What is Gibraltar?

Gibraltar is a small British Dependent Territory, connected to southern Spain by a narrow strip of land, which has been regarded as important throughout history because of its crucial strategic position as one of the 'Pillars of Hercules' that stands at the Mediterranean's opening into the Atlantic.

Once a crucial military base, Gibraltar is today renowned as a centre for international shipping and offshore banking, and benefits from a healthy tourist industry both because of its uniqueness and because of its VAT-exempt status that enables shops to offer low prices on items like perfumery, spirits, jewellery and electrical goods. Gibraltar has more registered companies than inhabitants. Nonetheless, it is still the site of a major NATO base.

In recent years there has been a protracted struggle over the future sovereignty of the Rock, with successive Spanish governments demanding control and successive British governments rejecting these calls. The previous Labour Government attempted to broker a joint sovereignty deal, but this shows no sign of being accepted while Gibraltarian and British public opinion remains so strongly opposed.


Spain lost control of the Rock after it fell to an Anglo-Dutch force in 1704 during the War of the Spanish Succession, and the territory was subsequently populated by immigrants from Malta, Genoa, Portugal and elsewhere, before being officially ceded to Britain in 1713 under the Treaty of Utrecht.

After many years of gradual reform, 1964 saw control over the civil service and policy vested in a democratically-elected Government of Gibraltar, headed by a Chief Minister. Gibraltar's foreign policy, however, remains in the hands of the British Government.

The ever-present tensions with Spain began to reach boiling point in 1967 when Gibraltarians voted by 12,130 votes to 44 to retain the link with Britain rather than opt for Spanish sovereignty. Spanish dictator General Franco closed the Spain-Gibraltar land border altogether in 1969, and it remained shut until 1985.

Following several years of rule by the Gibraltar Socialist Labour Party and JJ Bossano, the 1996 election saw Peter Caruana's Gibraltar Social Democrats take power and retain it in 2000 and 2003 and again for a fourth term in 2007.

In April 2011, Fabian Picardo was elected leader of the Gibraltar Socialist Labour Party and in December of that year, Mr Picardo succeeded Peter Caruana as Chief Minister of Gibraltar.


Spain refuses to recognise the Government of Gibraltar, and the issue has led to a fractious relationship between Spain and the UK, as well as some day-to-day hardships for the people of Gibraltar, who the Spanish refer to as 'transients' on the grounds that the 'real' population was expelled in the 18th Century.

Madrid bans ferry and air travel to the Rock, rejects its courts, police and ID cards, and does not recognise Gibraltar's international dialling code - considerably hampering the Rock's emergence as a major centre for world telecoms. Road travel is frequently disrupted by searches at the border.

The people of Gibraltar have twice voted to remain a British dependency, in 1967 and 2002. Prior to the 2002 referendum, when a change of status was rejected by 99 per cent of the population, the British and Spanish governments had been considering arrangements for joint sovereignty.

Although the British Government did not acknowledge that the Gibraltarian referendum was legitimate and binding, it remains British policy that Gibraltar's status will not change without the consent of the people.

In 2003, after long negotiations and much wrangling, Gibraltar's representation in the European Parliament was agreed. From 2004, it was treated as part of the South West of England for European Parliament elections.

On 13 December 2007, the European Commission adopted the Regional Competitiveness and Employment Operational Programme for Gibraltar in the United Kingdom for the period 2007-2013.

Community funding through the European Regional Development Fund (ERDF) amounts to some 5.8 million euros, which represents approximately 1.1% of the total EU investment earmarked for the United Kingdom under the Cohesion Policy 2007-2013.


Gibraltar statistics
Figures relate to 2011

Population 28,779
Total land area 6.5 sq km
Natural resources none
Head of State HM Queen Elizabeth II
Chief Minister Fabian Picardo MP
Legislature Parliament (no upper house)
Languages English and Spanish

Inflation rate 3.7% per annum
Minimum wage £5.40 per hour (£210.60 per week)
Registered employed 20,975
Registered unemployed 3.0%

Imports UK 60%; Spain 30%; Other EU 10%

Corporation tax:
Resident Companies 10%
Utilities Companies 20%

Personal Income Tax:
£0 - £4000 annual gross income 17%
£4001- £16,000 30%
Over £16,000 40%

No capital gains taxes
No tax on dividends
No inheritance tax/estate duty
No wealth, gif or capital taxes

Source: Gibraltar Chamber of Commerce - 2012


"The UK’s position on sovereignty is well known and has not changed. The UK will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their wishes. Furthermore, the UK will not enter into a process of sovereignty negotiations with which Gibraltar is not content."

Foreign Office Minister David Lidington – February 2012

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