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What happens next?

What happens next? Image

The Conservatives are divided. The Labour Party is falling apart. The Second Referendum petition is now at over 3 million. We have heard nothing from Boris Johnson or Michael Gove, the likely inheritors of this mess. The Spanish election results are yet to be declared (at the time of writing there seems to be no clear majority - again) the outcome of which will have a major impact on Gibraltar during the next 4 years.

There’s political shenanigans ahead which may see the SNP MPs (and others?) voting against the enactment of Article 50, or no party willing to enact it and forcing a general election. The 12 million who didn’t bother to vote in the referendum, might think about voting at a general election which could overturn the referendum. Democracy could then be served and we could wake up in November with this mess behind us. 

But it is hard to predict tomorrow, let alone the weeks, months and years to come.  

Local social media is full of supporting messages for Gibraltar’s future, “we’re in this together”, “we’ve been here before”, “we will survive because we are Gibraltar” etc.  

We have a resilient people. It is now time for us to determine our own future. We all hope for the best, however, in my opinion, we must now plan for the worst, just in case it happens.

The worst scenario perhaps is that the border is closed when it becomes an external border to the EU in 2 years and 3 months’ time (current forecast). Before then, Spain could make life difficult without actually closing it as I suspect Brussels’ appetite to assist is somewhat diminished now. We must trust in Gibraltar’s and the UK’s politicians to ensure that whatever future trade agreement is made between the UK and Spain (and there will be one, as Spain exports £26bn of goods and services to the UK whilst importing just £15bn from the UK (UK: Office of Nationals Statistics, Balance of Payments 2015)), that the agreement provides for a free flowing Gibraltar / Spain border. It would be an extreme and unlikely decision (in my view) by Madrid not to allow this but plan for this we must.

That means planning for an island economy, one where there is no land border, just in case. An economy which would thrive regardless of the fluidity of the border. 

Our supply line could include container loads from the UK, Morocco and even a new line to and from a potentially friendly Portugal perhaps. They welcomed us for football, may be there are supply line deals to be had from there. The nifty wholesalers and retailers of everything from food to furniture, jewellery to building supplies, will already be looking beyond the land border for future supplies. Is our port ready? I don’t know in truth. But there’s an opportunity.

Tourism becomes even more important, with the focus on air and sea. Please let’s have taxis waiting at the airport for every incoming flight like every other airport you travel to. We should increase efforts to ensure that cruise passengers both disembark and visit the City Centre. We measure cruise passengers by numbers who are on the ship, not by those who spend money in our shops or visit our tourist sites. Let’s enhance the tourism product here. Another opportunity.

Every visitor to Gibraltar, tourist or business, family or friend, must leave with the urge to come back. So whilst they are here they must experience impeccable service, from our shops, restaurants and tourist sites. Let’s look at how we can improve. The love of Gibraltar must be more than just about tax, which it already is to many, but not to everyone.

Another idea mentioned to me in this weird weekend we’ve just had is medical tourism. We have a hospital with fabulous facilities. Why not allow the private sector use the facilities (at a cost) out of hours for routine operations on visitors from the UK and beyond. Create a new revenue stream.    

In my own industry, property, we expect increased demand for rental properties as some of the thousands of Gibraltar employees based in Spain seek to de-risk and move in. I am sure we will run out of properties imminently. We will need more. I hope the planners can move swiftly to approve projects on the production line in the planning process. It will be important that developers build affordable housing targeting employees of existing businesses so that there is the option to move into Gibraltar, with the added bonus that more disposable income is spent in Gibraltar. 

Maybe our best opportunity is tax. There are endless opportunities here. Brexit has British ex-pats very worried.  4.5m British people live abroad of which 1.3m are in the EU.  Many of those will be seeking a new location and at Chestertons, we expect increased interest in the next few weeks. Gibraltar can move itself into pole position for those wishing to relocate. The only piece of Britain in the Med. Gibraltar, the safe haven. We could offer tax incentives to those Brits with a pension income of more than £5k per month (for example) seeking to leave Spain, Italy, France etc, for them to live in Gibraltar. Let them spend their money in our shops, bars and restaurants. There are a myriad of tax structures that could be used to attract different business sectors or people groups. 

Island economies work. In the Global Financial Centres Index dated March 2015 (published by the Qatar Financial Centre), Gibraltar was ranked number 45 (rankings based upon importance, success, credibility, safety etc).  British Virgin Islands was ranked 34. BVI has a population of 28,000. BVI is also a British Overseas Territory.  Cayman Islands is another British Overseas Territory and ranks 39th with a population of 57,000. Likewise Bermuda, ranked 41, population 65,000.  There are others, Jersey and Guernsey (Crown Dependencies) for example. Perhaps we can take new ideas from successful small island economies around the world and implement similar or better structures. 

Gibraltar is at the mercy of others right now. Let’s take control of our own destiny. With speed of thought, entrepreneurialism and sheer hard work from everyone, we can create a positive, whatever the outcome is of invoking article 50, the Spanish general election, the possible forthcoming British general election, the second referendum, the breaking up of the EU, or whatever other constitutional crisis comes our way.

Let’s seize the opportunity we didn’t want. 

Contributed by Mike Nicholls