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Editorial Comment
Finding a way to stay
The early feeling of despair at the thought of life without access to the EU after the Brexit referendum is understandable; the EU member countries are where many Gibraltar firms seek to expand their businesses – being the gateway to Europe through
‘passporting’. But the reality is that nearly all the territory’s financial services
current business is UK-facing and it’s a surprise to many that local firms are able to access Britain only by virtue of the EU’s requirement for free cross border flows of goods and services. Gibraltar outside of the EU must negotiate a whole raft of bi-lateral agreements with the UK; no wonder Fabian Picardo, Gibraltar’s Chief Minister, wanted written confirmation that he would be actively involved in those EU trade discussions, not simply consulted.
Internet gaming companies by contrast that form a top tier world hub in Gibraltar already generally have to negotiate separate licensing and regulatory arrangements to gain access to many individual EU countries – including the UK, (an aspect of which, Gibraltar eGaming firms coincidentally are challenging in the European Court of Justice). So Brexit has little impact there.
Most worrying of course, is the loss of protection under freedom of movement of people that the EU supports. Over 12,000 people now daily cross the Spanish border to work in Gibraltar; they account for half of the total workforce. Spain has long laid claim to The Rock that has been in British hands for more than 350 years having been gifted by a thankful Spanish King Philip V.
In recent years, the conservative Spanish government has repeatedly
and unsuccessfully sought joint-Sovereignty through pressure, in part by dis- rupting the frontier flow. Two years ago, cars and pedestrians queued for hours at the border, but with the intervention of the European Commission, things generally have improved. Even now though, the Chamber of Commerce has complained about high levels of arbitrary customs checks out of all proportion to any risk, resulting in long delays to EU custom-sealed lorries carrying food and goods into Gibraltar.
The vulnerability for Gibraltar is obvious. Added to which, 60% of the 1⁄2m people arriving at Gibraltar International Airport are accessing holidays in Spain – many thousands more arrive by foot, car or coach. Making that process difficult, will only serve to discourage tourists generally, to the dis-benefit of visiting business people and locals alike.
The thought of Nicola Sturgeon, Scotland’s First Minister, and Fabian Picardo cozying up to plot how they can subvert the will of the UK and remain in the EU rather than leave as the referendum requires, is not easy to digest.
Both jurisdictions voted to stay – in the case of The Rock, overwhelmingly so – and both can see great benefits in remaining attached to the EU, but proposing effectively to split up the UK surely cannot be right. Particularly for Gibraltar, which has steadfastly proclaimed its British heritage and dependence for protecting ownership of The Rock, then to seek separate treatment is like riding with the hounds and running with the hare. Exploring all of the possibilities must be right, of course, but.....
Nevertheless, what is encouraging is the extent of positiveness being displayed by Gibraltar businesses, and frequently by government, confident that a workable solution in a post-Brexit situation will in the end be found. It’s just a case of when – and how! Ray Spencer
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Contents
News p6
Spending cut back and higher “rainy day” funds to guard against Brexit effect
Post Brexit? p10
Just a week, but what a week
Budget p12
Budget 2016 – tax measures
Aug/Sept/Oct 2016
Volume 22/ Number 3
Women in Business p14
Bidding for a better opportunity and equality
Funds p18
Brexit and Gibraltar’s Funds and Investments Industries
Energy p20
Sea, sun and wind to meet most power needs within five years
Property p22
Steady demand keeps Gibraltar property market buoyant after Brexit
Business p24
Don’t Just Build It, BOT It!
Business round up p29