Brexit: Gibraltar

Baroness Goldie Excerpts

Tuesday 21st March 2017 Lords Chamber

[Baroness Goldie (Con)]

My Lords, I begin by thanking the noble Lord, Lord Boswell of Aynho, for tabling this debate. I also thank the European Union Committee for its report, Brexit: Gibraltar, which provides a valuable analysis of the opportunities and challenges presented to Gibraltar by the UK’s decision to leave the European Union. The Department for Exiting the European Union is considering the findings of the report and will publish its response in the coming months—I hope sooner rather than later. I also thank noble Lords for their contributions to this debate, which has been fascinating.

As noble Lords will know, my honourable friend Robin Walker, the Member for Worcester and the Parliamentary Under-Secretary of State at the Department for Exiting the European Union, appeared before the committee in February of this year to discuss the extensive engagement with the Government of Gibraltar that has taken place since the referendum. We remain steadfast in our support of Gibraltar, its people and its economy—the referendum has not changed that—and we have committed to fully involve Gibraltar to ensure that its priorities are properly taken into account as we prepare to leave the EU. It is, as the report rightly notes, the Government’s responsibility to ensure this, and I can reassure noble Lords that it is a responsibility that we take very seriously. I wish in particular to reassure the noble Lord, Lord Boswell, on that point.

This is demonstrated by the fact that the Prime Minister met the Chief Minister of Gibraltar on the day she took office, and has had regular engagement since. As a number of your Lordships pointed out, the Government have established a new joint ministerial council for Gibraltar which is chaired by the Member for Worcester. It brings together Ministers from the UK Government and the Government of Gibraltar to discuss the opportunities and the challenges presented by EU exit. The first meeting took place on 7 December and the second on 1 March 2017, with both DExEU and FCO Ministers taking part alongside the Chief Minister of Gibraltar, the Deputy Chief Minister and the Attorney-General. I know that the honourable Mr Picardo, his deputy and the Gibraltarian Attorney-General are taking a keen and tangible interest in these proceedings. Perhaps I may also say what a pleasure it was to meet them earlier this evening.

There has been a wide range of other engagements with the Government of Gibraltar at both official and ministerial level. The Secretary of State for International Trade met with the Chief Minister of Gibraltar on Monday to discuss the valued links between our economies, and just last week the Parliamentary Under-Secretary visited Gibraltar to get a first-hand view of its unique context and to speak to representatives from across its thriving economy, from the business community to the trade unions. The Chief Minister of Gibraltar said of the visit that it,

“symbolised the relationship that exists between the Governments of Gibraltar and the UK, and is a clear reflection of the real action there is on the real pledge that Gibraltar would be fully involved in exiting the European Union”.

Mr Picardo also said that Gibraltar has had access to the highest levels of the UK Government and believes that that access will continue. I hope that that reassures your Lordships, not least the noble Lord, Lord Collins, who expressed a particular interest in how this process is working. I hope that it demonstrates that this is not just a close but an informed relationship.

Through our engagement with the Government of Gibraltar we have built an understanding of Gibraltar’s particular priorities in the EU exit. We welcome this report as an important contribution to that process and we are pleased with its finding that the Government of Gibraltar have been satisfied with the UK Government’s engagement to date. Let me reassure the noble Earl, Lord Kinnoull, that we very much welcome that relationship. It is positive and it is important.

Let me turn now to some of the issues and priorities raised both in the report and by noble Lords over the course of this debate. Perhaps not surprisingly, the economy featured consistently. There are challenges and opportunities which EU exit presents to Gibraltar’s economy. Gibraltar is rightly proud of the strong economy it has built for itself. It has the fourth highest GDP per capita and the second lowest unemployment rate in the world. The committee heard how Gibraltar’s economy has been transformed in recent decades from one dominated by military spending to a thriving and resilient economy based on financial services, tourism and commercial port services. That is testament to the hard work, creativity and ingenuity of all Gibraltarians. If I may say so, it is testament also to that vision of 20 years ago conceived by the noble Lord, Lord Luce, to whom I pay tribute.

The noble Lord, Lord Hannay, with some justification, described Gibraltar’s position in the EU as a “Goldilocks deal”. I do not disagree; it is a fairly accurate description. But I also observe that the UK has been an important support and bolster in that relationship. The UK remains and Gibraltar remains—and with that tandem of talent I am unable to share the pessimism of the noble Lord, Lord Hannay.

On market access, the report highlights the strong links between the economies of Gibraltar and the UK, particularly when it comes to financial services. For example, as others mentioned, 20% of UK car insurance policies are underwritten in Gibraltar and around 90% of Gibraltar’s trade is with the UK. The Government are clear that we should work together to maintain and strengthen these economic bonds after we leave the European Union. When it comes to financial services it is important that the strong mechanisms already underpinning Gibraltar’s access to the UK market are enshrined in UK law. That is worth remembering. The Government’s clear intention is to maintain that access.

We have also agreed that, together with the Government of Gibraltar, we will take into account the priorities of Gibraltar and the other overseas territories as the UK looks to establish new trade and investment opportunities with the wider world. This is a very important aspect of what lies ahead. The Secretary of State for International Development confirmed this position to the Chief Minister of Gibraltar during their meeting yesterday. I hope that that reassures the noble Lord, Lord Anderson, that we approach these matters positively. It was an issue to which my noble friend Lord Dundee also referred.

On the issue of access, the Government have been clear that Britain is seeking a new, strong partnership with the European Union: a partnership that maintains the close relationship we have with member states and builds further on them for both the UK and Gibraltar. Although we are not seeking to maintain membership of the single market, this agreement should allow for the freest possible trade in goods and services between the UK and EU member states. The Government are confident that if we approach these upcoming negotiations in a spirit of good will, we can deliver a positive outcome that works for all, including Gibraltar. The noble and learned Baroness, Lady Butler-Sloss, raised a somewhat technical issue to which I confess I do not have the answer: I apologise for that. I undertake to write to her to provide clarification. I noted her concern about what possible amendments to the Criminal Finances Bill might mean and I will ensure that we look at that.

A number of issues were raised in relation to EU funding. My noble friends Lord Selkirk and Lord Dundee wanted to know what lies ahead, post Brexit. I am afraid that that is not something I can comment on in detail; it is too early to say what the position of Gibraltar and the other overseas territories may be in regard to such funding, but we will continue to work closely with the Government of Gibraltar to understand their concerns in this important area.

Not surprisingly, many contributors referred to the issue of the Gibraltar-Spain border. We recognise the importance of a well-functioning border to the economy, as well as to the surrounding Spanish region and to the thousands of Spanish workers who cross the border every day. We are clear that politically motivated delays are unacceptable. They cause serious problems for people on both sides of the border and we stand ready to work with the Government of Gibraltar and the Government of Spain to ensure that the border continues to function well after we leave the European Union. We approach these negotiations with good faith and determination and in a spirt of good will.

A number of contributors raised points and I hope that I have answered them. The noble Lord, Lord Boswell, made the point about the importance of the border very powerfully, as did my noble friend Lord Suri and others. The issue of the Local Border Traffic Regulation was raised by the noble Lords, Lord Boswell, Lord Luce and Lord Hoyle, my noble friend Lord Dundee and the noble Earl, Lord Kinnoull. The UK Government are working with the Government of Gibraltar to consider all options on the crucial issue of the border. As the committee noted in its report, the Local Border Traffic Regulation would, of course, require commitment from Spain.

The noble Lord, Lord Luce, also raised the issue of police and judicial co-operation, as did my noble friend Lord Dundee. That is a very important area. We have been clear that we will do what is necessary to keep our people safe. One of the 12 objectives for the negotiations ahead is to seek a strong and close relationship, with a focus on operational and practical cross-border co-operation, to fight crime and terrorism.

By way of encouragement I can say that there have been some very good examples of how that partnership with Spain and Gibraltar has been working. Spanish and Gibraltarian agencies often co-operate to tackle issues such as drug smuggling. In January of this year, approximately €4 million-worth of cannabis was seized in a joint operation on the waters. So there is a mutuality of interest in trying to make these positive arrangements continue.

The issue that came out of the debate perhaps more cogently than any other was that of sovereignty. A number of noble Lords referred to this. I want to reiterate that the UK has reaffirmed its double-lock sovereignty commitment to Gibraltar. We will never enter into arrangements by which the people of Gibraltar would pass under the sovereignty of another State against their freely and democratically expressed wishes, nor will we enter into a process of sovereignty negotiations with which Gibraltar is not content. We will, in short, continue to stand beside Gibraltar and its people. That is the metaphorical foundation of the Rock. My noble friend Lord Selkirk made a colourful analogy when he equated the steadfastness of the Rock with the steadfastness of our relationship with Gibraltar and its people. I could not have put it better.

I am conscious of time, which is a pity as there are important issues here that I wanted to cover. The noble Lord, Lord West, asked about the strategic significance of Gibraltar in relation to defence and free maritime passage. If he will permit it, I will write to him in fuller detail on the points that he raised. Questions were also asked about the general intentions of Spain. My colleague, my noble friend Lady Hooper, made a very helpful comment in that respect, echoed by others, that is that there is a mutuality of interest in the negotiations for both Spain and the UK. That has been reiterated by the Spanish Government. The indications are that they wish to take a pragmatic and constructive approach. The Prime Minister of Spain has said that he is confident that the Government in Madrid are sitting squarely behind the objective of achieving a positive relationship between the UK and the EU after Brexit.

In conclusion, this has been an important and interesting debate, with many positive and helpful suggestions. I am sorry that I have not been able to deal in detail with all the points raised by noble Lords. I would like to end on a note of optimism. I was aware that the noble Lord, Lord Luce, is currently Chancellor of the University of Gibraltar. I had a look at its motto: “Scientia est Clavis ad Successum”. I know that noble Lords are all scholars of Latin and do not require a translation, but it is simple: “Knowledge is the key to success”.

I suggest that knowledge by the UK of what Gibraltar and the Gibraltarian people need, knowledge of what our EU partners wish to achieve and their knowledge of what we seek to achieve make a good starting point for how we embark on these vital negotiations. If we approach these matters based on knowledge, all will benefit. The UK will benefit—and if the UK benefits, Gibraltar, too, will benefit.

House adjourned at 9.48 pm.