In discussion with a fellow passenger last week, a banker travelling to Gibraltar, he said things were booming on the Rock, contrary to my expectations. Building is continuing at a pace and insurance companies were setting up and not leaving, as may have been expected.
Regardless of what happens over Brexit, Gibraltar is still attractive as a place to trade because of the opportunities to do business with the UK and the rest of the world outside the EU. The British government has already confirmed that it will be “business as usual” for e-gaming companies trading into the UK. E-gaming now represents 25% of Gibraltar’s GDP.
After the Irish border issue is resolved, attention will turn to Gibraltar in the Brexit negotiations. Madrid has demanded things like joint control over its airport, cross border co-operation on smuggling and an end to Gibraltar’s lower tax rates.
Michel Barnier, the EU’s chief negotiator, has boasted that the Spanish will get their own way thanks to the “level of unanimous solidarity” as being part of the EU. “The lever is there, and the British know it well” he mused.
For the Prime Minister this poses a problem. To give in on Gibraltar, after conceding on fish stocks and EU funding would be a significant climb down.
The priorities for Gibraltar are:
1. To preserve existing sovereignty with the UK
2. To maintain the strategic position of the strait of Gibraltar
3. To maintain commercial relations with Spain. Indeed, Fabian Picardo has already met with his counterpart in Andalusia.
4. Maintain financial and taxation independence.
The UK has said Gibraltar’s sovereignty is not in question. Former Home Secretary Michael Howard QC has said that the UK would go to war over Gibraltar. We shall see. A lot of “red lines” have been crossed in the negotiations already.
By Warwick Bartlett