The Gibraltar economy continues, thankfully, to perform well, on practically all fronts: the ship repair yard, port services and tourism all continue to grow. The gaming industry continues its successful consolidation as an important part of our economy. And the finance centre continues to grow and prosper, despite the threats and challenges that all offshore finance centres are now facing from international organisations like the OECD, G7, the EU and others. We are particularly pleased to have secured the re-establishment of the Heathrow air service.

No one in Gibraltar, whether they work directly in the finance centre or not should underestimate how important the finance centre is to the economic, and therefore to the social and political prosperity of Gibraltar.

It would therefore be a huge mistake for anyone to misinterpret the Government's nurturing and protection of the finance centre as pandering to the interests of business or the privileged.

The finance centre provides vast numbers of jobs in Gibraltar. Probably as many as 5000 jobs depend, directly or indirectly, on the finance centre. These people are, in turn, customers of other businesses. Finance centre companies are themselves customers of many other businesses in Gibraltar. The corporate and income tax collected by Government from the finance centre pays for many public sector jobs, for many public services and for much public investment. The finance centre is an important mainstay of the private sector and therefore of the economy.

I say all these things because in order to protect the finance centre from the consequences of the international initiatives that I have referred to, Government will be obliged to take certain measures, especially changes to our tax system, to enable the finance centre to continue to flourish and thus sustain the direct and indirect employment that it currently provides. You may however rest assured that these measures will not involve the raising of direct or indirect taxes payable by residents.

Even though tourists continue to visit Gibraltar in record numbers, some sectors of our retail (and therefore also the wholesale) trade continue to suffer the consequences of the strong pound. This makes many of our shops uncompetitive for local and visiting shoppers alike. There are however signs, at long last, that the Euro may be strengthening. If this continues it will offer some relief to those local businesses affected.

One of the purposes of the economy is to provide money to Government to fund public services and public investment. The other important purpose is to provide jobs. Thanks to the continuing success of the economy, unemployment remains below the historically low level of 300. It finished the year at 287. The monthly average over the whole year was 313. These encouraging figures will not however lull us into a false sense of security. We will continue to focus on job creation and on modern training and apprenticeship facilities and opportunities. We are also building two new industrial parks to provide opportunities for business expansion and new start-ups.

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