Gibraltar Shuffles on the Precipice of Brexit

Just when everything seemed to be running so smoothly! For months the House of Commons has been more than compliant, after a brief stand on moral grounds the Lords too meekly wilted, and with the claim of the Supreme Court swiftly abated, Article 50 was finally triggered. Brexit was well and truly underway.

Theresa May sent her six-page letter to Brussels, and while there was an ominous phrase around future security measures, her tone was generally soft, as she relinquished all threats and promises around immigration, and asked for talks to begin ‘constructively and respectfully, in a spirit of sincere cooperation’. Donald Tusk for his part was characteristically gloomy, but while saying ‘goodbye’, he added ‘we miss you already’.

But then he shared the EU’s draft negotiating guidelines with the twenty-seven remaining member states. And while news outlets could not decide whether the concept of a staged negotiation process – with talks on future relations only commencing once ‘sufficient progress’ has been made on the divorce settlement – was positive or negative, an instance of the EU compromising or else hardening its stance, the draft guidelines contained at least one sting in the tail or spanner in the works for the most ardent of Brexiters.

Aside from outlining a desire for a transitional period, a single financial settlement, and the preservation of the integrity of the single market, the draft effectively offered Spain precedence in future arrangements concerning the British overseas territory of Gibraltar. It stated that once Britain is out of the EU, ‘no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without agreement between the Kingdom of Spain and the United Kingdom’.

Some interpreted this as handing Spain a power of veto over Britain’s future trading relationship with the whole of the EU, as thought the clause will enable Spain to dismiss any trade deal out of hand if they are unhappy with its ramifications for Gibraltar. Such an analysis seems to overplay the extent of Spain’s influence in the EU as well as the importance of the territory, and another interpretation is that the EU is simply encouraging bilateral talks wherever Gibraltar is directly concerned.

After an Anglo-Dutch force captured Gibraltar from Spain in 1704 during the War of the Spanish Succession, the territory found itself formally ceded to Great Britain – ‘in perpetuity’ according to the Treaty of Utrecht – in 1713. Today the convolutedly-named Gibraltarians are British citizens, but the territory is self-governing in everything except foreign policy and defence. Its economy is based on tourism, online gambling, financial services, and shipping, and just 12 miles off the north coast of Africa, it hosts an important UK military base.

Spain continues to assert its own claim on the territory, a bone of contention where Anglo-Spanish relations are concerned. Referendums held in 1967 and again in 2002 saw Gibraltarians overwhelmingly reject any form of shared sovereignty with Spain.

Between 1969 and 1985, a Spanish blockade severed all connections between Gibraltar and Spain. But today, around 12,000 people – almost half of Gibraltar’s workforce – commute daily across the border from the Spanish town of La Línea. Though the territory is sometimes caricatured for its traditionalism – labelled more British than Britain for its sense of patriotism, its red post boxes and pubs and fish and chips – it boasts a diverse culture, its people a mix of British, Spanish, Genoese, Italian, Portuguese, and Maltese descent.

To some extent, Gibraltar just like some Tories wants to be able to have its cake and eat it. While it continues to value its longstanding bond with Britain, maintains a taste for some almost parodically British artifacts and ways of life, and appreciates the British military presence, it sees access to the single market and the freedom of movement enshrined by the EU as essential to its economy. Meanwhile it profits from a low 10% corporate tax rate.

Prior to last year’s EU membership referendum, Gibraltar’s chief minister Fabian Picardo campaigned strongly in favour of ‘Remain’. In 2015, he wrote that Brexit could even ‘destroy’ Gibraltar, if it meant the territory lost the ability to freely provide financial services within the single market and saw Spain implement border controls.

As the vote neared and even afterwards, he continued to hope that in the case of Brexit, Gibraltar would be allowed to maintain single market access and free movement as part of a separate arrangement with the EU. In the end, 96% of Gibraltarians voted for Britain to remain as part of the EU. But they were not enough to sway the cause, as across the UK, ‘Leave’ won by a narrow margin of 51.89%.

Whether she thought it through or simply shrugged at the question, Theresa May decided that Gibraltar was not worth a mention. In early February, an amendment to the government’s Brexit bill which would have required May to consult Gibraltar before invoking Article 50 was roundly defeated in the Commons. Senior peers continued to stress that Gibraltar must not be ignored. However the territory did not feature in her letter to Brussels which notified Donald Tusk of Britain’s intent to withdraw from the EU.

That gave the EU and Spain the opportunity to make the first move. Typically the EU has favoured Gibraltar’s interests: the ending of the blockade in 1985 was a pre-condition of Spain joining the European Community the following year. But during José Manuel García-Margallo’s stint as Spain’s foreign secretary, he repeatedly criticised the situation of Gibraltar, saying last March that if Brexit did occur, ‘we would be talking about Gibraltar the very next day’.

His successor Alfonso Dastis has been more conciliatory. In January he said that Spain would not put Gibraltar at the centre of Britain’s exit negotiations. But it was Britain who instigated the back-and-forth betrayal of foreign nationals, describing EU citizens legally residing within the UK as ‘main cards’, ‘bargaining chips’, and ‘negotiating capital’. The EU obviously sees in Gibraltar a bargaining chip of its own, while being clear that throughout the negotiation process, it will serve first and foremost the interests of its member states.

If the clause in the draft guidelines remains in place once negotiations get underway, it does seem to raise the prospect of Gibraltar falling uneasily outside of any trade deal negotiated between Britain and the rest of the EU. Spain could still seek shared sovereignty over Gibraltar or other concessions, like the territory increasing its rate of corporate tax.

The publication of the EU’s draft negotiating guidelines caused Theresa May to reaffirm that Britain will ‘never enter arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their wishes’. Former Conservative leader Michael Howard went much further, suggesting that like Margaret Thatcher in the Falklands, Theresa May would be willing to wage war.

After condemnation from all sides, May was forced to laugh off Howard’s inflammatory remarks. But Gibraltarians can expect over the coming weeks, months, and even years to have their needs and motives explained for them, and their commitment to Britain ceaselessly restated and reframed, buffeted on both sides as they face an uncertain future over which they are afforded little say.

A version of this article was originally published at The Shimmering Ostrich.