ELEVENTH REPORT
LIST OF CONCLUSIONS AND RECOMMENDATIONS
(a) We conclude that Britain's negotiating
position with Spain could not have been prejudiced by the British
Government disclosing on, or shortly after, the relaunching of
the Brussels Process in July 2001 that joint sovereignty over
Gibraltar was under discussion as the Spanish Government was already
fully involved in those discussions. We further conclude that
the refusal of Ministers to make such a disclosure represented
a serious failure in their accountability obligations to this
Committee and to Parliament (paragraph 13).
(b) We conclude that it will be a long time,
if ever, before any agreement based on the principles outlined
by the Foreign Secretary to the House on 12 July 2002—including
joint sovereignty—can be made acceptable to the people or
to the Government of Gibraltar (paragraph 17).
(c) We reject the Foreign Secretary's view
that it is "eccentric" for the Government of Gibraltar
to hold its own referendum. We consider that in British Overseas
Territories it is of great importance that democratic expressions
of view should take place when territories themselves so determine.
We recommend that the British Government take full account of
the views of the people of Gibraltar as expressed in the referendum
held on 7 November (paragraph 24).
(d) We conclude that, without a prolonged
period of wooing the people of Gibraltar, it was surely unrealistic
of Spain to expect any change on their part (paragraph 27).
(e) We conclude that the Government was wrong
to negotiate joint sovereignty, when it must have known that there
was no prospect whatsoever that any agreement on the future of
Gibraltar which included joint sovereignty could be made acceptable
to the people of Gibraltar, and when the outcome is likely to
be the worst of all worlds—the dashing of raised expectations
in Spain, and a complete loss of trust in the British Government
by the people of Gibraltar (paragraph 31).
(f) We recommend that the Government in its
response to this Report explain whether previous Governments had,
as it appears from the evidence, made a commitment to the Gibraltar
Government to seek the Chief Minister's specific endorsement before
entering into any new arrangements affecting Gibraltar at the
Brussels Process talks, and, if this is indeed the case, why the
current Government decided not to renew that commitment (paragraph
39).
(g) We conclude that it was politically impossible
for the Gibraltar Government to participate in the Brussels Process
talks without also having the power to limit the outcome of those
talks (paragraph 41).
(h) We conclude that by publicly questioning
the probity of the Gibraltar Government during the course of the
relaunched Brussels Process talks, the British Government has
unwisely increased tension and suspicion of its motives within
Gibraltar (paragraph 45).
(i) We conclude that it is highly ironic that
the British Government has given credence to complaints by Spain
about law enforcement and the supervision of financial services
in Gibraltar, given that these areas are the responsibility, not
of the Gibraltar Government, but of the British Government and
of the Financial Services Commission appointed by it (paragraph
47).
(j) We conclude that there is no parallel
to be drawn between Gibraltar's legitimate complaints against
Spain and Spain's unjustified accusations against Gibraltar. We
recommend that the British Government should, as our predecessor
Committee recommended, rebut such allegations promptly and decisively.
We feel strongly that the Government's failures to rebut Spain's
unfounded allegations have let the people of Gibraltar down. If
the Government believes that any of the Spanish allegations are
in fact justified, it must set out clearly in its response to
this Report which allegations these are, and how it expects the
relevant authorities to remedy the situation (paragraph 50).
(k) We conclude that the British Government
now faces an unenviable choice. On the one hand, it can continue
to negotiate on the issue of joint sovereignty and reach a bilateral
agreement with Spain which may be in the wider British interest,
but which will not be acceptable to the Government or people of
Gibraltar. On the other hand, it can withdraw its joint sovereignty
proposal—with the risk that Spain will react negatively,
both bilaterally and against Gibraltar—re-establish trust
and good relations with the Government and people of Gibraltar,
encourage Spain to do the same, and only then attempt to negotiate
an agreement with Spain, with a representative of Gibraltar participating
as a full negotiating party (whether under the British flag or
not). We further conclude that this dilemma is entirely of the
Government's own making (paragraph 52).
(l) We recommend that the Government in its
response to this Report explain what measures any European Union
member state could take to obstruct unilateral action by the United
Kingdom to enfranchise the Gibraltar electorate (paragraph 55).
(m) We conclude that the British Government
is honour bound to carry out its promise to enfranchise the Gibraltar
electorate in time for the European Parliamentary elections in
2004. We recommend that the Government ensure that adequate parliamentary
time is made available during the next session of Parliament to
ensure that the necessary legislation is enacted (paragraph
57).
(n) We conclude that it is manifestly unjust
for Gibraltar to be legally liable to pay uprated pensions to
Spanish pensioners who had been prevented from making pension
contributions for years by their own Government. We further conclude
that it is unfortunate that the issue of this liability was not
satisfactorily resolved before Spanish accession to the European
Community (paragraph 64).
(o) We conclude that the legality of Community
Care payments has yet to be established under European law. We
recommend that a resolution of this issue be sought as soon as
possible, without the British Government taking a view on the
merits of the case which might prejudice its outcome (paragraph
76).
(p) We conclude that the status quo established
by the freezing of Gibraltar pensions was unsustainable, and that
it would have been politically precarious, and potentially immoral,
had the Gibraltar Government not taken steps to ensure that Gibraltar
residents of a pensionable age were adequately provided for (paragraph
78).
(q) We recommend that the British Government
should continue to meet the original liability to pay pensions
at frozen 1988 rates to Spanish pensioners, although we believe
it unjust that this liability should exist at all (paragraph 79).
(r) We recommend that in the event that additional
liability relating to pensions is incurred directly as a result
of the existence of the Household Cost Allowance, this liability
should be apportioned between the British and Gibraltar Governments
on an agreed basis if possible and failing that by some form of
arbitration, but that any additional liability which would have
been incurred regardless of the existence of that allowance should
be met in its entirety by the British Government (paragraph 82).
(s) We conclude that it was deplorable for
a Government minister to have described the pensions situation
in Gibraltar as a 'scam' (paragraph 84).
(t) We conclude that the root cause of the
current pensions issue in Gibraltar is a weakness in EU legislation,
exploited by the Spanish Government, which requires the Gibraltar
Government to pay full pensions to a large class of people (who
happen to be Spanish) who have barely contributed to the Gibraltar
pension fund, through no fault at all of the Gibraltar Government.
It may be that this is the law, and that nothing can be done to
change it. But the current arguments between the British and Gibraltar
Governments as to liability, and about the rather opaque activities
of Community Care, are a direct result of this unfair legal circumstance.
The current pensions situation, with or without Community Care,
is highly unsatisfactory. The British and Gibraltar Governments
should be co-operating to try to find a workable long-term solution
to the issue, rather than wrangling about who is to blame and
who should pay for the current situation, for which neither of
them is to blame, and for which, in an ideal world, neither of
them should have to pay (paragraph 87).
(u) We recommend that the Government seek
as a matter of urgency a meeting between British, Spanish and
Gibraltar officials to find a workable solution to the issue of
communications between Gibraltar and Spain (paragraph 105).
(v) We recommend that if no solution to the
Gibraltar communications issue can be found through negotiation
with Spain, the Government should refer the matter back to the
European Commission and should be prepared if necessary to take
it to the European Court (paragraph 106).
(w) We recommend that, in the absence of further
progress on telecommunications access with Spain in the near future,
the British Government should explore with Gibraltar the possibility
of enabling access to Gibraltar telephone lines via the British
numbering plan and dialling code as well as via Gibraltar's international
dialling code (paragraph 107).
(x) We conclude that Spain's refusal to allow
Gibraltar-bound aircraft to divert to Spanish airports in adverse
weather conditions is potentially dangerous as well as unjustified.
This is precisely the sort of incomprehensible restriction which
obstructs hopes of understanding between Spain and Gibraltar (paragraph
110).
(y) We recommend that the Government reexamine
its landing charges for commercial aircraft at Gibraltar airport
to ensure that they do not exceed the real cost of allowing commercial
operations to take place. We further recommend that the Government
should assess whether reducing the landing charges would encourage
greater commercial use of the airport, thereby ensuring that current
revenues are maintained (paragraph 111).
(z) We welcome the opening of a second customs
lane at the crossing from Gibraltar to Spain, and we recommend
that the Government encourage Spain also to open a second lane
at the crossing from Spain to Gibraltar (paragraph 112).
(aa) We conclude that it is mystifying that
the European Commission has been unable to find any evidence at
all to support the legal argument that Spanish checks at the border
with Gibraltar are disproportionate. We recommend that the Government
in its response to this Report set out its understanding of the
basis on which the European Commission concluded that Spanish
checks at the border with Gibraltar are not disproportionate,
and the evidence that was considered in reaching this conclusion
(paragraph 116).
(bb) We conclude that it would be inequitable
were Gibraltar to be forced unilaterally to abolish its low rates
of tax and import duty, without the same situation applying more
widely. We recommend that the Government explain in its response
to this Report its position on the sustainability of Gibraltar's
tax and customs status, with detailed reasons for this position.
We further recommend that, in the event of offshore financial
centres being phased out, the British Government should provide
practical assistance and advice to Gibraltar to help its economy
to react to these changed circumstances (paragraph 124).
(cc) We recommend that the Government take
vigorous and determined steps through NATO to lift the reservation
on direct military movements between Gibraltar and Spain and to
end the ban on direct military communications between NATO forces
in Gibraltar and Spain (paragraph 127).
(dd) We conclude that there is a risk that
in the event of an agreement concluded between Spain and the United
Kingdom which did not enjoy the support, or at least the acquiescence,
of the people of Gibraltar, the military base might find its ability
to operate severely constrained by the local population (paragraph
129).
(ee) We recommend that the Government explain
in its response to this Report how responsibility for Gibraltar
is apportioned within the FCO, with an explanation of why this
is the case (paragraph 130).
The Foreign Affairs Committee has agreed
to the following Report:
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