Skip to main content

Gibraltar: Spanish Workers

Volume 454: debated on Tuesday 5 December 2006

To ask the Secretary of State for Foreign and Commonwealth Affairs how much payments to Spanish workers formerly working in Gibraltar in respect of pensions will cost, broken down by main budget heading; and from which budget such payments will be made. (107482)

The Trilateral Agreement reached in Cordoba on 18 September provides a settlement to the long-running issue of pensions paid to Spanish workers affected by the 1969 border closure. The Government already fund pensions to this group under a 1996 agreement. As part of the Cordoba settlement, the Government will offer uprated payments from April 2007 to those pensioners who agree to leave the Gibraltar Social Insurance Fund (GSIF).

The cost of the existing pensions paid to this group is estimated to be £5.3 million in 2007-08. The additional cost of uprated payments in 2007-08 is estimated to be £3.75 million. The exact cost of payments in 2007-08 and subsequent years will, however, depend on the uptake of the offer, mortality rates and inflation rates.

This agreement removes a substantial liability from the UK taxpayer, as the Spanish Government have agreed not to claim healthcare costs for those Spanish pensioners for whom it would be entitled to do under EC law.

As under existing arrangements for pension payments, funding will be managed by the Department for International Development and payments administered by the Crown Agents Bank.

This settlement has opened the way for the wider reform of GSIF. In this regard, the Government of Gibraltar has announced it will uprate the pensions of all pensioners remaining within the GSIF.