Examination of Witnesses (Questions 220
- 234)
TUESDAY 20 APRIL 1999
THE HON
PETER CARUANA,
QC, MR
ERNEST MONTADO
and MR ALBERT
POGGIO, MBE
220. The airport has achieved a particular
significance. I want to check with you how you see we can make
progress building on that agreement?
(Mr Caruana) Yes. The one sentence that I was
going to add just before answering your question was the principal
confidence building measure now required is the frontier, in other
words to come to Gibraltar, which already opens its economy and
moots with us other confidence building measures when Madrid is
in effect pursuing a frontier regime calculated to bring our economy
to its knees is not starting at a starting point.
221. Come back to the question.
(Mr Caruana) All that said, the 1987 airport agreement
is not acceptable in Gibraltar because it brings into question
ownership and control over the airport, in other words it raises
sovereignty issues.
222. But it was acceptable to the then government
in 1987?
(Mr Caruana) It was not acceptable, it was accepted
under some pressure and reluctantly but it was certainly not acceptable
in the sense that they found it unobjectionable.
223. But it was accepted.
(Mr Caruana) It was acquiesced to. By the previous
government presumably you mean Sir Joshua Hassan's last government
not the immediate predecessor.
224. By Sir Joshua.
(Mr Caruana) Yes. It is not acceptable now and
has not been acceptable in Gibraltar since. Indeed the British
Government did not force it on Gibraltar, the British Government
in effect gave Gibraltar the option in terms which we found unfair
but did not force the airport agreement on Gibraltar. Our position
on the airport agreement as a Government now, certainly whether
or not it was acceptable to some previous government, is not really
the issue. I think our position at the moment is—and it
is in our manifesto again and I have made many public statements
to this effect both in and outside Spain—that the Government
of Gibraltar is interested in pursuing ways in which the airport
can be commercially exploited to a greater extent to the benefit
both of Gibraltar and the Spanish hinterland. In other words,
we are very happy to do a commercially orientated arrangement
for the enhanced use of the airport that makes it valuable as
an economic asset, not just to Gibraltar but to the Spanish hinterland
as well.[2]
225. Back to the question, do you see a
position at which it will be acceptable to the citizens of Gibraltar
that those arriving at the airport step out on one side in Gibraltar
and on the other side into Spain?
(Mr Caruana) I think it might be acceptable if
it were achieved in ways which placed no question mark whatsoever
over the fact that the airport was situated on British sovereign
territory. Therefore the issue is not so much whether people pass
under a tunnel or not but the terms and circumstances in which
they pass under that tunnel. It is possible, quite easily I would
have thought, to contrive of a situation in which that happens
without it putting into question British sovereignty, jurisdiction
and control over the airport and the territory on which it is
built. That said, I ought to just also mention to you that the
Government of Gibraltar also objects to what is sometimes called
the Two Terminal Solution. In other words, one thing might be
access into Spain through a tunnel, having passed through a terminal
that is situated in Gibraltar, even if it is without Customs and
Immigration control, as happens in Basle Airport for example,
and another thing would be questions that raise doubt on this
being a British sovereign airport. Yes, the answer to your question
is it is not inconceivable but it would have to be done in a politically,
which means sovereignty, safe way for Gibraltar and there are
other objections, there are other issues which would need to be
saved, the fact that we would not want one terminal on the Spanish
side and another terminal on the Gibraltar side with a shared
runway. What we would like is an airport in Gibraltar, exploited
at a commercial level and with any number of facilities, perhaps
of the sort that you have mentioned, provided they are achieved
in a politically safe manner, which allows the airport to be used
as an economic asset for the benefit of the whole region and not
just Gibraltar.
226. That practical economically beneficial
response could also involve Spain, of course, not abandoning its
own claim to the airport?
(Mr Caruana) Absolutely. Our approach to the unblocking
of the airport impasse would be based on the status quo being
maintained. The maintenance of the status quo includes the fact
that Spain has a sovereignty claim to the territory, a claim with
which we do not agree but so long as we are not being made to
make political concessions, nor do we expect Spain to make political
concessions either, we would like to find a way of achieving this
which leaves everybody's political interests saved whilst allowing
the asset to be at a more commercial level exploited to greater
value.
Mr Illsley
227. Is not the sovereignty of the airport
to some extent established by the fact that it is owned by the
Ministry of Defence? There is a military aspect here because of
the strategic position of Gibraltar, especially at the present
time where ships are being refitted and any ship travelling through
the Gulf can be refitted by air from a direct flight from here
to Gibraltar. Does that not give you any reassurance as to the
sovereignty of the airport?
(Mr Caruana) Not in itself. There are different
views expressed at different times about the continuing importance
of that airport to the RAF. I think now it would be argued that
it is important, in another moment in time perhaps the argument
might change. The issue of the sovereignty of the territory on
which the airport is built is not questioned by anybody except
Spain. It is not in dispute as far as Britain is concerned, it
is not in dispute as far as Gibraltar is concerned. What we have
is a Spanish claim to the sovereignty of the place. We would be
very happy to pursue an airport, I agree with what the essence
of the Chairman's question is, the airport has the potential to
provide a breakthrough in co-operation matters. We would want
to be very careful that it was not used for that purpose in a
way which prejudiced enduring British sovereignty and control
over the airport.
Chairman
228. That is understood.
(Mr Caruana) Certainly the fact that it is a British
military facility adds to the physical manifestations of that
British sovereignty.
229. And as a reassurance to you.
(Mr Caruana) And as a reassurance but by itself
would not be sufficient if there were political question marks
here.
Mr Mackinlay
230. The airport, a commercial question,
it is owned by the Ministry of Defence and its charges, Ministry
of Defence charges, are disproportionately high, are they not,
therefore dissuading probably other carriers to come in for tourism.
Would you amplify on that?
(Mr Caruana) Yes, indeed. We have a situation
where the Ministry of Defence pays for the running of the airfield,
obviously we pay for the running of the terminal services, terminal
building and all services within the terminal, but the Ministry
of Defence pays for the airfield facilities, the maintenance of
the strip itself, the safety measures, the air traffic control,
the Met Office, all that sort of thing is paid for by the RAF,
Ministry of Defence, as part of their defence budget for Gibraltar.
The civilian airliners that use Gibraltar pay the Ministry of
Defence landing charges, as they would any other airport operator.
Those landing charges are disproportionately high compared with
nearby airports and this is not a disincentive because there is
still business to be done but it makes the economics of operating
a service to Gibraltar much more difficult than to other airports
in the facility. This is very much an issue which the commercial
airlines are raising constantly with the Ministry of Defence,
the extent to which the airport charges are disproportionate,
too expensive, render some of their services unviable, particularly
the ones not at peak periods and not at peak seasons. We ourselves
engage the Ministry of Defence in dialogue on that basis to see
the extent to which it might not suit the Ministry of Defence,
even as a revenue raising measure, to lower the charges in the
hope of getting more revenue from increased volumes, albeit that
each operator is paying less per flight.
231. Let us have no ambiguity about that,
your view is that there is probably a case for the Ministry of
Defence to have a net increase in their return if they contemplate
lowering the charges?
(Mr Caruana) I believe that it would be possible
to achieve that situation indeed.
Mr Wilshire
232. Chief Minister, very, very briefly
as a footnote, on the day that we were with you the White Paper
was published on Britain's remaining dependent territories. Clearly
at that stage none of us had a chance to digest it. I just wonder
as a separate issue whether now you have had a chance to digest
it there are any issues raised in that which concern you not in
relation to what we have been talking to you about this morning
but assuming the status quo were to continue is there anything
you would like to tell us about your reactions to the White Paper?
(Mr Caruana) Yes, thank you for that opportunity,
Mr Wilshire. We are of course preparing a response to the White
Paper which we will submit to the Foreign Secretary in due course
and I will be very happy to send it to the Committee and all of
its Members.
Chairman
233. Thank you.
(Mr Caruana) In terms of the sections of the report
that relate to good governance and the financial services centre,
I think that the position of Gibraltar is that we match already,
and in many cases we exceed, the requirements or the agenda as
set out in the White Paper. There are aspects of the White Paper
which are very disappointing. It speaks of modernisation of the
partnership, it talks of modernisation of the relationship and
then it really only enumerates things that the United Kingdom
wishes to see done. I do not see that it is not right that the
United Kingdom should wish to see those things done but we will
be arguing with the Foreign Office and with the Foreign Secretary
that part of that modernisation of the partnership, as well as
being an opportunity for the United Kingdom to see some of the
things done differently from how they had been done in the territory
in the past, is a legitimate agenda for a British Government,
but the other side of that coin is indeed our constitutional modernisation
agenda where if there is going to be a genuine modern partnership
the United Kingdom has got to be willing in our case to listen
to our constitutional reform and constitutional modernisation
provisions. Obviously it is disappointing that again there has
been a repetition of the statement that the United Kingdom does
not think that integration is a preferable option to any of the
dependent territories. Speaking only for myself I have already
said that it is regrettable and disappointing that as an option
it has once again been declined. For the rest of the document,
we are concerned about aspects of it. So that, for example, the
whole area of tax issues I think is misplaced here. The fact that
the United Kingdom has an agenda within the European Union or
within the OECD to eliminate what it calls harmful tax practices,
in other words offshore financial service centre practices, I
believe it is inappropriate to use a document of this sort to
further that agenda which has got very little to do with the interests
of the overseas territories and indeed that agenda operates against
the economic interests of many of the overseas territories. There
is a curious provision in the White Paper where it talks about
the borrowing powers of Section 5(15). The document rightly talks
about the need for HMG to make sure that there is a ceiling on
borrowing so that dependent territories do not go off and borrow
more than they can afford, and indeed we do not have that problem
in Gibraltar, it is different from the position in all the other
dependent territories. We have had a Borrowing Powers Ordinance
for many, many years now which has capped our borrowing powers.
I think they are capped at £100 million. So we have already
got that. Then it goes on to say at paragraph 5(15)—and
I do not want to get anecdotal—"In general borrowing
should only be considered for discrete capital investment projects.
It should be restricted to investments which have a calculable
and reasonably certain financial and economic rate of return"
and then it goes on and it says: "... and in principle projects
with social objectives and no financial return should be financed
from recurrent budget surpluses". If that means what I think
it means in the English language, that dependent territory governments,
even if they can afford the repayments cannot borrow to build
a school or to build a new hospital because those are social projects
without an economic return, then I think this is a classical case
of "do as I say and not as I do".
234. Chief Minister, you have given us a
flavour of that response. Mr Wilshire gave you the opportunity
to do that. I would like to give you, finally, another opportunity,
this time in terms of the opinion in Spain. We know that all Spanish
parties assert the sovereignty of Spain over Gibraltar but there
are different tendencies. Mr Matutes has been somewhat hawkish.
Sr Estrella has been rather more reconciliatory. He has visited
Gibraltar, he has published a document suggesting that the issue
of sovereignty be frozen, rather as we dealt with Argentina and
the Falklands, and that we should seek to make progress for the
mutual benefit of Gibraltar and of the hinterland as far as possible.
What can you tell us about your response to Sr Estrella?
(Mr Caruana) I think that his approach has much
to commend it. Indeed, it is entirely compatible with our approach
which is "Look, sovereignty is an intractable problem, there
isn't going to be any progress on it. Let's freeze it, let's leave
it on one side. Let's engage in dialogue, let's engage in bridge-building
and let's see what can or cannot be achieved leaving sovereignty
to one side." I believe that that is an enlightened, constructive
approach. I believe that the official Spanish policy towards Gibraltar
is predicated on the belief that they think that if they put enough
pressure on the United Kingdom, the United Kingdom will ultimately
cave in. I suspect that in Madrid they have the view that one
day a British Government is going to get out of bed and say, "Enough
is enough, let's do a sovereignty deal", because there is
no other explanation for pursuing a policy which is calculated
increasingly to put distance between the Gibraltarians and the
Spaniards; their policies are counterproductive in their effect.
Unless Spain believes that she can make the United Kingdom hand
Gibraltar to Spain, contrary to the wishes of the people of Gibraltar,
there would seem to me to be no alternative but to engage in a
more constructive policy of dialogue and bridge-building and trying
to eliminate the tensions which have historically characterised
the relations, so that future generations can address this issue
in whatever new light and new spirit is then prevailing.
Chairman: Chief Minister,
that is a helpful, constructive, indeed enlightened reply. We
thank you for that and for your evidence.
2 Note from Mr Montado: I have first hand knowledge
of Sir Joshua's stance over the Airport Agreement having taken
up my current post some months before the Agreement was negotiated
and signed. Sir Joshua was not a party to the final negotiations
over the Agreement. When the Agreement was signed and announced
in December 1987 he took the view that it needed to be clarified
and studied. He welcomed the fact that the Agreement itself stated
that it could only be implemented if the Gibraltar House of Assembly
passed the necessary legislation to give it effect (namely changes
relating to Customs and immigration controls). Sir Joshua resigned
as Chief Minister shortly after for reasons unrelated to that
Agreement and a General Election was held in March 1988 when a
new Administration took office. Shortly after that, the House
of Assembly (with Sir Joshua's party by then in Opposition) unanimously
passed a motion rejecting the Airport Agreement. The House of
Assembly has been unanimous in maintaining that position since
1988. Back
|
