No 10 responds to Spanish claim that UK territory might be excluded from transitional arrangements unless there is deal over future status

Any Brexit deal “must work for Gibraltar”, Downing Street has said after Spanish government sources said the UK territory might be excluded from any transitional arrangement unless there is agreement over its future status.

The issue of Spain’s longstanding claim over Gibraltar has threatened to become an obstruction to a Brexit agreement after the EU said in April the territory would remain outside any trade deal if there was no agreement with Madrid over its status.

Q&A What is a hard Brexit? Show Hide A hard Brexit would take Britain out of the EU’s single market and customs union and ends its obligations to respect the four freedoms, make big EU budget payments and accept the jurisdiction of the ECJ: what Brexiters mean by “taking back control” of Britain’s borders, laws and money. It would mean a return of trade tariffs, depending on what (if any) FTA was agreed. See our full Brexit phrasebook.

On Wednesday, a senior Spanish government source said this stipulation included any deal on a transition period, intended to keep the UK in the EU’s single market and customs union for up to two years while permanent arrangements are finalised.

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Asked about this threat, Theresa May’s deputy spokesman said he could not comment on anonymous views. “But broadly speaking, we are seeking to engage with all EU member states and we are determined to get a deal that works for all parts of the UK family. That deal must work for Gibraltar, too.”

There have been no discussions over the long-term future of Gibraltar, with the Spanish source telling the Guardian the assumption in Madrid was that the territory would leave the single market on 29 March 2019, the official Brexit date.

Gibraltar’s prime minister, Fabian Picardo, has previously suggested that a hard Brexit would pose an “existential threat” to the territory, where 96% of people voted to remain EU members.



The source said May’s government appeared to have bigger issues to deal with than the fate of the 28,000 people who live on the rock. “I think the situation with Gibraltar is crystal clear,” the source said. “Gibraltar became associated with the EU project because of their dependence in the UK. This is going to stay until March 2019. In 2019 when the UK leaves the EU, Gibraltar will leave with the UK.”

“This is what we are telling the Gibraltarians. If you want to have your existing status, you will have to talk with us. And I cannot understand why Picardo has refused to do so. I think in the past he has played very hard on the other side. But reality arrives.”