China offers Gibraltar “one of the biggest opportunities” for trade and business growth after Brexit, the Gibraltar Government said this week as it defended the £400,000 annual cost of running its Hong Kong office.
The issue arose after it emerged in Parliament that a transaction involving “a very high profile Hong Kong firm” had fallen through because of uncertainty after Brexit. The firm, whose identity was not revealed but which has 4,000 employees worldwide, was planning to open an office here.
The government said major investments were still under discussion and that other business had already been generated in the private sector.
But Opposition MP Elliott Phillips asked whether, in the light of news about the failed deal, the government believed the running costs of the office led by Jason Cruz was justified.
Mr Phillips said £400,000 was “…an awful lot of money to be spending on a Hong Kong office…which is supposed to be bringing work and inward investment to our jurisdiction.”
But the criticism drew a stern response from Albert Isola, the Minister for Commerce who oversees the operations of the Hong Kong office.
Mr Isola said the Opposition had “some sort of obsession” with Mr Cruz and the Hong Kong office, adding he found this “absolutely staggering”.
“If [Mr Phillips] is suggesting that £400,000 is too much of a cost to have an office open in China, the biggest power house probably over the 10 to 15 years, then I struggle to understand how they could possibly have come to that conclusion, unless of course they have an obsession with Jason Cruz and the Hong Kong office,” he told Parliament.
“It must be the cheapest office internationally in the world, and Gibraltar would be going in the opposite direction to Jersey – which has an office in Mumbai, in Delhi, in Hong Kong, in China – to Guernsey, to the British Virgin Islands, even the Isle of Man has got offices in all of these countries.”
“The Opposition is telling the private sector today that for £400,000, Gibraltar shouldn’t have an office in Hong Kong.”
“I think it’s absolutely incredible.”
Mr Isola acknowledged that one transaction had fallen through but said the Hong Kong office had helped generate other opportunities.
The Hong Kong office had enabled access to “real and significant business opportunities” in Hong Kong for Gibraltar companies and organisations in financial services, shipping, education and trade.
It was also assisting in trade missions to mainland China having facilitated ministerial visits, with more planned in 2017.
“There is no question that serious business has been conducted between Asia and Gibraltar since the launch of the Gibraltar Government office in Hong Kong and engagements with huge state own enterprises continue both in China and Gibraltar,” Mr Isola said.
“The investments currently under discussion are substantial and ongoing.”
Acknowledging the work of “our man in Asia” for raising Gibraltar’s profile in the region, he added: “There are many other transactions that have come through…and there are businesses all over Gibraltar today working with Hong Kong and China that weren’t before we opened the office.”
Mr Phillips insisted that the Opposition welcomed inward investment from Asia, but persisted with his line of questioning.
“Everyone in Gibraltar wants Hong Kong to be a success, of course we do, we all want inward investment,” Mr Phillips said.
“What we want to do is ensure that the money going into this project delivers results for this economy.”
That intervention drew a tough response from Chief Minister Fabian Picardo, who said the Opposition MP was “wriggling on a hook” that he had created for himself.
“After Brexit, is it that they don’t realise that we will not be able to trade so easily with the rest of the European Union and we will have to trade with the rest of the world?” Mr Picardo asked.
“And that one of the biggest opportunities for trade is with China and that having an office in China is exactly what we should be doing?”
The Chief Minister expressed surprise that the Opposition should question the cost of the Hong Kong office and reflected on the GSD’s spending in government.
“The furniture that they bought for some of the rooms at Gibraltar House in London cost more than £400,000, or is it that they don’t realise the legacy that are carrying into this House?” he asked.
The Opposition was unimpressed by the responses in Parliament and yesterday said it would continue to probe this issue to ensure the taxpayers got value for money.
“Whilst everyone would welcome business from Hong Kong and the wider region establishing a presence in Gibraltar, it is demonstrably clear that despite the huge cost and commitment of our resources to the region, very little value has been derived from the tax payers investment,” Mr Phillips said.
“I have asked the Minister on several occasions to demonstrate what tangible benefits to our community have been directly or indirectly attributable to the deployment of significant resources in the region.”
“To date we have received an incoherent marketing speak-type reply which does very little to reassure the business community or the ordinary man in the street that we are getting value for money.”
“It is time to rethink how we direct our finite financial resources to creating real opportunities for Gibraltar and not continue to throw money away on jobs for the boys.”
Main photo of Hong Kong by David Parody.