House of Commons - Foreign Affairs

Select Committee on Foreign Affairs Fourth Report

THE EU DIMENSION

59. Spanish membership of the EU has given Spain an important arena in which it is able both to make accusations against Gibraltar, and to manoeuvre against the interests of the territory. Gibraltar is, of course, not a member of the EU but is within the EU under Article 299(4) of the Treaty of Amsterdam which applies the Treaty to "the European territories for whose external relations a Member State is responsible." Gibraltar has exemptions from Community policy in the Common Agriculture and Fisheries Policies, the Common Customs tariff, the free movement of goods (but not services) and the levying of VAT. The UK Government has delegated to the Government of Gibraltar responsibility for giving effect to EU legislation in the territory, but retains ultimate responsibility for the application of EU law in Gibraltar.[134] Mr Caruana told us that Gibraltar accepted its EU responsibilities, even where these resulted in onerous burdens being placed upon the territory. At the same time, Gibraltar wished to benefit from its full entitlement under EU law.[135]

Non-implementation of EU directives

60. One theme of Spain's accusations has been that Gibraltar has failed to implement EU legislation. In January 1999, an official complaint was made by the Spanish Government to the Commission in respect of 66 specified directives which Spain claimed had not been brought into effect in Gibraltar.[136] On 11 February, the British Permanent Representative in Brussels effectively rebutted this allegation: of the 66 directives, 39 had in fact been implemented, 12 were inapplicable because of Gibraltar's legal status within the EU, two did not require transposition, three were listed twice and two appeared not to exist. Of the remaining eight directives, four have subsequently been transposed. The four directives which are now outstanding from the list are the four directives known collectively as the 4th and 7th Company Law Directives,[137] to which we referred earlier.[138] Despite the invalidity of the Spanish list, it would be wrong to suggest that the picture is perfect. The British Government told us that "there is still a number of directives which were identified in 1994 which have not yet been transposed by Gibraltar. Most of them are the subject of infractions proceedings."[139] There is also new legislation which Gibraltar is in the process of bringing into force, but in this its position is similar to that of other jurisdictions within the EU.

61. The British Government acknowledges that there was a backlog in the implementation of EU law in the past, and has put pressure on Gibraltar to comply with its EU obligations.[140] Ms Quin told us that the record in Gibraltar is now a good one,[141] and the Gibraltarian Government told us that the "reality of the matter is that Gibraltar's EU directives transposition record is now very good."[142] A Legislation Support Unit has been set up in Gibraltar, headed by a senior lawyer with considerable drafting experience in the British civil service. This Unit has the Herculean task of transposing EU directives into Gibraltarian law—many of which will have precious little, if any, effect in so small a community. This was a point made by Ms Quin.[143] The Gibraltar Government described a "massive (by reference of our size) amount of financial, administrative and legislative resources [devoted] to directives implementation,"[144] and, as the FCO put it, this places a "strain... on Gibraltar's small public administration."[145] It is inevitable that there will be a strain on Gibraltar because of Gibraltar's separate legal jurisdiction, coupled with its size and its status as part of the EU. Nevertheless, we believe that Gibraltar should be applauded for the commitment it has shown to implementing EU directives promptly in its territory.

62. The attempt by Spain to allege a lawless attitude in this area has been rebutted, but nevertheless erodes confidence in Gibraltar among businesses and governments in the rest of Europe. In any case, we note that Spain itself is subject to infringement proceedings in 25 cases because of non-implementation of EU directives.[146] We believe that the message that Gibraltar does comply with its EU obligations should be emphasised by the United Kingdom Government to its EU partners. We further recommend that the British Government request that the European Commission, as part of its regular review of levels of compliance in EU Member States, assess the compliance of Gibraltar with relevant EU obligations and publish its findings.

Non-recognition of documentation etc

DRIVING LICENCES

63. There are many aspects to the principle of non-recognition of Gibraltar as employed by Spain. For example, Señor Matutes was reported as telling our sister Committee in Spain on 10 February 1999 that the Spanish Government was considering non-recognition of Gibraltarian driving licences. He repeated this threat in a television interview to Antena 3 on 1 March. Spanish objections appear to centre on the designation "UK (Gibraltar)" on the EU licence, which Spain regards as not complying with the requirement that licences should contain the distinguishing sign of the Member State which issued them. The British Government has informed the Spanish Government that, in their view, non-recognition would be contrary to EU law, and, in any case, if there is any dispute about the validity of the licence, this is a matter for the European Commission, not for unilateral action by Member States.[147] The British Government has also drawn the issue to the attention of the Commission. According to the British Government, Señor Matutes's threat has not been carried out, but the Government of Gibraltar claimed that licences had not been recognised "in a limited number of cases."[148]

64. There is one area relating to driving licences where Spain may have a legitimate grievance: prior to January 1997, Spaniards (and other EU nationals, including Britons) were able to obtain Gibraltarian driving licences without establishing residency requirements. In January 1997, Gibraltar came into line with the rest of the EU and imposed residency requirements. However, according to the FCO, "it seems that after January 1997 a number of non-Gibraltarians made false declarations of residence and received licences on that basis."[149] Procedures have since been tightened, at the prompting of the British Government, and we understand that investigations are proceeding into the scam which appears to have operated in the past. It is clearly important for Gibraltar not to allow any laxity in the enforcement of EU law in this field—or any other—if it wishes to demonstrate its credentials as a territory which complies fully with its EU obligations.

PASSPORTS AND IDENTITY CARDS

65. A similar objection is made by Spain in respect of passports which have the word "Gibraltar" on their front cover. These are issued by the Governor in Gibraltar, but are alleged not to conform to the 1980 intergovernmental resolution on the EC Common Format Passports. The Spanish view is again contested by the British Government.[150] According to the Government of Gibraltar, non-recognition of these passports has occurred "in a number of cases."[151]

66. Gibraltarians have also had identity cards since 1943. According to the Government of Gibraltar, their format was modified to be brought in line with the EU standard, and the British Government informed the Commission in May 1995 that the Gibraltarian identity card was to be accepted under the terms of relevant EU directives. This was accepted by the Commission, but "Spain refused to accept the use of the Gibraltar card and requested other Member States to follow."[152] According to the Gibraltar Socialist Labour Party and the Liberal Party of Gibraltar, only Sweden and the United Kingdom recognise the cards.[153] The Gibraltar Government told us that Spain's action was taken up with the EU Infraction Chefs Committee by the British Government in October 1995. We are aware that these representations have been repeated on several occasions at a very senior level. No decision has yet come out from the Commission. We recommend that the British Government should press the European Commission strongly for early action and speedy resolution of the issues involving non-recognition of driving licences, passports and identity cards.

TELEPHONES

67. The Gibraltarian Government told us that it was unable to comply with EU telephone liberalisation directives because Spain refuses to recognise Gibraltar's international dialling code, and will not allocate any more than 30,000 telephone numbers on the Spanish system.[154] Spain has also prevented its mobile phone network from granting roaming facilities for Gibraltar's mobile phone network. This matter was taken up with the European Commission by two Gibraltarian companies in 1996.[155] The British Government told us that it was for the Commission to decide on such private complaints, but that they took an "active interest" and have "urged the Commission to examine carefully the arguments put forward by the complainants and to find an early solution."[156] The non-resolution of this issue since 1996 is not acceptable, and we recommend that the Government take all steps open to it under the Treaties to ensure that a determination is made by the European Commission with no further delay in the case of telephone operations.

Non-recognition of authorities in Gibraltar

68. It is well precedented in European law for a number of different competent authorities to be designated as responsible for aspects of the implementation of the law in a Member State. Authorities in Gibraltar have been so designated. For example, social security regulations provided for the competent authorities in respect of the United Kingdom to be the Secretaries of State for Social Security, for Scotland and for Wales, the Department of Health and Social Services for Northern Ireland, and the Directors of the Departments of Labour and Social Security and Medical and Public Heath in Gibraltar. (In respect of Portugal, the same regulations provide for different competent authorities in respect of the Azores and Madeira from those for metropolitan Portugal).[157] Because of Gibraltar's separate legal jurisdiction, it is the norm for Gibraltarian competent authorities to be designated if any competent authority is needed. However, the Spanish Government is, according to the Gibraltarian Government, seeking to prevent the designation of Gibraltarian authorities "by insisting that Gibraltar should become the political and administrative responsibility of the appropriate UK domestic competent authority." This is unacceptable to Gibraltar because it "would, in practice, amount to administrative integration into the UK, without political integration."[158]

69. The Spanish policy to prevent the recognition of Gibraltarian authorities can be exercised in two principal ways. Where unanimity is required for the adoption of EU legislation (or Spain is the "swing voter" under majority voting), Spain can prevent legislation referring to Gibraltarian authorities from being adopted unless Gibraltar is suspended or excluded from the legislation. We deal with this issue in paragraphs 72 to 77 below. An alternative approach is to try to persuade other Member States that designated Gibraltarian authorities ought not to be recognised. This method has particularly been used against several industries which are important for Gibraltar's economic future. Thus, though the Gibraltar Financial Services Commission (FSC) have been given permission to "passport" Gibraltar-based insurance firms to operate throughout the EU,[159] "several EU partners have queried the status of the FSC, while Spain has sought to lobby against acceptance of notifications by the FSC."[160] The Government of Gibraltar believes that the refusal of other states to recognise the FSC's notification was "largely the result of Spain's lobbying."[161] The passporting of banking services is imminent,[162] but the same reaction to FSC passporting can be anticipated. Regulation of investment services is less well advanced,[163] but eventually the same problem is likely to occur.

70. The Gibraltar Government also produced evidence that Spain has attempted to dissuade shippers from flagging vessels to the Gibraltar Register, despite the recognition of the Register in British and in European law.[164] According to them, Spain has also objected to the nomination of Gibraltar's companies registry as a competent authority for the proposed Regulation to establish a European Company Statute.[165]

71. The financial services and shipping industries are all important to Gibraltar's future. We were left in no doubt by both the Chamber of Commerce and by representatives of the Gibraltar Government that the problems with passporting have had a severe effect on the financial services industry. The British Government has "consistently supported Gibraltar's efforts to build up a thriving financial services sector as an economic motor for the territory."[166] There is clearly a duty upon it to counter Spanish lobbying by itself lobbying vigorously for Gibraltar's competent authorities to be accepted by other Member States. The British Government can also press the European Commission to work more urgently to support the validity of the recognition of Gibraltarian authorities under European law. It is intolerable for third parties to decide which authorities are to be recognised within a Member State: that is a matter for the Member State Government alone. There may also be other steps which can be taken. The British Government told us that, in the case of insurance, "the possibility has been mooted of communicating with those insurance regulators that refuse to deal direct via a London "post-box"."[167] This is obviously a practical, if second-best, way forward. However, we understand from representatives of the Gibraltar Government that discussions on the post-box idea have been in train for 18 months, with the main obstacle to progress being a requirement from the British Government that the Gibraltarian Government provide suitable indemnification. We recommend that the British Government take speedy and practical steps to ensure that Gibraltarian financial and other interests are not adversely affected by the non-recognition of Gibraltarian competent authorities.

Exclusion of Gibraltar from EU Legislation

72. As we have mentioned, where EU legislation is subject to unanimity (or in cases under qualified majority voting where Spain is the "swing voter"), it is always possible for Spain to create difficulties in respect of Gibraltar. This may be done by attempting to exclude or suspend Gibraltar altogether, as in aviation legislation, or by refusing to recognise Gibraltarian competent authorities, as in the case of certain Third Pillar matters, so de facto excluding Gibraltar. The Government of Gibraltar referred us to three Third Pillar instruments (the European Judicial Network, the EURODAC Convention[168] and the Driving Disqualification Convention) where they believed that the UK abandoned its initial position that Spain could not insist that Gibraltarian authorities must not be designated as competent authorities under the instrument. They commented as follows:

"it was in the light of this extraordinary concession that Gibraltar was obliged to opt to be excluded from the measures rather than be forced to participate through the UK's domestic authorities and thereby surrender its jurisdictional status and administrative autonomy and allow Spain to make deep inroads into our Constitution."[169]

We raised the cases of the Driving Disqualification Convention and of EURODAC with Ms Quin and her officials. We were told that Gibraltar was excluded from EURODAC because the Gibraltar Government preferred "to remain outside Third Pillar measures rather than be included underneath the UK competent authority."[170] In the case of the Driving Disqualification Convention, the exclusion of Gibraltar was accepted because it was felt that adoption of the Convention was "in the interests of the United Kingdom as a whole."[171]

73. There are a number of possible responses which the British Government could adopt to the threat of exclusion. The first—of simple acquiescence to Spanish demands—is unacceptable. It would, in effect, give Spain control over what EU legislation applied in Gibraltar, and would turn Gibraltar—as opposition politicians in Gibraltar vividly described it to us—into a Spanish colony. As their party's Memorandum put it[172] "in practice, Madrid, instead of London and Gibraltar, is deciding which measures of European legislation apply in the British territory and which do not."

74. The second possibility is to take a more robust line with Spain, and to impose a British veto on any measure requiring unanimity, or where the British vote is the swing vote, unless any restrictions on Gibraltar which Spain proposes are removed. The application of the legislation in question would be a matter to be determined solely between the Government of the United Kingdom and Gibraltar. There are many attractions in this absolutist approach—and it would be an approach which would be very popular in Gibraltar. However, it will not always be right for the Gibraltarian tail to wag the British dog: to take the example of the Driving Disqualification Convention, it was obviously entirely sensible and desirable that the Convention should apply in Gibraltar. If, however, Spanish action prevented that happening, the United Kingdom had a duty to its 58 million citizens to prevent drivers disqualified in the rest of the EU from driving on British roads, and, on the simple utilitarian principle of the greater good of the greater number, that duty outweighed the interest of the 27,000 citizens of Gibraltar.

75. The Government's approach has been to steer a middle course. The FCO described a "case-by-case" approach.[173] As Ms Quin put it, "sometimes we feel it is unacceptable and we will veto the legislation. Occasionally, though, if the legislation is felt to be very much in the interests of the United Kingdom as a whole, we do allow that exclusion of Gibraltar take place."[174] She also emphasised that a decision to exclude Gibraltar "is taken after consultation with the Government of Gibraltar and only in exceptional circumstances."[175] The Committee agrees with this general approach, but proposes that a number of ground-rules should be established.

76. First of all, the Government of Gibraltar must be consulted on any draft EU measure which is to apply to them. This, of course, does not imply that Gibraltar should have the right to be excluded from directives which it regards as onerous in terms of its own interests—nor does Mr Caruana expect this.[176] We were pleased in this context by Ms Quin's statement that HMG wanted "the maximum involvement of Gibraltar" when draft legislation was being considered.[177] The assumption on the parts of the British and Gibraltarian Governments must be that Gibraltar will want to comply with its EU obligations, and will therefore wish to have the measure apply in Gibraltar. British officials in all Departments already have their attention drawn to Gibraltar pitfalls in EU business into which they may inadvertently fall,[178] and early notice of EU measures to the Gibraltar Government should help avoid these pitfalls. Feedback from Gibraltar will also ensure that officials throughout Whitehall (many of whom may never have dealt with Gibraltar issues before) will be aware of the Gibraltarian concerns about the measure under discussion.

77. If Spain attempts to exclude or suspend Gibraltar from a draft EU measure which the Government of Gibraltar, having been fully consulted, wishes to see apply in Gibraltar, the British Government should seek the support of other EU countries in putting pressure upon Spain to abandon its policy. This should be done through UKREP in Brussels and the Embassies in the countries concerned—each of which should be briefed on the disadvantages to that country if Gibraltar is not covered by the measure in question. Such a campaign could, as one witness put it, emphasise that "Spain is holding up legislation affecting 300 million people throughout the EU because of her intransigent stand in her anachronistic and undemocratic position over Gibraltar."[179] If bilateral pressure on Spain from the United Kingdom and other EU countries does not secure a change of attitude by Spain, then the British Government should assess whether the measure in question will bring greater benefits to Spain than to the United Kingdom and Gibraltar. Already, according to Ms Quin, Spain "does not find it easy" to persuade the United Kingdom to agree to matters which are in Spain's interests if there is an attempt to exclude Gibraltar.[180] If the assessment of a draft measure is that it will benefit Spain more than the United Kingdom, then there should be a presumption that the United Kingdom should exercise its veto. Only if the measure benefits the United Kingdom equally with, or more than, Spain should the British Government consider whether it believes the measure is of such importance to the United Kingdom as a whole (or of negligible importance to the people of Gibraltar) that the exclusion of Gibraltar should be accepted as the lesser of two evils. That judgement is likely to be reached, in Ms Quin's words, only occasionally and exceptionally. In essence, the British Government must protect the rights and interests of Gibraltar in this context no less firmly than it would the rights and interests of any part of the United Kingdom.

Problems in areas of internal affairs and justice

SCHENGEN

78. During the drafting of the Protocol Integrating the Schengen Acquis into the Framework of the European Union, concerns were expressed by the Government of Gibraltar that Spain should not be able to block any future participation in Schengen by the United Kingdom unless Gibraltar was excluded. According to evidence given to us in 1997 in our inquiry into the Treaty of Amsterdam,[181] Mr Caruana's mind was set at rest by the 12 June draft of the Protocol which would not have given Spain that right. However, the final text of the Protocol, as agreed on 16 June, re-inserted an unanimity requirement (and therefore a veto right) which had been present in earlier drafts. The United Kingdom thus does not have the right to opt in to any part of the Schengen acquis except with the unanimous consent of existing members and Spain is able, if it wishes, to block Gibraltar's participation.

79. Evidence given to us in 1997 by the Foreign Secretary made it clear that the British Government believed that it was the 12 June text which had been agreed by Ministers. He was critical of the way in which the Dutch Presidency had handled this aspect of the discussions and spoke of a "misunderstanding."[182] It was not a happy example of diplomacy. For some time, the United Kingdom attempted to have this part of the conclusions of Amsterdam re-written. Eventually, the attempt was abandoned, and a non-binding Declaration was adopted. Under this Schengen states undertake to "make their best efforts" to enable the United Kingdom to participate in Schengen.[183] This is obviously second-best to a position in which no state can obstruct the United Kingdom's, and thus Gibraltar's, participation in Schengen. It is most regrettable that the 12 June version of the Protocol was not the one which was adopted.

80. The Government of Gibraltar wishes to participate in any part of the Schengen acquis in which the United Kingdom participates. This was stated in evidence to us, and a letter was appended to that evidence which made it clear that the British Government was informed unequivocally of this view in November 1998.[184] Ms Quin told us that the issue had "not been pushed strongly" to her by Gibraltar.[185] Taking the Gibraltar Government at their word, we must assume that they wish to participate fully in "all areas of Schengen... which do not affect the UK's border controls"—in other words, those areas in which the Home Secretary told the EU Justice and Home Affairs Council on 12 March 1999 that he wished the United Kingdom to participate.[186] It is hardly surprising that Gibraltar should wish to participate in, for example, the Schengen Information System with the vast data base which it will open to the very small police force controlling an important access point to Europe. This was a point made to us by the RGP.

81. According to newspaper reports, there was an immediate Spanish reaction to the proposals of the Home Secretary, with a Spanish Government spokesman quoted as saying that questions were raised about "territorial entities and authorities, and the documents they issue".[187] We are therefore faced with the very real prospect that Spain will attempt to exclude Gibraltar from participation in this important part of the Schengen acqis. Ms Quin told us that if Spain tried to block British participation in Schengen it would be acting contrary to the Declaration on "best efforts."[188] In addition, Ms Kate Hoey, Parliamentary Under-Secretary of State at the Home Office, has argued to the European Scrutiny Committee that Ireland's decision to seek participation in the Schengen acquis alongside the United Kingdom made it very difficult for Spain to oppose United Kingdom participation if, at the same time, it supported Ireland's.[189] The British Government should liaise closely with the Irish Government on this matter. The Foreign Secretary has also pointed out that, if Spain is concerned about law enforcement in Gibraltar, it is in their interests for Gibraltar to participate in Schengen.[190] At the same time, the Foreign Secretary assured the House that there was "no intention of making any concessions on Gibraltar" in relation to Schengen. This answer had re-assured the Government of Gibraltar.[191] However, Ms Quin left open the possibility that the Home Secretary might decide that the United Kingdom's interests were such that it should participate in aspects of Schengen without Gibraltar.[192] This led to renewed concerns in the Gibraltar Government that the United Kingdom might be prepared to enter Schengen with Gibraltar excluded.[193]

82. As far as measures building upon the Schengen acqis are concerned, the United Kingdom could participate if it secured qualified majority support.[194] This appears to offer less opportunity for Spain to use the Gibraltar lever. However, measures building upon Schengen are likely to build upon measures already part of the Schengen acqis, and it is quite possible that Spain (or any other country) will be able to argue that a country which does not participate in the measure which is being built upon cannot logically participate in the measures built upon it.

83. The Committee believes that any move to join Schengen in respect of the United Kingdom should also apply to Gibraltar. We sincerely hope that Spain will see that its best interests are served by cross-border co-operation on the matters under Schengen, not least in the areas of practical co-operation in law-enforcement. If Spain were to seek to obstruct Gibraltar's inclusion along with the United Kingdom, British diplomacy should be directed towards reminding all Schengen states of the provisions of the "best efforts" Declaration appended to the Amsterdam Treaty. France and Germany have already welcomed the British desire to join,[195] and they and other countries must be fully briefed on the unacceptability—from the point of view of all Member States—of excluding Gibraltar from Schengen. For Mr Caruana, the decision as to whether Gibraltar was excluded or not was the "ultimate litmus test" of the United Kingdom's support for Gibraltar.[196] We recommend that a clear message be given to Spain that any attempt to block Gibraltarian entry into Schengen runs counter to the letter and spirit of the Declaration made at the time of the Amsterdam Treaty.

TITLE IV MEASURES

84. As well as Schengen, the Home Secretary signalled on 12 March that the United Kingdom was ready to participate in the Free Movement Chapter of the Treaty of Amsterdam, again subject to the proviso about the United Kingdom's border controls. This is Title IV of the consolidated version of the Treaty establishing the European Community, which came into force on 1 May 1999, and is concerned with asylum, immigration, visas, frontiers and civil judicial co-operation. In 1997, Mr Caruana told the Committee that he had been assured by the British Government that Spain could not attempt to exclude Gibraltar from measures to be drawn up under this Title.[197] He provided further evidence of this assurance in his written evidence in this inquiry.[198] Opposition politicians, however, argued forcefully to us during our visit to Gibraltar that the Protocol on the position of the United Kingdom and Ireland to the Amsterdam Treaty (Protocol 2) weakened the position of the United Kingdom if it was faced with Spanish objection to the inclusion of Gibraltar in a Title IV measure. Before Amsterdam, they believed, a measure of this nature could be blocked by the United Kingdom if Spain refused to allow Gibraltarian participation. This was, in fact, done in the case of the draft External Frontiers Convention. After Amsterdam, however, the United Kingdom could only sustain its objection for "a reasonable period" under Article 3.2 of the Protocol. Thereafter, according to the Gibraltarian opposition, the United Kingdom was faced with either being excluded along with Gibraltar or signing up but succumbing to any Spanish move to exclude Gibraltar.

85. The FCO's view is that the phrase "a reasonable period of time" was "deliberately left flexible so that it will not be open to member states to filibuster on a certain measure until the UK can be excluded." They also commented that "the length of this period is likely to depend on the complexity of the negotiation and the political will for an agreement at the level of the 15."[199] This may indeed be a reasonable interpretation of the position, but it may well not be one which is shared by Spain. Again, we believe that it will be important for British diplomacy to make it clear that it will be in the interests of the whole European Union for Title IV measures to apply to Gibraltar. The control of asylum-seekers and illegal immigrants in Europe cannot stop at the Gibraltar border. In this way, pressure will be put upon Spain not to filibuster discussions until the United Kingdom accepts the exclusion of Gibraltar from Title IV measures. But there remains the real prospect that, if negotiations on such a measure are blocked because the United Kingdom cannot agree to Spain's demand to exclude Gibraltar from its scope, the Council will decide to adopt the measure without the participation of the United Kingdom, relying on Article 3.2 of the Protocol.

86. The position set out in the preceding paragraphs applies when the United Kingdom seeks to take part in "the adoption and application" of any Title IV measure—in other words, when the United Kingdom wishes to be in on the act from the beginning. Under Article 4 of Protocol 2, the United Kingdom may also notify its intention to accept a measure which has already been adopted. In this case, no Member State has the right of veto, but the United Kingdom's application of the measure is subject to the Commission's agreement (and the Commission must decide within seven months of the receipt of the application).[200] There is obviously merit in being involved in discussions from the beginning, but the existence of Article 4 may demonstrate a way forward if Spanish intransigence prevents a measure being adopted with the United Kingdom (including Gibraltar) taking part. If this route is followed, the United Kingdom's ability to influence the content of the measure will be substantially reduced.

TITLE VI

87. Title VI of the consolidated version of the Treaty on European Union (the Maastricht Treaty) is what has normally been referred to as the "Third Pillar" of the Union, and, since the coming into force of the Treaty of Amsterdam on 1 May 1999, has been solely concerned with police and judicial co-operation in criminal matters. Before that date its scope extended to co-operation in the fields of justice and home affairs, including asylum and immigration policy. A measure proposed under this Title (except an implementing measure) must secure unanimity. Opposition politicians in Gibraltar drew our attention to a number of instances where Third Pillar agreements had been made by the Government in the past with Gibraltar excluded. They cited in particular the Brussels II Convention (on matrimonial maintenance payments) and the Driver Disqualification Convention. They also maintained that a number of the Conventions previously made under the Third Pillar would in future be made under the provision of this Protocol 2 referred to in paragraph 84 above where it was their belief that the United Kingdom loses its veto but Spain retains it. Any future agreement under Title VI could be obstructed by Spain unless Gibraltar is excluded.

European franchise

88. In a judgement delivered in Strasbourg on 18 February 1999 in the case of Matthews v. the United Kingdom, the European Court of Human Rights (ECHR) (which is, of course, the court of the Council of Europe) held that the United Kingdom had breached Article 3 of Protocol No.1 to the European Convention of Human Rights, in that the applicant (Ms Denise Matthews, a British citizen resident in Gibraltar) was denied the right to participate in elections to the European Parliament (EP). The attempt to secure EP voting rights had been long-running in Gibraltar, and Ms Matthews's victory was widely welcomed there.

89. The British Government, which previously opposed EP voting rights for Gibraltarian residents, has accepted the ECHR's judgement. Ms Quin has told the House that the Government will be "taking all available steps to secure an extension of the EP franchise to Gibraltar." However, the Government argue that they can do this only by amending the 1976 EC Act on Direct Elections, which will require the agreement of all EU Member States. Ms Quin said that "HMG will seek such an amendment in the current negotiations in Brussels on establishing Common Principles for EP elections."[201] The text of the proposed amendment was tabled in the General Affairs Group on 16 March 1999.[202]

90. Arrangements for direct elections to the EP were indeed established in an Act "concerning the election of Representatives of the European Parliament by direct universal suffrage" which was annexed to a Council Decision. Despite this unusual form, the Decision and the Act were in substance an international treaty supplementary to the EC Treaty. Annex II to the Act states that "The United Kingdom will apply the provisions of this Act only in respect of the United Kingdom." This apparently tautologous statement is generally understood as excluding Gibraltar citizens from the EP franchise but the language is hardly clear: the first reference to the United Kingdom has to be read as a reference to the United Kingdom as a Member State which ordinarily includes a reference to Gibraltar. This is because Gibraltar is within the scope of application of the EC Treaty by virtue of Article 299(4) of the Amsterdam Treaty as a "European territory for whose external relations a Member State is responsible." The second reference is then taken to be to the territory of the United Kingdom as such, that is to say, Great Britain and Northern Ireland. It might have been possible to argue that the second reference in the text also included Gibraltar, and therefore that amendment was not necessary for the franchise to be extended to Gibraltarian residents. At the very least, it would have been desirable not to cast doubt on this possibility by suggesting immediately that amendment was required.

91. The need for amendment causes problems. This is because Annex II to the Act can be amended only by the procedure by which it was adopted, that is to say unanimity in the Council of Ministers followed by ratification by each Member State according to its constitutional requirements. The requirement for unanimity has given a potential weapon of obstruction to Spain. Ms Quin "strongly deplored" any suggestion that the Government had invited Spain to exercise a veto, and said that the Government "would expect all countries to abide by the court's ruling."[203] Nevertheless, the potential for mischief-making by either the Spanish Government or the Cortes is obvious: the judgement by the ECHR was against the United Kingdom, and Spain is not bound by it directly.[204] There was, however, a hopeful sign when, according to a report in El País, a spokesman for the Spanish Ministry of Foreign Affairs refused to comment on the ECHR judgement saying that it was an "internal matter for the United Kingdom."[205]

92. The Government of Gibraltar has said that it expects the violation to be "rectified as soon as possible."[206] Clearly it was impracticable for this to happen before the EP elections in June 1999. However, it will be unacceptable for the ECHR judgement not to be implemented in time for the EP election in 2004. If there is evidence of Spanish obstruction, we believe that it will be possible—and desirable—for the United Kingdom to act unilaterally, at least as a stop-gap. This could be done by amending British law to allow British citizens resident in Gibraltar to register to vote in European constituencies in a similar manner to the extension of the franchise in domestic and EP elections to British citizens resident abroad under the Representation of the People Act 1985—though the 1985 parallel is not exact since overseas electors under that Act must previously have been registered in the United Kingdom. If Gibraltarians were admitted to the franchise in this way, it would be very difficult to argue that the whole election was thereby invalidated—and no United Kingdom Member of the European Parliament could be said to have been elected solely because of Gibraltarian votes. And anyone who mounted such an argument would, in effect, be setting himself or herself against the spirit of the judgement of the ECHR. It would be quite wrong for Spain, a member state of the Council of Europe, to attempt to frustrate the judgement of the ECHR. Indeed, if it were to do so, the United Kingdom could cite the Matthews judgement in defence of its actions. We recommend that the Government make it clear that they will ensure that all British citizens resident in Gibraltar will be able to vote in the 2004 European Parliament elections.

93. Our general conclusion is that Gibraltar has a right to be treated in the same way as any part of the United Kingdom so far as the benefits of EU membership are concerned. We recommend that the Government continue to press with determination for the fullest protection of Gibraltarians' rights as citizens of the EU.

134 Ev. p. 2, paras. 8-9. Back

135 Q150. Back

136 Ev. p. 6, para. 50; p. 34, paras. 21ff. Back

137 Ev. p. 6, para. 50-although rather confusingly, the 4th and 7th directives in fact are contained in two original directives and two amending directives. Back

138 See para. 55. Back

139 Ev. p. 6, para. 49. Back

140 Ev. p. 6, para. 48. Back

141 Q95. Back

142 Ev. p. 35, para. 27. Back

143 Q94. Back

144 Ev. p. 35, para. 27. Back

145 Ev. p. 6, para. 48. Back