambulance service, a new health centre, a new, very well equipped hospital; new standards of health care; new and additional health services; a wonderful improved and expanded Mt. Alvernia. And these positive improvements will continue. I have already mentioned the second old people?s home in the old John Mackintosh Wing. But our investment and modernisation programme will not be complete until we implement the last piece of the jigsaw, the replacement of KGV mental health hospital with a new mental hospital. This project gets under way this financial year.
The Economy in the Private Sector
Mr Speaker, while not every sector of the economy is in the same boat, overall the economy, insofar as concerns the private sector, has continued to grow handsomely, to develop the quality and sustainability of its business and to grapple well with external and market challenges. As always, our business and professional fraternity, aided by supportive Government policies and measures, have shown the business acumen for which Gibraltar is well known.
I wish to congratulate the Chamber of Commerce for its comprehensive, objective and penetrating assessment of the economy and the needs of business. The Government accepts both the plaudits and the criticisms contained in it. In respect of the latter, and also in respect of the Chamber?s agenda of issues, I commit the Government to working with the Board to address and resolve as many of these as the Government reasonably can.
(1) Economic Growth
Mr Speaker, the economy grew in 2004/2005 by 7% to a GDP of ?599.18 million. Based on the statistics in the 2006 Surveys, the Government statisticians estimate that it has grown by about 8.5% in 2005/2006 and by 10.8% in 2006/2007 and that GDP is probably now around ?730 million, much more that twice its (?327 million) size in 1996. This is the scale of Gibraltar?s economic success in the last 10 years, making Gibraltar one of the most affluent communities in the entire world.
Inflation in Gibraltar was running at 2.6% in 2006. The inflation rate, which is largely outside the Government?s control, is likely to continue within the 2% to 3% range throughout 2007.
Mr Speaker, last year I said that in 2005 the number of jobs in the economy rose by a huge 880 jobs. In 2006 there was a veritable explosive rise in the number of jobs in our economy, from 16,874 to 18,485. That is 1,600 jobs or 9.5% growth in job numbers. This is an indicator of the remarkable performance of our economy, even if some of the increase reflects wider coverage in respect of the October 2006 Employment survey. There are now 5,500 more jobs in the economy than there were in 1996, an increase of 42%!
The overwhelming majority of the 1,600 new jobs created in 2006 have been in the private sector, around 400 of them in the gambling industry. 232 were weekly paid, full time jobs. 1,064 were monthly paid, full time jobs. There are thus now 15,480 full time jobs in the economy, an increase in the year of 1,296!
Mr Speaker, employment in respect of Gibraltarians increased significantly by 476 employees (+ 4.8%).
(4) Average Earnings / Take-home pay
Average annual earnings in respect of all employees rose in 2006 by 5.6% to ?20,470. Average earnings by full time weekly paid employees rose by around 8% to 10% to ?347 per week for males, and ?234 for females.
Mr Speaker, another measure of how individual citizens have benefited from the economic success is that a combination of higher pay and lower taxes have resulted in average ?take-home? pay having risen since 1996 by 64%, while inflation was only 22%. Figures also show that the percentage of Gibraltarians that are economically active continues to rise, and now stands at 63%. As I said last year, these figures amount to 97% activity in the Gibraltarian economically active population ? effectively full employment.
Mr Speaker, the buoyancy of the economy does not prevent or disincentivise the Government from monitoring each of it sectors and from working with sector operators and representatives to address its needs and further enhance its prospects.
Tourism has continued to perform well. The number of visitors in 2006 increased by 5% to a record 8.2million, spending an estimated ?210 million. Cruise passengers rose by 12% to a record 211,000 in 202 ship calls (compared to 171 in 2005). Employment in tourism related activities such as hotels, restaurants and transport continues to rise, by 114 jobs in 2006. Visitors to the upper rock increased by 7% to 724,000.
The Port continued to perform strongly, delivering 3.9 million tonnes of fuel and receiving nearly 9000 ship visits, including 202 cruise ships. Yacht visits were 3112 despite disruptive development works affecting the marinas. The ship registry continues to grow as a quality tonnage register, as befits its Category 1 status.
The on-line Gambling industry continued to perform strongly in 2006, and has continued to do so in 2007 despite the well publicised difficulties in the US and other markets. In 2006 employment grew by 398 jobs, or 26% to 1893 jobs. As at 31st May 2007 employment stood at 1689, a drop of only 204, notwithstanding the turmoil caused in the US, following which employment levels remain above the 2005 levels. Many of the companies affected have started to recruit more staff again. This, together with new licensees will continue to grow the sector and employment levels. Gaming tax revenue has increased to ?7.3 million from ?6.6 m last year and ?1.8 m in 2002.
It is not possible to exaggerate praise for the finance centre given the robustness and resilience with which it has operated and indeed grown during some of the toughest times and circumstances that it has faced.
Bank assets and liabilities stand at around ?8 billion. Total number of licensees rose from 208 in 2005, to 214 in 2006 and 232 in 2007, with the strongest growth being in insurance companies and investment firms. Employment in the finance centre rose in 2006 by 332 or 14% to 2652, and the sector now accounts for 14.3% of all jobs in the economy. The number of jobs in the finance centre has grown by 1056 or 66% since 1996.
Mr Speaker, even though areas of the retail and wholesale trade continue to experience tough trading conditions, mainly as a result of superstore competition and competition from retailers in Spain, the general level of trade as reflected in the value of imports (excluding fuel) rose by ?63 million or 21% in 2006.
The Government fully supports the view expressed by the Chamber of Commerce in its 2006 Report that retailers must remain agile and willing to vary the retail product offered to meet changing demands and opportunities. For its part, the Government will continue to work with the Chamber to address as many as possible of that sector?s needs. The retail and wholesale trade will of course be beneficiaries of the lowering of corporate income tax during the next 3 years.
Finally, in relation to trade generally, Mr Speaker, it is to be expected that the Cordoba Agreements relating to the airport, telecommunications and frontier fluidity will each prove positive to, and boost trade for the future. The Government welcomes the efforts of trade to exploit the commercial opportunities offered by improving formal relations with Spain.