Gibraltar Treaty

Duke of Wellington Excerpts

Tuesday 3rd March 2026 Lords Chamber

[Lord Collins of Highbury (Lab)]

I do not think a single businessman in Gibraltar would agree to that. As the noble Lord said, 98% of the people in Gibraltar, through their referendum, supported the continuation of membership of the EU. The EU benefited Gibraltar in terms of cross-border trade and prosperity. The situation since Brexit has been five years of uncertainty that has impacted on businesses. What the Gibraltar Government fully understand, but perhaps the noble Lord does not, is that their service industry is their biggest export—that is what generates jobs. Other customs and tax issues are for the Gibraltar Government to agree, but they will work in concert where that does not impact on the trade that they seek to expand upon.

[The Duke of Wellington (CB)]

My Lords, I declare my interest in Spain. I very much welcome this draft treaty. I think it is very much for the benefit of the United Kingdom, Gibraltar and Spain. There is reference in the helpful note prepared by the Foreign Office to various “Parliaments with an interest”. The note then goes on to say:

“The Government will … work closely with the Government of Gibraltar, the EU and Spain”.


Can I ask about ratification? Does this treaty need to be ratified by the European Parliament, the British Government, the Gibraltar Government and the Spanish Government—or not? That is one question. Secondly, there is reference to indirect taxes in Gibraltar being imposed without adopting VAT. Can the Minister explain what that means?

[Lord Collins of Highbury (Lab)]

This is a treaty between the EU and the United Kingdom and obviously the EU has consulted and engaged with the Spanish Government, who are supportive of the EU agreement. We have been consistent, as I have said before, and there has not been a single meeting without the Gibraltar Government and the Chief Minister being present. That will continue in any discussions. On the tax and customs relationship, there will be changes, not least because the border will be open for goods. The days when I bought 200 cigarettes and put them in the boot of my car to get across that border are well over. Cigarettes will undoubtedly cost roughly the same in Gibraltar in the future as in the EU. That is still substantially lower. I notice the noble Lord smiling at me—it is about time he stopped smoking.