The close attention that Peter Caruana, Gibraltar’s Chief Minster, pays to the details of his country’s affairs is shown by the number of green folders on his desk. In fact, they cover several surrounding desks and tops of cabinets too. He is a man of lawyerly manner and old-fashioned politeness, but neither the OECD nor the G20 were considerate enough to give him any prior warning of Gibraltar’s inclusion on their list of “tax havens”. As I have argued before, it was unfair of the G20 thus to attack offshore financial centres. The true causes of the financial crisis were onshore: not Bermuda and Gibraltar, but Wall Street and the City of London.
Caruana’s attitude is pragmatic. He believes that Gibraltar must adapt to the new mood and is keen that Gibraltar be seen as an onshore financial centre firmly within Europe. Zero tax is being phased out and all companies will pay 10% tax from 2010.
Gibraltar is politically stable. Its regulators are efficient and helpful. Its economy is diversified. From a hillside you can watch the large transport ships waiting to refuel. The Atlas mountains of North Africa – only eight miles away – provide an imposing backdrop. A wag I met described Gibraltar as “Essex on the Mediterranean”, but the new Ocean Village, with its marina and millionaires’ yachts, reminded me more of the south of France.
Gibraltar is officially part of the UK, which looks after all defence matters. British forces are in evidence, though not as many as there used to be. Some years ago, the diminution in British Navy spending was one of the reasons Gibraltar turned – with London’s encouragement – to the development of finance. But now London has launched the Foot Review, an examination of UK offshore territories that are financial centres.
Asked about the Foot Review, Caruana is again philosophical. He will provide the UK government with all the information it needs – after he has informed Gibraltar’s own parliament first, he says. What if London wishes to do more than be informed? What if it wants to act? It is welcome to offer advice, he says.
David Sandham, editor of Global Reinsurance