Defend Gibraltar? Better condemn it as a dodgy tax haven
In 1999, Vladimir Putin was angling to become president, a complex task considering the amount of money and violence in Russian politics at the time. He needed to talk to all the players and needed to do so somewhere unobtrusive, so he convened a meeting at an oligarch’s Mediterranean villa. This, however, caused a problem: how could he travel to southern Spain without alerting the Spanish, who might monitor the conversations and learn what was going on?
Fortunately, there was a solution: Gibraltar. The then-FSB chief flew into the British territory, hopped on a boat and entered Spain illegally, on perhaps as many as five occasions. Russian spooks are not the only thing Gibraltar has smuggled across the border. According to media reports quoting a confidential EU investigation, the Rock imported 117m packets of cigarettes in 2013, enough for every Gibraltarian to smoke almost 200 a day. The cigarettes didn’t stay there, however; they, like Putin, were passing through. This epic smuggling operation may have cost EU countries €700m in lost tax revenues over four years.
Britain’s response to Spain’s demand that it have a say over how Brexit affects Gibraltar has been one of almost universal fury, but it shouldn’t have been. If you imagine that, owing to some ancient treaty, Spain had a base in Dover, from which Russia’s chief spy had repeatedly sneaked into Kent, and smugglers had flooded the country with cheap fags, massively undermining our tax base, we would be pretty cross, too. It’s something of a wonder that Spain has put up with it for so long.
Gibraltar hasn’t always been this way. It used to be a naval garrison blockaded by Spain and with almost no links to its neighbours at all. Naval spending made up almost two-thirds of Gibraltar’s economy in the 1980s, but the money dried up with the end of the cold war and the Rock had to diversify. Like most of the other remaining British colonies, it did so by aggressively undercutting the rules and taxes of its neighbours. In time, it found a comfortable niche enabling business projects that were too dodgy for Jersey or the Isle of Man...
https://www.theguardian.com/commentisfree/2017/apr/08/defend-gibraltar-condemn-it-as-dodgy-tax-haven
