Wednesday, 3 February 2010

The Rule of Law or Consensus Law Enforcement?

Unbeleivably, it seems that the Chief Minister needs the help of the Chamber of Commerce, the Gibraltar Federation of Small Businesses and Unite, the trade union, to give him ideas on how to enforce the laws of Gibraltar. He makes the admission (see: Gibraltar Chronicle article) that tax and employment laws are being flouted and he seeks help to resolve the failure to enforce the law. These breaches of the law are known by many to have been happening for a long time. Their effects, which the Gibraltar Chronicle summarizes as being unfair competition and the pernicious consequences on employees, is well known.

The responsibility, indeed the obligation,to resolve this blatant disregard of the law lies with the government. It is it that is responsible for ensuring that the rule of law is maintained and that public servants charged with enforcement do their work efficiently and effectively. If these departments need to be resourced let the government do that. The resultant increased revenue from both social security and tax will cover the additional cost of this resourcing. What needs to be avoided is additional resourcing that will result in added cost followed by inefficiencies that do not translate into increased revenue.

On the subject of tax, whilst persons not on PAYE may have greater flexibility (read the ability to delay payments), this alone is not the main cause of the problems under discussion. Collection of PAYE is still not so efficient such that tax leakage is wholly prevented . There are frequent reports of companies declaring bankruptcy with large amounts of PAYE (and also social security contributions) remaining unpaid. The priority given to these payments when a distribution on the winding up of a company takes place works unfairly on all other creditors if, as is often the case, inefficiency has led to increased liability with that priority, thus denying other creditors of any recovery or reducing their recovery.

There is no need to have quarterly returns to improve collection of tax from those who are not on PAYE. A system of monthly self-assessment with payment of the monthly amount due within 15 days (as is the case for PAYE) would improve government's cash flow and reduce its risk of non-collection. On submission of an annual tax return the necessary adjustment could be made.

Why then has the Chief Minister so publicly called this meeting? The explanation could be that he knows what the negative effect that proper enforcement by the political government might have on its electoral chances. He may wish to mitigate this by his attempt to bring all the mentioned representative bodies into account by seeking their advice.

The direct impact of unpopular decisions of this type on the electoral fortunes of a political government are self inflicted. It arises from continual intermeddling in purely administrative matters that should properly be undertaken by civil servants. True, that where the civil service fails, the political government has to answer for that failure. If changes are made to return to a system in which the civil service undertake efficiently and properly their legislative duties and responsibilities and the political government empowers them to do so, then any electoral repercussions on the political government would be reduced. This would have the salutary effect of a return to good governance but the civil service also have to be made fully accountable for any failings and that accountability must be enforced without exception.


  1. Your last paragraph is the crucial one. The preceding analysis is insightful and correct, but the detail obscures the key issue: political interference in the most basic of administrative issues.

  2. I agree with the above comments. Having said this, the current civil service mentality has to change and the civil service should accept that times have changed. Starting with the 'Summer Hours' extravaganza. There has to be a culture of change. Will this unjust inefficient anomaly ever end. This is just an example of 'I'm alright and I am not rocking the boat'! I do not hear anything from the No. 6 mandarins.

  3. I was the first anonymous - que pena que 'tamo to' tan anonymous. 'toy de acuerdo: the civil service has to change. However, the Civil Service is simply an avatar of Gibraltarian panzismo, much as it pains me to admit it. If truth be told we all have to change. A bit of political leadership might help, but I cannot see the emergence of cross-party consensus on this, or any issue, anytime soon.

  4. I agree that anonymity is a pity. The truth is the I remain anonymous not out of any fear of what I say but so that what I say is not misinterpreted by reason of whom I am. I have every intention of making myself known at the right time: that is if I am not "outed" earlier, as there are some who know who I am.

    Cross-party consensus will not be possible until and if it is forced upon them by a change in the electoral system. There is a blog about this in previous posts that you can read if you have not already read it.