Select Committee on Foreign Affairs Minutes of Evidence


Examination of Witness (Questions 208-219)

HON. PETER CARUANA QC

5 MARCH 2008

  Q208  Chairman: Good morning, Chief Minister. We are pleased to see you. Will you introduce your colleagues before we begin?

  Peter Caruana: On my right is Richard Armstrong, my senior principal private secretary. John Reyes, on my left, is one of my private secretaries.

  Q209  Chairman: As you know, we are carrying out an inquiry on the Overseas Territories and we thought that it was important to have evidence on the record from Gibraltar. Committee members visited Gibraltar last year, so there has been a recent visit. Obviously, that was some months ago so it will be useful for us to have an update.

  I want to ask you about the progress on the Cordoba agreement. Before I come to that, are you satisfied with the recent meetings of the trilateral forum and the outcome of those?

  Peter Caruana: Yes, it is important to see the trilateral process as the political architecture or structure of dialogue and the Cordoba agreements as simply the first fruits of that. Committee Members will know about this because many of them—indeed, the Committee collectively—were instrumental in assisting us to fight for the terms that we eventually obtained in the trilateral forum: that Gibraltar should have its own voice, that it should be there on an equal basis and that it should be free from agreements imposed on it against its wishes.

  All three of those terms were secured and are explicit in the Chevening agreement of December 2005, which set up the terms and conditions of the trilateral forum. My Government have been advocating that process of dialogue since 1996. We were therefore overjoyed when we eventually secured it and put the unacceptable aspects of bilateralism between London and Madrid concerning our affairs behind us.

  The Cordoba agreements were a bold political investment by all three Governments because of the new way of handling the political relations and the political issue between Gibraltar and Spain. The UK lubricated the process and contributed quite a lot of money to one element of it, namely, the pensions agreement. The Governments of Gibraltar and Spain were also reasonably bold by the standards of what was acceptable to their various electorates at that time on some of the other issues, such as the airport agreement, the frontier issue and the telephones issue.

  All three Governments contributed an important measure to make possible the Cordoba agreements, which in one broad brush stroke removed from the table three or four of the most emblematic, representative manifestations of the difficulties of the previous 30 years. Of course, the fundamental difference is not gone.

  Q210  Chairman: We will come on to the details and some of the specific points in a moment. Before I bring in my colleagues, may I ask how the agreement and the trilateral forum are perceived generally within the House of Assembly? Is this just the position of your Government, or is there broad consensus and support for what is happening?

  Peter Caruana: In small places, and Gibraltar is no exception, consensual government is not easy, as you witnessed on interviewing the Leader of the Opposition not long ago. The Government lead and try to secure as much support as possible from opposition parties, but the support that matters is among the electorate in the country. The Government cannot go too far from that. The Government have to lead. If they want to do so, they must be willing to put some distance between themselves and public opinion, otherwise they are not leading. However, there must not be too much distance because then we would not be leading for very long.

  The Cordoba agreements have been welcomed overwhelmingly by the people of Gibraltar. Even many supporters of the opposition, while not voting for us simply because we made the Cordoba agreements, would nevertheless privately acknowledge—and indeed have privately acknowledged—that the Cordoba agreements and the trilateral process have been hugely successful not just for Gibraltar, but for the general dynamics of our relations with our neighbour.

  Q211  Mr. Horam: Chief Minister, one of the specific aspects of the Cordoba agreement is that you can now use Spanish airspace. As one who once experienced a rather dodgy take-off from Gibraltar myself, is that working satisfactorily? Is it safer and better now?

  Peter Caruana: Yes, it is working better. Discriminatory air restrictions are no longer in operation. Aircraft flying in over the bay now take a much wider arc and fly much closer to Algeciras. There is a proposal, in the context of the airport agreement, that aircraft should fly straight in, from above Algeciras and that area, on what is called a straight-in approach, but that is subject to technical study and environmental assessment.

  Q212  Mr. Horam: What is the point of that?

  Peter Caruana: The point of that is that you would avoid the L-shape altogether as you came in through the bay. You would just descend from over the other side of the bay.

  There is much misunderstanding about the airport agreement. It is not an agreement about shared control or jurisdiction over the airport. The airport remains an exclusively British sovereign territory. The agreement says that it remains under the exclusive jurisdiction and control of the UK and Gibraltar authorities. The management of all governmental, authoritative and statutory functions of the terminal remain exclusively in the hands of the Gibraltar Government.

  Q213  Mr. Horam: What about immigration, for example?

  Peter Caruana: That remains exclusively in the hands of the Gibraltar Government as well. Some concessions have been made to Spain, of a non-political kind, in order to make the airport more convenient, but without any loss of jurisdictional, governmental authority or control on the part of Gibraltar and the UK over such issues. For example, passengers entering the terminal via its entrance adjacent to the Spanish frontier will be treated the moment that they step across the frontier line straight into the terminal building as air-side passengers in transit. They will not, as a matter of administrative concession by the Gibraltar Government, be subjected to immigration control on entering Gibraltar, simply because they are walking 30 yards into the airport. That is an administrative concession and the agreement says that the Gibraltar Government, if circumstances require, can remove that and revert to controls.

  Then there are passengers flying to and from Spanish destinations—for example, a flight from Gibraltar to Madrid. Madrid is inside Schengen, Gibraltar is outside the Schengen frontier chapters, as is the UK. We have agreed to do something there because, importantly, when the aircraft arrives in Madrid, the passengers will have mixed—those who entered the aircraft from Gibraltar and those who originated in Spain. We have been able to get around all passengers, including the Spanish ones, having to be readmitted into Schengen by doing what you do here now at St. Pancras—it used to be at Waterloo—on Eurostar. Advance Schengen entry clearance is given in Gibraltar by Spanish officials who are not physically in Gibraltar. The passenger is in Gibraltar—I will explain the architecture in a moment, which is interesting—but the Spanish official is not. That is unlike the French and Belgian immigration officials, who give advance Schengen entry clearance to you here at St. Pancras station—they are actually situated in British sovereign territory. That is not the case in Gibraltar airport. The Spanish officials will be sitting on their side of the frontier line. The corridor runs parallel to the frontier line, so the passenger will always be on the Gibraltar side and the Spanish official always on the Spanish side. It is an extraordinary piece of architecture, but there it is.

  That is what we have done, but there is absolutely no question—I think you may have been left with the wrong impression a few weeks ago—of Spanish immigration officials exercising any form of control over entry into or exit out of Gibraltar. What they are doing is giving Gibraltar passengers advance Schengen entry clearance, and deferred Schengen exit clearance, which is also required under the Schengen acquis.

  There is no customs, by the way. I heard it said recently that some of these arrangements affected customs as well as immigration control. That is not the case. The arrangements apply only to immigration control. There is nothing in any of the Cordoba agreements about those aspects of customs control, so customs control would carry on as normal.

  Q214  Mr. Horam: Finally in this area, will the new terminal provide value for money?

  Peter Caruana: Value for money has to be measured against various factors. You could say, "Do I need it today? Do I need to invest in this facility today for the demand that there is today?" The answer to that is probably no, we could get away with a smaller airport for the use that we put it to today, but public investment in expensive public infrastructure that takes six or seven years to build is about long-term vision. It is about what you think the demand will be. In other words, you want growth space, too. We think that Gibraltar airport will be an important part of the transport, social and economic infrastructure not just of Gibraltar's future, but of the future of the neighbouring parts of Spain immediately on the other side of the border. We think it is a very good, sound, visionary investment. Oppositions rarely share the visions of parties in government, and my opposition are no exception to that rule.

  Q215  Sir John Stanley: Chief Minister, I understand that as far as aircraft are concerned, the Cordoba agreement dealt only with civil aircraft. I should be grateful if you could tell us whether any process is ongoing or contemplated whereby there are plans to ensure that the indefensible restrictions applied so far by the Spanish on the use of Spanish airspace by NATO aircraft landing in or taking off from Gibraltar are removed, as they should have been many years ago.

  Peter Caruana: As you rightly say in your question, Sir John, the Cordoba agreement dealt only with civil air traffic—of all sizes, not just small aircraft. It delivers for Gibraltar a normal EU airport subject to the obligations of, and enjoying the benefits of, all EU liberalisation, open skies directives in so far as civil aviation is concerned. Those of you who are long-serving members of the Committee or who are interested in the affairs of Gibraltar will know that a historical grouse of ours has been that we were excluded from EU aviation measures and did not therefore benefit from free movement. All that has been swept away. The Cordoba agreement converts Gibraltar into a normal British, European airport subject to the whole EU regime.

  What the agreement does not do, which is the point of your question, is deal with the military side at all. I think it is the view of Madrid and probably also of London, although I have not actually asked, that defence relations are a matter between them and not something that is my constitutional competence or responsibility. It was not part of the agenda of the Cordoba agreement on aviation, but I agree with the sentiment that I think your question underlines, which is that Spain and the United Kingdom have been for many years NATO allies; Gibraltar is British sovereign territory by valid and binding, as far as Spain and the UK are concerned, international treaty; and there is no justification for Spain treating the British military any differently from the military of any other of her NATO allies.

  Spain does not dispute that Gibraltar is properly, in law, British territory. Therefore, this is not disputed land. She has a political claim to the return of Gibraltar sovereignty, but she does not dispute the fact that in proper international law, she ceded sovereignty to Britain in perpetuity and therefore it is undisputed British sovereign territory. In those circumstances, there is no justification, in my humble opinion, for Britain to be treated in the way that we are discussing. I remember that, when the late Robin Cook was Foreign Secretary, we came very close to this being unravelled, but in the end, in bilateral discussions between the UK and Spain, that did not materialise. I was not privy to that, but I know that we came close at that time.

  Sir John Stanley: Chairman, I wonder whether we could have a note from the Foreign Office in answer to the particular question I have raised.[1]

  Chairman: I am sure that we can pursue that with the Foreign Office after this evidence session. Sandra Osborne.

  Q216  Sandra Osborne: Chief Minister, may I ask you about the pensions deal? Do you think that it is satisfactory and fair, and do you believe that the UK should be worried about the cost? The National Audit Office has estimated that it will come to £100 million, but Mr. Bossano gave evidence to this Committee that it was more likely to be in the order of £250 million. What is your view on that?

  Peter Caruana: Can I come to the cost? I will give you the correct figures in a moment. The answer to the question of whether it was a worthwhile deal has various dimensions. I do not think that it lends itself to the treatment simply of how much it cost, and whether it is too much or too little.

  There was also a political aspect to the deal over Gibraltar, which was a huge obstacle to improving relations between the United Kingdom, Spain and Gibraltar. This Committee has looked in depth in the past into the pensions question and made certain recommendations, to which I believe the UK Government have been faithful. The Committee recommended that the British Government should try to resolve the pensions issue and I think that the Government did that.

  The political aspect was that the decks needed clearing to make the trilateral process possible, and all the agreements have flowed from that. There was also an EU legal challenge, which could have been far more expensive than the actual pension settlement.

  What is more, Spain had a parallel claim. Members of the Committee will know, I am sure, in which case, shut me up straight away, Mr. Chairman, that there are rules in Europe whereby people who have worked in a host country and contributed to its social security scheme, but who then return home to retire in their own home country must be provided with health services by the home country where they live. However, the home country can then make a claim on the social security system of the host country where the person worked, to recover that cost. I am not sure whether I have made myself clear; I may have done.

  Spain had such a claim, and tabled it in respect of the thousands of Spanish workers who have worked in Gibraltar, not least in the royal naval dockyard over the years. That claim was settled and bought off as well. It could have been substantial, because, as you know, there is an EU tariff—a certain amount of money, which is not just so much money for the worker but is upgraded for the worker's family. So there was a significant claim in addition to that for pensions, in relation to the health service, that was also negotiated away by this pensions settlement.

  Of course, there was also the historical aspect of how the matter arose. The problem was brought upon Gibraltar's social security system by the UK Government back in 1982, in the face of warnings from the then Gibraltar Government that what they were doing should be prevented, but they did not listen. All those aspects provide the backdrop and the various dimensions.

  Remember, the settlement related to the question of increases. The UK Government have effectively been paying Spanish pensions since 1986 at frozen rates, as the Leader of the Opposition told you when he was here. The deal was therefore about two things. I must correct the Leader of the Opposition in respect of a couple of the points he made, but the main essence of the deal was about unfreezing the pensions for Spanish pensioners. Indeed, that permitted us to unfreeze it for our own pensioners as well, which we did.

  On the cost, let me give you the figures, which I am sure you are most anxious to have. The UK Government said, "Look, we will pay you an amount in compensation," which the Leader of the Opposition described as discriminatory arrears payment—completely politically opportunistically and erroneously, in my view. The UK Government said, "We will give you compensation if you will leave the scheme altogether." The Leader of the Opposition told you that the only thing the Spaniards had to do to achieve the payment was to agree to have the money sent to a bank account, as opposed to coming to Gibraltar to collect it in person. That is not the case. In return for this lump sum payment, those who opted for it from among the Spanish payments had to physically leave the Gibraltar statutory scheme. They had to cease to be a member of it and to have any claim under Gibraltar statutory pensions law altogether, which the vast majority did. I think from memory—please do not hold me to this figure—that fewer than 100 Spanish pensioners have stayed in the Gibraltar scheme. The rest are no longer Gibraltar pensioners at all. That was what the lump sum was for. That is what happened and that is how the agreement describes it.

  The lump sum element for that cost the UK Government £25.25 million. Because they are now no longer Gibraltar pensioners entitled to pensions under the Gibraltar scheme, a special UK fund administered by Crown agents has now been set up, and our information is that the ongoing cost of that—not per annum—is £49 million for the frozen element and £48 million for the uprating and future increases. I think that you are looking there at £100 million for the future and £25 million for the historical element. Some of that—£50 million—was already there. It is not the result of Cordoba; the result of Cordoba is the £25 million for the historical element and the £50 million for the future uprating. The second £50 million for the future would have been paid, even without Cordoba, because that is what Britain has been paying since 1986—the frozen element. You could argue that Cordoba has cost the British taxpayer £75 million.

  Chairman: Thank you—that is very helpful and comprehensive. No doubt we can pursue this in correspondence with the Government to see if they give us the same figures.[2]

  Q217  Mr. Pope: Relations have clearly been transformed since the Cordoba agreement. We have heard about the improved flights, and the border situation is a lot easier and the phone line problems have been resolved. That is to be welcomed. However, have these improved relations with Spain been damaged by Spain's arrest last year of the Ocean Alert 3.5 miles off Gibraltar and the whole Odyssey Marine Exploration saga?

  Peter Caruana: I do not think that it is had damaged relations because one of the main gains for all sides of the trilateral forum is that it has established a degree of normality of contact and relationship between the three Governments. When you have contact and a relationship it is easier to manage problems when they arise. All countries have problems and issues with each other and Gibraltar and Spain, having not been the exception to the rule, are not suddenly going to become the exception so that there are no issues between us. We are more likely to have such issues than other countries, but now we have a political architecture that allows us to telephone each other. I speak regularly to Spanish Ministers and Spanish foreign office officials. There is thus the means to manage issues when they arise. Spain will not stop doing things that she thinks are important for the protection of her fundamental position on the sovereignty dispute, just as we will not stop doing things that are fundamentally important to us on our position on our sovereignty and self-determination. The difference now is that we pick up the phone and distil the issues to the minimum for either side. In the case of the Odyssey, Spain did what she felt she had to do to protect her national interest. The rest is subject to political management. That is one of the great achievements.

  We thoroughly oppose what Spain did as regards the Odyssey. That is not because she sought to enforce her national domestic heritage preservation legislation, which she is free to do, and not even because she misbehaved in terms of enforcing her laws in international waters, which is a matter for the UK, as we do not strut around on that sort of global stage. Our concern is that Spain was asserting that she was entitled to arrest the Odyssey where she did not because they were international waters but because they were Spanish waters. That boat was in the three miles of water that are beyond Gibraltar's three British miles. Spain was saying: "As we don't recognise that the first three miles are under British sovereignty, therefore the next three miles can't be anything other than Spanish. We think the first three miles are Spanish, not British, and if the first three are Spanish, then because Spain claims 12 miles, the next three and the next six after that are Spanish too." Our objection to the Odyssey saga was that, indirectly, Spain was denying the British sovereignty of the first three miles. What Spain does outside our territorial waters is of relative lack of interest to me, except to the extent that it impinges on the sovereignty of my three miles.

  Q218  Mr. Pope: That is interesting, because when we were in Gibraltar in the summer I understood that, if you leave aside the first 3 miles and go into the 9 miles beyond, Spain is now claiming a dog-leg of territorial waters surrounding Gibraltar. Is not the answer to that, surely, that we should extend our territorial waters 12 miles out from Gibraltar? We do that with quite a few of our other Overseas Territories. That would resolve the situation, would it not? It would resolve it from your point of view if we were to do that. What is the view of your Government?

  Peter Caruana: Yes, it would certainly resolve one issue; whether we would create different ones is a matter for diplomatic balance sheet calculations. The position of Gibraltar is simple. Gibraltar runs roughly on a north to south axis. On the western side of Gibraltar—the Bay of Gibraltar—there would be no point in extending beyond the 3 miles, because we do not even have that now; the median line runs down the middle of the bay, which is less than 3 miles, so you could extend it to 200 miles in that direction and you would achieve nothing at all. On the other side—for those of you who know Gibraltar, the Catalan bay and the Mediterranean, rather than the bay side—you could theoretically go 12 miles. In the straits, you could not even go to 12 miles, although you could probably go to six, because the straits are also subject to a median line calculation. The straits of Gibraltar are only 15 km of water, so you could not actually go 12 miles into the straits, but you could certainly go more than three. You could go 12 miles on the eastern side of the Rock.

  We have no economic or social need for more than 3 miles of territorial water. There are some countries that claim 50 miles of territorial waters. Spain could do exactly the same between 12 and 15 miles as she did between 3 and 6 miles if she wanted to. That would not resolve the issue. The underlying fundamental issue is that Spain claims that Gibraltar has no sovereign territorial waters—a claim that is unsustainable, because there is a 1982 United Nations convention on territorial waters, which gives every spot on the planet the treaty right to territorial waters for a minimum of 12 miles. Spain subscribed to that treaty, making no reservation whatsoever in relation to the Gibraltar question. International law makes Spain's denial of territorial waters in Gibraltar completely unsustainable in law. To us, that is the important question.

  Q219  Mr. Pope: It is a de facto recognition. I thought that the Spanish were very clever, or certainly astute, in making sure that they did not detain the Ocean Alert within 3 miles—it was 3½ miles.

  Peter Caruana: I think that they were politically astute. I honestly do not believe that in the Odyssey saga Spain was motivated by any Gibraltar, still less anti-Gibraltar, dimension. The respect for possible Spanish shipwrecks lying in an unknown position somewhere near her coastline obtained a huge domestic political dimension in Spain; it acquired a huge momentum and the Spanish Government and authorities were responding to that. It had Gibraltar manifestations and there were certain issues that we had to do our best to safeguard, which we did, but this was not an intervention by Spain that was in any sense driven by her politics towards Gibraltar, it was driven by her politics towards her own heritage conservation.

  Chairman: Can we now move on to Fabian Hamilton, please?


1   Ev 361 Back

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