Members present:

Donald Anderson, in the Chair
Mr Eric Illsley
Andrew Mackinlay
Mr Greg Pope
Sir John Stanley
Ms Gisela Stuart


RT HON JACK STRAW, a Member of the House, Secretary of State for Foreign and Commonwealth Affairs and MR JAMES BEVAN, Director, South East Europe and Gibraltar, Foreign and Commonwealth Office, examined.


  1. Secretary of State, may I welcome you again to this meeting of the Committee and welcome with you for the first part of our deliberations, Mr James Bevan, who is the Director of the South East Europe and Gibraltar and then at 4.45 you will be joined by Mr Kim Darroch, the Director of the European Union. That division is because we have decided the ground rules in advance so that the first half an hour or so of today's meeting will be on Gibraltar and the rest in relation to the Seville European Union Council. Secretary of State, first, if I may, in respect of Gibraltar. There seems to be now an increasing consensus among observers that the talks under the Brussels process have run into the sands and will increasingly do so, do you agree?
  2. (Mr Straw) No. The talks have not reached an end of the current stage. As you may know, and as Mr Hain announced in the Westminster Hall debate yesterday, I am due to have a further discussion, informal discussion, in London with Mr Pique, the Spanish Foreign Minister, on Wednesday next. I should say, also, that the undertakings which I gave you, Chairman, in a letter earlier this year, about making a statement to the House about the House being the first to know and if there is any declaration there being a proper time between the publication of that declaration and the time allowed for this Committee to consider it before there is a debate in the House of course stands.

  3. Is it anticipated that the Prime Minister will be taking the opportunity of Seville to be entering into bilateral discussions with Senior Aznar?
  4. (Mr Straw) The subject did not come up - I was not present at the discussions with Mr Aznar on Monday, not least because I was in Luxembourg - it did not, according to the record I have seen, come up on that occasion. I cannot be certain. It will almost certainly be discussed, but fairly briefly, between myself and Mr Pique in the margins of Seville. It is worth bearing in mind that particularly for the country which has the Presidency their whole focus has to be on the subject of the Presidency. That is just the way it is. Let me say, Senior Pique and I looked at the possibility of whether there was going to be any time either before, during or after the Seville Council, but at Seville, where we could hold a serious discussion as an informal adjunct to the Brussels process but we decided it simply was not going to be possible.

  5. If when you meet Senior Pique, your opposite number, next week it is clear that there is unlikely to be any movement, will you then fold your tent and say "It was a brave but some would say misguided attempt"?
  6. (Mr Straw) No. Well, you cannot anticipate the outcome of negotiations until the negotiations have been completed. If you could anticipate the outcome of negotiations before they were completed there would be no need to have negotiations and that is a truth about negotiations which is timeless. You do not know until you get into the end period of negotiations what is going to happen and that is the position at the moment.

  7. The assumption is that there are three major roadblocks currently. One, the question of joint sovereignty or single sovereignty; two, the question of the military facilities on the Rock, both the air and naval; and three the question of self-determination.
  8. (Mr Straw) Yes.

  9. Turning to the question of sovereignty, is there any serious expectation that the Government of Spain, under Mr Aznar, will be prepared to see any arrangement as other than a staging post on the way to full sovereignty for Spain?
  10. (Mr Straw) We have always ruled out what you described as single sovereignty which would be a transfer of sovereignty from the United Kingdom to Spain, full stop. We have made that clear all the way along, that has never been in negotiations.

  11. We have ruled it out. Is there any question at all that the Spanish Government ---
  12. (Mr Straw) You are asking me, Mr Anderson, to speak for the Spanish Government in what at the moment is a bilateral negotiation, I had hoped would be a trilateral negotiation with the Government of Gibraltar also present alongside me under the so-called two flag three voices formula but that was not possible. I am afraid that is a question you are going to have to ask the Government of Spain, not the Government of the United Kingdom.

  13. I ask you for this reason, that you and the Prime Minister have been involved in a series of discussions with your opposite numbers so you must have a pretty serious clear view now on whether there is any give at all. Is it conceivable that the Spanish Government would accept an arrangement which was other than for them a staging post on the way to full sovereignty?
  14. (Mr Straw) The purpose of these negotiations within the Brussels process, as it has been ever since 1984, since they were announced by the Thatcher Government, is to try and resolve by negotiation the dispute between the United Kingdom and Spain about the status of Gibraltar. What is the basis of that dispute, aside from, as it were, day to day matters, behind it lies a claim by the Government of Spain which they claim - we dispute this - is backed by United Nations resolutions for sovereignty over the Rock. It is for single sovereignty. That is the purpose of the negotiations, to try and resolve this claim and this dispute. I am not going, with great respect to you, to anticipate the outcome of the negotiations because the simple truth is I do not know the outcome of the negotiations, if I did I would tell you.

  15. There will come a time when you will have a clear idea of whether or not there is any serious prospect of making progress.
  16. (Mr Straw) Of course.

  17. Are we coming near to that?
  18. (Mr Straw) What we are coming near to is the timescale which I initially set, it is not set in stone, let me say, but it is on the record that I said we hoped to bring this stage of the negotiations to a conclusion by the summer. I should make clear, also, as again colleagues here will remember, that in the particular circumstances in which the Government of Gibraltar felt unable to take part directly in these negotiations (I feel that we made it entirely safe for them to do so, they felt that it was not) in those circumstances this simply would, in any event, be the first stage of a negotiation with a joint declaration which will then be the subject of further and more detailed negotiations outside the Brussels process on a tripartite basis to provide further detail, further flesh on the basic structure that we had created in that joint declaration and then further down the track once clear detail was apparent its admission to a referendum.

  19. The target is to reach a joint declaration by the summer. Is it on the basis of what you have seen so far realistic that in July - which presumably is called the summer pretty widely - you will have an agreement by then or will know whether or not an agreement will be reached?
  20. (Mr Straw) I am sorry to repeat myself. The discussions continue. There will be a further discussion next week again. If I knew the outcome of negotiations before they took place, as I said, there would not be a need for negotiations. The history of negotiations, not only inter-governmental but all sorts of negotiations, which many colleagues here will have been involved in, is that you do not know whether negotiations are going to conclude satisfactorily until you reach the end game.

    Mr Pope

  21. Welcome, Foreign Secretary. I was just interested by a point you made a few moments ago about the country which has the Presidency of the European Union only being able to focus on Presidency issues. I was wondering if you could comment whether you think Spain will be able to devote more time and eventually conclude talks at the end of the Presidency?
  22. (Mr Straw) Sorry. They have been able to devote a great deal of time generally to the issue of Gibraltar. I am just saying that in terms of the meeting of the European Council and functional councils, because it is the Spanish ministers who are in the Chair and Spanish officials who are supporting them, it is not possible within those meetings for there then to be separate bilaterals. Whereas if there was a negotiation between the United Kingdom and one of another 13 countries who do not have the Presidency, it would be very easy for us to extract ourselves while, say, Luxembourg and Brussels, have a bilateral for a couple of hours while one of our officials is, as it were, minding the shop in the room but that is not possible for the country which has the Presidency. That is a very discrete point.

  23. That is helpful. Can I just return you to the issue of sovereignty and put the question to you the other way round, which I hope is directly your responsibility and that is this. Is there any prospect of you, as the Foreign Secretary, being able to sign up to an agreement on joint sovereignty in which Spain does not give up its own claim to full sovereignty? Can you sign up to that?
  24. (Mr Straw) If full sovereignty remained in dispute it would obviously be a logical impossibility to sign up to an agreement on joint sovereignty at the same time. I do not know what word would exist to accommodate those two positions. It is well known that joint sovereignty is one of the issues under discussion. It has always been, as it were, there ever since the previous Conservative Government in 1984 agreed that sovereignty should be one of the matters under discussion. It is the circumstances in which there could be an accord around joint sovereignty and so on which is the matter under discussion at the moment.

  25. I do not fully follow that.
  26. (Mr Straw) I thought it was pretty clear.

  27. I guess that was intended.
  28. (Mr Straw) No, no, no.

  29. Can I move you on.
  30. (Mr Straw) I remember, Mr Pope, that you are one of my voters, so you are directly one of my employers so I have an even higher imperative on making things clear to you than to anybody else.

    Mr Pope: God help the others.

    Chairman: Try again, Mr Pope.

    Mr Pope

  31. I will move on to the issue of the military base. You say that joint sovereignty is something which has been under discussion and obviously I think we knew that. Is the joint sovereignty of the base an option and is that a real sticking point for the UK Government?
  32. (Mr Straw) If there were joint sovereignty it would obviously apply to the whole territory of Gibraltar.

  33. It would not necessarily, would it?
  34. (Mr Straw) If you are asking me would this become a British/Spanish base, the answer to that is no and that is not in prospect. Part of the aim of the negotiations is to ensure that it remains a British base.

  35. So it would effectively be excluded in pretty much the same way as our bases are in Cyprus?
  36. (Mr Straw) This then gets us into a rather rarefied discussion about the nature of sovereignty. It does not remotely follow that because there is sovereignty by a nation, or nations, over a territory that one or other of those nations then has complete and exclusive control over land and activities in part of that territory. That never has happened and never will.

    Sir John Stanley

  37. Foreign Secretary, I have the transcript of the part of the Today programme of 20 May 2002 which reads as follows: "James Naughtie: If you got what you wanted - a deal on sovereignty with Spain in the negotiations, and you put it to the people of Gibraltar and the people of Gibraltar said "No", would the deal that we are talking about now then be off the table?"
  38. (Mr Straw) Yes.

  39. "Jack Straw: Yes, of course it would and that would be the end of it." Please can you confirm that statement represents the British Government's position?
  40. (Mr Straw) Yes. I am surprised anybody should think other. What I was being asked previously was that by some piece of magic if at the end of this process there was a referendum and the people of Gibraltar said "no" that I would be able to airbrush out the history of what had happened before and somehow by some kind of Harry Potter process to ensure that all the copies of the joint declaration, and the fact that I had been present at the negotiations, was somehow excised from the collective memory. That was literally what I was being asked. I cannot do that but of course it would follow that there would be a joint declaration, then there would be further negotiations, then there would be what amounted to a draft treaty or the abstract of a draft treaty, and other matters as well which together would be the matter for consideration by the people of Gibraltar in a referendum. If we have said, as we have said continually, that they will in practice have the final say on this in a referendum, if it is then put to them and they say "no", as I said that is the end of the matter. It may be down the track there will be further negotiations but it would take many years before that happened. That is the real world in which we live. I do not quite understand why people are so excited about this. It would only be in circumstances in which we did not actually commit ourselves to giving the people of Gibraltar a right to say "yes" or "no" that there could be any other answer to that question.

    Sir John Stanley: Thank you very much, Foreign Secretary, for confirming that a referendum answer "no" means off the table as far as the British Government is concerned. Thank you.

    Mr Illsley

  41. Foreign Secretary, the Spanish daily El Mundo, 1 May, carried the report stating that if the talks are not successful Spain will use all the means in its power to "frustrate the development of a colony which will not for long be able to maintain a status which is unjustifiable in the European context". If the talks do fail, are we in danger of leaving the whole situation of our relations between ourselves and Spain, Spain and Gibraltar, ourselves and Gibraltar in a much worse situation than when these talks began?
  42. (Mr Straw) No, you cannot possibly say that. I do not accept that for a moment. I am no more responsible for what is said in the Spanish press than what is said in the British press. We live in democracies and part of that is free press. That is that. We were absolutely right to enter into these negotiations. The consequence of the negotiations that they have already produced is some people can argue about the degree of benefit but, for example, some easing of the delays on the border, there ought to be a greater easing of delays. I say, also, as it were, through you, Chairman, that one of the points we have been able to make in these negotiations, perhaps more powerfully than British Governments have in the past, precisely because we are involved in the negotiations, is that it is incumbent upon the Government of Spain and also I would say on the Parliament of Spain to recognise that there are deep suspicions amongst the people of Gibraltar about Spain, I know there are deep suspicions the other way, which we are trying to allay but I am talking here about suspicions by the people of Gibraltar, about the way they feel they have been treated. It is incumbent on Spain if they want down the track a rapprochement with the people of Gibraltar to recognise that gratuitously making for delays across the border or, for example, a matter of some frustration to me, offering quite a large number of phone numbers and then frankly not delivering those, is something which is bound not to improve levels of confidence by the Gibraltarians in Spain. I just add, also, however, that on the other side, I think it is incumbent upon the Government and people of Gibraltar to recognise that the complaints that Spain has had in the past are not all without foundation and there has to be a dialogue both ways.

  43. I think we are looking at a case here. If there is an agreement and it is rejected by a referendum of the people of Gibraltar, and it is an agreement between ourselves and Spain which will exist, the people of Gibraltar will still be subject to harassment from the Spanish if there was an agreement which they did not accept. If the agreement fails, there is no agreement between ourselves and Spain, and assuming there is some truth, if any, in that press report, the people of Gibraltar are still going to get hassled by the Spanish because of worsening relations. Bearing in mind the people of Gibraltar are used to this but what about the prospects for the European Union where Spain has in the past blocked European Union Directives because they will not agree to them covering Gibraltar? As you know yourself, you have negotiated some of them, this is holding up the European Union.
  44. (Mr Straw) Mr Illsley, there are certain realities here which we are trying to deal with. It is a straight forward reality that the Government of Spain has had it in its power to block a whole series of EU instruments, which is where I first encountered this issue as the Home Secretary five years ago. They have that opportunity to do so. Moreover, I have to say, whether we like it or not, that the other 13 countries inside the European Union regard this as a bilateral dispute between the United Kingdom and Spain, do not want to take sides, do not want this dispute to affect them. There is little prospect, ever, of us getting the support - and this has been true of previous British governments - of other EU members. The whole purpose of these negotiations was and remains to try and sort out and normalise the relationship between Spain and the United Kingdom above all for the benefit of the people of Gibraltar. Now personally I happen to believe, yes, we have some clear red lines and so do the Spanish Government, it is in nobody's interest for either us to cross our red lines or the Spanish to cross theirs because that produces what amounts to an undeliverable, unstable agreement but if we can deal with that I believe that the kind of components of an agreement which we have in mind would bring very significant benefits to the people of Gibraltar. My very great regret is that the Government of Gibraltar has not been present in these negotiations notwithstanding the fact - let me make this absolutely clear - that the initial demand of the Government of Gibraltar was for what has been described as two flags three voices, which was originally resisted by Spain. I negotiated with Spain, they agreed two flags and three voices in every particular and that was then turned down again by the Government of Gibraltar when they imposed further conditions on their participation which had not been there in the first place. One of the conditions was that there should be some kind of complete veto over the final outcome of any negotiations between three parties. Well, you cannot have a negotiation on that basis. Mr Illsley, of course, the idea of these negotiations is that we produce better circumstances for the people of Gibraltar. I still hope and believe that we may be able to do that but I cannot guarantee that. One of the difficulties in this has been that the Government of Gibraltar has, as I have indicated, been unwilling to take part in the negotiations.

    Andrew Mackinlay

  45. Soon after you became Home Secretary I put questions to you about the European franchise. I always remember, it is ingrained in my mind, your reply was "could not and would not" or it might have been "would not and could not". It was two sided in saying "no, this was a ridiculous idea". The inference was what a stupid idea and anyway we could not do it, so I felt rather smug when the European Court said you should do it.
  46. (Mr Straw) Okay.

  47. Then we have Baroness Symons and a whole catalogue of Foreign Office Ministers saying "Well, we still have to get an amendment to the Treaty". Then we achieved, certainly under the plethora of European Foreign Ministers you have had, we have had five I think since Labour came to office, we got Minister Vaz who then said "no" but ultimately if Spain had got a veto we would not implement it in time for the next European elections. Then there was some wobbling on that and we had it confirmed whatever happens, come hell or high water, we do not have to get the Treaty amendment but it will be in franchise. I get a bit jumpy, frankly. Can you give us a categoric assurance that the people of Gibraltar will be franchised as has been the commitment of a whole plethora of Foreign Ministers under this Government, that it will be enacted?
  48. (Mr Straw) I can give you an assurance that is our intention. I cannot give you an absolutely categoric assurance because it does require domestic legislation and, as you may have spotted, that is not in my gift.

  49. No.
  50. (Mr Straw) It is called parliamentary democracy and also neither is Parliamentary time in my gift. We are committed. Mr Mackinlay, I remember the exchange on this matter and this was in the context of the now celebrated European Parliament Elections Bill, which was rejected six times, as I recall, by the House of Lords, and had to be subject to the Parliament Act, the one which introduced a system of proportional representation to such wide approbation. That was our position. As you know the matter went to the European Court of Human Rights. We have always accepted the authority of the European Court of Human Rights. I took one view, they took a different view, their view is the one which prevails so that is why we are here. Fine. Also, frankly, it makes it a lot easier because there is no question of negotiation with Spain.

  51. That is where we are.
  52. (Mr Straw) That is where we are. I want to do it. The Electoral Commission currently have the responsibility to advise, for example, on which constituency is most appropriate and matters like that.

  53. Thurrock will do nicely.
  54. (Mr Straw) It is part of East Anglia. There are only 16,000 ---

  55. I know. I am being flippant.
  56. (Mr Straw) I know you are. There are fewer voters in Gibraltar than there are in a couple of wards in Thurrock and they are small wards. That is an issue of whether it is attached to, say, I guess the most obvious one would be the South West Region but it is a matter for the Electoral Commission. We do want to go ahead, yes.

  57. What did concern me and surprise me - because I have a high regard for our colleague, Minister Hain - was in the Chamber he referred to the pension scam, "scam", not disagreement or controversy but "scam". That has never been retracted. Now, first of all, everyone was amazed, gobsmacked, when they heard it because they were wondering what this was. When you scratch the surface you find it is a disagreement about whether or not certain payments are lawful. There are plenty of disagreements in the European Union. I wonder if you can confirm, firstly, it is not a scam and, secondly, that this is a matter which has to be pursued, pursued politically between governments and the European Union? It is a controversy, it is a matter which has not been prosecuted by the Commission.
  58. (Mr Straw) There is something more to this though and it may be worth spelling this out, Mr Mackinlay. I think a common definition of a scam would be something which is opaque, not transparent and also potentially unlawful. I am afraid to say that both apply to the pensions situation in Gibraltar. The short story here - it is much more complicated than this - is there were people from Spain, Spanish citizens as well as Gibraltarian citizens working in Gibraltar, they had a single entitlement to a single set of pension rules. Then, subsequently, the rules were changed by the creation of a little confection, the result of which is that Gibraltarians who are in receipt of these pensions get a bigger pension than those in Spain. That is potentially unlawful under European legislation which applies to Gibraltar as much as it applies to anywhere else. That will in due course be a matter for the Commission and be subject to proceedings by them. Meanwhile, because there is a potential liability of 80 million - that is a lot of money for a territory of 30,000 people - which the Gibraltarian Government will try to impose on us, we have had to say to the Gibraltarian Government "This is your responsibility" and make it clear it is. "80 million, your responsibility. We are not sure you are on good grounds but what is more we want to find out whether you are on good grounds, could we see the accounts? Could we see the basis on which this arrangement is made?" My officials have been backwards and forwards to the Government of Gibraltar trying to get them to be transparent with us and so far the Government of Gibraltar have failed to be so. One of Mr Caruana's claims is that since he was elected to power in 1996 he has cleaned up a lot of completely unacceptable practices in Gibraltar. That is true to a point but it begs the question, also, about the nature of those unacceptable practices which were going on before 1996 which were consistently being denied. One of the things they have done, I understand - there is a whole series of companies run by the Government of Gibraltar on which ministers used to sit - I gather that ministers no longer sit on these companies but these companies are still a very opaque set of front organisations by which it appears to us, because we cannot get at the full circumstances, some of these arrangements are made opaque. That is the problem. Would that they had transparent arrangements which they would make available to us as the sovereign government. It is a similar position, I may say, in respect of official statistics. I have had a lengthy explanation about why the Government of Gibraltar is still not publishing an annual abstract of statistics. Right? I got on to this when, Chairman ---

  59. I was going to ask you about that.
  60. (Mr Straw) Please do. I got on to that because I am interested in official statistics, always have been, I have a Statesman's Year Book on my desk and I wanted to look up GDP and other figures for Gibraltar and I discovered that the most recent figures in the up-to-date version of the Statesman's Year Book were 1995. Then I started to ask questions. I said "Could someone go and get me the annual abstract of statistics" like you can get them from any other country, OECD, EU country, not forthcoming. Then I raised this by polite letter to Mr Caruana, still nothing forthcoming. I raised it with him when I saw him on my visit. I am afraid to say I got a bombastic reply from him. Now I have had a lengthy explanation with a promise that this will be forthcoming in due course. The answer is it is the clearest responsibility on governments which subscribe to standards of transparency to provide proper abstracts of statistics that make them public.

  61. If you look at the transcript tomorrow you will see I asked about a specific thing and the Foreign Secretary went on to two other things, one of which we have heard for the first time Going back to the so-called scam, I listened very carefully to what you have said, it is a disagreement about the interpretation. They believe it is lawful and it has never been challenged. On the business of the accumulated thing, I understand Her Majesty's Government from that point is saying "Look, the meter is running on this, if somebody does have to pick up the bill, it is a large sum of money". I understand that point, Foreign Secretary, but on the actual language of Minister Hain, and the actual substance, it is a disagreement as to what is lawful.
  62. (Mr Straw) I am sorry to say it is more than that.

  63. All right.
  64. (Mr Straw) I sought to explain that. It has been challenged. It has been challenged loads of times. The difficulty is getting to the bottom of this arrangement. I am afraid to say the Government of Gibraltar have not been forthcoming. We are the sovereign government. We are, as it were, the party which will be in the dock in the European Court of Justice on this. I think we are quite entitled to expect complete answers when we raise this with them.

  65. You have never asked them - when I say "you" I do not mean you personally, the Foreign and Commonwealth Office and your predecessors, including the Conservatives - to put on the Statute Book through the House Assembly that they will pick up the bill?
  66. (Mr Straw) I cannot answer that.

  67. I will tell you you have not, you have not because the Foreign Office interfered in Gibraltar politics largely because they thought if they pressed what they thought would be a favourable administration it might embarrass it in a Gibraltar General Election.
  68. (Mr Straw) Have we done that?

    (Mr Bevan) I know successive governments have raised this issue with the Government of Gibraltar, at least as far back as 1996. Successive governments have made clear that if the contingent liability does become actual they will hold the Government of Gibraltar responsible for payment.

  69. You have never done that publicly, have you, until recently? Have you?
  70. (Mr Straw) We try and have negotiations with overseas territories in private. This has become a larger issue.

  71. Coincidentally at this time. Coincidentally. The second point you raised - I had never heard it before - about the state companies, you did not stop for breath, you moved from that thing I asked you about ---
  72. (Mr Straw) That is part of the opaqueness, Mr Mackinlay.

  73. I never used the word "opaque".
  74. (Mr Straw) No, I did.

  75. I do not know if any Members of the Committee have heard that before.
  76. (Mr Straw) I have not been asked this question before in the Committee.

  77. The third point you made was the question of the statistics.
  78. (Mr Straw) Yes.

  79. Which, again, apparently is of major importance. Can you help me on this because you appoint the Governor, Her Majesty's Government here in London appoint the Attorney-General and you appoint the Financial Secretary. The Financial Secretary is an ex officio member of the legislature, he is your man in the legislature. I understand he is answerable to the Government. He is your man. Is that correct? A man called Bristow is the Financial Secretary. Caruana does not appoint him, I do not appoint him, HMG appoints him.
  80. (Mr Straw) As it happens in Gibraltar, as in some of the other overseas territories, the line between what is British Government and what is the government of the overseas territories is a very fine and shifting one. What has happened in practice, I make no particular point about this just at the moment, I may do in the future, is there has been in practice a gradual shift in influence towards the Government of Gibraltar in one area after another in practice. I have to say to you if you are trying to say, Mr Mackinlay, that the responsibility for the statistics in Gibraltar ---

  81. I have not said anything.
  82. (Mr Straw) --- rests with this chap called the Financial Secretary, that is not the answer I have been given by the Government of Gibraltar.

  83. I am correct that Caruana, and/or any other Chief Minister does not have a hand in the appointment of the Financial Secretary, that is correct, is it not? I do know the Gibraltar constitution.
  84. (Mr Bevan) I was just going to confirm that is correct. It is a British Government appointment.

  85. This is our man from here. Now he wrote to the Financial Times on 5 June - this is not Mr Caruana, it is our man appointed from London - he says "Dear Editor, I am mystified by the assertion that the Gibraltar Government has failed to publish detailed information about its finances. Each year the Government produces estimates of its annual Revenue and Expenditure, as required by the Gibraltar Constitution. The Government's annual accounts are then subject to audit by an independent external auditor appointed under the Gibraltar Constitution. In fact the system operates in a similar way to that of the UK". Then he goes on. I am truly bewildered how you can come here and complain to the press about this issue when your own man said it is a load of nonsense.
  86. (Mr Straw) It is not a load of nonsense.

  87. He says that.
  88. (Mr Straw) With great respect, in the real world, it is slightly more complicated than this, we appoint him but he works for the Government of Gibraltar. He is not responsible, also, for official statistics and official statistics are not just about income and expenditure accounts, they are about the performance of governments. If all the information which was available to Members of this House was income and expenditure accounts, political debate would be impoverished. All right? What I am talking about is, for example, national income accounts. Now those, it turns out, have never been published in Gibraltar. They have never had national income accounts. I think that is a dereliction of duty by successive governments of Gibraltar. Also I am talking about the production of an abstract of statistics. Apparently if you delve away long enough and hard enough you can get different tables, all right, but that is no way for a Government to operate, you need these brought together. That is what I have sought. I want, also, to say to you, Mr Mackinlay, I raised this in the spirit genuinely of an enquiry. Nobody, as it were, put me up to it, I just wanted to know where the figures were. I have had lengthier and lengthier answers, all explaining why it is so difficult to produce an annual abstract of statistics. The Government of Gibraltar has a lot of revenue, it is not short of money, it has got good people working for it, it ought to have produced annual abstract statistics. I hope very much, Mr Mackinlay, as someone who is concerned about standards of probity in Government that you take the same view as I do.

  89. Indeed I do. If I was to put down a Parliamentary Question to you - because you might not have it here - would you be able to tell me on what occasions has any predecessor of yours, because you are relatively new, raised this or the Governor or this man who is your man there, the Financial Secretary, or his predecessors? This is a Straw thing which might be wholly legitimate, I do not complain about that. You can say "I want these things" but it has never been raised. This is a matter which has just been raised by you, is it not?
  90. (Mr Straw) No, it is not. Look, there are clear standards. This is incumbent.

  91. I understand.
  92. (Mr Straw) With great respect, Mr Mackinlay, the issue of the publication of transparent robust statistics is not just an optional matter for governments where they do it if they are prompted to by the Foreign Secretary for the time being who happens to be interested in statistics, this is an obligation on all governments and a continuing obligation set out very clearly in the EU but also by the OECD. It was also, as it happens, set out by the present Government in 1999 in the White Paper on the Overseas Territories where we actually said that we stand ready to give expert advice and assistance to help the overseas territories bring their audit and statistical systems up to the required standards. You cannot dodge this one by saying it is the first time I have raised it. It was by chance I raised it but they should have been doing it anyway.

  93. To the Financial Secretary, the existing one or a predecessor, is there on cardboard a stiff note saying "Chief Minister, this cannot go on. I do insist that we have this for reasons of probity" and so on? Has the Governor ever done it, of course not. Have your predecessors ever done it, no they have not. You cannot pretend otherwise, can you?
  94. (Mr Straw) I have given you the answer but I have done it, all right.


  95. Can we just confirm this: if it be an obligation on all overseas territories to publish those accounts why has it not been raised at any other time before you yourself have done so?
  96. (Mr Straw) Mr Anderson, with great respect, if I may say so, that is not the best question you have ever asked me because I am now raising it as a question, all right? My predecessors are not necessarily people who have taken the same interest in official statistics as I do. I have unearthed this, if you like, and for my predecessors then to be criticised for failing to do so seems to be a rather eccentric idea. I understand the sympathy by some Members of this Committee for the Government of Gibraltar, I have huge sympathy for them. At the same time they have to accept and acknowledge their responsibility for transparency and in some areas they fall down on those. That is the reality. I went to the Statesman's Year Book in the hope not of discovering they did not produce statistics but that they did.

    Chairman: Can I ask you this. The Committee will be visiting Gibraltar on Monday week, can you give us a brief on the specific relations between our Government and the Government of Gibraltar in respect of those official statistics and why, if at all, it has not been raised and other relevant matters.

    Mr Illsley

  97. I have in front of me a copy of a letter dated 31 May from the Chief Secretary of the Government of Gibraltar to the Deputy Governor which addresses all the points the Foreign Secretary has raised. Are you now saying that letter does not answer the points you have made regarding transparency of statistics?
  98. (Mr Straw) It seeks to deal with the questions which I have raised. However, I hope you would accept, Mr Illsley, on the basis of the letter that my questions about why they were not official statistics were actually well placed because they should have been. The Government of Gibraltar, this having been raised by me now, seeks to accept that. All right.

  99. I do not question your reasons for raising it.
  100. (Mr Straw) They need to start publishing them. The answer to "Are there official statistics?" ought to be "yes". What in place of that I have had, after quite a lot of prodding it has to be said, is a lengthy explanation as to why there are not official statistics in an annual abstract. I look forward to the annual abstract being published.

    Chairman: Secretary of State, I will move on shortly but I know Sir John wishes to ask one further question before we leave the subject of Gibraltar.

    Sir John Stanley

  101. Foreign Secretary, again like you in a spirit of genuine enquiry, your discussions with the Spanish on joint sovereignty - I want to leave aside for a moment whether that is a matter of policy and principle - I wish to understand, and I am sure other Members of the Committee also wish to understand, how you envisage the mechanics of joint sovereignty actually operating to achieve timely and proper decision taking for Gibraltar should joint sovereignty ever come into place. Presumably in your draft Treaty you will be setting out the issues that will be reserved to the two governments that are to be the subject of joint sovereignty and therefore of joint decision taking. It must be right, I assume, to believe that over the whole of those areas joint sovereignty, and therefore joint decision taking, means that each party, each government will effectively have a blocking veto over the decision and that therefore unless unanimity can be achieved there will be no decision. Now I question whether that is remotely a viable way of carrying out the responsibilities of Government over a country or dependency, admittedly a relatively small one but one which covers most of the totality of national life. How can such a blocking veto system between two governments be established as a viable basis for decision taking over Gibraltar?
  102. (Mr Straw) Sir John, may I first say that one of the paradoxes of this situation in respect of Gibraltar is that part of the result of any arrangement in respect of joint sovereignty would be to give the people of Gibraltar a greater degree of control over their lives than they are able to enjoy at the moment. So there will be fewer decisions for determination by, as it were, the sovereign powers - plural - in that case than there are at the moment for determination by the Government of the United Kingdom. The second point is this. I understand the point you are making. I do not think in practice there would be those difficulties but this is an important area for discussion in stage two of the negotiations which is why we are taking it in two stages. You have stage one where you set out broad agreement over all principles. Then stage two in which the Government of Gibraltar would be taking part in a tripartite basis where there would be discussions about this kind of issue. Then only when those were satisfactorily completed would there be a set of coherent proposals to put to the people of Gibraltar. The last thing I would say about sovereignty is that sovereignty is a legal concept and it is in that sense an intellectual abstraction. It can vary in its application hugely. There are territories which are not sovereign which have a huge degree of day to day control, people do, and equally there are countries which are sovereign which in practice, for reasons of geography, history or size, have virtually no control over their lives. What we have to do is to ensure that there is this, as it were, overall umbrella of what would be joint sovereignty and joint responsibility for the territories but within that envelope a higher degree of day to day control, as I say, going to the people of Gibraltar, that is the challenge.

  103. You say that but I think I am prepared to wager if you ever get to the position where you put an agreement to the people of Gibraltar and to this House of Commons that one of the areas which will most emphatically be reserved to the two Governments will be the issue of the operation of the airfield in Gibraltar. As you know, that is a joint military/civil airfield. From an earlier incarnation I have some degree of familiarity with the sort of potential problems which can arise. How can you envisage some system of joint sovereignty being exercised by the British and Spanish Governments successfully over the operation of a mixed military and civilian airfield in Gibraltar? I just do not see how that can conceivably be operationally sensible or possible.
  104. (Mr Straw) Never see, is the answer but also I do not know whether you are referring to a previous incarnation when the previous Government, of which you were a Member, in 1987 negotiated the Airport Agreement with Gibraltar, an agreement which, let me say, was not only satisfactory to the Governments of the United Kingdom and Spain but also satisfactory to the Government of Gibraltar which negotiated it at the time. Of course what then happened was that it was a subject of political controversy inside Gibraltar and it was decided in the end by the then Government, the British Government, to withdraw from that agreement. Just to go back to a point Mr Illsley has made, the Spanish Government can be forgiven for feeling rather concerned about the way they were treated because they signed up to an agreement on the airport in good faith and they felt that good faith was not carried through by British Governments. Now, Sir John, we can argue about this. My own sense is that agreement would have been to the benefit of the people of Gibraltar and would have operated in practice. Actually there are plenty of examples of bilateral agreements and treaties in very, very difficult circumstances which operate. I am not using this as a facetious example at all but one of the only pieces of good news in respect of the current dispute between India and Pakistan is the fact that the River Indus Water Treaty Commission still operates. It is an entirely bilateral commission between India and Pakistan in respect of the territory, part of which is disputed. It continues to operate and we have got very careful mechanisms and architecture for the determining of disputes between those two countries who are close to war with each other from time to time. I do not believe that it is remotely impossible to have a structure between two countries which are allies in NATO and equal members of the European Union to operate effectively on joint sovereignty.

  105. Can you name any joint sovereignty agreements between two governments for the running of a country or dependency?
  106. (Mr Straw) There is a number where there are some arrangements, and these are not the same but they involve some degree of sharing, for example Andorra is one. It is different but it raises similar principles.

    Ms Stuart

  107. A very quick one. You may have answered this before and I have simply forgotten it. If plan A is the Brussels process which has been going on for more years than we care to remember, if Plan A fails what speaks against Plan B which is full integration, give Gibraltar an MP who sits at Westminster and than make him comply with all the UK rules?
  108. (Mr Straw) Maybe there will be a demand for that. That would be consistent with the terms of the Treaty of Utrecht but of course what it would mean and have to require is an acceptance by Gibraltar - and there is no commitment here in respect of a referendum - an acknowledgement by Gibraltar that all the acquis of the European Union would apply to it. That would include, therefore, Common Agricultural Policy, Common Customs Union, the Single Market and Common Taxation. They would then be 16,000 voters, a bit like probably the Outer Hebrides, who would have a Member of Parliament and the current Chief Minister would be running a local authority. I understand, Ms Stuart, that is what you are suggesting and certainly it is not outwith the current terms of the Treaty of Utrecht.

    Andrew Mackinlay

  109. I need to get a life because like yourself ---
  110. (Mr Straw) I have been thinking that.

  111. --- I also study the Statesman Year Book when I cannot sleep. I was looking at it just the other night. If you look under Andorra it is what is called the Suza Management.
  112. (Mr Straw) Okay.

  113. All you can refer to is the fact that the President of France and the Bishop are joint heads of state. They have no executive authority whatsoever, am I right?
  114. Chairman

  115. I feel "I rest my case". One final question, Secretary of State. We always think of you as a pragmatic feet on the ground Foreign Secretary. In those circumstances can you envisage, seriously, any time in which the people of Gibraltar will agree that sort of deal in a referendum?
  116. (Mr Straw) What do you mean?

  117. They would vote in favour by a majority for that deal?
  118. (Mr Straw) Not Mr Mackinlay's deal.

  119. Your deal.
  120. (Mr Straw) Not a Bishop and a Prince.

  121. No, no.
  122. (Mr Straw) Thank you. Certainly I can conceive of circumstances.

  123. In the real world.
  124. (Mr Straw) In the real world in which I believe it is very strongly in the interests of the people of Gibraltar ---

  125. That was not the question.
  126. (Mr Straw) Hang on a second. What is more, as we got into the second stage, not the joint declarations, it would not be, never has been a matter that the joint declaration would go before the people of Gibraltar for approval in a referendum because a joint declaration essentially sets out a detailed agenda for further negotiations, that in the end the people of Gibraltar, for all the reasons which have been raised around this table, decide yes this is a way in which they end up with a greater degree of self-government than they have at the moment, much greater degree of self-government and at the same time solve all these day to day problems which they have with the Government of Spain, a very good deal. Then, of course, it is a matter for them to decide whether to vote for it.

  127. The heart has its reason which reason does not comprehend. Can you think of any real possibility that in a referendum the people of Gibraltar would accept that?
  128. (Mr Straw) I am not going to produce a list here but I think that such a deal which was also based on the concept of joint sovereignty and an end of the dispute would be very much in the interests of the people of Gibraltar. Okay.

  129. We hear what you say.
  130. (Mr Straw) I just remind you the person who said that was referring not to negotiations between States but affection and love.

  131. That is a very good point.

(Mr Straw) I am trying to remember who said it. It will come back to me in a moment.

Chairman: Secretary of State, I believe now Mr Bevan will leave us as we have finished on Gibraltar and Mr Darroch will take his place.