Brexit: Gibraltar Contents

Chapter 5: An uncertain future

90.Throughout this short inquiry, there was a pervasive sense of uncertainty over what lies in store for Gibraltar following Brexit. Marlene Hassan Nahon observed that “Gibraltarians are once more faced with the insecurity of what our perennially fragile future will entail”.97

91.Robert Vasquez said that Gibraltar’s situation was “uncertain, fluid and evolving on most fronts”, and emphasised that the impact of Brexit on the territory “depends entirely on the outcome of the withdrawal negotiations between the UK and the remaining Members of the EU, and on Spain’s attitude and reaction to that process”.98

Gibraltar’s role in Brexit negotiations

92.Mr Picardo was clear that Gibraltar’s involvement in the process of EU withdrawal would be “in the context of one negotiation, led by the United Kingdom”; he emphatically rejected the idea of any bilateral Brexit negotiations between the UK and Spain over Gibraltar.99

93.This approach was reflected by the Minister, Mr Walker, who emphasised that it would be for the UK to negotiate terms of exit and future relations with the EU. However, he stressed that the Government was focused on getting the “best deal on market access for the whole of the UK and the family of territories on whose behalf we are negotiating”. Mr Walker also told us that there was widespread, cross-party support in the House of Commons for “making sure that Gibraltar’s interests are respected in this negotiation”.100

94.We note that two paragraphs of the Government’s February 2017 White Paper on The United Kingdom’s exit from and new partnership with the European Union make reference to Gibraltar, together with the Crown Dependencies and other Overseas Territories. Noting that Gibraltar has particular interests as the UK leaves the EU, the White Paper outlines the mechanisms through which the Government will engage with these territories on Brexit issues, and asserts that the Government will “continue to involve them fully in our work, respect their interests and engage with them as we enter negotiations”.101

95.For Gibraltar, the mechanism established to fulfil this undertaking is a new Joint Ministerial Council (JMC) on Gibraltar EU Negotiations, chaired by Robin Walker MP (representing DExEU), and including the Government of Gibraltar and Sir Alan Duncan MP, Minister of State for Europe and the Americas at the FCO.

96.Mr Walker described the JMC as the formal structure for Gibraltar to feed into the Brexit process, but noted that a lot of other meetings outside this forum were taking place, including meetings between the Gibraltar Government and other UK Government departments, as well as between officials. He noted that the Government of Gibraltar had been “very forthcoming” in sharing its views and concerns on Brexit, giving the UK Government a good understanding of the “key issues” facing Gibraltar as a result of the UK’s decision to leave the EU.102

Responsibilities of the UK Government

97.Witnesses commented on the responsibility placed on the UK Government, negotiating on Gibraltar’s behalf, to protect and promote the territory’s interests throughout the process of withdrawing from the EU. Marlene Hassan Nahon feared that “the interests of a much larger British population will displace those of Gibraltarians in the UK government’s dealings in exiting the European Union.”103 Mr Picardo, on the other hand, was confident that the JMC would facilitate adequate representation of Gibraltar’s interests, but took “nothing for granted”. He would keep “a cynical eye” on the JMC throughout the Brexit process.104

98.The Government of Gibraltar argued that the UK could not afford for Gibraltar to become a “high profile failure” of Brexit.105 Professor Canessa agreed, suggesting that “Gibraltar in the context of Brexit presents considerable humanitarian and political risks for the UK Government”.106 Marlene Hassan Nahon also stressed that Gibraltar would require “the utmost support from the British Government”.107

99.Professor Fletcher noted that Gibraltar had survived many economic challenges over the years. But he emphasised that:

“It will survive this one properly only if the UK keeps Gibraltar close to it in the way in which it can trade, build its services and carry on developing the economy … it needs the UK economy to be with it going forward.”108

Professor Fletcher and Dr Grocott also argued that a public declaration of the UK’s plans in relation to Brexit and Gibraltar would help to provide more certainty for Gibraltar’s people, and for businesses looking to invest in the territory.109

Gibraltar’s future relationship with the EU

100. The Chief Minister told us that he would be looking to see whether the UK could negotiate sufficient access to the Single Market in services to meet Gibraltar’s economic needs. He emphasised that Gibraltar and the UK would start from a position of full compliance with EU regulations, and hoped that financial services businesses in Gibraltar would be able to continue either to “passport into the EU” post-Brexit, or to trade on the basis of ‘equivalence’: “On the day of Brexit we will be entirely compliant with EU rules and therefore, the morning after Brexit, we will be equivalent”.110 Professor Fletcher acknowledged that decisions determining equivalence, which are taken by the European Commission, could be as much political as technical.111 Nevertheless, given the extent of Gibraltar’s legislative autonomy, it will have considerable discretion in seeking to maintain equivalence with the EU following withdrawal.

101.If it were not possible to reach a satisfactory outcome for Gibraltar within the UK-wide Brexit process, Mr Picardo suggested that Gibraltar might seek a microstate-style relationship with the EU, or, “to have an aspect of the new agreement between the United Kingdom and the European Union apply in a different way to Gibraltar.”112 Robert Vasquez, in contrast, did not consider ‘special status’ a realistic prospect, though he agreed that the future relationship between the UK and EU could be “nuanced” to facilitate specific local needs, such as the fluid operation of Gibraltar’s land border with Spain.113

102.Mr Vasquez also highlighted that any proposals for special or differentiated treatment of Gibraltar would need to be approved by the EU institutions and 27 remaining Member States.114 On this, Ashley Fox commented:

“I am fairly confident that the Spanish would say absolutely no, and I suspect that most other MEPs have not turned their minds to the subject.115

This was borne out by Spanish centre-right politician Esteban Gonzalez Pons MEP, giving evidence to the Select Committee during its visit to the European Parliament, who said unequivocally: “There can be no special solution for Gibraltar.”116

Relations with Spain outside the EU

103.As we have seen, in the context of common EU membership, regional cooperation between Gibraltar and Spain has improved, particularly with regard to fluidity at the frontier. Robert Vasquez observed that the EU had “greatly ‘managed’ the ongoing relationship between Spain, the UK and Gibraltar”, and expressed real concern at the potential for this relationship to deteriorate when two of these parties leave the EU.117

104.Susie Alegre argued that, bearing in mind Gibraltar’s clear show of support for the EU during the referendum and the EU’s Treaty obligations under the Charter of Fundamental Rights, the EU had a role to play in preventing undue harm to Gibraltar’s people or to its economy, and in maintaining regional cooperation with Spain.118

105.The Government of Gibraltar suggested that the best avenue for managing future relations would be for Spain, the UK and Gibraltar to return to the trilateral Forum for Dialogue, where discussions could take place on all aspects of the post-Brexit relationship, including on cooperation for the effective management of the frontier.119

106.We note, however, that while the UK continues to support this process, Spain maintains its position that bilateral sovereignty talks should take place under the Brussels process.120


107.Gibraltar faces potentially significant economic consequences as a result of the UK’s decision to leave the EU. The extent to which these consequences will be realised hinges both on the outcome of the UK’s negotiations with the EU, and on the reaction of Spain during and after withdrawal.

108.We agree with the Chief Minister of Gibraltar that Gibraltar and the UK should be considered, for the purposes of withdrawal negotiations, as a single State. Gibraltar is part of the EU, and its withdrawal is a matter for the UK and the EU collectively, not for a separate, bilateral negotiation between the UK and Spain. Aspects of the agreement on the future UK-EU relationship could nevertheless include specific bilateral arrangements between Spain and Gibraltar, for example in relation to local border traffic management.

109.A dedicated Joint Ministerial Council has been established to facilitate Gibraltar’s involvement in the wider Brexit process, and we note that the Government of Gibraltar appears satisfied with the level of contact it has had with UK ministers and officials to date.

110.The Government of Gibraltar has placed its trust in the UK to negotiate on its behalf and secure a Brexit that meets Gibraltar’s needs. However, it remains the case that, in leaving the EU, Gibraltar finds itself in a situation that 96% of its voters did not support. Negotiating on their behalf, the UK Government has a moral responsibility to ensure Gibraltar’s voice is heard, and its interests respected, throughout the Brexit process.

111.At this stage, it is unclear what level of Single Market access the UK will be able to negotiate after Brexit, in particular with regard to services. It therefore remains to be seen whether Gibraltar will feel compelled to seek a differentiated future relationship with the EU. We note, however, that Spanish opposition may present an insuperable barrier to any perceived special treatment for Gibraltar.

112.Moreover, a microstate-style status would need the agreement of the EU institutions and the other 27 Member States. It is not clear that the EU would prioritise special arrangements for a dependent territory of a State which is leaving, not joining, the EU. At the same time, we note that the EU itself has a continuing interest in promoting the economic well-being of Gibraltar, as a neighbouring territory, in developing good relations between Gibraltar and Spain, and in protecting the welfare of EU national border residents.

113.It is essential that Spain, the UK and Gibraltar, once they lose the common forum provided by shared EU membership, redouble their efforts to find a structure through which open lines of communication can be maintained, promoting cooperation and good relations. We call on the Government to give early thought to how such a structure might be established, and what, if any, role the EU might play in it. Agreement on this should be sought in tandem with Brexit negotiations.

97 Written evidence from Marlene D E Hassan Nahon MP (GLT0004)

98 Written evidence from Robert M. Vasquez (GLT0005)

99 Q 8 and supplementary written evidence from the Government of Gibraltar (GLT0001)

101 HM Government, The United Kingdom’s exit from and new partnership with the European Union, Cm 9417, February 2017: [accessed 7 February 2017]

103 Written evidence from Marlene D E Hassan Nahon MP (GLT0004)

105 Supplementary written evidence from the Government of Gibraltar (GLT0001)

106 Written evidence from Prof Andrew Canessa (GLT0002)

107 Written evidence from Marlene D E Hassan Nahon MP (GLT0004)

108 Q 19 (Prof John Fletcher)

109 Q 19 (Dr Chris Grocott, Prof John Fletcher)

111 Q 15 (Prof John Fletcher)

113 Written evidence from Robert M. Vasquez (GLT0005)

114 Written evidence from Robert M. Vasquez(GLT0005)

115 Oral evidence taken on 18 January 2017 (Session 2016–17), Q 38 (Ashley Fox MEP)

116 Oral evidence taken on 18 January 2017 (Session 2016–17), Q 1 (Esteban Gonzalez Pons MEP)

117 Written evidence from Robert M. Vasquez (GLT0005)

118 Written evidence from Susie Alegre (GLT0007)

119 Supplementary written evidence from the Government of Gibraltar (GLT0001)

120 ‘Spain and UK agree a more constructive approach on Gibraltar dispute at UN’, MercoPress (11 November 2016): [accessed 8 February 2017]. This article reports on the UN General Assembly’s Fourth Committee consensus decision which sets out the conflicting positions of the British and Spanish governments on Gibraltar.

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