How Gibraltar could stop Theresa May’s Brexit agreement in its tracks

The risk is that the withdrawal agreement over Gibraltar will give cheer to the Brexiteers over the Irish border. If Spain can seek to change the terms of the withdrawal agreement, then why not the UK?

Yesterday, the Spanish government made further mockery of the idea that Brexit had enabled us to “take back control”. Despite the suggestion that the EU27 were united over the withdrawal agreement, the Spanish government stated that it will not agree to the draft deal without clarity over Gibraltar. The Spanish would like the Rock to be treated as a bilateral issue to be negotiated between Madrid and London, rather than being included in a future UK-EU trade deal.

The UK’s sovereignty over Gibraltar was formally enshrined in the Treaty of Utrecht in 1713 but Spain has always claimed sovereignty over it in the same way that Argentina has over the Falklands.

The potential derailing of the withdrawal agreement can hardly come as a great shock to May or the Brexit ideologues in her party. Gibraltar voted 96 per cent to remain in the EU. Its citizens were fully aware of how Spain might use Brexit as a way of driving a wedge in order to reopen discussions over the Rock. The response of some of our Eurosceptic politicians has played into the hands of the Spanish government. Lord Howard last year compared the Spanish government’s attitude to Gibraltar to the Argentine junta in the 1980s and suggested that we might even go to war with Spain, a Nato ally, over the matter. A typical distraction tactic of Brexiteers that I have previously written about.

The Gibraltar question barely featured in the referendum unlike the Irish border question. But the issues are very similar. How to maintain close economic and security ties between Gibraltar and Spain after Brexit. More than 13,000 Spanish citizens cross daily into Gibraltar to work. The draft withdrawal agreement protects their ability to move freely in and out of Gibraltar post-Brexit and to enjoy the same protections against discrimination on the grounds of nationality that they currently enjoy.

Spain also wants and needs cooperation in matters of fighting organised crime. Cigarettes are 40 per cent cheaper in Gibraltar than they are in Spain, which inevitably increases smuggling. Gibraltar also has much lower corporate tax rates than Spain – the Spanish head of customs described it as “a bad boyfriend” rather than a friendly neighbour for that reason.

Spain’s worries over Gibraltar are surely no different to the worries of the EU as to how the UK might end up post-Brexit. A tax haven, with increased scope for money laundering and smuggling.

The bigger risk is that if Spain seeks to alter the withdrawal agreement over Gibraltar this will give cheer to the Brexiteers over the Irish border. If Spain can seek to change the terms of the withdrawal agreement, then why not the UK?

However, the issue could end up torpedoing the entire withdrawal agreement. If this happens then MPs will be faced with two choices – no deal or a People’s Vote. There is no majority in the House of Commons for no deal. If the whole Brexit project crashes because of a piece of land that the UK took control of hundreds of years ago it would be the ultimate irony.