IN JULY 2016, 96% OF THE GIBRALTARIAN ELECTORATE voted to remain in the EU. One of the main reasons was the border between Spain and Gibraltar and the need for it to remain open. The border brings 11 million visitors annually into Gibraltar. On a daily basis over 10,000 Spanish workers and 2,000 other European workers commute into Gibraltar, about 40% of the workforce. Many are union members. Gibraltar plays a significant role in providing employment for the surrounding hinterland - around 25% of the GDP for the Campo Area, in one of the poorest parts of Spain.
Prior to the Brexit vote, concerns over the border had already become prominent. The experience of many workers and tourists in crossing the border has been of continuous delays. Whether by policy or otherwise, the perception has been that the right wing Spanish government slows down the transit deliberately as a political act. This led, in April 2014, to the creation of a campaign called the Cross Frontier Group. It was composed of trade unions and employer organisations from both Gibraltar, and Spain. They raised concerns about the border in London, Spain, and the EU. In response the EU intervened, which was welcomed in Gibraltar.
However, there is no doubt that the Brexit vote has brought an added level of political and economic uncertainty. There are some clear economic and political reasons why Remain was strong, not just that recent intervention on the question of the border. Other factors include access to EU funds, the dependency of the Gibraltarian economy on its relationship between the UK and the EU and the services sector that is dependent on that relationship, such as insurance - 25% of UK car insurance providers operate via Gibraltar - and gaming and financial services.
The provision of financial services in the economy was a policy meant to replace the losses in revenue from both the closure of the Royal Naval Dockyard and the subsequent job losses in the Ministry of Defence, which is no longer the main employer on the Rock. In effect the continued relationship with the UK and the City of London has allowed this approach to the economy to flourish, like in many other British overseas territories - a switch from the military to the financial as the mainstay of the economy.
The switch in the economy was definitely a challenge with the loss of good, well-paid, unionised jobs. This is particularly significant to understand given that Gibraltar has no natural resources, limited land mass and no manufacturing. But it does have an airport, a harbour and is a tourist hotspot. So choices are limited in what economic model to adopt.
Spain has also proposed recently to remove Gibraltar’s low tax regime. While many on the left will question the legitimacy of an economy that offers corporates an opportunity to pay a lower overall share of profits, few can argue that Gibraltar’s management of its economy has been anything other than spectacular. In effect Gibraltar has played the role of a peripheral economy well, and attracted enough companies to pay into the public coffers.
Moreover, the government of Gibraltar has prioritised social spending. The revenue from the main economic sectors, via income tax, national insurance and corporation tax, has gone to pay for the public services, including a 14.5% rise in public sector wages since 2012, renationalisation of the telecoms company, a freeze on water and electricity charges, free bus services to residents and student grants. This revenue has even allowed the current Socialist government leader, Fabian Picardo, to declare "No to austerity", and no to cuts in EU workers’ rights on this year's May Day. The union movement is concerned about the political and economic uncertainties brought about by the Brexit vote and the forthcoming negotiations. It is particularly concerned about the impact on the working class in Gibraltar, who by a clear majority did not vote to leave.
The threats are real - are there going to be potential losses of EU funding? Losses in revenue to the government of Gibraltar if companies take flight? If a ‘hard Brexit’ looms, what happens to the 40% of the workforce that cross the border daily? Finally, what impact will it have on jobs and living standards?
In the 2017 General Election, only Labour included a manifesto commitment to “protect Gibraltar’s economy and ensure that its government can continue to create jobs and prosperity in the years to come”.