If the UK leaves the EU, it will probably have to start propping up the Gibraltar economy with grants.
Gibraltar is not an island – yet. But if the UK votes to leave the European Union in June, the rock may well, in many senses, become one. The debate may be raging in mainland Britain but in Gibraltar there is a strong consensus. Leaving the EU would be disastrous for the local economy and way of life.
In 1969, Spanish dictator General Franco tried to ruin Gibraltar’s economy by imposing an economic blockade. He closed the land frontier from Gibraltar to Spain and prohibited direct sea and air transit from the Rock to the mainland in the hope that Gibraltar could be pressured into ceding sovereignty to Spain. The attempt was dogged and determined. And the blockade continued after Franco’s death, when Spain transitioned to a democracy.
Only in 1985 were links between Gibraltar and Spain fully restored – but not because Spain relinquished its claim to Gibraltar – rather, the UK was using its political leverage to block Spain from joining the European Economic Community until it dropped the embargo.
When the UK joined the EU, Gibraltar came with it. Gibraltarians vote in European elections as part of the south-west England European constituency. And 23,000 Gibraltarians will vote in the June referendum which will decide on the UK’s continued EU membership.
While the UK is a member of the European Union, Spain is forced to concede an open and functioning frontier with Gibraltar. But if the UK left the EU, it would not necessarily continue to do so. In fact, Spanish politicians have already raised the possibility that the frontier could be closed once more. Without membership of the EU, there would be very little that Britain could do about it.
Severing communications with Spain once more would be disastrous for the Gibraltar economy and, for that matter, for the surrounding Spanish hinterland. The Rock is visited daily by 7,000 migrant workers who live in the Campo de Gibraltar in Spain and commute over the frontier to work. Supplies of food come to Gibraltar from Spain and, likewise, Gibraltarians visit Spain to buy things that would be more expensive at home.
Tourism and shipping represent around 30% of Gibraltar’s economy. Much of the workforce in these industries commutes in from Spain; closure of the frontier would severely disrupt this essential industry. Likewise, off-shore gaming and financial services companies contribute significantly to the Gibraltar economy and, just as there are fears as to the effect of a Brexit upon the City of London, Gibraltar’s economy could be severely affected by the arduous process of the UK having to bilaterally agree new trade agreements with key markets.
If the UK leaves the EU, it will probably have to start propping up the Gibraltar economy with grants. This is what happened when the frontier was closed. Between 1970 and 1973, the British government gave Gibraltar £4m. Between 1978 and 1981, that total rose to £14m.
Today, money might solve some problems but it could not hope to solve a crisis of labour shortage. In the 1970s, many women in Gibraltar did not work, providing a reserve pool of labour. But today employment rates among women are high and overall there is very little unemployment. And in any case, Gibraltarians do not want to survive on handouts from the UK government.
All three of the Rock’s political parties have joined together in a Gibraltar Stronger in Europe campaign. The main trade unions and representatives of business on the Rock, such as the Gibraltar Chamber of Commerce, have also come out in support of remaining.
Whether the united front in Gibraltar can make a difference to the overall decision on referendum day is anyone’s guess, but with polls currently very close, 23,000 votes aren’t to be sniffed at.
Naturally, the government of Gibraltar has found friends within the UK government who are willing to add weight to the pro-European stance of Gibraltarians. The foreign secretary, Phillip Hammond, made a recent surprise visit to remind voters of the historic ties between Gibraltar and the Conservative Party.
Traditionally, Gibraltarians have looked to the Conservative Party to safeguard their interests against Spanish claims over sovereignty. Upon discovering that Hammond’s private jet was en route from London to Gibraltar, for example, the Spanish government forced his plane to take a route over Portugal, bypassing Spanish airspace (although it says this is a routine procedure).
The trouble is, many of Gibraltar’s traditional allies within the Conservative Party are pro-Brexit.
Andrew Rosindell, a member of the All Party Parliamentary Group for Gibraltar has been trying to square Gibraltar’s interests with the Brexit campaign, arguing that political integration with Britain and a Gibraltar MP in Westminster would compensate for lack of representation within the EU. But there have been confrontations between the government of Gibraltar and pro-Brexit members of the Conservative Party. There were dramatic scenes when Fabian Picardo, the chief minister of Gibraltar, offended the pro-Brexit chair of the parliamentary group by declaring that true friends of Gibraltar would be campaigning to remain in the EU.
If Britain votes to remain, Gibraltar’s politicians will be very relieved, but they may have some relationships to repair. Some key allies in London are both pro-Gibraltar and pro-Brexit and they may feel rather alienated by the strident Stronger in Europe campaign.
If the UK does leave the European Union, on the other hand, one can imagine a new Conservative Party leader in Boris Johnson making Churchillian speeches in defence of Gibraltar. But I cannot help but feel that Gibraltar, like Scotland, may look to redefine its constitutional relationship with the UK in the event of Brexit.
Chris Grocott is Lecturer in Management and Economic History at the University of Leicester