Brexit could have a significant impact on Gibraltar
At the beginning of March 2017, a report titled "Brexit: Gibraltar" was published by the House of lords EU Select Committee. The purpose of the report was to make sure UK Government does not forget about Gibraltar during negotiations for an exit deal, ensuring its voice is heard.
The potential issues facing Gibraltar are felt to be so concerning that a debate on the report was held on March 21 in the House of Lords. The Chief Minister of Gibraltar, Fabian Picardo, attended the debate. At the session Baroness Goldie stated that the economic bonds between the UK and Gibraltar would be maintained and strengthened after Brexit, and Picardo said this was "deeply important" for Gibraltar.
Gibraltarians have much cause for concern over Brexit. As a British Overseas territory which is also part of the EU, Gibraltar was able to vote in last year's referendum. There was close to unanimous support for Britain to remain in the EU on the Rock, with 96 per cent of Gibraltarians voting to remain in the EU. This made it the most pro-Remain area taking part in the referendum.
Because of this overwhelming support to remain in the EU, and as the country is set to face significant challenges when it leaves the EU along with the UK, the select Committee has stated that the British Government has a "moral responsibility" to make sure the interests of Gibraltar are protected during negotiations.
Why the concern?
The Rock is in a vulnerable position because its economy is highly reliant on the single market and on its connections with other European countries. Now Theresa May has confirmed the UK won't remain a member of the single market, it is likely to mean Gibraltar won't either.
Peers have warned that there are "serious potential economic implications for both Gibraltar and the surrounding area of Spain".
In the "Brexit: Gibraltar" report, the Lords EU Committee warned that leaving the EU could damage the territory's shipping trade, online gaming industry, and finance centre. The financial services and online gaming industries make up 40 per cent of Gibraltar's GDP and account for a quarter of jobs. Approximately 40 per cent of Gibraltar's workforce cross over the border from Spain and both the online gaming and financial sectors are highly dependent on frontier workers. Potential restrictions on workers moving freely across the border from Spain could cause serious problems.
Gibraltar's economy is currently very strong. The Financial Times reports that it is "one of the most affluent places in the world", with a GDP of £1.5 billion. But, it says, a hard Brexit puts all this at risk.
Such a change in the economy would surely have a knock-on effect on the citizens of Gibraltar and their individual wealth management, and during such uncertain times, it becomes necessary to enlist the help of a financial professional.
Another worry is that the disputed sovereignty of the Rock could lead to it becoming a key bargaining chip in future economic negotiations. Gibraltar has been under British sovereignty since 1713 when Spain gave up the territory to Britain, but now some are worried that Spain will see Brexit as a chance to regain control.
Now that Theresa May has triggered Article 50, it can only be hoped that decisions regarding Gibraltar are reached fairly quickly so that concerns and trepidation can be alleviated as soon as possible.
Blacktower offers expert financial advice for expats during Brexit by keeping abreast of all the pertinent developments during volatile times. If you require help and advice regarding wealth management in Gibraltar, contact a Blacktower adviser today.