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Madam Deputy Speaker (Sylvia Heal): Order.

Mr. Straw: Her Majesty's Government believe that a settlement along those lines would offer Gibraltar and its people a great prize. It would mean greater freedom for the people of Gibraltar to make decisions affecting their lives, and to live, work and travel without constraints anywhere in the region and beyond. It would mean greater prosperity and more jobs—from new opportunities to trade freely in the European Union, from the investment that would come if the dispute were settled, and with the prospect of millions of pounds of EU funding to help. It would mean a better quality of life, with improved telephone and transport services, a cleaner and healthier environment, a better infrastructure and faster communications. And it would mean a long-term, settled future: it would mean preserving Gibraltar's links with Britain, while developing a new and successful relationship with Spain.

I profoundly believe that such a future is in the interests of the people of Gibraltar; but, as I have stressed many times, it is not in the end a decision for me or even for the House. The decision rests with the people of Gibraltar. If we and Spain can, after taking stock, reach agreement on the kind of framework that I have outlined, and if thereafter all parties can build on those principles to produce a comprehensive settlement, the whole package will be put to the people of Gibraltar in a referendum and they will decide.

We had hoped to reach agreement with Spain by the summer, but I have also made clear many times that no deal is better than a bad deal. There have been distinct "red lines" throughout this process.

We and Spain have not yet resolved all differences. In respect of the duration of co-sovereignty, we must have a permanent settlement. Co-sovereignty cannot be just a stepping stone to full Spanish sovereignty, however long

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delayed. I know and understand that Spain has a long-standing historical aspiration to regain full sovereignty one day, but any agreement between us and Spain must be permanent. Gibraltar must have certainty. As for the British military facilities, we have made it clear that our current arrangements should continue.

Unless we and Spain can resolve the outstanding issues, there will plainly be no agreement. Our aim, however, remains to overcome them if we can. We must remember that Spain too has interests. It too has politics; it too has history. The departing Spanish Foreign Minister, Josep Pique, has conducted the negotiations throughout with honesty, dignity and integrity, and I pay tribute to him. I am confident that his successor, Ana de Palacio, will wish to continue in the same spirit.

I hope that the people of Gibraltar will be able to reflect over the summer on the progress that we and Spain have made to date. I am glad to say that there is already some new thinking in Gibraltar. I have been struck by the readiness of some people there to think constructively about the future. Gibraltar's Chief Minister, Mr. Peter Caruana, has himself long been committed to dialogue with Spain, and I have always wanted him in the talks alongside me, and free to represent Gibraltar. That offer from the United Kingdom and Spain still stands, under the long-standing "two flags, three voices" formula. I believe that this and the phased process that I have described provide both the safety and the dignity that Mr. Caruana seeks for his participation, so that Gibraltar's voice can be heard in the negotiations as well as outside.

After 12 months of negotiations, we are now closer than ever before to overcoming 300 years of fraught history and securing a satisfactory outcome to a process established 19 years ago by the Conservative Government of whom the right hon. Member for Devizes (Mr. Ancram), the shadow Foreign Secretary, was a member. The chance of a better future for Gibraltar—more stable, more secure and more prosperous—is too important to let slip. We shall continue to seek an agreement, but it must be one that is acceptable to the people of Gibraltar in a referendum. That is the basis on which I commend our policy to the House.

Mr. Michael Ancram (Devizes): The statement is a disgrace and a sell-out. We understand the reasons for the postponement of the talks in Madrid today. Indeed, we formally welcome the new Foreign Minister, Ana de Palacio, and hope that she will be more sensitive to the concerns of the people of Gibraltar than her predecessor was.

I thank the Foreign Secretary for giving me 20 minutes' sight of what is a detailed statement with deep implications. For the moment, I can do no more than respond in general terms. We will wish to study it in great detail before we respond more fully. It would have been better to hold it over until next week and to give us more notice of it, even if the Minister for Europe had to make the statement. It would have been better to make the statement before a fuller House than the rather small House that is always here on a Friday. I do not like ascribing conspiratorial motives to the Foreign Secretary but I suspect that it is not an accident that he chose to make the statement on a Friday.

The key to the Foreign Secretary's statement is his admission that the British and Spanish Governments are in broad agreement to "share sovereignty over Gibraltar".

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That is what we have feared has long been being cooked up in the dishonourable talks that have taken place over these past months behind closed doors. Today's statement is yet another shabby step in what has been from the start a shabby and dishonourable process.

Despite clear evidence to the contrary, the Foreign Secretary clearly gave the Spanish Government the impression at the outset that he could deliver a sell-out on sovereignty. Right from the start, the Minister for Europe sought to bully and to intimidate the Government and people of Gibraltar. He mocked the size of their population. He accused them of being stuck in the past. He threatened that they would be left behind if they did not cave in to the Government's determination to betray them. That hectoring tone continued in the statement today.

When will the Foreign Secretary and his colleagues realise that this issue is not about our relations with Spain? It is about the democratic rights of the people of Gibraltar, who have no representation in this House and rightly look to the British Government to represent their best interests. Does he not understand that democracy is about consent freely and democratically given and not about consent sought under duress, threat and deliberate financial pressure?

Does the Foreign Secretary not understand that his broad agreement to share sovereignty is a betrayal of the people of Gibraltar? Does he really not understand after his visit to the Rock the true feeling of the people of Gibraltar whose interests he is supposed to represent? Does he not understand that sovereignty shared is sovereignty surrendered, that the people of Gibraltar will not vote to surrender their British sovereignty, and that they will be right not to do so?

Why cannot the Foreign Secretary accept that the process that he has outlined today is doomed? Why will he not learn the lessons from Northern Ireland and guarantee that in future such talks will be genuinely three-sided, with the Government of Gibraltar properly represented and able to make their own case?

Why will the Foreign Secretary not accept that agreements on the sovereignty of Gibraltar, broad or otherwise, should never be concluded with Spain without the consent of the people of Gibraltar, freely and democratically given, before rather than after such agreement has been reached? Will he explain why he is attempting to divide the sovereignty over the military interests in Gibraltar from the sovereignty of Gibraltar as a whole? Will he assure us that in future the full agenda of talks, and the limits within which they are taking place, will be fully and openly disclosed?

I call on the Foreign Secretary to suspend the current round of talks, and to set about reconstituting them on the basis of an agenda that excludes sovereignty, upon which agreement cannot be reached, and deals instead with those issues relating to the normalisation of relations between Spain and Gibraltar, upon which agreement might be reached.

Does the Foreign Secretary not accept that these talks have been a humiliating episode for his Government? He has achieved the impossible. He has upset the Spaniards, he has infuriated the people of Gibraltar, he has shamed himself and his Government, and at the same time he has nothing to show for it. Will he now stop playing with

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Gibraltar's sovereignty, call off the talks and start repaying the loyalty of the people of Gibraltar to Britain by demonstrating a little loyalty to them in return?

Mr. Straw: The right hon. Gentleman begins by making what I can only describe as an absurd complaint—that I as Secretary of State have taken the first opportunity to come to the House to make a statement. I was available to make a statement today because I was not in Madrid. I am sure that, had I not used this opportunity and had my right hon. Friend the Minister for Europe made a statement quite late in the afternoon next week in what will be a very busy week in the House, the right hon. Gentleman would have made the opposite complaint—that I was not here to make a statement because I was in the far east.

I listened very carefully to what the right hon. Gentleman said. I remind him that he was a member of the Government who began the process of which I am giving a staging-post statement.

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