The Rock at the End of the British Empire

As Spain and Gibraltar residents fight about its future, the battle is a cautionary tale for small communities in a world of big trade

The Rock at the End of the British Empire
A person walks past the iconic Gibraltar rock in May 2023. (Photo by Nono Rico via Getty)

Every weekday morning at 9 a.m., a thrumming line of cars builds up along the Carrer de la Frontera in the Spanish town of La Linea de la Concepcion, waiting to cross into the tiny British territory of Gibraltar — home to some 30,000 Gibraltarians, a handful of high-net-worth individuals, a booming offshore financial services industry and one of the world’s leading online gambling hubs. Thousands of Linenses — as the inhabitants of La Linea are known — make the commute across each day.

Up close, it is not a picturesque scene. Gasoline fumes fill the air. A line of cafeterias and car rental outlets clustered under a corrugated metal roof stretches back into the concrete jungle of La Linea. On the Gibraltarian side there stands a standard issue mid-2000s glass-and-metal airport.

For a while it was hoped the terminal building, designed in an optimistic period in Spanish-British relations when both were members of the European Union, could be open to both sides. Perhaps treating the airport as a shared asset would soften the longstanding sovereignty dispute between London and Madrid about who actually owns the land on which it is built.

But that didn’t happen. For now, a barbed-wire fence runs along the mile or so of the border. The flag of Spain flutters opposite a Britannic trio: the Union Jack along with the Gibraltar and Commonwealth banners, a reminder of Gibraltar’s constitutionally semi-detached relationship to the U.K. Until three years ago a different emblem also flew here: the gold stars of the European Union.

Look a little further afield, however, and the view improves. On the other side of the runway looms the Rock of Gibraltar itself, a mini-Everest rising magnificently 400 meters above the Mediterranean, topped with the white dome of a radar station that doubles as a listening station for GCHQ, Britain’s electronic snooping agency.

Since Brexit, this border has been at the crux of negotiations about Gibraltar’s future relationship with the EU. After 13 rounds of negotiation between London and Brussels, and long after the U.K. secured its own post-Brexit deal with the EU, Gibraltar is still in limbo, without a treaty itself.

Gibraltar’s residents did not want to leave the EU, voting overwhelmingly to stay in the 2016 referendum. Yet they are now hostages to a political choice they did not make, waiting for a resolution over which they have limited control, buffeted by events in London and Madrid.

“We were screwed,” a local tells me.

For many in La Linea and Gibraltar, the border is an umbilical cord, a lifeline; 15,000 workers cross from Spain and back daily. In the past, they would have overwhelmingly been Spanish laborers going to work in Gibraltar’s docks. Now the mix is different: workers from Portugal, Hungary or India, going to jobs in hospitality, Gibraltar’s care homes or its finance sector. Each side is dependent on the other.

Though relatively fluid for the moment, after Brexit this strip of barbed wire has in principle become an external border of the EU, subject to a whole panoply of European controls which could be applied more or less heavy-handedly depending on the mood in Madrid.

A deal with the EU would put things on a far firmer footing, reducing uncertainty and opening the way to a far more integrated future in which the barbed wire goes and the existing border becomes more or less invisible.

It is a tantalizing prospect. As it stands, Gibraltar feels both hyper-global and oddly parochial. The only way to get from Gibraltar to the Spanish capital is to make a seven-hour car journey, or take the bus from La Linea to Malaga, and then a train or flight from there. The only places you can fly to directly from Gibraltar are British cities. Why not Barcelona and Berlin in the future?

The outlines of a post-Brexit deal have long been discussed. In theory, Gibraltar could be effectively incorporated into Europe’s border-free Schengen zone, transferring the EU’s external border from where it currently lies – cutting across the isthmus of Gibraltar – to its southern tip.

But if the EU’s external frontier were to move south, who would manage it? Though the formal negotiating parties on any post-Brexit deal are the U.K. government and the European Commission, most of the heat comes from Gibraltar and Spain. What might appear a purely practical question from afar feels very different up close.

Madrid has long insisted any deal should involve Spanish police at the port and airport; Gibraltarians view that as unacceptable Spanish “boots on the ground,” preferring the minimally invasive involvement of the EU Frontex border agency, if any. This is a viscerally felt issue. Spain’s claim to Gibraltar remains. Even if sovereignty itself is not formally on the agenda in current negotiations, Gibraltarians are suspicious of anything that looks like Spanish encroachment.

At times, a deal has seemed within touching distance. The resolution of the Northern Ireland Protocol dispute earlier this year raised hopes an agreement over Gibraltar might be next, part of a generalized push to improve relations between London and Brussels. Rhetoric softened. Compromise was in the air. A deal seemed there for the taking.

Then, in May, events intervened. Disastrous local election results for Spain’s ruling Socialist Party forced the government to bring forward national Spanish elections from the end of the year to the end of July. Gibraltarians are now bracing themselves for what may come next: the possibility that a new government in Madrid might disavow progress on a post-Brexit deal made by its predecessor or even shelve it.

On one level, viewed from London, such twists and turns are simply another chapter in the tortuous, ever-unfolding Brexit saga. Disentangling the U.K. from the EU has raised, and continues to raise, all kinds of problems.

But future historians will no doubt take a broader view, the wider sweep of history. The name Gibraltar is itself Arabic, a shortening of Jebel Tariq, after the Muslim commander who initiated the Umayyad conquest of Iberia in the eighth century. After conquering the territory in turn, the Spanish ceded it to Britain more than 300 years ago. Since then, it has survived its metamorphosis from a colony in an age of empire to an offshore finance hub in an age of untrammeled globalization.

Now, deal or no deal, Gibraltar faces another phase of that metamorphosis, with uncertain future prospects. Less the unfinished business of Brexit, more the unfinished business of the British Empire.

2023 is likely to be a watershed year: either the year a deal with the EU slipped from everyone’s grasp, or the year Britain and Gibraltar began to bid each other farewell.

It might end up being both.

Out at sea, in the glistening Bay of Algeciras, ships wait at anchor to be refueled. On some days, the accumulated moisture swept in over hundreds of miles of open sea hits the sheer wall of the rock and forms a long trailing cloud, known as the Levanter. On a clear day, you can see all the way to Morocco, and the Spanish enclave of Ceuta, the mirror image of Gibraltar in north Africa.

Borders are not just lines on a map. They define their surroundings as well as divide them. The single most important factor making Gibraltar and La Linea what they are today is their boundary: how hard or soft it is, how long it takes to cross and the wealth disparity between them.

According to Gibraltar’s statistical bureau, GDP per head was 76,153 pounds ($99,900) in 2021 and 2022, more than double that of the U.K. Much of Gibraltar looks like a property developer’s fantasy, though not always a very upscale one. A walk along the Westside waterfront takes you past a chain supermarket overlooked by dated tower blocks built on land reclaimed from the sea, Dubai-style, in the 1990s. A studio in the Eurotowers building costs about $400,000. A duplex penthouse is $3 million.

The GDP per head for Andalusia, the Spanish region of which La Linea is one of the poorest parts, was closer to $28,000. A certain push and pull is inevitable: the mutual attraction of labor and capital.

Just inside Spain, a prominent statue erected in 2003 by the Association for Cross-Border Workers of Gibraltar honors the decades of Linenses who have daily crossed the border in search of higher wages on the British side. The statue shows a smiling worker in a Lenin-style cap pushing his humble bike in the direction of the rock. It is number three on Tripadvisor’s list of local things to see and do.

Another kind of historic border arbitrage is less visibly commemorated. Back in the early 20th century, one long-time resident tells me, the frame of the honest worker’s bicycle might be empty going into Gibraltar but filled with coffee beans or chocolate or nylons on the way back.

On a bright day in January, I went to meet a representative of the cross-border workers’ association in their bar on the ground floor of a La Linea tower block.

A spry man in his early 70s wearing a bright purple sweater, Juan Jose Uceda explains the role of the border in local psychology. It gets into people’s nightmares, he tells me over the sound of midmorning reggaeton music. Daily uncertainty over how long it will take to cross, how much the Spanish will control the flow, becomes an obsession. When things are bad, “the whole day is spent thinking Gibraltar, Gibraltar, Gibraltar.”

A few years ago, Madrid demonstrated its displeasure with London’s unwillingness to negotiate over sovereignty by enforcing a “go-slow” approach at the border, conducting lengthy inspections of documents as well as other time-consuming procedures. Workers from La Linea got up earlier and earlier to try to beat the long lines.

“There were not enough psychiatrists in La Linea,” Uceda tells me. “People were going mad.”

While both the U.K. and Spain were members of the EU, the scope for such a “go slow” was limited. Uceda remembers an earlier period in the border’s history, in 1969, when it was shut entirely on the orders of Francisco Franco, Spain’s longtime dictator. The blockade lasted for years. La Linea’s economy went into freefall.

“It was like in Western movies, you know?” Uceda says, his hands rolling over one another, searching for a word. “Tumbleweed,” I help him out.

Franco built an oil refinery nearby to employ locals who lost their jobs in Gibraltar and, some say, to spoil the view from Gibraltar’s beaches. Uceda moved to England to get away.

When he came back after the return of democracy to Spain in 1978, he found La Linea in the grip of a heroin epidemic. “You couldn’t wear your watch on the street,” Uceda remembers. The border fully reopened only in 1985, as Spain’s entry fee into the EU, the bloc the U.K. has now left.

Things are much better now. La Linea still has a disjointed, end-of-the-world feel to it, but it doesn’t feel unsafe. And the food is better than in Gibraltar.

“Brexit was like a tsunami here”, he says. “A deal would give us a chance, a symbiosis.”

In the British press, Gibraltar is often caricatured as the British Empire’s most loyal outpost, a Falkland Islands in Europe. The reality is more complicated.

There is no denying Gibraltar’s patriotic British seaside town feel. There are fish-and-chips shops galore and Cornish ice cream on sale to weary walkers who make it up the rock. A “Heroes Welcome” banner supporting Britain’s armed forces greets arrivals at the border. A recent British academic study described Gibraltar as a “simulacrum of Britishness.”

When Queen Elizabeth II died last year, Gibraltarian Chief Minister Fabian Picardo tearfully declared, “Gibraltar was her rock; and she was ours.” Javier Ortega Smith, a leader of Spain’s far-right Vox party, used the occasion to tweet “Gibraltar to Spain; the Malvinas to Argentina!” using the Argentinian name for the Falklands, over which Britain and Argentina fought a short war in 1982.

Franco didn’t just cut off the flow of people in 1969. He severed the telephone lines too, as well as delivery of supplies of oxygen for the hospital. Everyone has stories about news of the deaths of family members shouted across no-man’s-land between the Spanish and British border posts. For over a decade and a half, Gibraltar became, in effect, an island. Food was brought in from Tangiers. The mid-1980s border reopening carries the same resonance here as the fall of the Berlin Wall in Germany — minus the desire for reunification.

Gibraltar is no longer a garrison town. Lush gardens have been planted along the old fort walls; multimillion-dollar houses stand where there were once gun emplacements. But the fortress mentality runs deep. Some Gibraltarians remember the border-closure era in the way an older generation of British remember World War II, as years of togetherness and community. Some view the border as a safety barrier against criminality from Spain.

Two referendums, in 1967 and 2002, confirmed Gibraltar’s unshakeable preference to remain British, returning 99% votes in favor of sole British sovereignty. The result of a third has been more troublesome: the 96% vote to remain in the EU in June 2016. The 19,000 Remain votes in Gibraltar were overwhelmed by 17 million Leave votes in the U.K. This has all reinforced a longer-term trend. Gibraltar’s history over the past century is not simply a hymn to eternal Britishness. It is the story of Gibraltarians dealing with the end of empire and forging their own path alongside, but separate from, the U.K.

London has not always treated Gibraltarians well. In WWII, almost the entire civilian population was evacuated. Many went to Britain and Ireland. Several thousand were sent to camps in Jamaica. They had to fight to return and faced unequal treatment when they did. The dockyards had separate bathrooms for British and Gibraltarian workers until the 1960s. Gibraltarians were not full British citizens until the 1980s.

Looking further back, Gibraltarians are as likely to trace their origins to Genoa and Malta as to Plymouth and Bristol. In the decades after the 1713 Treaty of Utrecht, the territory also became home to a substantial population of Sephardic Jews from North Africa, something the Spanish, in their Inquisition-era keenness to keep Iberia free of both Jews and Muslims, had insisted the treaty forbade. Gibraltar survived two 18th-century sieges through trade with Morocco.

Things quietened down considerably thereafter. The makeup of Gibraltar’s population changed. The border with Spain was porous. People had family on both sides. By the early 20th century, a third of Gibraltarian men married Spanish women. The lingua franca was Llanito, a dialect of Spanish. One highlight of Gibraltar Day celebrations is a spirited rendition of “Llevame Donde Naci” — “Take Me to Where I Was Born” — a patriotic anthem sung by wartime evacuation committees in Spanish.

Postwar self-government, initially very limited, sprang from these same committees, along with the demand that Britain finally recognize Gibraltarians’ basic rights. It was less an unqualified love story, then, and more a tale of hard-fought emancipation, tinged with admiration for British power.

In the wave of decolonization that swept the world after 1945, Gibraltar stood out. The territory was listed by the U.N. as a British colony. But in Gibraltar’s case, that might be interpreted as requiring union with Madrid. Spain was a much poorer country then; Franco was still in charge. For the father of Gibraltarian self-government, the lawyer and later Chief Minister Joshua Hassan, himself of Sephardic Jewish heritage, the notion of Gibraltar finding itself under the control of a man who had won a civil war with Nazi help was abhorrent.

So in 1963, Hassan went to the U.N., where he argued that Gibraltar was not somehow an artificial British implant on the coastline of Spain. Gibraltarians were not servants of a semi-defunct empire.

“It is precisely because our culture is eclectic that it has become individual”, he told the U.N. “And it is precisely because it is individual that we do not desire to allow Gibraltar to be swallowed up by Spain, Britain or anybody else.” There was, he insisted, a “Gibraltarian way of life.”

Then why not seek independence? Even after Brexit, few take that option seriously. It is not necessarily a question of viability based on size: Gibraltar’s population is not dramatically smaller than Europe’s fully fledged microstates, a tad less than that of Liechtenstein and in between those of San Marino and Monaco. All three of those states are members of the U.N.; all are rich. Then again, these countries have a settled political relationship with their immediate neighbors. Gibraltar does not.

In the meantime, the U.K. gives Gibraltar diplomatic protection. Franco is long gone, but the sovereignty claim remains. Any push for independence would likely cause Spain to invoke an article in the Treaty of Utrecht giving the Spanish Crown the right of first refusal were the British to ever give it up.

Gibraltar might claim an inherent right to self-determination on the basis of peoplehood, contending that Gibraltarians are a distinct people in their own right, just as Hassan argued half a century ago. But it would be a risky journey with an uncertain outcome.

It would, moreover, be very bad for business.

Further advantages available to wealthy foreigners include no capital gains or inheritance tax and, in effect, a cap on income tax. The marina is packed with boats. When I go, the largest is a superyacht recently confiscated from a sanctioned Russian oligarch, the steel-pipe mogul Dmitry Pumpyansky.

Yet Gibraltar does not feel like a billionaire’s paradise or indeed a place with a per capita GDP twice that of the U.K. There are beautiful beaches toward Gibraltar’s southern tip, glorious coves magnificently arrayed beneath the rock. But they hardly abound with the kind of bougie cafes you’d find on the Cote d’Azur.

Owen Smith, a lawyer who lives in the Old Town, bemoans Gibraltar’s city planning. He gestures toward a new building on a downtown walking street. The regulations here mandate wooden frames and shutters. This one has aluminum window frames, and no lintels at all.

“The problem with everything in Gibraltar,” the lawyer tells me earnestly, “is enforcement.”

Gibraltar’s situation has unique historical and geographic characteristics. But it also has elements of a cautionary tale: a small community trying to navigate huge global shifts with potentially existential consequences. In a world increasingly divided into huge, semi-detached trading blocs — of which the EU is one and the U.K. is not — is its current economic and political model right for what lies ahead?

The world has become a lot colder in recent years for small jurisdictions surfing the waves of financial globalization. Deal or no deal, Gibraltar may increasingly find itself drawn into the orbit of the EU, an organization that prides itself on being a regulatory superpower. The U.K. may be less willing or able to provide a degree of protection.

Variations of the question of enforcement have bedeviled Gibraltar for years.

In the 1980s, it was said to have not transposed a single European directive into local law. In the 1990s Spain claimed that Gibraltar was turning a blind eye to cigarette smuggling. In 2000 the Organization for Economic Cooperation and Development listed it as a noncooperative tax regime: the definition of a tax haven. (It was taken off that list in 2002 and has never been on the EU’s equivalent list.)

Much of this is historic. But it casts a long shadow. The Gibraltar government regularly pushes back against alleged mischaracterization in the Spanish press.

It used to be common for wealthy Gibraltarians to pay Gibraltar taxes while choosing to live in Spain, particularly in the coastal resort of Sotogrande, a Florida-style semi-gated development of expensive flats and villas clustered around a couple of man-made islands and a golf club. (Tony Blair was once said to have had a property here). A 2019 tax treaty with Spain — something Madrid had been requesting for years — made that much harder.

The swirl of headlines around Gibraltar’s financial center, even where its regulatory frameworks are only tangentially in question, if at all, doesn’t help its reputation. This January, Nadhim Zahawi, a leading British politician, was sacked from his role as chair of the Conservative Party over a scandal involving the use of a Gibraltarian entity as a shield against U.K. tax. More recently, the collapse of a Gibraltarian-run cryptocurrency trading platform in which several of Gibraltar’s elite were investors — including former Chief Minister Peter Caruana, the leader of the opposition, and the current chief minister’s wife — has brought further unwelcome attention.

“The world has changed,” says Marlene Hassan, the first woman to lead a Gibraltarian political party: Gibraltar Together. “Whether we like that transformation or not, it’s going to be transformative,” she told New Lines when we spoke in February. “It’s a totally new era.”

At the time, Hassan was fresh back from a trip to Israel, where her sister is deputy mayor of Jerusalem. Hassan’s father was Joshua Hassan, the former chief minister. Her cousin is James Levy, head of Hassans, Gibraltar’s largest and most influential law firm. She has deep roots in the establishment. But in recent years she has become an outspoken advocate of Gibraltar’s need to change the way it does business and what business it does. Despite the name of her political party, it often seems a solitary task. She is her party’s sole representative in the 17-member Gibraltar Parliament.

Hassan lauds the current government for its progressive stance on some social issues, including backing a 2021 measure to legalize abortion. But she is a stark critic of what she says is a tendency to accuse those who question Gibraltar’s economic model of disloyalty. Many Gibraltarians are struggling to access decent public services or make ends meet, she contends. Hassan insists she is calling for a rebalance, not a revolution in Gibraltar’s relationship to finance, in its own long-term interests.

“When you’re selling these services as your main economic model, you are attracting types that can bring your reputation down.” She calls it “Icarus syndrome,” flying too close to the sun.

In one blog post, she cites Dan Gertler, an Israeli businessman under U.S. sanctions for alleged corruption relating to Congolese mining interests, two of whose companies were once registered at the address of her cousin’s law firm and with whom Picardo worked when a lawyer there.

The uncle of Syrian dictator Bashar al-Assad, Rifaat, sold property in Gibraltar at a time his assets elsewhere had been frozen pending money-laundering proceedings. The purchaser was a trust, 75% owned in turn by the family trusts of Gibraltar’s financial services’ minister and his brothers — a leading lawyer and a leading estate agent.

None of this is illegal. Indeed, in the case of Assad, Gibraltar’s Supreme Court greenlit the deal. There is no suggestion of any wrongdoing or neglect. But it is hard not to be troubled by the intimacy of it.

Closeness between business and political interests is a common thread in small societies. Often, it benefits them. When, years ago, Gibraltar’s betting tax was cut, ultimately making it a global online gambling hub, it happened as a result of a chance conversation in the street. But when large sums of money are at stake, with a couple of highly concentrated industries, it is not hard to see the risks.

“Any progressive, greater-good-thinking government should think of ways to reduce our dependence” on the finance sector, Hassan insists. “It is not sustainable — morally, ethically or philosophically.”

“We need to reposition ourselves,” she tells me. Maybe there should be less focus on finance and gambling and more on local quality of life and on diversifying the economy. A deal with the EU could offer a chance for a reset: “There’s an opportunity, and there’s a need.”

Yesterday, in the middle of summer holiday season, Spanish voters went to the polls, with domestic issues high on the agenda. The results of the parliamentary election are close, and neither the Socialists nor the chief parties on the right will be able to form a government without help from smaller parties.

The way the politics of the next few months plays out will have a direct effect on Gibraltar. One path could lead to a deal, another to much harder measures that could be disastrous for the territory.

When I texted Uceda, the representative of Spain’s cross-border workers, before the election to ask about the situation, he sent me back an unhappy face emoji and a simple message: “very alarming.” Ultimately, a U.K.-EU treaty would offer protection against the ups and downs of Spanish politics, or indeed the ups and downs of British politics. In the absence of one, uncertainty reigns.

Identities change, but the fundamental question for Gibraltar remains the same as always: the extent to which Gibraltarians will have the power to shape their own destiny or whether their destiny will be shaped for them, by the distant capitals of former empires, or by the ebb and flow of other global forces far beyond their control.

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