Select Committee on the European Union Uncorrected oral evidence: Progress of UK-EU Future Relationship Negotiations

Thursday 25 June 2020

3 pm

Watch the meeting

Members present: The Earl of Kinnoull (The Chair); Baroness Couttie; Baroness Donaghy; Lord Faulkner of Worcester; Baroness Hamwee; Lord Kerr of Kinlochard; Lord Lamont of Lerwick; Lord Oates; Baroness Primarolo; Lord Ricketts; Lord Sharkey; Lord Wood of Anfield.

Evidence Session No. 1 Virtual Proceeding Questions 1 - 13

Witness

I: Hon QC, Chief Minister of .

USE OF THE TRANSCRIPT

1. This is an uncorrected transcript of evidence taken in public and webcast on www.parliamentlive.tv.

2. Any public use of, or reference to, the contents should make clear that neither Members nor witnesses have had the opportunity to correct the record. If in doubt as to the propriety of using the transcript, please contact the Clerk of the Committee.

3. Members and witnesses are asked to send corrections to the Clerk of the Committee within 14 days of receipt. 1

Examination of witness

Hon Fabian Picardo QC.

Q1 The Chair: Good afternoon, Fabian, and welcome back. For those watching in the UK, Fabian Picardo QC MP is the Chief Minister of Gibraltar. We are grateful that you are exposing yourself yet again to a grilling from us. It is enormously helpful, particularly at this time. This is a public evidence session of the European Union Committee in the House of Lords, held in the House of Lords virtual system. As such, a transcript will be taken and we will send that to you. We would be grateful if you could check it in due course and make sure that there are no errors in that transcript. I thought I should explain the format, which is a bit different from the usual one. We have prepared some questions and we have a running order of members of the Committee, who will each have up to five minutes to ask you questions. We will then move on and I will call the next member, and we will go through like that. At the end, if there is still some time, there will be a sort of injury time list of questions, where members have two minutes to ask additional questions. Given that time is short, I will start. To bring things to what has been going on for the last 100 days, I wondered if you could tell us how Gibraltar has responded to the Covid-19 outbreak and how you would characterise the co-operation you have had from both the Spanish and UK authorities. Fabian Picardo: My Lords, good afternoon. Thank you so much for taking a continued interest in Gibraltar. I see this much less as a grilling and much more as an opportunity to share with members of the upper Chamber the experiences of the , in the context of both the ongoing negotiations as to the future relationship between Gibraltar, the United Kingdom and the rest of the European Union, and, indeed, the times in which we live, the way the virus has affected Gibraltar and how we have got around it. It is not just those two, but how they have interplayed with each other.

I must emphasise that I am welcoming you to Gibraltar because, for the first time, I am giving evidence to the upper Chamber while sitting in my own office. It used to be a chapel in its day. You have introduced me to a splendid new experience. You have made my office feel a little like Hogwarts. I have walked through the usual door and ended up in the Palace of Westminster. It is, indeed, a pleasure to give you this hybrid welcome to my usual place of work.

To reflect a little on what has happened in Gibraltar in the past three and a half months and how we have dealt with the issue of coronavirus, we have done so as a community, very much in unity. The Government have followed public health advice assiduously and worked with our equivalent of the NHS, the Gibraltar Health Authority, not just to ensure that we were dealing with the issues manifesting in the infection but also in getting ready to deal with more serious cases that might have required 2

hospitalisation. As a result, we upgraded the amount of beds that had ventilated capacity in our ICU by over 500% and we opened a Nightingale ward in a sports centre in Gibraltar, which served as an additional ward to our St Bernard’s Hospital.

We have been blessed in being able to tackle the coronavirus as a real community, with a team spirit that has enabled us to face down the first round of the arrival of coronavirus on our shores. The death toll in Gibraltar has been zero. The number of persons infected in Gibraltar today, for the ninth consecutive day, is zero. We had a maximum number of persons infected that ascended to 176, if the statistic does not fail me, but it may have been 184. None of them was serious. We had some people in our wards and some in our intensive care unit. Nobody with coronavirus required any serious intervention or ventilation as a result of coronavirus.

The key to our success was that we locked down early and in stages. When I came back from seeing the Prime Minister in mid-March, on the aircraft and having received public health advice as we began our flight back to Gibraltar, the Deputy Chief Minister and I were able to consult the Attorney-General. Both of them are with me. I was also flying back with the Financial Secretary that day. I was able to consult the Attorney- General on the proportionality of steps that we intended to take on landing, with the support of the Cabinet. That included closing down restaurants, cafeterias and bars in Gibraltar. We did that quickly. We then confined our over-70s immediately because we understood that they were most at risk.

A week later, we took the next step. In keeping with our approach of including everyone in our decision-making, and of consultation with our parliamentary Opposition, the leader of the Opposition attended Cabinet as we made those decisions and shared with us his views. We shut down the and locked down the whole population of Gibraltar.

As a civil libertarian, that was a difficult step for me and for all members of my Cabinet to take, but it was absolutely the right decision. It led us to a difficult period, which will mean that we need strong opportunity for recovery, because the economic effects will be in Gibraltar as they have been around the world. But we can say that we have won the first round against Covid-19 and we are ready for when she comes round again.

The Chair: How would you characterise the co-operation that you have had with the Spanish and UK authorities?

Fabian Picardo: Thank you for reminding me of that limb of your question. In fact, one of the things that I discussed with the Prime Minister in London was how we might receive support from the United Kingdom in the procurement of PPE, which I know has been a vexed issue in the UK itself, and how the United Kingdom might assist us with issues relating to ventilator capacity. Also of importance in Gibraltar was that we 3

worked alongside the MoD on a MACA request, which the Foreign Secretary and the Defence Secretary agreed to.

We had support from the United Kingdom on procurement and military assistance to the civilian authorities, and an ongoing dialogue with the UK authorities, and with the NHS and Public Health England at a professional level, over the procurement of all the necessary materials for swabbing and testing, et cetera. In particular, we liaised with an NHS trust that includes a consultant epidemiologist, Nick Cortes, a Gibraltarian working in the United Kingdom. That has been a very fluid process.

I established a platinum command when I declared a major incident, which included the Deputy Chief Minister, the Minister for Civil Contingencies and our civil contingencies head, as well as the Commander British Forces in Gibraltar and the , so that we could cover all aspects of our separate responsibilities, in case we had issues relating to internal security as a result of what we feared might be the worst consequences of Covid-19 sweeping through Gibraltar. That was a very strong relationship between Gibraltar and the United Kingdom.

At the same time, we found that this difficult moment for mankind brought the politics of the Spain-Gibraltar issue to a new pass, at a moment when we received immediate communication from the Spanish Ministry of the Interior, which has responsibility for the frontier crossing. I spoke directly to the Spanish Minister of the Interior, Señor Fernando Grande-Marlaska, about the lockdown not preventing workers coming to do key jobs in Gibraltar from crossing the frontier. Indeed, the Foreign Secretary of Spain, Ms Arancha González Laya, also spoke to me about issues relating to cross-frontier movement and how they would be managed.

We enjoyed a strong relationship with the Spanish public health authorities. They enabled the movement of swabs from individuals suspected to have Covid from Gibraltar to Spanish laboratories, which assisted us in taking the load before we were able to do our own testing and verification, and continued movement of health supplies to Gibraltar, despite the Spanish state of alarm preventing the movement of health supplies other than in keeping with the directions of the Government.

A moment that, in the past, might have resulted in Spain using this key political opportunity to try to strangle Gibraltar at the frontier turned out not to be anything of the sort. There was fluid communication between Gibraltar and the Spanish authorities to enable those people who had to cross the frontier, in keeping with the respective lockdown rules of Gibraltar and Spain, to continue doing so. I am very pleased and gratified that the relationship between Gibraltar and Spain has matured to that extent, and just in time too.

The Chair: That is very good to hear.

Q2 Lord Wood of Anfield: It is very nice to see you in Gibraltar. I want to 4

ask you a general question about preparations for the end of the transition. Could you maybe give us an overview of what preparations Gibraltar has been undertaking to get ready for 31 December this year when the transition ends? Fabian Picardo: As you can imagine, in Gibraltar we have been running two workstreams in parallel as we deal with the negotiation of the future relationship, in the same way as we did in the run-up to the withdrawal agreement; that is to say, the work that has to be done in the event that there is no agreement and what we might call a hard-Brexit moment at the end of the process, and the work to negotiate a new relationship so that we do not have such a difficult, hard-Brexit moment.

Under the auspices of the Deputy Chief Minister, who you will see over my right shoulder, Gibraltar has done a lot of work to prepare for a hard Brexit when we thought it might have come either at the end of October 2019, at the end of last year or on 31 January. We are as ready as we were then to deal with the end of the transition without a deal at the end of this year, or such later period if the transition were to be extended, although I understand that the position of Her Majesty’s Government is not to seek such an extension.

At the same time, we are putting all our energy and enthusiasm into the process of negotiation of that future relationship, so we avoid that. Businesses in Gibraltar, however, have been ensuring that they are lean, fit and prepared for a hard Brexit, if I may call it that, in the same way as the Government were at the end of October last year, the end of the year, the end of January and now, if necessary, the end of December this year, or so soon thereafter as we might find that we leave the European Union without a deal, if that were to materialise.

Gibraltar businesses are ready. They have looked at their supply chains and they were ready to deal with the hard-Brexit consequences, if they came earlier. The Government of Gibraltar are ready for such an eventuality, although I hope it will not materialise. I believe it would be bad for Britain, bad for Gibraltar and bad for the European Union.

Lord Wood of Anfield: That leads on naturally to Lord Lamont’s question.

Q3 Lord Lamont of Lerwick: My question has also been partly answered, in that you commented on business. The point I was going to raise was the extent to which Covid-19 has made the task of business so much more difficult. That is what a lot of businesses in the UK claim. Fabian Picardo: I can imagine that it is impossible to suggest the contrary. The Government of Gibraltar used their powers under the Civil Contingencies Act—we have a written constitution and statutory powers in this respect—much in the same way as the United Kingdom authorities used their powers, to forcibly shut down businesses. We tried to put our businesses into a state almost of hibernation, so that they would be in an induced coma, ready to come out and deal with such business as might be available at the end of the process. We introduced something called 5

the BEAT Covid measures: the business and employee assistance terms. In any business where the Government had shut down operations, we paid it the sum of the salaries of the employees it had, calculated on the basis of the Gibraltar minimum wage, without deduction for PAYE or social insurance.

Where businesses were tenants of the Government, we waived their rents and rates. We brought into effect other measures that affected all businesses, such as on business rates, PAYE deferrals and social insurance deferrals. We used fiscal measures to ensure that landlords of commercial entities understood that they should charge, at most, half the rent. To do so, we proposed to surcharge rents for that period by 150% where landlords had not reduced the rents to 50% of what they were. However, I understand that a landlord is a business too and, therefore, we needed to help landlords in some way. We have been in close dialogue with landholding businesses about how we can assist them. Our lending institutions have granted them mortgage holidays in respect of lendings they might have over properties, et cetera.

I tell you all that because that is the picture into which businesses now emerge as the Government unlock the Rock, to ensure that they can start business from a slightly better position than they might have been in if the Government had shut them down but given them none of that assistance. We have brought into law measures similar to those in place in the United Kingdom in respect of insolvency, so that businesses are not made insolvent if the issues giving rise to their solvency problem result from coronavirus. We shut down the ability to put a business into liquidation. We also shut down the ability to dismiss employees, for a simple reason: the Government would be paying for those employees and there should be no excuse for anybody losing their job. In that way, every worker in our economy, whether resident in Gibraltar or outside Gibraltar, could be assured that they had enough to feed their families and put food on the table. There was not much more going on. You could not go on holiday and you did not need to pay your mortgage, but you needed to ensure that you could put food on your table and pay for groceries, which you could buy at the supermarkets that remained open throughout. In those circumstances, this is now going to be, no doubt, a very difficult trading environment, but not an impossible trading environment, as it would have been if we had not provided that assistance. As you know, Gibraltar has a large influx of tourists, and a lot of our business is based not just on financial services, insurance and online gaming, but on the physical presence on the Rock of tourists, who arrive in droves, particularly in the months between May and September. Those months this year are not going to produce large influxes of tourists. Indeed, if we had very large influxes of tourists, we might be very concerned about whether that might be an opportunity for Covid to start spreading among our community again. However, we will have some tourists, and some people who might 6

otherwise have gone away are staying in Gibraltar and shopping in Gibraltar. We are running a campaign saying, “Buy local; stay local”, so that people understand that it is better for the Gibraltar economy if those of us who earn locally also spend locally in this period. I therefore hope that, with the further measures that I will announce early next week for the period beyond this first quarter since the pandemic hit, we will provide an environment for business to continue to thrive on the Rock, and for the prosperity that we have enjoyed to suffer the blip that the whole world is going to suffer, but for us to soon see business confidence rise and our businesses once again becoming freestanding, profitable entities. Lord Lamont of Lerwick: Are you still worried about the fact that the transition period ends on 31 December? You once declared that one does not need to be a magician to read your mind, which was interpreted, I gather, as meaning that you wanted an extension, but you are plainly not going to get that. Is that still bothering you? Presumably, there is still the possibility of a run-in period in a free trade agreement as well.

Fabian Picardo: It does not take a mind-reader to work out what this witness thinks about the need not just for Gibraltar but, indeed, the United Kingdom and the European Union to transition seamlessly from the terms of membership that have been established for some time to the future relationship. I fully appreciate that Her Majesty’s Government want to ensure that minds are concentrated and negotiations are ongoing on the basis that they end on 31 December at the very latest, or, indeed, earlier, to be ratified by then.

Let us see what happens. Lord Lamont, I know, will have much more experience of what European negotiating is like, and how things might change at the last minute, than I ever have had or will have. But it makes sense to concentrate everybody’s minds on a deadline of the end of this year—we do not want this to be a death by a thousand cuts for any of the parties—or for there not to be a cliff-edge, especially if we have an agreement within reach. I sincerely hope that, with the ingenuity of the Prime Minister and the commitment of the Europeans, we can get to an agreement in such time that no debate is needed about whether a hard, cliff-edge Brexit, of the sort that we do not want to see inflicted on Gibraltar, the United Kingdom or the European Union, can be avoided. I am sure it can.

Q4 Lord Faulkner of Worcester: Good afternoon, Chief Minister. It is a pleasure to see you and your colleagues there in Gibraltar. Following on from Lord Lamont’s question, which referred to a free trade area, how confident are you that Gibraltar will be covered by the terms of a United Kingdom-EU free trade area, bearing in mind that the EU position has been that the involvement of Gibraltar is subject to the agreement of the Spanish Government? Fabian Picardo: The situation has been set out for the United Kingdom and Gibraltar since Tim Barrow responded to the position provided by the European Union in November 2018 with a very clear statement that the 7

United Kingdom would approach the negotiation of the future relationship as one where it represented the United Kingdom itself and the whole British family of nations, including Gibraltar. That was a response by Sir Tim Barrow to the minute statement filed by the European Commission in the context of the position taken by Spain.

We need to understand that this is not new. Spain has sought to use such veto powers as it might have, throughout its period of membership of the European Union, alongside and in parallel with the United Kingdom, in any matter relating to Gibraltar. We saw that manifest itself initially in the guidelines that the European Union set out in Malta in 2017, when the Article 50 notice was given by Prime Minister May. That also envisaged that Gibraltar would not be included in a withdrawal agreement, and so on. In good faith, we worked with the European Union and one of its member states, Spain, to ensure that the interests of all citizens of the European Union, including British citizens resident in Gibraltar and European citizens of all nationalities working in Gibraltar and living in Spain, were provided for in that withdrawal agreement. Indeed, we went even further and made other provisions under a protocol to that withdrawal agreement.

There is a concordat entered into between Her Majesty’s Government of Great Britain and Northern Ireland and Her Majesty’s Government of Gibraltar, which sets out what you might call the equivalent of a political declaration between HMG and HMGoG about how we are going to handle the future relationship negotiation. The concordat deals with how the protocol and the MoUs were to be executed by the United Kingdom for Gibraltar in almost a quasi-reverse entrustment, which sets out that, because the United Kingdom is responsible for Gibraltar’s external relations, it will enter into the MoUs and protocol negotiated by Gibraltar with the European Union and, in some instances, with Spain.

That says that, in relation to future relations, “It is the shared aim and objective of the Government of Gibraltar and the United Kingdom Government, within the context of the wider negotiations on future relations with the European Union, and taking into account Gibraltar’s deep existing relationship with the EU provided for by Article 355(3) of the Treaty on the Functioning of the European Union, to secure a future relationship for Gibraltar which appropriately reflects its particular geographic, socioeconomic and constitutional characteristics and needs.

“Given this specific situation, particular regard will be had to the need to take into account Gibraltar’s specific interests with regard to the mobility of persons and in the services economy.

“Alongside that future relationship with the EU, the United Kingdom Government and the Government of Gibraltar also reaffirm their intention to ensure that the valued and historic links between the UK and Gibraltar grow, deepen and endure”.

I am not going to take the position that Michel Barnier has taken in respect of the United Kingdom’s commitment to the political declaration 8

that it entered into with the EU. I am going to tell you that the United Kingdom has entirely respected and acted in keeping with that element of the concordat entered into between us, and that we are fully apprised of all aspects of the negotiation of the future. We are working with Taskforce Europe, with David Frost’s team and with the Prime Minister’s wider team of Ministers on all issues that relate to Gibraltar, to ensure that Gibraltar is very much a part of the United Kingdom’s negotiation of the future relationship with the European Union.

We are also talking to our nearest neighbour, Spain, about issues that arise in the context of our continued bilateral relationship, which is the access through which we reach Europe physically. Gibraltar is, as you know, on the southernmost tip of the Iberian peninsula. Spain is our way, physically, geographically and, these days—let us make no bones about it—politically to the heart of the European Union. Those discussions are ongoing and very positive.

You can see that, in the period of the withdrawal agreement, we successfully negotiated a number of MoUs between Gibraltar and Spain. Those are now in action, and the specialised committee, which I am sure we will talk about in a moment or two, has been overseeing the work of those committees. The reason I mention that now is because the work of those committees has started to build confidence between Gibraltar and Spain in a way that perhaps we have not seen before. That will also enthuse and energise the negotiations and discussions between the United Kingdom, the European Union, Gibraltar and Spain about the future relationship.

The Chair: Unfortunately, time is marching on and we have quite a lot of questions. I am very keen that we get through the full menu because it is important to do that. I wondered, therefore, if you would keep your understandable enthusiasm and answers as short as possible. I know that poor old Lord Faulkner had one or two additional questions for you, but I am going to ask him whether he would mind going into injury time with those, and I ask Baroness Couttie to take up the running from here.

Q5 Baroness Couttie: What conversations have you had with Members of the European Parliament other than Spain? What perspective have they expressed on the application of the FTA to Gibraltar? Fabian Picardo: The work we have done has not been limited to speaking to one member state; we have ensured that we have spoken to all member states. The attitude that we have perceived at a bilateral level in our discussions with other member states has been an entirely positive one. At the same time, it is true to say that member states are very much sticking together in the context of this negotiation. We would expect them to. They learned the lesson that we sometimes try to divide and conquer, and they are not going to fall for that one.

There is a positive approach to Gibraltar’s inclusion in the future trading arrangements that are provided for, if the negotiation is successful. No one is seeking to exclude Gibraltar specifically. Indeed, there is an 9

understanding that it would not be in anyone’s interests in the European Union for the southernmost two and a half square miles of the continent of Europe to somehow be ostracised from any method of trading co- operation with the rest of the continental bloc. That would not be in the interests of any European and no European Government are seriously pursuing that, although they may be setting that position up in the context of the negotiation.

Baroness Couttie: What will the consequences be for Gibraltar if the EU and the UK fail to reach agreement on the FTA? Are there any advantages to Gibraltar if we fail to reach agreement?

Fabian Picardo: It is not necessary to consider failure as an option at this stage. I am very much geared towards delivering success for Gibraltar in the context of these negotiations, but I have no compunction in asserting that Gibraltar will thrive, whether or not we enjoy the benefit of a trading agreement with the European Union. How we will thrive and whether we will thrive more or less is a moot point. You might guess from the fact that I am putting all my energy into trying to achieve an agreement that I believe that there is more to be had for all sides by achieving an agreement.

Q6 Lord Kerr of Kinlochard: Chief Minister, you were talking about the specialised committee or the Article 165 committee, which I understand had its first meeting four weeks ago. Is it going to be useful? You were represented by your Attorney-General. I do not know whether or not the Kingdom of Spain was represented. What role is it going to play? Fabian Picardo: Thank you very much indeed for that question, Lord Kerr. With the consent of my Lord Chair, I will give you an overview of the work of that committee and how it goes into other aspects of the work we are doing. The specialised committee is important in ensuring that all sides comply with their obligations, in providing an objective standard that we will all need to ensure we comply with, and in giving us an opportunity to talk to each other in the context of the withdrawal agreement. That happens now only in the context of the MoUs and the specialised committee.

That meeting went well. The Spanish Government were represented as part of the EU delegation, as were a number of other Governments, including Germany, Italy and Cyprus. As you know, that committee is looking at the MoUs and performance under the MoUs. All parties were very pleased with the work done by each of us in respect of the MoUs. There was nothing to recriminate and everything to see us encouraged by the work we are each doing. For example, the first meeting of the MoU committees, which we were able to report to the specialised committee, happened in Algeciras, on the other side of the . The next meeting, which is due shortly, will happen in Gibraltar. All these things were reported to the specialised committee. The atmosphere of co- operation was convivial and positive. 10

I can report to you today that, this very afternoon, the Government of Gibraltar have published a legal notice in our gazette, which brings up the price of tobacco to the 32% agreed differential in the context of the MoU on tobacco. The Government of Gibraltar gave a unilateral commitment to hit that differential, which I set out in a letter to the Prime Minister. There is very good reason to look at the work that we are doing in the specialised committee and use it as a springboard of confidence for the negotiation that is ongoing and for the future relationship.

Lord Kerr of Kinlochard: Are the MoU committees the same as the co- ordination committees mentioned in the protocol?

Fabian Picardo: The specialised committee is above the MoU committees. The co-ordination committee comes below the specialised committee and is the committee that co-ordinates the work of the MoU committees.

Q7 Baroness Hamwee: That is the second time you have used the word “confident”, which is good to hear. Can I continue with regard to the specialised committee and ask about the UK Government’s engagement with you? When is the next meeting going to be? Fabian Picardo: If you are asking me about the next meeting between the Government of Gibraltar and the United Kingdom, that work is ongoing. It has not even stopped as a result of the pandemic. We have been able to harness the facilities that videoconferencing now provides to continue working seamlessly on a secure basis and to set out the parameters of the negotiation as we see it developing. Officials in Gibraltar and in the United Kingdom have been working non-stop through the period of the pandemic. At a political level, our communication has really not stopped at all. That process is very positive. The latest virtual encounter took place 24 hours ago and another meeting will be had in the next 24 hours, as we plan how we will roll out our position in negotiations.

Baroness Hamwee: What about the next meeting of the specialised committee?

Fabian Picardo: I am afraid to tell you that the next meeting of the specialised committee is not yet provided for. It will come after the next round of meetings of the MoU committees. I believe it is not going to happen until the autumn, but I stand to be corrected in that respect.

Baroness Hamwee: That is interesting, given that we all have to get on with putting things in place, so that there is a bit of time between the final agreement and the end of the year. You have quite a hierarchy of committees. Do you have ideas about the structure for co-operation between Gibraltar, the UK and the EU after the end of 2020? Let me wrap up another question with that: not just ideas about structure but subjects you would like to see the specialised committee address as we continue.

Fabian Picardo: To deal with that point, the hierarchy of the committees you refer to is the structure of the withdrawal agreement, as we moved 11

away from the formal structure of membership of the European Union. As we go forward, on 31 December 2020, absent agreement between us and the European Union on the future relationship, all the MoUs will expire. The only rights that will continue in perpetuity will be the rights of citizens attained under the period of operation of the treaty, which I know the Committee is fully apprised and aware of. The specialised committee will, therefore, continue in existence only in respect of those enduring parts of the withdrawal agreement—that is to say, the citizens’ rights aspects—and all its strands and tributaries, such as matters relating to social security, will endure until the last citizen with enduring rights has passed away, et cetera.

However, as you know and as you have now picked up, given that I have talked about confidence in the future, I am an optimist. I believe that we will very likely be able to enter into positive new arrangements going forward. For Gibraltar in particular, those need to touch and concern the area of mobility, the area of access to markets in the European Union, if that is agreed by others and for others, and even, indeed, the possibility of considering whether any aspect of the movement of goods should be liberalised in some way going forward, in a manner that has not been the case since 1972, when we joined under the original accession agreement.

Q8 Lord Ricketts: Chief Minister, good afternoon. I wanted to take you exactly to the area that you were beginning to map out: some of the specific issues covered in the protocol that was part of the withdrawal agreement last autumn, and the co-ordination committees between the UK and Spain that that established. The protocol covers a formidable array of very important issues for Gibraltar: citizens’ rights, air transport, financial issues, the environment, fishing, police and customs. I was going to share the workload with my colleague Baroness Primarolo and start by asking you precisely about citizens’ rights and how that is working out, particularly in the area of frontier workers, who we know are so important for the economy of Gibraltar. I would then like to come back to police and security co-operation after that. Fabian Picardo: Indeed, this was, for the Government of Gibraltar, one of the key concerns as we negotiated the arrangements for withdrawal: that the human beings behind the politics, the people who had taken the benefit of the arrangements that had seen our membership of the European Union be settled for a number of generations, did not now find themselves in difficulty, and that that had to be reciprocal. We have to understand that a number of Gibraltarian British citizens take the benefit of the treaties in the purchase of property and living in Spain, and a very large number of European citizens—the rump of them Spanish—cross the frontier every day to come and work in Gibraltar. It is not just frontier workers but citizens generally who enjoy rights that are preserved under the withdrawal agreement.

The memorandum on citizens’ rights does not create any new rights; all it does is focus the rights that are provided for generally between the United Kingdom and the European Union in the withdrawal agreement in the manner in which those rights might manifest themselves in the 12

context of Gibraltar, Spain and our area of the world. That has been working very well in terms of issues relating to social security and understanding the rights of workers in both directions. A handful of workers live in Gibraltar and work in Spain, and their rights are provided for, as is the ability of Gibraltarian British citizens to continue to reside in second homes in Spain and enjoy the rights that the withdrawal agreement gives them. All sides have been very pleased with how we have co-operated in the operation of that part of the withdrawal agreement under the provisions of the MoU on citizens’ rights.

Lord Ricketts: Specifically on the important area of security and justice co-operation, what is the impact likely to be on Gibraltar if the UK and the EU can reach agreement in those areas, but particularly if they cannot between now and the end of this year? That is looking, I must say, increasingly likely. You have spoken in the past about how important the European arrest warrant is to prevent Gibraltar becoming some sort of safe haven. Could you perhaps give us your assessment of what the impact on Gibraltar would be if we found ourselves without the current level of access to the EU instruments?

Fabian Picardo: Thank you for that question, because it is an important one. It is not too different to the question posed by the former Prime Minister, the right honourable Theresa May, to the current Prime Minister, , three or four weeks ago during Prime Minister’s Question Time, because the issues are alive as much for the European Union and the United Kingdom as they are for Gibraltar and the European Union.

My key concern is that we have seen so much progress delivered under the Schengen Information System and the European arrest warrant, et cetera, on co-operation in this key area of security. Apart from Covid-19, we all know that we live in a world where security is key. The issue of security is fundamental to business as much as it is to us personally. I do not want to see a breakdown of those relationships. In particular, as you rightly indicate, I do not want any European criminal to think that, if they get themselves to the United Kingdom or to Gibraltar, they are safe from European justice.

That is very much a reciprocal point: I would not want any British criminal, whether UK British or Gibraltar British, to think that they can get away from UK British justice or Gibraltarian British justice by moving across the frontier into the European Union. That is good only for the criminals and for the mafias. We need to do everything possible to avoid creating a gap between the two or 28 systems of law enforcement that there may be, so that they do not find a way to wriggle away from justice and the long arm of the law.

However, we are not dealing just with criminal law. We are also dealing with civil justice and matters that affect ordinary people, such as family breakdown, the enforcement of maintenance orders in respect of matrimonial disputes, the different sides of jurisdictional divides and the settlement of other civil disputes, which might be economic and commercial. 13

Q9 Baroness Primarolo: Good afternoon, Chief Minister. It is good to see you. Can I drill down into some specific areas with regard to discussions? Could you explain to us where you believe the negotiations are with regard to the impact of Brexit on the status and operation of the airport in Gibraltar? Fabian Picardo: It is a pleasure to see you too. The last time we met was in Gibraltar during the course of National Day celebrations some years ago, so it is, indeed, a pleasure to have a chance to see you and to deal with these issues with you once again.

The issue of Gibraltar Airport hit the headlines during the course of the negotiations of the withdrawal agreement, as you will recall. Indeed, the Spanish Foreign Minister, Señor Dastis, was particularly keen to highlight that issue during some aspects of the negotiation on the withdrawal agreement. In fact, Gibraltar Airport did not feature in the context of the protocol or the arrangements in the withdrawal agreement, other than for a provision setting out that nothing would change in respect of the application of European law to Gibraltar Airport in the period of transition. A fat lot of good that clause did, because the dispute was whether European law should apply to Gibraltar Airport at the time that we left and throughout our membership of the European Union, because of the Spanish veto since 1988 on the application of air liberalisation measures and the air services packages to Gibraltar Airport.

As we go forward, my view is that, if we can do a highly ambitious arrangement in respect of mobility that, in effect, sees Gibraltar share the freedom of physical movement of persons—the mobility across the frontier—in a way that is akin to the established mechanisms in what you might call the European common travel area, which is not dissimilar to the operation of the United Kingdom, Irish and common travel area, the issue of Gibraltar Airport might be resolved in a way that has not been possible before.

I am ambitious about that and I have said so on a number of occasions. I do not know what the negotiation will result in, but Gibraltar will do everything possible to achieve a highly successful result in the context of that aspect of the negotiation, which is the mobility aspect. That is the key to unlocking future prosperity for Gibraltar and for the region around it. That is one of the factors that unlock what I call the rainbow of opportunities that can touch all parts of the shores of the Bay of Gibraltar.

Baroness Primarolo: In your comments, you touched on the hierarchy of the committees. I wanted to focus specifically on the co-ordination committees provided for in the protocol on Gibraltar and to ask whether they have begun their work but, importantly, whether you can explain to us what direct operational involvement the Government of Gibraltar have had in those committees?

Fabian Picardo: The work of those committees has commenced and the Government of Gibraltar are principally represented there by the 14

Attorney-General of Gibraltar. As many of you will know, he is an expert in European Union law and was Gibraltar’s representative in Brussels before he was the chief legal adviser to the Government of Gibraltar and then Attorney-General. The Government of Gibraltar, under the concordat entered into between the Government of Gibraltar and the Government of the United Kingdom, have carriage of the work that is the constitutional responsibility of the Government of Gibraltar, in respect of the work and the reporting of those committees.

As I told you, in the top committee, which is the specialised committee, Gibraltar is very much represented, although the parties are the United Kingdom and the European Union, but the United Kingdom, for the purposes of that specialised committee, is the member state United Kingdom, which included Gibraltar, and the representation of Gibraltar is assured in that specialised committee. The Government of Gibraltar’s Attorney-General, Michael Llamas, is the person to co-ordinate and represent Gibraltar in that committee.

Baroness Primarolo: Chief Minister, you seem to be quietly confident that the hierarchy of committees ensures that the views of Gibraltar in these negotiations are clearly heard and acted upon. Whether it is environmental protection, financial interests or fiscal matters, as well as the important issue of the airport, you are confident that your views are being heard, taken note of and acted on?

Fabian Picardo: Yes, absolutely, in every respect, in every instance and in every regard. If I felt for one moment that they were not, I would be raising merry hell. Given that I have not, you can rest assured that I am satisfied that we are fully and entirely apprised of all aspects of the negotiations that might be relevant to Gibraltar. We are fully involved in dealing with those aspects and, in many instances, representing Gibraltar for ourselves in the context of that negotiation, as should be the case.

Baroness Primarolo: Thank you very much for your time, Chief Minister. That is very helpful.

Q10 Lord Sharkey: Good afternoon, Chief Minister. Could you provide us with a brief update on developments following the March 2018 agreement with the EU and UK? Perhaps you could start with market access for financial services and online gaming firms. Fabian Picardo: The position has been ventilated in public quite often by the statements of Ministers from the United Kingdom and by me and other Ministers in and from Gibraltar. We established a strong commitment from the United Kingdom that Gibraltar would continue to have all the access that we have enjoyed to date under the provisions of the single market arrangements between us and the rest of the European Union, as well as between us and the United Kingdom.

The 2018 agreements you refer to establish a transitional arrangement and longer-term arrangements. Indeed, there were many doubting voices in Gibraltar that said in 2018 that we might have achieved something for 15

the interim but we had not yet achieved anything in the long run. I am very pleased to tell you that, earlier this week, the Chancellor himself, in the House of Commons, set out the Government’s position in respect of the Finance Bill to be introduced, which would continue to provide the access that you refer to for financial services firms from Gibraltar.

This was the culmination of a number of statements relating to the introduction of that Bill since the Queen’s Speeches last year. I say that in the plural because, as we know, there were two in the autumn, both of which included reference in the notes from the Treasury to the Finance Bill being inclusive of the provisions relating to Gibraltar and its continued ability to access the regulated market in financial services in the United Kingdom. That has continued to be the case during the course of this year, as that Bill is starting its process through the legislative agenda.

Lord Sharkey: Is there progress on online gaming firms?

Fabian Picardo: The work continues between the respective regulatory authorities to ensure that that is also entirely seamless. I am satisfied that that is the case, in relation to both financial services and online gaming.

Lord Sharkey: Could I also ask about any developments on university tuition fees?

Fabian Picardo: You will know that, for some years now, Gibraltar has been able to benefit from the payment of university tuition fees at UK rates. As part of the European Union, European Union citizens pay UK rates of tuition fees to United Kingdom universities. That is now agreed in respect of English universities. We are almost there in relation to Welsh, Scottish and Northern Irish institutions. The bulk of our students travelling to the United Kingdom for further education go to England. We are progressing very positively with Scotland, Wales and Northern Ireland in respect of the small number of students from Gibraltar who attend institutions there. I say “small number” but it is meaningful; in particular, the universities of Cardiff and Edinburgh are very popular with . Those arrangements are reciprocal and we will honour those in respect of tuition fees charged by the to students from any nation of the United Kingdom.

Q11 Baroness Donaghy: Good afternoon, Chief Minister. Referring back to the important bilateral agreement of 2018, would you like to expand on what progress has been made in the fields of health, transport, the environment and fishing? Fabian Picardo: In respect of health in particular, one of the key factors for Gibraltar is the continued relationship with the United Kingdom in the referral of patients from Gibraltar who cannot receive tertiary care in Gibraltar because we just do not have the ability to provide that type of specialised care. That has been working very well. There is an additional strand, also confirmed in correspondence, which is the procurement of pharmaceuticals for the Gibraltar Health Authority, where, in our view, 16

the Gibraltar Health Authority is disadvantaged by size. We now have agreement with the Department of Health in the United Kingdom that we can procure our pharmaceuticals with the NHS buying power going forward. Both of those are very positive developments and I am very pleased indeed that we were able to finalise those arrangements. They were finalised by my former Minister for Health, , and my current Minister for Health, , respectively. They are both quite historic milestones in cementing the relationship between the United Kingdom and Gibraltar.

On matters relating to transport, the environment and fishing, the key issue for us is that we remain out of European fisheries negotiations. That is the position we have taken since 1972 and we wanted to protect Gibraltar waters from commercial fishing. Artisanal fishing sometimes goes on in breach of the laws of Gibraltar, and the law enforcement agencies of Gibraltar have to deal with that as they consider appropriate to ensure compliance with our laws. On matters relating to the environment generally, the work we are doing with the United Kingdom is very positive, particularly in accessing bodies beyond the European Union, and particularly United Nations entities in the context of the protection of the environment. The was only the second in the world to declare a climate emergency after Westminster.

Transport is a difficult area. It is an important part of the ambition that we set out for the resolution of the future relationship with the European Union, in particular when it comes to road haulage and aviation et cetera. It is vexed, but that will not stop us trying to resolve it.

The Chair: Thank you very much. We have one remaining question in regular time and, in injury time, Lord Faulkner will come back, so I am afraid we are going to overshoot by nearly 10 minutes. I hope you can do that, Chief Minister, because it would be very valuable to us.

Fabian Picardo: My Lord, I am a Liverpool fan and I have got used to the best bits coming in injury time.

The Chair: At least Lord Wood would approve of that.

Lord Wood of Anfield: Let us talk about that for a while. That is a good idea.

Baroness Hamwee: It is not for Manchester City fans.

Q12 Lord Oates: Thank you, Chief Minister. I shall avoid the difficult subject of football allegiances. Are you satisfied with your engagement with the UK Government in relation to the issues that we have just been discussing? Do you have any particular thoughts on how it might be improved? Fabian Picardo: I am, indeed, satisfied with the relationship between Gibraltar and the United Kingdom. At the government level, the work we are doing has delivered success in the context of the withdrawal agreement and I have every confidence it will deliver success in the 17

context of the future relationship between Gibraltar, the United Kingdom and the European Union. Could it be improved? We will all be clear that, if it was not for the infernal pestilence that has been visited upon us these past few months, we would have been doing a lot more together. However, as I told you, we have managed to continue that work with the assistance of technology in as seamless a way as possible. All commercial relationships, let alone political ones, have been upset by this but everyone has, in good faith, tried to work through. I am very satisfied with the tenor, tone and management of the relationship between our two Governments and it would be churlish of me to pretend otherwise.

Lord Oates: Do you feel that the UK-Gibraltar Joint Ministerial Council is functioning effectively? Can you tell us when it last met?

Fabian Picardo: The last meeting of the JMC was during my last visit to London, which now seems like an age ago. It was on 11, 12 or perhaps 13 March. Wendy Morton, now Minister for Europe, very ably chaired that meeting alongside me. It is a great opportunity for the work that is being done between the two Governments and particularly between officials to surface, and to have the opportunity to present that work to the public, and for the public to see the progress we have made in the context of issues that we have each set out that we want to progress.

Meetings have also been attended by, for example, John Glen for the Treasury, and other ministries, when the work we are doing at an intergovernmental level involves other Whitehall departments. They have also seen the attendance of other Ministers from my own Government when we have wanted to finalise agreements that have been worked on between officials in the context of that moment of summit between the two Governments. I am satisfied with the work that the JMC is doing. It would probably have already met again, if it were not for this period. There is no need for it to meet in short order but I am sure it will be back in the medium term, by which I mean in the next few months.

The Chair: We move to injury time, and Lord Faulkner.

Q13 Lord Faulkner of Worcester: Let us call it time added on, shall we? Can I ask you a bit more about your recent meeting with the Spanish Government on 11 June? Can you tell us what you talked about and when you expect to meet them again? I have another question that follows on from what Lord Oates was talking about, and maybe the Chair will allow me to ask that in a second. Fabian Picardo: It is important to highlight that the meeting we held on the 11th was positive. It was not just cordial. There is a meeting of minds and the product of the work we do will enhance the opportunity for a UK- EU agreement and not detract from it. It is not prudent for me to get into any detail at this stage because none of that has yet matured. Like good wine, good cheese and good politicians, it is better that we mature these things before we serve them up to the general public. It is important that we observe the discretion of negotiations at this stage. If there had been difficult issues, I would be flagging them up now. 18

There is a positive in the fact that I am saying that the engagement is cordial and convivial, and it is moving in the direction of what I hope will be agreement. I said already quite publicly that I continued to believe, at the beginning of this year, as I had at the beginning of the process of discussion, once the Article 50 letter had been sent, that a mobility agreement was hugely important for both sides of the frontier, and for Gibraltar, the UK, the European Union and Spain. González Laya, the Spanish Foreign Minister, replied positively to that in a leading interview in the Financial Times on 14 February. You can see that there is, therefore, a positive ongoing dynamic in those discussions. We pinch ourselves and cynically prepare ourselves to be let down—we have been here before—but we will continue to put all our good will, energy and enthusiasm into producing agreement at the end of this process without compromising on any of the issues that are fundamental to us.

Lord Faulkner of Worcester: Thank you for that very diplomatic answer, if I may say so. My other question relates to the fact that Gibraltar has lost its place in the European Parliament with the removal of the British delegation from that Parliament. Have you any ambitions to obtain representation in the House of Commons, possibly by an attachment to a parliamentary constituency, as you had with south-west England?

Fabian Picardo: I must tell you that it was very painful for Gibraltar to lose representation in the European Parliament. The person to my right, the Deputy Chief Minister, and I campaigned for years for Gibraltar to have its own seat in the European Parliament, or at least to be represented there. The person to my left, the Attorney-General, led the case when he was in private practice that saw a young Gibraltarian defeat Her Majesty’s Government in the European Court of Human Rights in Strasbourg. They then had to enfranchise us because the European Court had found that the European Parliament was a Parliament for Gibraltar and, therefore, we must be represented where those decisions were made.

It was very painful and I certainly believe that there would be benefit to Gibraltar in the future if matters relating to representation were considered very carefully in consultation with the Government of Gibraltar. Those matters raise constitutional issues, and the representation of the people of Gibraltar must be done in a way that in no way erodes the constitutional acquis between Gibraltar and the United Kingdom, but those issues can also give rise to as many concerns as opportunities. I put it to you that the West Lothian question is complicated enough without us having to consider the Rock and whether we might vote on some matters but not others, given the state of devolution that the constitution of Gibraltar provides to the Government of Gibraltar, which is self-government in every respect, except external relations, internal security and defence.

Compare that to the devolution settlement with the nations of the United Kingdom and the position taken in practice for MPs of those nations when 19

it comes to votes in the House of Commons on matters that are the responsibility of the devolved Governments. Imagine how complex and vexed it would be for a Gibraltar MP when the Government of Gibraltar are making all decisions about government in Gibraltar except those relating to external relations, security or defence.

The Chair: Chief Minister, thank you very much indeed for your time and the great frankness and very informative way in which you have answered our questions. For the benefit of those watching, although we have public evidence sessions with the Chief Minister every now and then, we see him and his colleagues in the interim anyway. We see particularly his London representative, who is a most effective person in helping us understand the Gibraltar issue. We thank you for that. Indeed, we look forward to seeing you again, because this is a marathon, as far as we are concerned, not a sprint. With that, the meeting is over, but you might have a final word to say.

Fabian Picardo: Thank you very much, my Lords. I sincerely appreciate your continued interest in Gibraltar, as you rightly say, not just in the context of formal evidence sessions but throughout the work of the Committee. On behalf of the Government and people of Gibraltar, I convey to you our gratitude. I will be making my way back to Platform Nine and Three-Quarters and out of Hogwarts now.

The Chair: Thank you very much indeed.