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Mr. Straw: Yet again, we see a man without a policy. On the one hand, the right hon. Gentleman says that the Brussels process will lead to a sell-out, and on the other that we should continue with it. He needs to make up his mind.

Only by discussion in the Brussels process can we conceivably reach the point where proposals can be put to the people of Gibraltar. I should much prefer it if the right hon. Gentleman were to write me a letter about a different architecture for the discussions. I would prefer there to be a different architecture for the discussions, and for the Government of Gibraltar to be part of those discussions. I keep repeating that invitation to Peter

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Caruana. I believe that it is safe for him to take part in the discussions, as nothing to do with his involvement in them would remotely prejudice anything that he said to the people of Gibraltar by way of advice about voting yes or no in a referendum.

I would value Peter Caruana sitting alongside me—two flags, three voices—in the process. In that way, instead of having to meet him separately and make telephone calls to him—which I am always happy to do—I would have his advice in the room. At the moment, that is not possible. The only alternative under the Brussels process, which the Conservative party in government initiated and with which the right hon. Gentleman agrees, is that there should be bilateral discussions.

If the discussions are satisfactory—they may not be—their outcome will be that we agree proposals. However, those proposals will come into law only if the people of Gibraltar agree. That is a sensible way in which to proceed. It has the absolute democratic guarantee that, ultimately, it will be the people of Gibraltar who will decide. Let them decide, is what I say.

Mr. Lindsay Hoyle (Chorley): I know that my right hon. Friend has a great interest in trying to achieve agreement over Gibraltar, but the real problem is that Piqué has stated openly and clearly that he will never accept that the people of Gibraltar have a right of self-determination. That declaration should be reason enough for us to withdraw from the talks.

We must be aware that we face the danger that people will accuse us of double standards. We cannot go around the world saying openly that we believe in democratic rights, and that we went into Bosnia and Afghanistan because we believe that people have the right to democracy, at the same time as we are beginning to put an end to the rights of the people of Gibraltar.

Spain has stated deliberately today that the people of Gibraltar have no rights. I declare an interest in what goes on, as I am chair of the all-party Gibraltar group. I believe that we should reconsider our position and allow that other countries in the EU have differing tax statuses within their borders. One example is Spain, and the circumstances covering Ceuta, Melilla, Tenerife and the Canary islands. Another example is France, and the differing status accorded to Monaco. Another example is Britain, with Jersey and the Isle of Man—

Mr. Speaker: Order.

Mr. Straw: Let me deal with the issue of self-determination. I apologise for not picking up on it in my response a moment ago.

The Spanish Government and people have maintained a long-standing position on Gibraltar. However, they are involved in the negotiations and we have made it clear that there is no way that we shall accept that position and hand over sovereignty, lock, stock and barrel, to Spain. I have said that repeatedly, as has my right hon. Friend the Minister for Europe. We are involved in negotiations. However, as my hon. Friend the Member for Chorley (Mr. Hoyle) is an expert on the origins of British sovereignty in Gibraltar, he will know that by the treaty of Utrecht, sovereignty was ceded to the English Crown, to the United Kingdom, and that the same clause in that treaty states clearly that if ever sovereignty is given up by

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the United Kingdom it has to go back to Spain. So in the classic terms of normal decolonisation—when we had absolute sovereignty and no country had first refusal on it—we could of course grant independence if we and the other country so wished. That does not arise in respect of Gibraltar, so the alternatives are sovereignty with the UK, sovereignty with Spain or something in between.

As regards self-determination, whatever Spain may have said in the past, Spain has acknowledged, as part of these negotiations, that we will put any agreed proposals to the people of Gibraltar and that we will not implement them without the consent of the people of Gibraltar. We can argue about whether that really is self-determination, but in the context that I have described I think that it is.

I hope too—Spain has also acknowledged this—that as part of those discussions, if we reach an agreed outcome, we can grant a far greater degree of internal self- government to Gibraltar than exists at present. Spain is entirely in agreement with that.

Mr. Menzies Campbell (North-East Fife): Has the Foreign Secretary been able to identify any advantage to the people of Gibraltar from their Government staying out of the negotiations, especially when they would have no obligation either to accept or to endorse any result of the negotiations? Furthermore, what efforts has he made in his conversations to persuade the Spanish Government to take unilateral measures designed to increase confidence in Gibraltar—not least by the removal of the bureaucratic obstacles at the border? Finally, can he think of any greater illustration of the principle of sovereignty than that the people of Gibraltar should have an unencumbered veto over the British Government—something that no part of the United Kingdom enjoys?

Mr. Straw: The right hon. and learned Gentleman's final point is absolutely right. I also believe in the wider sense of the word sovereignty. If sovereignty means greater control over one's own life, the kind of future that we seek to map out for the people of Gibraltar—in which there is real freedom across the borders and for trade, and where the economy can be opened up not only to the people of Gibraltar but to the whole of that part of southern Europe—would provide them with a much greater degree of practical sovereignty than they have at present.

As to why Chief Minister Peter Caruana should not take part in these discussions, he has advanced reasons to me that I do not want to go into in public, but in discussion with him I continue to try to identify the rubbing points for the Government of Gibraltar and to try to accommodate them. I regret that that has not proved possible so far, but the invitation remains open. In my judgment—although ultimately it is a matter for him—the people of Gibraltar would be better served by Mr. Caruana being in the negotiations rather than outside them. However, we shall continue to consult with him.

As regards Spain taking unilateral steps to build confidence, the right hon. and learned Gentleman is correct: Spain should do that. It was for that reason that we urged Spain to put in the telephone lines. We obtained agreement in principle and we want those lines actually to be installed. Furthermore, it would greatly help if Spain could now take other measures—they have formed a

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major part of my conversations with Minister Piqué—to reduce the lack of confidence that exists across those borders.

Denzil Davies (Llanelli): My right hon. Friend has mentioned the rather bizarre concept of two flags, three voices. He has also mentioned Spain's so-called historic claim to Gibraltar. Can he give us an assurance that, if agreement is reached on the two flag concept, an express condition will be that Spain give up its historic claim?

Mr. Straw: That is obviously one part of the discussions. [Interruption.] As people who have ever been involved in the negotiations will know, that is, of course, one part of the discussions. I shall not anticipate the outcome of the negotiations, until there is a satisfactory outcome, but I am happy to say that there is no way, in these negotiations, that we intend to cede, lock, stock and barrel, the sovereignty of Gibraltar to Spain. That is not part of our agenda—not now, not for the future.

Sir Teddy Taylor (Rochford and Southend, East): As the Government of Spain have been shamefully and blatantly depriving the people of Gibraltar of their entitlements in anticipation of the discussions, would not the Foreign Secretary, as a great enthusiast for the EU, think that a better start to the negotiations would be to invite the Commission to take Spain to the European Court of Justice for blatantly and wrongfully depriving the people of Gibraltar of their rights?

Mr. Straw: The hon. Gentleman suddenly seems to have been converted to the merits of the European Court of Justice. [Interruption.] Well, he mentioned it. That is a rather dangerous path down which to take Gibraltar because the infraction proceedings that are in prospect before the European Court of Justice are not against Spain, but against Gibraltar for its failure to transpose a number of EU directives. Whether or not one accepts another party's position in the negotiations, it is always at least worth comprehending that position. Spain has a number of points against Gibraltar. We have to examine carefully the way in which Spain thinks that Gibraltar and, indeed, the United Kingdom have behaved towards Spain historically, and we have to take that into account in any final agreement that we may reach.

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