HL Deb 24 July 1979 vol 401 cc1898-914

7.1 p.m.

Lord SELSDON rose to ask Her Majesty's Government what steps they are taking to ensure that Gibraltar obtains full benefit from membership of the EEC. The noble Lord said: The Question standing in my name today is prompted by two separate, and not necessarily related, issues, and I hope to seek to find a way to relate them. The first issue is the cost of British membership of the EEC and the benefits which we receive from that membership. The second issue is the enlargement of the EEC with the joining of Spain. And in the middle I have placed Gibraltar, because this is one territory which takes up both these issues.

The first issue which I raise is one that has caused considerable concern throughout the country, both with the previous Government and with this Government, who with considerable force have pointed out that they object strongly to the high cost of British membership, and in a relatively soft and weak voice have failed to point out that the cost of membership is exactly as was planned and budgeted many years ago, but the benefits that have accrued from it are substantially less. The reason why these benefits are lower than anticipated is in my view to some extent the responsibility of the Government of the United Kingdom in that we have failed to respond to initiatives which have been suggested to us by the Community and have grudgingly accepted proposals and made very few of our own. It is surely our responsibility to do what we can to help the regions of this country and territories which are dependent upon the United Kingdom to obtain the greatest benefits possible in both the economic and political spheres from membership of the EEC.

We of course suffer from a disadvantage in that we were one of the late entries, so to speak, and came in with a large number of relationships around the world, probably greater than the rest of the EEC put together. It is therefore not surprising to note that the older members of the EEC, in particular France, have managed to obtain considerable financial and economic benefit for their dependent territories and for their former dependent territories. If we look at the benefits offered under the Lomé Convention, we find that the major beneficiaries are not members of the Commonwealth but former territories of other nations.

Thus, my first point is to ask what responsibility is it of the United Kingdom Government, and what will the Government do, to ensure that our Dominions or Crown Colonies obtain maximum economic benefit from membership of the EEC, for surely since they are dependent territories and dominions, the responsibility for benefits accruing to them rests as much with the United Kingdom as it does with the territories themselves.

I start with the subject of Gibraltar by reminding your Lordships' House that in the Preamble to the new Constitution in 1969 it was stated: Gibraltar is part of Her Majesty's Dominions and Her Majesty's Government have given assurances to the people of Gibraltar that Gibraltar will remain part of Her Majesty's Dominions unless or until an Act of Parliament otherwise provides". Presumably the same principles apply to many other dominions around the world. If we inquire of these dominions directly or indirectly what benefits have they received out of United Kingdom membership of the EEC, we find, first, that they are somewhat lacking in knowledge of what benefits they could receive, and that more often than not they have never really had direct touch with the EEC.

Gibraltar is a special case at this time for it is a territory which, because of relationships with Spain, is having and suffering economic and political problems. The reasons for that we are all aware of. But we come to the question of the solution, and the solution to the Gibraltar problem must inevitably be related in some way or another to the EEC, for surely it is not practical that when one assumes wider membership of the EEC and Spain joins, there should be a border set up between two EEC countries over which man may not tread freely. That is of course an issue that I know could be resolved; but I am sure that the Government would not hold back support for Spain's membership of the EEC purely on the question of Gibraltar. But surely between now and the time of Spanish entry there are chances for discussions and negotiations on this particular front. Therefore, I would argue that Gibraltar should be entitled to obtain some form of political benefit from membership of the EEC, and that we should use the opportunity of Spain joining to seek further discussions and negotiations with a view to trying to arrive at an equitable solution before the final act of accession by Spain.

I do not believe in this case that the fault necessarily rests with the United Kingdom Government—with this Government or with the previous Government—nor with Gibraltar, for I understand that some time ago Gibraltar took an initiative and suggested that there might be talks between the British Foreign Secretary and the Spanish Foreign Minister. This was agreed, and as long ago as November 1977 talks were held in Strasbourg, presumably an independent EEC centre. At those talks it was agreed that a working group of officials from Britain, Spain, and Gibraltar would be established to study a number of areas, and I believe that the group met twice, once in London and once in Madrid. But I think no real progress was made, and I see no signs of any progress being made at the moment, unless, as I hope, my noble friend can report some initiatives following a recent visit to Gibraltar by one of his right honourable friends. But if no progress is made, I think it is up to Her Majesty's Government to try to propose and take some form of initiative, which I am sure they would do. Obviously the Spanish-Gibraltar situation is really a bilateral problem, but equally, with impending EEC membership, there is perhaps something that could be done.

So I move now away from the political scene to the economic scene. There is no doubt that the problems with Spain have had an adverse effect upon Gibraltar's economy. Previously she was relatively independent and self-sufficient, but since these problems she has had to rely more and more heavily upon the United Kingdom for aid and support. This support has been both generous and fair, and not for a moment would I suggest that Gibraltar should have any complaints about the way she has been handled in this particular field.

But when it comes to the question of membership of the EEC, one of the objectives of the EEC is to help to some extent the poorer or underdeveloped parts of the EEC territory. Gibraltar does not necessarily qualify as being poor. While she has a growing visible balance-of-payments deficit up to about £28 million, she has in all a moderate trade surplus due to invisibles. She has a relatively low level of unemployment; about 40 people are totally unemployable, and the general level is in the field of hundreds. Thus she does not qualify in that particular area.

However, I am advised that some time ago she made an application to the European Investment Bank for financial support, which was rejected. I therefore thought that I would see what the attitude might be among the Community institutions and the Commission, and I asked informally, as one can do in this world, what their attitude to Gibraltar would be. All those to whom I spoke, of all nationalities, confirmed a willingness to try to help and support Gibraltar if the right mechanism could be found, and all of them seemed to indicate that it was up to Her Majesty's Government to find that mechanism. There were possibilities that Gibraltar could be declared an assisted area, and all forms of technical ways in which Gibraltar could qualify for financial support from one of the EEC institutions.

Therefore I would ask my noble friend whether it is possible that Her Majesty's Government could take certain initiatives which would then permit Gibraltar to borrow money from the European Investment Bank, perhaps to benefit from the European Coal and Steel Community, from Euratom, or from the Ortoli facility, or from whatever funds or facilities the Community may devise in the years ahead. It is fair to say that, without some form of support of this sort from the Community, Gibraltar will continue to look to the United Kingdom for aid.

Its 1978–81 development plan calls for a total expenditure of around £28 million. I believe that around £13 million of that will be provided in grant aid or other forms of aid in the overseas development administration of the United Kingdom. Gibraltar will be required to find the balance of that finance, and she herself could be relatively stretched, particularly with the recent increase in oil prices. This has two effects upon Gibraltar. First, because of this increase in prices, and for other reasons as well, the pound sterling has risen sharply in value. This may be beneficial to the United Kingdom, but could have a detrimental effect upon Gibraltar's own tourist trade, which is part of her main invisible income. Secondly, of course, there is the cost of energy for Gibraltar, and her need to be self-sufficient and independent.

These are relatively minor sums in the context of the world as a whole, but the same principles as apply to Gibraltar could well apply to other dominions in other parts of the world. Gibraltar has one thing which makes her separate and different, I think, in the financial world. I am not quite sure whether I am totally right in this, but I believe that she is effectively the only territory outside the British Isles which is within the scheduled territories—the Gibraltar pound is on a par with sterling—and under the currency note ordinance Gibraltar notes in circulation have to be covered at least 70 per cent. by eligible sterling assets in a note security fund held and managed in London by the Crown Agents. So she is more closely linked to the United Kingdom than perhaps other dominions in matters relating to finance and the economy.

My Lords, I know, or I believe, that there is this willingness within the EEC institutions and within the new European Parliament to seek to support individual anomalies, if I might put it that way (because to some extent, in this area, Gibraltar is an anomaly), and before I sit down I would ask my noble friend whether he will do what he can to seek to help Gibraltar in terms of relations and opportunities which can come from its membership of the EEC. My Question does not imply any criticism, but is to point out that I believe there is an opportunity to obtain support which might reduce to some extent the burden upon the British taxpayer and, in the years or months to come before Spain joins, provide a real chance to resolve, independently and in a reasonable atmosphere, the current political difficulties.

7.13 p.m.


My Lords, I must first thank my noble friend Lord Selsdon for tabling this most important and very well timed Question—certainly far better timed than one your Lordships may recall I tabled for Question Time earlier this month. The reason why I tabled a Question on Anglo-Spanish relations was to establish a measure of the priority which the new Administration placed upon this subject. Your Lordships may further recall that the Answer forthcoming, and indeed that to a supplementary put by the noble Lord, Lord Goronwy-Roberts, was positively brutal in its tartness. Be that as it may, serve me right for having the impertinence even to suggest that this Administration could get its priorities wrong!

My Lords, subsequent developments appear to show that Her Majesty's Government are placing perhaps an even higher priority on these matters than did the previous Administration. At a Press conference on 17th July the Lord Privy Seal said that it was a mistake to sit back and wait upon developments; Lord Carrington would be meeting the Foreign Minister in September. Indeed, the Spanish Foreign Minister, I understand, was in London this week. Furthermore, the Lord Privy Seal stated that Britain supported Spanish accession to the EEC. The transition to democracy in Spain was one of the major political achievements of the 20th century, and should be ackknowledged as such.

My Lords, this is marvellous stuff. It appears that Her Majesty's Government are following the previous Administration's example of maintaining assiduous and continuous negotiation. Indeed, I believe it would be quite wrong to pour a cold-water douche of disdain over the previous Administration's diplomatic efforts, for two reasons. The first is that, as the noble Lord, Lord Goronwy-Roberts, said on a previous occasion, foreign relations is a continuing process that flows from one Administration to the other, and partisan politics have no place in foreign affairs. Secondly, the previous Administration's efforts and achievements should be recognised and praised.

What I see as being particularly welcome is that Her Majesty's Government are seeking a positive dialogue for the future and are not dealing in a sterile debate of the past. In a statement on 17th July last, the Lord Privy Seal said: During the past ten years, during which all direct communications between Gibraltar and neighbouring areas of Spain have been severed, much has changed in Western Europe, including Spain. There are now new Governments in both Madrid and London engaged in bringing about further change. Spain's accession to the European Community is one of those changes, which should be turned to good account in Gibraltar as well as Europe generally. It is a common British and Gibraltarian interest for Spain to be inside the Community and a normal relationship resumed This, of course, must be so, and I believe that in the forthcoming negotiations Her Majesty's Government will be most assiduous in determining that any changes will be turned to good account for Gibraltar as well as for Europe generally.

There is, however, one point which had worried me. It is a point which could be inferred from the Question; namely, whether the question of lifting sanctions, or progress over any matters relating to Gibraltar, should be made a condition precedent to Spain's entry as a member of the European Economic Community. I believe that it should not, for the very good reason that the United Kingdom entry was not so fettered. I was therefore delighted to read that the Lord Privy Seal stated at the Press conference previously referred to that no formal link was made between the British Government's attitude towards negotiations for Spanish entry to the EEC and progress over Gibraltar. The Lord Privy Seal went on to say that it is, however, inconceivable that a border between two parts of EEC territory could remain closed. That would be out of the question. It was hoped that restrictions would be lifted before detailed negotiation was engaged: if not, the matter was bound to come up. My Lords, may I ask the Minister whether he would be good enough to confirm that the lifting of sanctions on the border is being made a condition precedent to the negotiations between Her Majesty's Government and Spain in September? I am not so concerned with the strategy but with the tactic of this device should the Minister's answer be in the affirmative.

I am most optimistic for the future. I believe that the lessons of 1966 are being learned. I believe most fervently that the history of the two great old monarchies has reached a watershed. I most respectfully ask Her Majesty's Government that when considering matters of style—namely, of form and timing—they consider very carefully matters of outlook and temperament. May Her Majesty's Government always remember—to paraphrase Yeats—to tread softly, for they are treading on dreams.

7.19 p.m.


My Lords, the House is grateful, I am sure, to the noble Lord, Lord Selsdon, for initiating this short debate, which should give Her Majesty's Government an opportunity to reiterate their views on the future of Gibraltar and its people. I think the noble Lord made a powerful and cogent case for examining with great care the future of Gibraltar as an economic entity within the EEC, in view of its special link, economically and constitutionally, with this country, and certain difficulties that may arise if the mainland—that is to say, Spain—accedes to the Community in 1983 with certain relationships between it and Gibraltar still unresolved. I think it is a speech that will bear careful scrutiny in the cold light of Hansard tomorrow morning and a contribution to our thinking on these matters.

Similarly, I thought that the noble Lord, Lord Morris, put some very important points particularly in regard to the impact of the Gibraltar question on the long-standing friendship between us and the people and Government of Spain. It is of the utmost importance that we should endeavour to relate proper consideration and, indeed, recognition of the desires of the people of Gibraltar with a very great British interest in the very best relations with Spain. I agree with him that it is a continuing process—he said an "assiduous and continuous" process—of consultation and co-operation with the Spanish Government.

I am confident that when the noble Lord replies to this debate what he has to say will not substantially or essentially differ from what 1 have said from time to time when I had the privilege of explaining the policy of the then-Government in relation to Gibraltar and to Spain. Our views, and, I think, the views of successive Governments, and of the overwhelming majority of the people of this country and of Gibraltar, are enshrined in the preamble to the Constitution of 1969 which, in so many words, says that Her Majesty's Government will not agree to any change in the constitutional status—and that has economic overtones, as the noble Lord, Lord Selsdon, will agree—of Gibraltar which was at variance with the democratically-expressed wishes of the people of Gibraltar.

Before and after the adoption of the 1969 Constitution those wishes were indeed democratically expressed. The referendum of 1967 produced an overwhelming majority against any change of constitutional status; and in subsequent elections to the Gibraltar Parliament the support given to the two pro-Spanish groups was negligible. Neither the party for autonomy for Gibraltar, a Rightist group, nor the Socialist Party of Gibraltar, a Maoist-Marxist group, won a single seat in the Assembly. All 12 seats were, in the majority, won by the moderate socialists led by Sir Joshua Hassan and in the minority by a centre party, both in favour of the present constitutional and, therefore, economic status of Gibraltar. There can be no doubt, therefore, about the democratically-expressed wishes of the people of Gibraltar. With a passionate near-unanimity they want to stay as they are in the constitutional sense.

On the other hand, it is true that Spanish feelings run deep on this issue; and it is also true that there are ties of historic, cultural and commercial importance between Britain and Spain and a friendship which was not essentially impaired even by the long night of fascism which estranged the people of the two countries for a time. Now that Spain, as we have heard, has courageously, and, I think, effectively, re-asserted its democracy, that friendship between Britain and Spain is warmer than ever and even more valuable to the course of Western democracy than it ever was. And it is powerfully reflected in the strong support from the very start given by the United Kingdom to the candidacy of Spain for membership of the EEC. Like our partners in the Community, we wish to see signature by the end of 1981 and entry somewhere at the beginning of 1983. This is British policy; it is Community policy; and it is equally the wish of the people of Gibraltar that Spain should effectively enter the Community in 1983.

But, naturally, as the noble Lord, Lord Selsdon, said, Gibraltarians of all shades of opinion, all shades of (shall we say?) pro status quo opinion—because there is very little else there—are asking questions. They ask me, they ask the noble Lord, and, no doubt, the noble Lord, the Foreign Secretary, and the noble Lord, the Lord Privy Seal, who was recently there on a visit: "How will the entry of Spain affect the position of Gibraltar?" There is no simple and instant solution to the dichotomy of interests in the Peninsula. We must respect the intensity of Spanish feeling—and we do! We respect and understand it. Our Spanish friends must equally recognise the intensity of the feelings of the people of Gibraltar. We must earnestly hope that the Spanish Government will lift the vexatious restrictions on contact between the Rock and the mainland.

I think we could agree that, as Spain accedes to the Community, so it may join the rest of us in the Community in cooperatively seeking a modus virendi for Gibraltar in the post-Spanish accession period. This gives point to the appeal made to the noble Lord to tell us about the intention of the present Government, like the last one, to continue with friendly discussions with the Spanish Government about this entire question.

My Lords, we are looking to the future. I spoke of vexatious restrictions on movement; and I agree that it is inconceivable that those should subsist into a post-accession period, that two territories within the same Community should, nevertheless, be subject to these restrictions on their mutual border. One often wonders how a noble, warm-hearted and imaginative people like the Spaniards can hope that restrictions of this kind can have any other result than to estrange the people of Gibraltar. Certainly, it is difficult to see how this kind of restriction can be carried legally into a situation of Spanish membership of the Community. The Lord Privy Seal's recent visit was, I am sure, undertaken in the hope that ideas about a better relationship between Gibraltar and Spain should arise as a result. His visit and his statements afterwards reflect that purpose, and I see nothing in what he did or said during his visit, and afterwards, to which Her Majesty's Opposition could take exception.

I have intervened to support the noble Lord in raising this matter to give an opportunity for the Government to repeat what we all assume to be their attitude, and to support the noble Lord, Lord Morris, in the reminders that he has ably given to us of the potential for intra-territorial difficulty within the Community unless we are very careful during the period of the run-up to the signature in 1981 and actual entry in 1983. It is a difficult problem which admits of no quick solution, as I said, except the solution of mutual tolerance, respect and patience; an evolutionary solution based on the participation of both Gibraltar and Spain in an attempt within the Community, when the time comes, to seek a way out of this difficulty.

I have only one further point to make: I agree entirely that it would be counter-productive to say the least—possibly dangerous—to attempt any formal linkage in this matter—that is to say, to trade off. One cannot trade off emotions one against the other, and the basis of this—whatever the economic and constitutional results may be—is deeply held feelings on both sides. It would be a grave mistake to be seen to try to barter two distinctive patriotisms; but rather bring them together within a larger entity, that of the Community. It is in the spirit of strong friendship for Spain and absolute assurance to Gibraltar that I hope that the Government, like the last Government, will proceed in this matter.

7.33 p.m.


My Lords, once again the House has been treated to a careful, thoughtful and helpful speech from my noble friend Lord Selsdon and indeed from my noble friend Lord Morris. May I say that from the noble Lord, Lord Goronwy-Roberts, we have had a useful introduction to this difficult subject. My noble friend's Question hangs on the precise relationship of Gibraltar to the EEC. Let me begin by reminding noble Lords of the formal status which we secured for Gibraltar—I might add after lengthy negotiation—in the Accession negotiations between 1970 and 1972.

What we wanted for Gibraltar was that the Treaty should apply, but that certain provisions of it which would have been either irrelevant or unnecessarily and excessively complicated, should not. This was achieved in the following way. Article 227.4 of the Treaty of Rome declares that the provisions of this Treaty shall apply to the European territories for whose external relations a Member State is responsible". But special provisions in the Treaty of Accession provide that three major areas of Community business do not apply within Gibraltar: the Common Commercial Policy (thus enabling Gibraltar, which has a very narrow tax base, to continue to control and retain revenue raised from import duties); the Common Agricultural Policy (because Gibraltar has no agriculture); and the obligation to introduce a value added tax. I need not go into details of the legal mechanics by which these derogations are given force of law. The effect of the arrangements I have described is, of course, that Gibraltar has not been required to make any budgetary contribution to the Community budget, nor have Her Majesty's Government done so on Gibraltar's behalf.

It may be useful if I review briefly the other main areas of the Treaty as they apply to Gibraltar. All the other rules of the Community apply in Gibraltar and Gibraltar is part of the territory of the Community. Community regulations are given direct force by law by means of Gibraltar's European Communities ordinance; and the Gibraltar authorities have taken steps to implement all Community secondary legislation where relevant locally.

Gibraltarians are United Kingdom nationals for European Community purposes. Gibraltar therefore has had the opportunity to benefit from the provisions of the Treaty covering freedom of movement of persons, services and capital. Among other things, this means that any Gibraltarian wanting to establish himself professionally in any of the other member-States has the general right to do so. Furthermore there are now a number of specific areas—doctors, dentists, nurses, in some respects lawyers, and so on—where there is Community-wide recognition of qualifications. This too provides potential benefit to Gibraltar. But it will be for the Gibraltar Government itself to monitor the extent to which Gibraltarians have taken advantage of these arrangements.

I now come to the three major sources of Community aid, apart from the CAP, to members of the Community. I refer to the Regional Development Fund, the Social Fund, and loans from the European Investment Bank. These were the points raised specially by my noble friend Lord Selsdon. In principle, both the provisions of the Treaty concerning the bank and the acts establishing the funds apply to Gibraltar. There has been careful analysis by the Government over the years of the possibility of securing aid for Gibraltar from these sources. No doubt these analyses—as they are now—took place under the previous Administration.

As far as the EIB is concerned the bank has confirmed to the Government of Gibraltar that there is no legal obstacle to EIB lending to Gibraltar. Applications from Gibraltar for EIB loans would however naturally have to fit one of the three separate criteria set out in Article 130 of the Treaty of Rome. These are: projects for developing less developed regions; projects for modernising undertakings or developing fresh activities called for by the progressive establishment of the Common Market; and projects of common interest to several member-States.

A condition for both the last two is that they are of such a size or nature that they cannot be entirely financed by the means available in the individual member-States. It has not so far been possible to identify a project acceptable to the bank in the light of these criteria. There are, however, a number of projects still under discussion between the Gibraltar authorities and the appropriate departments in London, although I call give no undertaking as to what the outcome will be. One of the Banks' requirements is that it must have appropriate security for any loans it makes. The Government are currently examining whether it would be possible to provide the necessary guarantee if a suitable project was identified.

One possibility in the longer term is of a project that would meet the so-called "common interest" criterion. With Spain a member of the Community it is possible to think of a number of projects of common interest to both Gibraltar and Spain and that might conceivably qualify for EIB assistance. Although the Regional Development Fund in principle applies to Gibraltar, Article 3 of the regulation establishing the fund provides that regions and areas which may benefit from the fund shall be limited to those aided regions established by member-States in applying their systems of regional aid. Investments may benefit from the fund's assistance only if they fall within the framework of a national regional development programme. Gibraltar has never hitherto been included in areas to which the Government apply their system of regional aid: nor have the Government ever adopted a regional development programme covering Gibraltar. My noble friend Lord Selsdon specifically asked me whether Gibraltar could become an assisted area. I am told there may be some difficulties in doing that, but it is a matter I should like to look into further and perhaps I may write to my noble friend about it.

I am afraid there are similar problems with respect to the European Social Fund. Again, we would of course be willing to consider any projects which the Gibraltar Government might wish to put forward in relation to the Social Fund. They have not so far done so. This is not surprising, given, as the noble Lord, Lord Goronwy-Roberts, said, that Gibraltar has full employment or virtually so. This Government remain constitutionally responsible for Gibraltar's external relations. This includes representing Gibraltar's interests in the Council of Ministers and taking Gibraltar's interests into account in all relevant matters discussed within the Community context.

Gibraltar's relationship with the European Parliament has been a matter for discussion in this House in the context of direct elections to the European Parliament. Your Lordships will recall that the Government decided that it would be inappropriate for Gibraltar to participate in the direct elections to the European Parliament, given that the territory was not represented at Westminster. No overseas territory of any member State which does not participate in the national elections is represented in the directly elected European Parliament. Accordingly, Annex 2 of the Act annexed to the Council Decision of 1976 providing for direct elections to the European Parliament stated that the United Kingdom will apply the provisions of this Act only in respect of the United Kingdom. This provision was not directed specifically to Gibraltar: it operates to exclude the Channel Islands and the Isle of Man also.

The provisions of the Treaty relating to the European Court of Justice also apply to Gibraltar. This means that in principle a matter coming before the legal authorities in Gibraltar could be referred to the European Court for a preliminary ruling under Article 177. In practice this has not yet happened.

May I turn now to the implications for Gibraltar of Spanish accession to the Community. The problem of the Spanish frontier restrictions at Gibraltar, referred to by my noble friend Lord Morris, is one on which strong views are understandably held by your Lordships and indeed elsewhere. The Government's view, like that of successive British Governments, is that these restrictions are unjustifiable and should be removed without delay. We are not establishing a formal link between Spanish accession to the EEC—for which of course there is firm British support—and the Gibraltar problem.

In our view, the best way to find a solution would be through discussion with Spain. It is inconceivable, as my right honourable friend the Lord Privy Seal said during his recent visit to Gibraltar, that a border between two parts of EEC territory could remain closed. It is therefore best to work on the assumption that restrictions will be a thing of the past by the time this point is reached, and that direct contact between Spain and Gibraltar—impossible over the past decade—will be re-established before rather than after the Spanish treaty of accession is signed.

As I have said, Community provisions on the Common Commercial Tariff, the Common Agricultural Policy and VAT do not currently apply to Gibraltar. There is a case for considering changing the situation, and it seems likely that the closer integration into the Community which would result would be welcome to Gibraltarians, but there would inevitably be financial problems. In making the contribution to the Community Budget which would result from Gibraltar accepting these obligations, the territory would naturally also expect to enjoy the normal financial benefits of full Community membership.

As I have already indicated, Gibraltar is not currently a strong candidate for the Regional Development and Social Funds. Once Spain has joined the EEC, the European Investment Bank may offer rather more possibilities in terms of finance for projects of common interest to both Spain and Gibraltar; but it has to be recognised that the "resource" transfer from such loans might well of itself not match Gibraltar's own contribution to the EEC budget. The underlying problems involved are under active consideration both here and in Gibraltar.

My Lords, these are difficult and complex matters which need full and careful consideration, but your Lordships can rest assured that the Government have the best interests of Gibraltar in mind and will ensure that everything possible is done to enable Gibraltar to enjoy the maximum benefits from the EEC to which she is entitled.


My Lords, before my noble friend sits down, may I ask just one question? For the last 30 years I have been very interested in the affairs of Gibraltar and I am delighted that my noble friend Lord Selsdon is also interested in them. May I ask whether Her Majesty's Government cannot by themselves exert sufficient influence on the Spanish Government for the lifting of restrictions between Spain and Gibraltar at the frontier? Will Her Majesty's Government seek the assistance and support of other Common Market countries to that end?—because in effect it is a crucial issue. For years now the Gibraltarians have been under this shadow of restrictions at the frontier. Would not my noble friend agree that something greater than he has announced this evening should be done?


My Lords, I really do not think I can go much further than I have done. We do not link the question of Spanish accession to the EEC with that of the lifting of restrictions across the border between Spain and Gibraltar. As my right honourable friend said, it is inconceivable that these restrictions could remain. If Spain were to join the EEC, we think the Spaniards will see the merits of that argument and we hope that restrictions will be lifted long before Spain has joined the Common Market.