16
Examination of witness
Fabian Picardo.
Q14 The Chair: Good afternoon and welcome to this resumed session of the European Affairs Select Committee in the House of Lords. We are conducting an evidence session on the UK-EU Gibraltar treaty. I am very grateful to our witness for the second session, the honourable Fabian Picardo KC MP, who is the Chief Minister of Gibraltar. Thank you very much indeed for joining us. We look forward to your public evidence and we hope to finish by one o’clock.
I will start by asking you a general question to enable you briefly to set the background, before we get into more detail. From your perspective, why do you think the vote of the Gibraltarians was so overwhelmingly in favour of this treaty, at 96%? How was the outcome of the 2016 referendum on the UK’s membership of the EU greeted in Gibraltar? I imagine that that has some sort of bearing. Why do you think that it has taken so long from the decision of the UK to leave the EU and the trade and co-operation agreement to get to the position where we are now, where we have this treaty?
Fabian Picardo: My Lords, thank you for the opportunity to address you from Gibraltar. I am sorry that I cannot be in London with you.
The year 2016 was very difficult for Gibraltar. The result of the UK referendum on membership of the European Union, in effect, upended our economy as it was, or had the prospect of upending it. That was deeply understood by the people of Gibraltar and, for that reason, they voted overwhelmingly to remain in the European Union.
Of course, it was not just our economy that would be upended; it would be the ability of many in Gibraltar to visit their closest family, who might live in Spain, and the ability to continue to live the lives that we live not just in the reduced geography of Gibraltar but with access to southern Spain and Europe from Gibraltar.
We could see that all of that would end in the way that it has ended for many of those who found it so easy to get from the United Kingdom to destinations in the European Union and, during this summer, to name but one, have found that the application of new EU border rules, all of which were known about in 2016, has come home to roost. When 15,000 people come into your territory every day, who would have to go through those new, more difficult border arrangements in and out of Gibraltar, you understood as a voter in Gibraltar, without needing to have it explained to you, that the result of the United Kingdom leaving the European Union would be a very bad thing for this proud British territory.
The Chair: Thank you very much indeed. That helpfully sets the scene. Baroness Suttie?
Q15 Baroness Suttie: You have talked a little about some practical problems that Brexit caused for Gibraltar that this agreement seeks to solve. Which of these were the most difficult and sensitive issues, and do you believe the agreement will help resolve them?
Fabian Picardo: Undoubtedly the issue of fluidity at the frontier was the starkest, most difficult and most dangerous issue that we faced. I was indicating to you before that 15,000 cross-frontier workers come into Gibraltar every day. Imagine the volume of people that that represents when they need to come in, principally between 7 am and 10 am. If entry checks or exit checks went perfectly well then they would take 15 to 30 seconds per person, and the number of lanes we were able to have would be restricted to two or three, so you can see that fluidity of people was going to become a huge issue. Those people work in our public services looking after our elderly, in our health services looking after our ill and our children, and in the online gaming industry and the insurance industry. They work in the public and private sector in equal measure. Therefore, the Government’s ability to offer the public services that we do in Gibraltar—which are, if I may say so, at the highest European standard—and our ability to produce the public finances that fund them were at risk. You can imagine that that is not a risk that any Gibraltarian thought we should be taking.
Q16 The Duke of Wellington: My question, Chief Minister—thank you so much for joining us this morning—is whether, when there was a change of Government in this country in 2024, that had any effect on the negotiations, which I imagine had already begun before the 2024 election. Did that change of Government affect the tone, speed and facility of those negotiations?
Fabian Picardo: I never expected to be facing the Duke of Wellington.
The important thing to note is that different political parties at Westminster have been equally supportive of the Government of Gibraltar throughout the negotiations that we have been involved in, in the context of the withdrawal agreement—I see that my good friend Lord Barrow is among you, and no doubt will have something to say about that—then the negotiation of the New Year’s Eve framework agreement between the UK, Spain and Gibraltar, and then the commencement of the negotiation of this treaty, which started under a Conservative Government. I was able to accompany Lord Cameron to Brussels on two occasions and then David Lammy and Stephen Doughty on another occasion. So when it comes to the negotiation of these arrangements, both parties in the UK have been equally supportive.
Of course, because there was a socialist Government in Madrid, the election of a Labour Government gave us a bit of an ideological frisson of excitement that we might be able to move more quickly, but if I must be honest with you—which I always want to be in the evidence that I give these committees—I think that President Trump, and the speech by Vice-President Vance at the Munich Security Conference in February 2025, was what gave the biggest boost to the negotiations, as all of Europe and the UK realised that we needed to start working together and thinking together about geopolitical issues and strategy, and that the UK and Spain—and the UK and Europe—could not be at loggerheads over two and half square miles of geography on the southernmost flank of Europe. We need to be working together on those issues.
Q17 Baroness Smith of Newnham: I suspect President Trump and Vice-President Vance would not be enthusiastic to realise that they were helping the cause of European integration and co-operation. In the negotiations that we have seen—across, as you say, Governments of two different political persuasions in the UK—to what extent do you feel that the principles that you and the then Foreign Secretary Dominic Raab released in March 2021 have been adhered to? In particular, the Foreign Secretary undertook not to agree arrangements that meant that sovereignty over Gibraltar would pass to another state and with which you were not content. Do you feel these aims have been achieved, or are there issues that remain on the table?
Fabian Picardo: They were not his aims; they were my aims. They were the aims of my negotiating team and the Government of Gibraltar, to which the UK agreed. What you have referred to are not the terms of those negotiating guidelines for the UK; you have referred to what we call the double lock on the Gibraltar constitution, which dates from 2006. It is a sine qua non for any Government of Gibraltar that that should be the position, and it has been the position of the UK since then.
The key issue for us, for Mr Raab and for all Foreign Secretaries that I have worked with of all political complexions, has been that the exclusively British sovereignty of Gibraltar should not be compromised by one iota in any arrangements that we entered into, and they have not been. If you wish, I am happy to go through any outstanding threads that you may feel you might want to talk to me about after having taken the evidence of Lord Wood, given the questions that I have heard from Lord Moynihan and others, because I can put my hand in the Gibraltarian political fire and tell you that not one iota of our sovereignty has been compromised at all.
Baroness Smith of Newnham: I am a Liberal Democrat who, along with the two main parties, has been very supportive of Gibraltar. I do not have any further questions. I suspect some other members of the committee might wish to come back, though.
Fabian Picardo: I have the leader of the Gibraltar Liberals on my right—it might be my left over there—Joseph Garcia, the Deputy Chief Minister of Gibraltar, who was part of the negotiating team.
Baroness Smith of Newnham: We have met.
Q18 Lord Jackson of Peterborough: Liberals do tend to be on the left, in this country.
Chief Minister, I want to pick up on what you say about sovereignty, although we will come back to sovereignty in more substance a bit later. Something that, as you will have heard, the Minister did not allude to that much but which is important is the potential involvement of the European Court of Justice in interpretation of the legal acquis of the EU. Do you see that in terms of dispute resolution being an issue that may infringe upon the sovereignty of Gibraltar in the future?
Fabian Picardo: Absolutely not. I want to be very clear that the people of Gibraltar voted 96% to remain in the European Union. That means with the full application of the European Court of Justice’s jurisdiction, as it was under the European Communities Act. What Gibraltar is doing is akin to what the UK did in 1972—that is, it is agreeing to abide by the rules of a club. It is agreeing that the dispute resolution mechanism of that club, which is the European Court of Justice, should be able to determine interpretations as to those rules as a price for membership—membership that can be determined, and we will no doubt go through the termination issues that you have touched upon already, in a number of different ways should the people of Gibraltar, in the exercise of their own sovereign will, so determine should they wish to leave that club. There is therefore no question that the ECJ determining the meaning of European provisions in any way impinges on sovereignty, because that is all the ECJ can do: it can tell us what European text means. There is a good reason for it too, because that European text has a life in the European Union legal order and in our treaty.
What you cannot have, and this makes a lot of jurisprudential sense, is different interpretations of exactly the same words in exactly the same circumstances. For example, a directive on matters of the environment that applies within the member states in the EU, which is interpreted in a particular way by the European Court of Justice if there is a dispute, cannot—because it might also be one of the instruments that we agree should apply under the treaty—be subject to a different interpretation as to its same words by the dispute resolution mechanism of the treaty, without that mechanism having regard to the interpretation of the European Court of Justice. This is not sovereignty; this is jurisprudential consistency.
Q19 Lord Brennan of Canton: Thank you for joining us, Chief Minister. I think you heard some of the earlier exchanges with the Minister, Lord Wood, so you may have heard the question I asked about how the agreement’s provisions will deal with the refusal of individual entry into Gibraltar. How will they work? Who takes the final decision to exclude somebody and when? In the answer from both the Minister and the official, there was some confusion over exactly how that would work and they agreed to write to us to clarify that prior to any debate we might have in the House of Lords. Did you hear that exchange and can you shed any more light on it, other than what the Minister and the official said?
Fabian Picardo: Yes, I did hear it and I heard what Stewart Wood said. I have to say that you are also talking to one of his footballing ideological complexion. When he left Gibraltar last week, we were very clear that neither of us would ever walk alone.
I do not think that there was confusion. To be fair, these are extraordinarily complex arrangements. There is complexity, but I am happy to take you through the issue as we see it, because I think that might be more helpful.
The principle that we set out in the New Year’s Eve framework agreement was a very simple one, which is very complex written down—namely, Gibraltar would continue to do the Gibraltar immigration check and have the jurisdiction that it has today to accept or deny an individual having the right to come into Gibraltar. Schengen would continue to do the same thing. Of course, because we would do them as consecutive checks, one after the other, Gibraltar would make its decision and, if it permits the individual to come in, the individual goes to the Schengen check also to be permitted access to Schengen. If that individual is permitted access to Schengen they have no problems. If we permit access to Gibraltar but access to Schengen is not permitted, the individual has the right to visit only Gibraltar and not Schengen. In those circumstances, the individual can come only to Gibraltar and not to Schengen.
If we say that the individual cannot have permission to enter Gibraltar, we none the less allow them to go to the Schengen check. If they are permitted access to Schengen, they can then go into the Schengen space through a different exit at Gibraltar Airport, which will not allow or permit them access to Gibraltar, but they can then have their run of Spain and the rest of the Schengen area. That makes sense logically because, if they had landed in Cádiz or Málaga, each of which are less than 100 kilometres away, they would have been permitted access to Schengen without a problem. In those circumstances, the individual would be told that they are not permitted to access Gibraltar. We will put their face on our facial recognition systems and, if they come into Gibraltar, they will be in Gibraltar illegally.
Lord Brennan of Canton: So it is exit but not via the gift shop, as it were. In those circumstances, you would not be allowed through in the same way.
Fabian Picardo: It no longer allows us a gift shop on the way in.
The Chair: Can I ask a point of clarification, Chief Minister? You said that, if you allow entry to Gibraltar but Spain does not allow entry to Schengen, they can then come into Gibraltar but not into Schengen. How do you know if there is a fluid border?
Fabian Picardo: In certain circumstances, they are permitted to come into Gibraltar but, if they then go into Spain, they would be in Spain illegally. So there are very restricted circumstances in which they would be able to come into Gibraltar. These circumstances are very similar to those which apply—and I should have made this point, Lord Stirrup, so thank you for taking me up on it—when somebody arrives at any of the EU Schengen states and they have not been permitted a Schengen visa. For example, there are circumstances where Germany would allow you into Germany, but you do not have a Schengen visa and therefore have no right to visit France or any of the Schengen states. If you were to wander over the frontier, you would be in France illegally.
Lord Brennan of Canton: Do you have any idea of how many people we are talking about who are likely to fall under that sort of circumstance?
Fabian Picardo: In the couple of months—it is literally two months to the day—that we have been applying these arrangements, there have been no such instances. There have been instances of people who are undocumented for the purposes of arrival in Gibraltar or Schengen—a double refusal, so to speak, not a single refusal.
Lord Brennan of Canton: That is very helpful. Finally from me—I was not going to repeat this—since you mentioned President Trump, do you have any insight into his views about Gibraltar’s relationship with the UK?
Fabian Picardo: I do not have any insight into that. I do not want to make any comment on matters beyond my jurisdictional competence, if you will forgive me. I was giving my view because it was a clear accelerant at the table, not because I am making any comment on anybody else’s leadership of their particular nation.
Lord Brennan of Canton: That was very deftly handled.
Q20 Lord Grantchester: Good morning and welcome, Minister, to the committee. We come to payment for services. While being of the same city as the UK Minister, our side of the park has the motto “nil satis nisi optimum”. With that in mind, the parties have agreed to implement the “principles of good governance in the area of taxation” on the basis of “transparency and exchange of information and fair tax competition” under Article 211. How will this obligation actually work and what are the implications for Gibraltar’s tax policy?
Fabian Picardo: Gibraltar’s tax policy already aligns completely with the principles set out as best practice under the OECD. When we were members of the European Union, we already fully complied with the European Union standards in respect of transparency et cetera. Let me give you a reason to be proud of this particular British Overseas Territory: we were the first jurisdiction in the European Union—ahead of the United Kingdom, Germany and France—to implement the fourth anti-money laundering directive’s obligation to have an open register of beneficial ownership of companies. We have maintained that.
We have no difficulty abiding by the highest international standards in respect of transparency, good practice and what a fair and objectively verifiable tax rate is. For those reasons, when the EU set that out as a requirement under the treaty, as it does for all the treaties that it enters into with third parties, we were very happy to sign up with absolutely no objection whatever. It does not impede our ability to be a competitive, well-regulated—indeed, very highly regulated—financial services centre for the world.
Q21 Lord Jackson of Peterborough: I am going to ask a slightly different question than I had originally intended, because Mr Picardo has adequately addressed the issue about the acquis and the treaty itself.
Given that the old UK visa route for travel to Gibraltar ended on 8 July, and that exemptions based solely on UK residence or UK visas no longer apply for entry to Schengen, is there any concern from local businesses in Gibraltar that the default position will be to recruit young Spanish people into the service, hospitality and leisure industry, rather than the traditional route in which a not insignificant number of young British people would come to Gibraltar to train and take part in the employment market in leisure, tourism and such areas? Is that something that concerns you? The corollary is that there will be a displacement over time, that practically everyone will be Spanish citizens and that young British people will not travel to Gibraltar any longer to take part in those employment opportunities.
Fabian Picardo: I am sorry to say, with the very greatest of respect, that I cannot imagine a more misconceived approach.
Lord Jackson of Peterborough: It is a question. It is not an approach; it is a question. Will you answer it directly?
Fabian Picardo: Of course I will, and I preface my answer by saying that the position from which it comes is entirely misconceived for the simple reason that there are almost none of the people who you describe in the Gibraltar job market—young Brits who might wander down to Gibraltar to form part of the Gibraltar employment market.
The reality is that we have a resident population in the employment market. Last time I checked, there were seven people unemployed who are residents of Gibraltar. Let me be very clear, as I do not know whether the microphone might have created some distortion. I did not say 7%; I said seven people: Michael, Richard, Timothy, Dorothy—give me seven names.
Lord Jackson of Peterborough: I did not ask you about the unemployment rate.
Fabian Picardo: If you do not let me answer, I cannot give you the answer. Some 15,500 people come through the frontier every day to work in Gibraltar. Half of them are Spanish and half of the balance are British. They will continue to be able to come to Gibraltar to work without impairment. In the same way as they have become residents of Spain before and come to Gibraltar to work, they will be able to become residents of Spain again and come to Gibraltar to work. There is absolutely no question of a British person who wants to work in Gibraltar who has a job in Gibraltar being able to come into Gibraltar as a result of this treaty. It is just not related to anything set out in the treaty.
What you are trying to get at is that the Government of Gibraltar, of their own motion, have set out new residence requirements for those who will be able to become resident in Gibraltar and take employment in Gibraltar. The reason for that is because the treaty makes Gibraltar such an attractive jurisdiction to become resident in that we have to be more discerning than we may have been before about who becomes resident in Gibraltar.
We have set out a minimum wage that you need to be able to demonstrate that you are earning to maintain yourself in Gibraltar, which is in the region of £37,000—just shy of the average earnings in Gibraltar. That might not be the sort of salary that a young British person of the sort that you describe is able to earn when they first take a job. Despite that, we want to see young people of any nationality able to come to Gibraltar, whether they are British or not British, who might be able to bring something to the emerging digital industries that we have. We also have exemptions for people who are particularly young.
I think that is what your question was getting at. We have resolved the issue that some of our businesses identified with those new residence requirements, but those new residence requirements are not required by the treaty. They are our own sovereign constitutional obligations and rights of the Government of Gibraltar to fix for the reasons that I have set out.
Lord Jackson of Peterborough: Thank you for your comprehensive reply.
Fabian Picardo: I think that sounded a bit aggressive at the beginning, but I really did not think that it was coming from a treaty source and therefore I wanted to scotch it dead.
The Chair: That was an interesting statistic; I was personally not aware of that. So half of the people coming across the border every day to work in Gibraltar are British citizens resident in Spain.
Lord Brennan of Canton: No, half of the half are—half of the remaining—
Baroness Smith of Newnham: Essentially it is a quarter. Half are Spanish. Of the other half—
The Chair: So it is a quarter.
Baroness Smith of Newnham: Yes, half of the half.
The Chair: Good—I am glad I managed to clarify that.
Q22 Lord Elliott of Mickle Fell: Thank you for joining us, Chief Minister. I would like to explore the costs element of the agreement. It says that “The Cooperation Council shall establish a financial mechanism to promote cohesion in the region”. How much will Gibraltar pay for these arrangements and will the UK make a contribution as well?
Fabian Picardo: The Government of Gibraltar will be making a contribution towards the financial mechanism. It is not the UK taxpayer who is contributing to that. The Government of Gibraltar will be raising the money for that financial mechanism through their own taxpayer resources and contributions from some of the companies in the leading industries in Gibraltar, which have indicated that they want to help us to populate what I might call the Gibraltar-UK side of the fund. It will be used exclusively for the purposes of training people in or for the Gibraltar job market, in or around Gibraltar. We think that this is a good way of ensuring that we have the people necessary for our job market to continue to flourish and grow.
To give you another statistic, when I was first elected as Chief Minister, the number of cross-frontier workers was in the region of 6,000 or 7,000, and the job market in Gibraltar has grown exponentially in the last 15 years. The more industries we have, the more people we need, the more public finance we receive as a result, not just in PAYE social insurance contributions and corporate contributions. Initially, the fund will be in the low millions of pounds, but it will potentially grow in coming years.
Q23 Lord Barrow: It is a pleasure to see you, Chief Minister, and other colleagues. To turn to the debate within Gibraltar, if I can call it that, the agreement was unanimously endorsed by parliamentarians in Gibraltar in March this year. Could you tell us a little about what was welcomed in particular and if there were any concerns hidden within that vote, if I can call it that? Secondly, there was a concordat agreed with the UK Government. I would be interested to know how you see that and whether you feel comfortable that it protects Gibraltar’s position.
Fabian Picardo: Lord Barrow, it is a pleasure to see you—a veteran of the Gibraltar trenches in Brussels, from 2018. Thank you for all your help in getting us here. If we had not had a withdrawal agreement clause on Gibraltar, we probably would not have got to the New Year’s Eve agreement and this treaty.
I think it would be unfair for me to set out the concerns of my fellow parliamentarians on the opposition Benches in the Gibraltar Parliament, but the Hansard of the Gibraltar Parliament on that debate has been published. It sets out both the concerns of parliamentary colleagues in the Opposition and my response to those concerns.
This is an international arrangement between the United Kingdom and the European Union, where Gibraltar and Spain are equal in the negotiation. You can imagine that it is the fruit of compromise. As I said on a number of occasions in Gibraltar, I did not pitch up in Brussels to negotiate the European Union’s surrender to the people of Gibraltar, so there are issues here that required compromise from the point of view of key areas in which the Commission is the guardian of the treaties. There are key areas that are Spanish concerns not related to sovereignty, key concerns of the United Kingdom and key concerns of Gibraltar. They have become this treaty.
I have described the treaty as imperfect, but as exactly what we need to keep going forward as a community with our sovereignty intact. I was very heartened to hear the Leader of the Opposition use the same description last week, as he reflected on our treaty during our Gibraltar Day events. So I think there is wide agreement and consensus on that in Gibraltar. Of course, there are some dissenting voices: perish the thought that there are not, otherwise we would not be the vibrant democracy that we are. To see a Parliament united in Gibraltar around this treaty says a lot. We do not often unite on issues other than the defence of British sovereignty.
The concordat, as you rightly say, was the condition that the Motion put by the Government and the Opposition together may ask the United Kingdom to start the process of ratification of the treaty. Why was that relevant? As you will know—you were involved—we had a concordat on the withdrawal agreement, where there was a chapter on Gibraltar. The United Kingdom and Gibraltar needed to know, in respect of that chapter, who does what, who is responsible for what and who is going to put their hands in their pocket for what. Of course, in relation to a free-standing treaty just for Gibraltar, there had to be a concordat that also set out the responsibility of each of the parties. Because it is a treaty, these are UK international legal obligations, even though Gibraltar is going to discharge the lion’s share of them at the coal face, at the Gibraltar frontier and in the jurisdiction of Gibraltar, where constitutionally we are the only entity empowered to discharge those functions. So the concordat was always going to be important. The terms of the concordat and the letter that accompanies the final version of the concordat from Steve Doughty have been scrutinised in Gibraltar. They have been found to be satisfactory, if not perfect—back to the imperfect analogy in respect of the treaty—and that, in politics, I think is what we call success.
The Chair: That is a very helpful clarification on the concordat.
Q24 Baroness Ashton of Upholland: Chief Minister, it is great to see you. I just want to get a couple more clarifications for the purposes of the committee reporting to the House. We note that obviously it has been provisionally applied from 15 July. Can you explain why you have to provisionally apply rather than fully apply? You have said that this is satisfactory in terms of how it is working out, and I agree with you that in politics this is a good result, but has anything emerged during this period of the provisional application that you would like us to be aware of—any issues or problems that perhaps we need to take note of?
Fabian Picardo: Thank you, Baroness Ashton, for your continued interest in Gibraltar. We had an opportunity to meet and discuss all things Gibraltar in Córdoba, I seem to recall, in the era before Covid and around Brexit. So thank you for your continued interest; I really do appreciate it on behalf of those I represent.
As you know, we have had a number of different deadlines for the application of the new European entry and exit rules, the now infamous EES. During the course of the negotiation, these were cliff edges that were constantly coming towards us because we had an entente cordiale between Spain, the UK and Gibraltar on how the frontier would continue to operate without the full application of the Schengen border code while we were negotiating, as perhaps should have been the case from our departure in 2020. Once the EES arrived, that was going to require people to give biometric data in order to enter the European space, and the most recent deadline for that was July this year. Ninety days on, even the discretion was to end, although we understand—only from journalistic reporting—that the discretion for easing up on EES may have been extended in the past 24 hours by the Commission.
What Spain, Gibraltar, the UK and the EU all wanted to do was to avoid people having to cross the land frontier at Gibraltar to have to go through the EES checks when those came. Think of Dover, where you are going in a car on to a boat. Here you had literally thousands of vehicles crossing every day, so you would have to have iPad EES for many of them, which would cause a huge tailback—however efficiently and with good will you might be trying to do so—and we would have had reciprocal checks. This really would have snarled the whole thing up—but our job as politicians is to make life easier for people, not harder.
We all wanted to hit the date before the application of EES but we could not hit that date for ratification, so we included—I think at the suggestion of the Commission at the time in the negotiation—a provisional application clause in the arrangements. That is what has enabled us to see the treaty work its magic, if I may say so, on fluidity for people at the frontier from 15 July, with ratification due, I think, at the Strasbourg session of the Parliament on 14 or 15 December this year.
With regard to what we have seen in that period of provisional application, I think we are doing a good job in terms of how we deal with people entering via the airport and the port. Sometimes, when we have four or five aircraft arriving at once, some people experience a delay that is shorter than the delays that are being experienced at some other, larger European airports, but then our airport is small. As we look to make the arrangements for the final layout of what the airport will look like, we will hope to—in liaison with Spanish colleagues—add more EES booths so that at peak periods we will be able to deal with more EES enrolments by those who are not resident in Gibraltar or the European area.
On customs issues, in the early days we found that there were logistical traffic issues. Never let something as complex as a treaty get in the way of a regional fair that is going to be set up just where the lorries have to do their turnaround, which is going to cause a longer queue. The new procedures are also a little sticky, and we need to ensure that the best application of those new customs procedures is seen through and that we do not have different officials taking a different view on the European side of how the new procedures apply. We need a fixed procedure.
We were pleased to hear Paul confirm that, as we know, the working groups are in the process of being established so that the EU-UK working groups, which will involve largely Spanish and Gibraltarian presence, will be able to resolve not just what we have on the ground at a practical level but also perhaps new protocols, which will be the product of those committees, on the way that we will go forward in the bits that have been stickier.
I will give you a statistic. In the first couple of days, we have gone from about 250 to 300 trucks a day coming into Gibraltar to about 100 to 150 trucks coming in. A lot of that was the traffic problem we were having because of the fair and people getting used to the new systems. We are back up now to 250 to 300 trucks a day. Things are working. People are still getting used to the new systems. There are better ways of doing some things, and we will finesse those in the days, weeks and months ahead, but we are getting there and the fluidity is where it needs to be.
Lord Jackson of Peterborough: This is just a technical question, Chief Minister. Have you published guidance on the new residency regulations and how they will be interpreted?
Fabian Picardo: Yes, we have.
Lord Jackson of Peterborough: When were they published?
Fabian Picardo: I cannot tell you the date. I am happy to write to you with the date and the regulations.
Q25 Lord Tugendhat: Before I ask the question that I am down to ask, I just want to come back to the point about people crossing the frontiers. In the past, my recollection is that there were many British people who lived on the Costas who had their banking facilities in Gibraltar, their pensions were paid to an account at a British bank in Gibraltar, their mortgages were with British banks in Gibraltar and indeed there were citizens of some other European countries who also used the facilities of British branches in Gibraltar. I ask as a matter of interest: is that still the case to any great degree? If it is, I imagine that, inasmuch as it makes a difference, the treaty that we are talking about facilitates the arrangements of those people as well.
Fabian Picardo: That is no longer a discernible part of the business of Gibraltar. For example, I do not think there are any banking institutions in Gibraltar now that offer banking to non-residents. Most of the people who have property in the Costas around Gibraltar will have banking arrangements and mortgages with lending institutions in Spain, or perhaps in the UK, because after Brexit that became very difficult indeed. There are a few British institutions that now trade as British institutions in the EU, usually with a British name but the European branch or the European corporation that holds that name will be doing that banking business.
What we see coming across the frontier today are principally tourists who are arriving in the Spanish Costas and come to Gibraltar for a day or longer. We see people who live in the area who want to come to Gibraltar to shop for British produce, in so far as that British produce can still make it into the European Union after Brexit, and before the SPS agreement that we sincerely hope the UK will do as part of the reset negotiations—once again further delayed, I read today—but none of the demographic that you describe now stands out.
There are a lot of what we call expats—British people who reside in the Costas—who come to Gibraltar principally to shop, to see Gibraltar, to see a British bobby and, if they want, to stand by a red phone box, but they do not do their banking here. That is not a demographic any more.
Lord Tugendhat: We have covered a lot of ground. Is it your expectation that this agreement settles matters as far ahead as one can see, or will further agreements be necessary?
Fabian Picardo: On the question of fluidity and the relationship between the United Kingdom and the European Union in relation to Gibraltar, the issue is settled. It should be regarded as settled even by parties that are not presently in Government. I detect that there is going to be a lot of rhetoric on Gibraltar in an election year—in Spain, for example—but we will have to see whether that rhetoric leads to a change of approach if there is a change of Government.
Look, I would never tell you that it is not impossible for the issue to come back for relitigation in the future, but I think everybody is happy with the imperfect arrangements that have been done and that they continue to apply. They give business efficacy to the requirement of all of the relevant Governments and institutions to permit people to move fluidly from one territory to another, for all of the commercial and personal reasons that we have set out. The United Kingdom has reserved its position on sovereignty because it wanted to and we wanted to; we would have insisted that that is the case. So has Spain; nothing has changed on the sovereignty issue.
Of course, Gibraltar is not for one moment setting aside its fight for the recognition of its right to self-determination in Gibraltar and the United Kingdom—and in New York, where we are still on the list of non-self-governing territories. We need to come off of that list, which is something that is hotly disputed by Spain in New York. I might perhaps say that we have resolved the issue for Brussels, but we still have a lot to do in New York.
Lord Tugendhat: Thank you very much. I must say that it has been a great pleasure to listen to the clarity of your responses.
Q26 Lord Moynihan of Chelsea: Thank you so much, Chief Minister, for taking some of your precious time to come and talk with us. It has been very enlightening. I remember crossing La Línea in, I think, 1964. At the time, there was a threat of the border closing suddenly, and we managed to get into Gibraltar, but were then unsure whether we would be able to drive out. The problems that were present in 1964 have rumbled on a lot, so let us hope that you are right that this is going to be a very good settlement.
If I could offer a disclaimer to your earlier concerns about the things that I said, I doubt that there is anybody in this room who is not incredibly proud of Gibraltar’s past and current achievements. Obviously I cannot speak for everybody in the country, but I think that there is a real sense of a bond with and closeness to Gibraltar. Long may that continue.
However, the concerns that you were talking about earlier and reverted to just now were about sovereignty. The UK has always been very anxious to give Gibraltar as much sovereignty and freedom as is possible, within the context of its being a British Overseas Territory. You addressed that just now, and you heard a previous witness tell us that this deal means that Gibraltar will no longer be allowed to join the CPTPP in goods. Either we will need a carve-out in our negotiation on the CPTPP or we will have to exclude Gibraltar for goods.
We all agree that this deal is only about goods, not services, and that Gibraltar is a services economy. However, the economy of our country is growing at the moment only because of our ability to step outside a bunch of EU regulations that are throttling growth over there. Because we are avoiding them, we are getting growth over here in AI, tech and other similar areas. Will you, as Gibraltar, be controlled by the product parts of the AI Act, the product liability directive on goods and the Cyber Resilience Act, for example? There will probably be others. If so, coming back to sovereignty, if you have to take all these laws, would you look more like a British Overseas Territory or an EU overseas territory?
Fabian Picardo: Thank you for your long-standing interest in Gibraltar. I was not around in 1964—I only popped out in 1972, by which time the gates had been closed—but, although we may come to an area of disagreement between us in a moment, I do recognise the bond of friendship that unites us with all of the British people, however they may have voted in 2016. Our bonds go deeper than just membership, or no membership, of the European Union. That is the reality.
Will you allow me a quick flourish? When the gates came down and I was asked by Spanish journalists what we were going to do with the gates, I suggested that they might be taken to the cemetery where the Spanish dictator now lies and laid on his coffin. Given that he was so enamoured of them, we might make sure that he never comes out and does any damage again.
I want to be very clear about what we have done; I will try to explain it philosophically for a moment, and then I will come on to the detail. What we have looked at is the reality: Gibraltar is geographically, and therefore physically, attached to Europe, so the things that move physically, such as people and goods, need to be able to flow with Europe in a very fluid fashion. Note that, in the time in which I have been addressing you, I have never used the concept of free movement, because the concept of freedom of movement for people permits people the right of establishment. We have not done that deal with the EU. We have done a deal on only the fluidity of people, goods and other things that move metaphysically—that is to say, services outside the scope of the UK-EU treaty in relation to Gibraltar.
That brings me to your question on the CPTPP. We can now have all of the international trade agreements that the United Kingdom has extended to Gibraltar in services. We have very little interest in goods trade with the United States, the Pacific region, et cetera, because, first of all, Gibraltar is a very small market. We have never been involved in the exportation of goods—other than tobacco, perhaps, but we did not exactly cover ourselves in glory in that respect. What we want is to continue to be able to grow in the only thing you can grow in a geography of 2.5 square miles: services. So we can have the CPTPP, the Japan agreement and all of the other agreements—including the Morocco agreement, which is more relevant because it is our neighbour—extended to us in services.
We have never formed part of what you referred to in an earlier question to my colleague Lord Wood: British trade policy, so to speak. In fact, it might have made for a very different Gibraltar had we been included in British trade policy, but we were never considered, consulted or given a role in that respect, which is a pity. It would be good if we could go back 50 years and change that, but we cannot. I hope that that answers the question.
On AI and cyber, we are as free an agent as the United Kingdom, unless—this is important; you rightly point to it—there is a murky, grey area in the interface between those two things, goods and the WTO’s concept of servicification, which is about how services can accept goods. However, in pure services, which is where our business is, we are a free agent, along with the United Kingdom, and we can do more of what we do very successfully.
Lord Moynihan of Chelsea: You just said that, for example, you cannot buy or trade any genetically modified food that comes from the UK—say, one that has health benefits—and you cannot engage in any research or activity in that area. So you are precluded from all sorts of things that the UK can do.
Fabian Picardo: Let me put it this way. I would answer that glass-half-full presentation like this: we have chosen to continue to grow in the services area, making the compromise of not having in future any of the research that we have never had in respect of genetically modified organisms—because we have nowhere to grow anything in Gibraltar—and we have chosen to make those compromises in order to be able to continue to grow in the areas where we can grow. Since 2016, we have not had the ability to bring to Gibraltar any fresh produce that is not able to enter the EU under the current arrangements for the UK, but I hope that the United Kingdom Government’s reset with the European Union will reach a safe harbour and include an SPS agreement so that anything produced in the UK will be able to come into Gibraltar—although it is very likely that, in reaching those SPS arrangements, the United Kingdom may also make the same compromises that we have made in the context of these treaty arrangements.
Lord Moynihan of Chelsea: Yes; that would be tragic for our economy.
The Chair: On that note, Chief Minister, thank you very much indeed for sparing us your time today. It has been most helpful and will, I do not doubt, be an important contribution to the House’s consideration of the treaty. I also pass my appreciation on to the team at your end for bearing with the various technological challenges that we have had in setting up this link, but I am delighted that it has been successful. Thank you again for joining us. With that, I draw the public session to a close.
Fabian Picardo: May I say something before you close?
The Chair: Go ahead.
Fabian Picardo: I simply want to thank you—both this configuration and earlier configurations of the committee—for your interest in Gibraltar and say goodbye because I will be retiring from my office in the coming months. I imagine that, barring any last-minute urgency, this is the last time I will appear before your committee, so thank you for all your considerations when I have appeared before you in the past decade and a half.
The Chair: We wish you a happy, productive and busy retirement. Thank you very much.
