While a walk down Main Street remains the medium of choice for exchanging ideas in Gibraltar, a report published earlier this year laid bare the extent to which social media has taken root in this community and helped foster a parallel, online debate.
Nearly two thirds of the population of Gibraltar is registered on Facebook and a growing number of people are dabbling in Twitter and other platforms.
The figures released by the tracking website Socialbakers suggested some 17,540 people in Gibraltar hold a Facebook account. That amounted to nearly 61% of the community, the third-highest per capita concentration of Facebook users in Europe, according to Socialbakers.
Users in Gibraltar are spread across all age groups, with nearly half of them in their late teens to mid 30s, the data showed.
And when it comes to social media, there is no discrimination. In terms of gender, the spread is roughly even. Both men and women enjoy Facebook.
For many, Facebook is a means of staying in touch with family and friends who are not in Gibraltar.
But the popularity of discussion groups such as Gibraltar Politics and Speak Freely! demonstrates that social media also has a vibrant local dimension too.
Increasingly, mainstream media outlets such as The Chronicle, GBC and Panorama are also turning to Facebook and Twitter, both as a means of breaking news and as a source of information.
But is there a down side to all this? Perhaps.
Another recentsurvey, this time by Internet security company Webroot, found that 56% of the 4,000 people it questioned confessed to being addicted to social media.
According to Webroot, 46% of respondents visit their favorite social network several times a day or constantly, while 18% visited at least once a day.
The survey found that new technologies lay at the root of this phenomena, with 42% of those who visited their social sites several times a day or constantly accessing them from mobile devices.
The level of usage prompted questions about security issues and the protection of personal information, and one important piece of advice: Do not do or say anything online that you would not do or say in the real world.

Highlights
•    Half of this year’s respondents had seen their year on year sales either flat or reduced. This shows an improvement on last year when two thirds of respondents said that their sales had remained flat or been cut.
•    Respondents said that 44% of their employees were frontier workers against 40% in last year’s survey.
•    16% of respondents had made people redundant during the year. Collectively the number of people who had lost their jobs amounted to 11 people against 39 people in last year’s survey. Just 16% of respondents thought it likely that they would be making further redundancies during 2011, the same as last year although more optimistically 58 per cent of respondents had no plans for job losses during the year.
•    Competition from the UK (in last year’s survey it was competition from Spain), high business costs and staff recruitment and retention were by far the three factors deemed to have the biggest impact on local businesses. These three have remained virtually unchanged for several years although a close fourth has been government red tape.
•    Members returning completed questionnaires employed more than 1,069 people or around 5% of the private sector workforce in Gibraltar.
•    The survey generated a 27% response rate against a 32% response rate last year (70 completed questionnaires returned against 87 last year).

Employment levels
Members returning completed questionnaires employed more than 1,069 people or just over 11% of the private sector workforce in Gibraltar. Of this total, 473 (44%) were frontier workers.
Nearly one quarter of respondents (23%) said that they had increased the number of employees in the previous 12 months, whilst just under a fifth (19%) said that they had reduced their workforce during the same period. The majority reported no change to the number people employed over the period.
Business Performance
Around a half of those responding (49%) said that they had seen an increase in sales compared with the previous year. This is a better result than last year’s survey where only 30% of respondents reported a year on year increase. Just under one third of respondents (31%) said that they had seen a fall in sales. The remaining fifth (21%) said that their sales had been flat compared with the previous year.
Taken together these results are reason for some moderate optimism as broadly they show an improved trading environment compared with the result from the Chamber’s 2010 survey. We commented that last years survey results gave cause for concern as the trading environment seemed to be consistent with previous economic cycles. This year’s results give cause for some cheer as the worst seems to have passed. Nevertheless, it remains far from certain that the rate of economic growth seen in during the first decade of the new millennium will return. After all the growth levels of Gibraltar’s two principal trading partners, the UK and Spain, remain anaemic. Against this background, Gibraltar continues to do well.
Business Outlook
Despite this, two thirds of respondents remain optimistic about future business prospects for the rest of the year and for 2012 as well. This is consistent with responses in last year’s survey.
However, there remains a degree of concern about the prospects for this year as 27% of those responding expect the outlook to deteriorate in the year ahead. As with last year’s survey most of respondents predicting a worsening outlook are from the retail and wholesale sectors. This is to be expected as discretionary expenditure becomes tighter during a downturn. As with last year the principal sector which is most upbeat about the future outlook is the Finance sector which includes banking, insurance, funds, lawyers and accounting firms. The new lower corporation tax rate looks to be having initial positive effects in generating business for this sector. Long may this continue.
Some of the comments from the various sectors are as follows:
Retail sector “Slow, less disposable income and selling goods at less profit”
“The recession in Spain and poor sentiment in UK depress sales and substantially squeeze margins”
“Trend is downward.”
“Very mixed bag of sales. No pattern whatsoever.”
“Both UK and Spanish economies weak, so tourists will be spending less.”“Local customers are less able
to borrow, so they are also consuming less. This will not change in the near future.”
Wholesale sector “Costs up, food price inflation high, increasing competition from non-Gib established Spanish companies”
“Business is very much dependent on visitors to Gibraltar. But these must spend on consumable to benefit
the economy. If they visit but do not spend, what good are they to us?”
Legal sector “The risk of increased inflation and a shrinking private sector economy are a threat”
Insurance sector “Anticipate benefiting from continued rise in GDP and expansion of financial services”
“The recession is hitting Gibraltar”
Banking sector “I have noticed 2011 a lot quieter than 2010 on the number of clients I am seeing have to get business
from UK and Switzerland by actively promoting Gibraltar.”
Property & Construction “First half of year has already shown a positive growth by comparison to 2009 to 2010”
“Our market is incoming HNWI’s and companies. We are growing our market share and the size of the market is growing. We have reasons therefore to be optimistic.”
Hotel & Catering sector “Slightly better although greater pressure on margins due to increased cost of goods and staff costs, and increased competition”
Transport sector “Difficult trading conditions locally. International markets still weak”
Port & Shipping sector “Sales gradually increase as confidence returns amongst yacht visitors.” “Local boating market is restricted by laws, berth shortage and competition from Spain.”
“To maintain business to 2010 level as a minimum.”
Issues affecting business
As with previous Chamber surveys the three perennial factors deemed by members to have the greatest impact on their business in the year ahead were: increase in business costs (27%); competition from the UK and elsewhere (14%) and staff retention and recruitment. Other factors such as dealing with government departments, red tape and traffic congestion were seen to have an impact but not to the same extent as in previous years.
A new question in this year’s survey asked members whether they supported the government’s policy of getting tough with late payers of PAYE, Company Tax, Rates, Social Insurance and Municipal Charges. A resounding 76% of respondents supported this with just 10% of respondents not supporting this initiative. A cautious 14% were unsure whether to support this or not. (Maybe it depends on whether they have had a good month’s trading.) Perhaps what was most revealing were the comments which accompanied some of the answers.

Here is a selection:
“But treat ALL alike. It is despicable big companies are getting away with daylight robbery.”
“Absolutely. I question how ‘fairly’ they take this stance with ‘older’ family businesses.”
“We are always up to date with all our taxes and SI which makes us uncompetitive with companies who
are not and when they close down we pay the penalty.”
“Big boys seem to have got away with not paying before the decision to get tough is made!”
“Getting tough may mean shutting down some businesses. This has a negative impact on the economy. Everyone has to pay but the Government should try and introduce payment facilities to ease the burden and help cash flow.”
“Though it affects us, it also levels the playing field.”
“On condition that there is a level playing field and all are treated the same without exceptions, and that they are equal.”
“But surely they should be doing this anyway? It would certainly have prevented other businesses losing money with Haymills etc.”
“Such a policy has got to be seen to be fair, but when big business is allowed to get away with millions owing and simply wind-up and disappear and the small businessman is hounded for pennies, then this policy will never be seen to be equitable.”

“We are up to date on PAYE etc. If we get one month behind we are chased – this does not seem to be the case for some.”
“In principle, however everyone should be measured with the same stick.”
“Definitely. Government slackness on those in arrears is a disincentive to businesses who pay on time. Level the playing field!”
“Feel the Government gets tougher on the smaller trader than it should in comparison to the treatment of bigger institutions.”
“Need to also pay back owed money quicker.”
Will lower tax rate lead to increased investment?
This year the survey asked members about whether the introduction of the lower corporate tax rate would give them an incentive to invest more in their business. Responses were mixed: 28% said that it would give them an incentive, 34% said it would not and 38% were unsure if this was an incentive to invest more in their business or not. Thus far the impact on investment appears inconclusive. Again though some useful guidance was provided on the thinking behind some of the answers given. Here is a selection of the comments received:

“No real change to tax cost for company if it takes into account high personal tax rate.”
“Previously exempt – therefore we now have to pay tax.”
“It made us utterly paranoid of what may be deemed ‘benefits in kind’ and ‘allowable expenses’ and has put us off reinvesting in our business.”
“By encouraging more business to Gibraltar has increased sales opportunities.”
“It has made selling ‘Gibraltar PLC’ a lot easier. We have a compelling product.”
“The new rules are too radical and have created much uncertainty leading to expensive meetings with accountants who themselves are unsure how the new rules will be applied.”
“Lack of clear understanding. Government should resource guidance for small businesses.”
“Company too new to be able to comment.”
The new tax regime is still relatively new and as the Chamber commented in the 2010 Annual Report there were clear calls for clarification on parts of the new legislation. These comments reflect this and we understand that the Income Tax office is working through this with individual companies.
Banking sector woes
The survey asked what effect their banks’ lending criteria had had on their business. Just 3% of respondents said that this had had a positive effect on their business with 35% of respondents saying it had had a negative effect. An overwhelming 62% said it had had no effect on their business. Some of the respondents’ comments were enlightening:
“Limits development due to lack of finance.”
“Takes too long and too complicated to get any funds out of them.”
“Banks have remained supportive.”
“We applied for a loan in November 2010 – fully secured – we are still waiting to draw down 7 months later.”
“For the business itself we have no borrowings so no problem. For our clients, the banking situation is dire. We (interested parties in Gib) need to use all our contacts in the finance world and pool our intellectual resources to find a solution. There is ample equity out there, we just need a structure and some government led impetus to create a lending institute out of it.”
“No lending, none responsive!”
“It was as bad in 2009.”
“Very slow decision making process. There is little or no decision making at local level.”
“Monthly ‘business’ bank account charges are too high. They do not take into account the type of client/business size and volume. They make charges on every single thing they do.”
Government’s Economic Management
With a forthcoming general election due the survey asked members for their opinion as to whether they thought the GSD government were doing a good job in running the economy. The current administration should draw sharp relief that 64% of respondents thought it was going a good job. Just 16% thought it was not doing a good job and 20% of respondents were unsure.
Resourcing the Marketing of the Finance Centre
With the downturn elsewhere continuing to affect other economies and the significant changes to the Corporate Tax regime, the Chamber’s board wanted to get a feel from its members in the Financial Services sector if they thought that it was adequately resourced. Gibraltar Inc needs to bang its drum even louder now that other jurisdictions are even hungrier in attracting business. Gibraltar likewise needs to raise its game. Responses from members in the sector were pretty unanimous: 53% of those in the sector thought that the Finance Centre was not adequately resourced whilst 16% of those responding thought it was. 32% of respondents were unsure. Given what the Chief Minister said at Finance Centre dinners before the summer break (“we need ten more Jimmys”), this looks like being addressed in the near future.
Commercial rents
The survey asked members about the sustainability of commercial rents and whether they thought this was in the public interest. Given that a number of members are also landlords the answers to this question were not that clear-cut: 59% of respondents thought that it was not in the public interest; 23% of respondents thought that it was in the public interest and 18% were not sure if maintaining the current level of rents was in the public interest or not. To this end the survey asked if members would support an independent study of the current situation of Gibraltar’s commercial property market. Perhaps unsurprisingly the responses mirrored the answers to the previous question: 66% said that they would support an independent assessment, 17% would not support such a study and 17% were unsure whether they would support a study or not. Again some useful insights were provided in the accompanying comments as summarised below:
“Loads of empty retail shops on Main St.”
“Rents are unsustainable and in the future will have a negative impact as some will need to close.”
“The Landlord and Tenants Act does not work as it has led to the increases far in excess of increases in turnover. The issues of: A) Market Rents B) Arbitrations C) Upward only rents all need to be looked at.”
“Market will decide.”
“Yes as long as it was me! Can’t see the point really, focus needs to be on unlocking funding. There is enough space, enough developers, and enough schemes to build. Funding alone is the issue. Thereafter the market will resolve itself..”
“Landlords increase rents until operators fail. Then they are replaced by business with high margins.”
“We need more transparency.”
“Market will find its own level. A study would be a waste of money. How would any results be enforced? Legislation – you must be kidding!”
“Market forces dictate.”
“Rates on commercial property excessive. There should be concession on rates payable on empty premises for minimum of up to 2 years.”
“Commercial rents – let the market determine the rents. Look what happens when the Government gets involved in rents, we have far too many residential properties around town which have controlled rents. Landlords don’t invest in those properties as a result. Leaves a mess. The market is usually right.”
Burning issues
There was no shortage of opinions and views on what members wanted the board to take up on their behalf during the year. Here is a summary of the main ones:
“Ask opposition what they stand for in Main St.”
“Good Chief Minister but I am annoyed about over spending and high debt level. Good income in economy, but pathetic over spending. Sadly no alternative.”
“Abolition of import duty.”
“Concern is future legacy costs of these expenditures. Is Government not aware of dangers of excess expenditure? Need to consider the lessons to be learnt from what is happening around us.”
“Q17 Comment: Government spending too money on both capital (loans) and recurrent – big legacy costs for future.”
“Marketing the ‘tourist’ product.”
“Red tape (FSC data protection) etc. When traders allowed to carry out licensed activities without license and with impunity.
“Transparency in local sourcing of building materials.”
“More equitable distribution of tourists between the northern and southern end of Main St. Tourists could be dropped off in lay by behind museum and directed to Main St. They then have to walk the length of Main St. Hopefully they shop. Right now dropping them off at ‘Plaza del Reloj’ does not help anyone. Tour operators need to be engaged.”
“Commercial border to open on Saturday.”
“Lack of banking finance for expansion and development.”
“Traffic congestion generally.”
“High cost of public sector pay and pensions.”
“Government recurring expenditure insofar as it may or may not be sustainable.”
“Worldwide increases in regulatory burden and costs.”
“Payment facilities for internet trading.”
“A long term tourism strategy.”
“Monopolies and tenders.”
“Government capital expenditure.”
“Bring Gibraltar’s laws and all legislation up to date with the UK & Europe.”
“Unfair competitive environment re PAYE arrears / unregistered employees.”
“Spanish business not established locally to sell to local retailers.”
“Income Tax Act 2010 requirements re business expenses not allowable as a deduction.”
“Our infrastructure service sector is well below par. It is of huge embarrassment when we welcome HNWI’s and we cannot get their electricity or water switched on for 2 weeks because there is a queue. Or we cannot connect a new customer without appearing at the office personally. We have a third world system. No complaint about the staff. The system it third world.”
“Tender process, especially JBS monopoly.”
“Employ more Health & Safety Inspectors – insufficient number to cover Gibraltar’s businesses.”
“Foreign construction companies need to source more locally.”
“International expansion.”
“Overtime rates charged by Customs after 14.30 hrs for commercial entrance of goods.”
“Hopefully the power failures will be addressed by the temp generators and the proposed new
generating station.”
“Shutting of Government offices at 2 pm for 25% of the year needs addressing if we want to be the international finance centre of Europe. No need to erode workers’ rights. Just employ more staff or start a flexi-time system. We compete on the international stage. We need a government service structure to support that competition.”
Finally, the Chamber asked its members if it thought that the board overall were doing a good job. 68% of respondents said “Yes”, 5% said “No” and perhaps most worrying 28% were “Not sure.”
If you have any questions about the survey or the results please contact the Chamber on 200 78376 or email on info@gibraltarchamberofcommerce.com

MH Bland is pleased to announce that new MH Bland Group of Companies website, www.mhbland.com is now up and “live.”
Mandy Gaggero, Marketing Manager for the Group, said that “Of particular interest to the community will be the archive section which offers visitors to the site a wide selection of photographs and other material spanning the 200 years of the company’s and therefore Gibraltar’s history.
We have worked on giving the site a fresh look after celebrating our 200th Anniversary and taken the time to include a complete copy of the commemorative booklet which was commissioned in 2010. I hope that all visitors will enjoy the new look and I would welcome any feedback.”
MH Bland also recently re built and re launched their MH Bland Travel Services website, www.mhbtravelservices.com which offers clients details on special offers on both holidays and cruises.
MH Bland Travel Services also has a Facebook page as do Dolphin World which posts all the latest marine activity in the Bay of Gibraltar.

Want a pension at 65 of £10,000 a year in today’s money? Start saving at age 25 and it will cost you £270 a month. Start saving at age 45 and it will cost you £630 a month, well over twice as much. We’ve all seen these sorts of figures before. The moral is start saving early and let compound interest do its work.
Actuaries reckon that in future it will be common for homo sapiens to live to age 100 (and maybe without, as Woody Allen said, having to give up all the things that make you want to live to be a hundred). Governments have now begun to put up state pension ages, but not by as much as increases in life expectancy, so peoples’ retirements are getting longer and longer. The need to save, save enough, and save effectively is more important than ever.
Companies don’t have to offer a pension scheme, but most do. The view that the employees are not interested in or don’t understand pensions is no more or less true than any generalisation. Certainly pensions do seem to be bringing people out onto the streets these days. A recent survey of public sector workers in the UK indicated that a significant number would rather have a pay cut than reductions in their pensions.
Employers therefore play a valuable role in providing a good pension scheme. Understandably most now prefer the defined contribution model where their pension costs are a fixed and known percentage of their salary bill.
However, for many people a defined contribution pension is an act of faith.
The employer and employee each typically pay something like 5% of salary into a scheme and basically hope for the best. Pension benefits from a defined contribution scheme don’t have to be a matter of luck. Just like final salary pension schemes defined contribution schemes need to be regularly reviewed and made to work, so that when an employee reaches retirement there are no surprises or disappointments about the level of pension benefits.
This still doesn’t do away with the need to start saving early, but it certainly helps in a world in which it seems many more of us will become centenarians.

Ibex Insurance Services Ltd celebrated the official inauguration of their new offices, 68 Irish Town.
On the 8th of June, Ibex Insurance hosted the official opening of their new offices, 68 Irish Town. The event, which took place between Sacarello’s and the new office, saw the ribbon being cut by the Chief Minister Peter Caruana, who officially announced that the office was open and congratulated John Harrison, Chairman of Ibex Group, on the success of Ibex and its growth over the last 10 years.
Mr Harrison then took the opportunity to thank the loyal Ibex staff who had been instrumental in the Company’s success and to show the Chief Minister around the offices which are located over four floors and house over 40 members of staff. More than another 40 staff are located in 14 Ibex Insurance branches in Spain and Portugal. The new offices have now centralised the underwriting, claims and administration functions of the Company with the retail office giving Ibex Insurance a ground floor presence in the centre of town in smart new surroundings.
The event was attended by many local business people, and a number who had travelled from Spain and the UK for the special occasion. The guests enjoyed the ‘street party’ atmosphere on a warm summer evening, with canapés by Vickie Bishop Catering and jazz music by UK musician Tom Rust.
For more information about Ibex Insurance and its range of Insurance products including the newly launched Business Insurance please call 200 44628. www.ibexinsure.com

Since the 10% corporation tax rate became effective, most attention has been on the quality and quantity of companies being attracted to Gibraltar to take advantage of our attractive fiscal regime. However, what stood out for us at Chesterton, in August, was acting for two entirely different companies taking office premises here in Gibraltar, both of which will add to local employment and the local economy, yet were not directly a result of the low tax regime.
Firstly, Hideaways Experienced Investor Fund. This overseas lifestyle property investment fund, now the largest fund in Gibraltar measured by the number of investors, moved to significantly larger premises within Gibraltar to enable it to increase the number of operational staff it employs locally. Further growth is forecast as the fund grows.
What this demonstrates is that the increasing funds sector will boost more than just balance sheets as many such funds have a requirement for an operational side to their businesses, some of which will be in Gibraltar. It is pleasing to identify the fact that the funds industry has a positive ripple effect beyond just the finance centre in Gibraltar.
Secondly, and perhaps what will impact our economy more, is the establishment of Computacenter in Gibraltar.
Computacenter is Europe’s leading independent provider of IT infrastructure services. It has over 10,000 employees across Europe and £2.7bn annual turnover.
It is a significant addition to the corporate sector locally.
According to Marc Fryer, Computacenter’s Client Director for the Corporate & eGaming Sector, and with whom we worked closely during the process of establishing them here, “Gibraltar continues to attract the best in class gaming companies across the world. We have invested in Gibraltar to offer the support these companies need and deserve. Computacenter is a respected and pan European IT Infrastructure Services and Solutions provider with a history of dealing with some of the largest public and private organisations globally.”
Its prime motive for establishing in Gibraltar is not, therefore, tax driven. It is quite simply the ripple effect of Gibraltar’s gaming sector that has convinced such a large corporation to establish here.
And it bodes well for high end employment too. “We will have personnel on the Rock that can assist in providing Supply Chain Services, Professional Services and Managed Services, focussed on IT Infrastructure” Fryer told B2B.
The ripple effect goes further, because when a large organisation like Computacenter establish in Gibraltar, other related parties from overseas watch and learn. “We are also educating tier 1 technology vendors on the importance of supporting Gibraltar and these vendors include EMC, Cisco, HP, VMWare, Oracle and Microsoft.”
All in all, it was a good August.

Mike Nicholls is a Fellow of the Institute of Chartered Accountants and a member of the Gibraltar Society of Accountants.

Mike operates Chesterton estate agency (www.chesterton.gi) and owns MN Associates Limited, a local company specialising in Gibraltar property, funding and relocation.
See www.mn-associates.gi