As government ramps up contingency planning, Picardo rules out pre-Brexit election

Chief Minister Fabian Picardo has ruled out a general election before the Brexit deadline of March 29, insisting Gibraltar must instead focus on ensuring it is ready to leave the European Union.

In a wide-ranging interview with the Chronicle, Mr Picardo expressed confidence that Gibraltar was ready for all eventualities including a hard Brexit.

He said preparations were well under way to address any potential supply chain challenges that could arise from a no deal Brexit, adding that Gibraltar must also be ready to seize opportunities that could arise in such a scenario.

But speaking after a Panorama poll predicted a comfortable electoral win for the GSLP/Liberals and a split vote on the Opposition bench, Mr Picardo said he would not go to the polls until after the UK and Gibraltar had left the EU.

"I think it would be irresponsible of us to hold an election despite the potential partisan advantage there might be in doing so early," he said.

"I think it would be irresponsible for us to take an election before the Brexit process has been seen through."

"As long as that is not extended after March, I can rule out the possibility of an election before the 29th of March this year."

"It would be irresponsible to do that even if it were advantageous in a partisan sense."

"There is a lot to be done in the management of the process of leaving the European Union and in particular in the opportunities that might arise in the context of a hard Brexit."

"We have to be ready to take those for the benefit of the whole community and not simply take a route that might be the most politically advantageous for the government that I lead in coalition with the Liberal Party."

The Chief Minister’s comments come as the UK and the EU step up preparations for a no deal Brexit ahead of a crucial debate in the House of Commons next week, at the end of which MPs will vote on Prime Minister Theresa May’s controversial divorce deal.

Mr Picardo said the Gibraltar Government's baseline position was that the best thing for Gibraltar was to remain within the EU.

But he said this was not an option available at the moment and that, in Gibraltar's inter-governmental relationship with the UK, the only thing on the table was Mrs May’s deal.

The Gibraltar Government had negotiated protections for Gibraltar within that deal, he said, adding that it was a better outcome for the Rock than a hard Brexit.

Mr Picardo, who has been criticised by the GSD for championing Mrs May’s deal, said he would personally welcome a second referendum - "even though it is another roll of the dice" - but that as a government, his administration's only option had been to engage with the UK Government on the divorce agreement.

"In the context of leaving, with remaining not being an option and with Leave fast coming up towards us, the question is 'what is safest for Gibraltar?'," he said.

"And I have to tell you, the safest thing for Gibraltar in a Leave scenario is the Withdrawal Agreement."

"What can we do to stop the UK leaving the EU? Join a political campaign in the UK? We may have the luxury of doing that as individuals, but as a government, we do not have the luxury of joining a political campaign in the UK against the UK Government."

"It is safer for Gibraltar to remain [in the EU], but if the UK is fixed on leaving, our role must be to ensure the protection for Gibraltar in the context of that leaving."

PLANNING

In recent days, the Gibraltar Government has ramped up its work to prepare for the implications of a hard Brexit on Gibraltar.

But despite the bleak news from the UK and the EU about the potential problems that could arise if the UK crashes out of the bloc without a deal to soften the landing, Mr Picardo remained positive about Gibraltar’s prospects.

He said officials were drawing on lessons learnt in the immediate wake of the 1969 border closure, adding that Gibraltar had long operated as an island economy in key aspects such as infrastructure and the provision of essential services and commodities.

"A lot of what was done as a result of the closure of the frontier has actually remained in place," he said.

"We have learnt those lessons. We still operate like an island economy."

"Gibraltar's economy before Franco's restrictions was much more integrated into the region around it."

"After those restrictions, it became an island economy and has remained as such."

"Because we are a separate jurisdiction, that has been the key to our success and our logistic independence."

"All we are doing is reaffirming that logistical independence and asserting our jurisdictional independence in doing so."

"We are replicating in great measure the lessons of those who acted in the immediate aftermath of the closure of the frontier in 1969."

He added: "A no deal scenario contains serious logistical issues to be dealt with, but it contains also some potential opportunities.”

"Being ready is as much about dealing with the potential logistical problems as it is about being able to take advantage of the opportunities without letting them go in the short window that will become available."

Mr Picardo said the government had no concerns about the supply of food and other vital commodities after Brexit.

He said officials had met with wholesalers and retailers to ensure that any potential problems were addressed ahead of the March deadline.

Even at this late stage, those companies had not flagged any concerns in the context of their own supply chains.

"They've already made arrangements to ensure that they are able to continue providing the services or goods that they provide," Mr Picardo said.

Gibraltar has always been outside the EU Customs union, which means that controls on goods at the border will remain the same.

But because most of those goods are shipped overland from the UK, the key supply chain challenges could arise "upstream" in the movement of freight between Britain and the EU.

"But even then, the problem is likely to be a short-term one as the UK and the EU adjust their systems for future trade," he said.

The Chief Minister was confident too that border fluidity would continue much the same as it had for the past three decades.

"My view is that the Gibraltar-EU frontier will operate for the next 30 years in exactly the same way that it has operated last 30 years," he said.

"My job as Chief Minister is to try and bring about improvements to that and to bring about more reliability and more certainty to the fluidity that we enjoy today, and to bring about greater fluidity if possible."

"But I don't see that we will be any worse at all than we have been in the last 30 years."
"There may be times when it's a little bit more difficult because of political issues, but fluidity and an open frontier are guaranteed."

Mr Picardo said too that a hard Brexit would open up opportunities for Gibraltar, arising mainly from the UK’s commitment to guarantee market access to Gibraltar-based companies.

"In a hard Brexit scenario, the only jurisdiction that is guaranteed seamless, continued access to the UK markets in financial services and online gaming is going to be Gibraltar," the Chief Minister said.

In practice, that means that some companies could move the UK-facing parts of their businesses to Gibraltar.

"Some have done so already, while others have made enquiries as to how they could quickly come to Gibraltar in those eventualities," he added.

"These are entities that are already licensed in EU jurisdictions and subject to EU standards of regulation."

"We have to be ready for the potential migration of those entities to Gibraltar in a short period of time if hard Brexit becomes a more realistic possibility."

Mr Picardo said it was not possible right now to put a figure on how much Gibraltar's contingency planning will cost the taxpayer.

But he said the government was working to avoid unnecessary costs from preparations for a hard Brexit and that anything put in place is commercially viable and has value beyond the immediate circumstances of withdrawal.

"We don't want to put in place anything that comes at a cost to the taxpayer that doesn't have commercial viability behind it," he said.