Shadow Minister of Finance Dr. Grant Gibbons last night urged Government to tighten its belt and cut back on spending in immediate response to the downturn in the economy.

He said instead of sitting back and saying Government is going to see what happens, it should be trying to make savings now and trying to work with the business and tourism communities to ensure that Bermuda passes through the recession as soon as possible. He said: "I think, to some degree, the message we are getting from Government, at least recently, is there is no need to cut Government spending for the simple reason that Government revenues are fine right now. While they are doing some planning, they are taking a wait and see attitude.

"But I think the reality is very different, from my perspective, in terms of what we are already seeing in the business environment.

"I think Government is, to some degree, in denial."

And he said if belts were not tightened, it could result in Government having to raise money through taxes in order to cover expenditure, which many businesses could not meet. He added: "Government needs to start tightening its belt and should be looking very carefully at both how it spends money and how it raises money.

"If we were in Government we would be doing this."

Dr. Gibbons said there were two different aspects to business in Bermuda following the events of September 11. He said the insurance companies have said they will meet the demands resulting from the terrorist attacks, and may even gain some additional business from it.

However, he said the hospitality and service industry was a different story.

He added: "One side of the economy is possibly masking what is going on in the other side. "The hospitality sector has gone into deep decline. We had a decline in this sector of some 15 percent up to June this year alone. This is a deep recession and it cannot be business as usual as far as Government is concerned.

"Government should have already started working with this sector. Government raises their revenue by taxes and, quite frankly, Government needs to share some of the pain that the hospitality industry and other individuals are feeling. It can do that by starting to reduce unnecessary spending and borrowing.

"What people should remember is the situation from the early 90s when the US went into recession. The US went into recession and came out again, but it took Bermuda almost three years to come out of it.

"Clearly, we should be working with these sectors. It's not a case of wait and see."

Dr. Gibbons said Government could easily begin to reduce its own spending by shaving off the additional $1.5 million it put on its travel budget this year.

He said questions should be asked whether Government really needs the 98 new positions it budgeted for this year, and said some capital projects could be deferred until the country is on a better financial footing.

Other areas for cutbacks, he suggested, could be flowers for Government buildings, which the United Bermuda Party alleges have cost Government $100,000 since it came into power in November 1998.

Prime Minister of St. Lucia Dr. Kenny D. Anthony on Tuesday this week told MPs that Government on the Caribbean island would move swiftly to cushion the recession by introducing cost-cutting measures, including the reduction of overseas travel, freezing new employment, suspending salary increases in the public sector, and encouraging banks to reduce the cost of doing business. Money was also to be injected to boost employment among unskilled workers.