Gibraltar and Spain plan last minute Brexit side-deal to keep free movement

British overseas territory set to face disruption despite voting 95 per cent for Remain

Vehicles queue at the border of Gibraltar (AFP via Getty Images)

Spain and Gibraltar are planning a last-minute bilateral Brexit deal aimed at making Brexit less damaging for their citizens when the transition period ends on 31 Decemb

The proposed agreement, which would not directly address the vexed question of sovereignty, would aim to preserve free movement across the Gibraltan border, the Financial Times reports.

Arancha González, Spain’s foreign minister, told the newspaper that an agreement could make the coming changes "simpler" and "less costly".

Gibraltar and neighbouring areas of Spain are set to face serious disruption to their current settlement when the UK and its territories leave the single market and customs union at end of the year.

Brexit is very unpopular in the British overseas territory, where thousands of people cross the border with Spain every day for work.

All political parties and every politician in the Gibraltar parliament supported a remain vote, and 95.9 per cent of the territory's population voted to stay in the referendum.

Despite this, Gibraltar had to leave the EU with the rest of the UK. The territory's government has since said it wants to join the Schengen area and customs union to ease its economic relationship with Spain.

Fabian Picardo told the FT the deal would have to be "sovereignty neutral and positive for all sides".

The issue of Gibraltar has been a recurring sub-plot of mainline Brexit talks - never dominating the narrative, but rearing its head from time to time.

In 2018 Spanish prime minister Pedro Sanchez threatened to sink Theresa May's Brexit deal over the issue, but he was won around with concessions that punted the issue into the long grass.

One of those concessions was for the EU negotiating mandate to make clear that Gibraltar is not covered by the future EU-UK trade agreement being worked out between London and Brussels.

A UK government spokesperson said it remained "committed to finding a solution that supports Gibraltar, its people, and its economy".

"The UK and government of Gibraltar continue technical talks with Spain to deliver the shared priority of continued wellbeing and prosperity of people in the region.”