ROCK OF CONTENTION

Prince Edward begins Gibraltar visit amid high tension over fishing rights

Chief minister makes surprise claim that British territory is “under attack”

Spain appeals to EU over colony's taxation system

Britain's Prince Edward, Earl of Wessex (L) greets people as he arrives in Gibraltar June 11. / MARCOS MORENO (AFP)

Gibraltar is under attack, according to Chief Minister Fabian Picardo. The inflammatory statement was made on day one of a visit to the British territory by Prince Edward and his wife as part of Queen Elizabeth’s Diamond Jubilee celebrations.

The “attack” was a reference to the dispute with Spain over fishing rights in waters that Gibraltar claims as its own but which Spain does not recognize as such. For the last two months, most of the fishing fleet from Algeciras and La Línea has been grounded while a negotiated solution to the conflict is sought.

Minutes before Picardo made his statement, journalists asked Prince Edward for his opinion on the fishing dispute. But the Earl of Wessex and his consort, Sophie Rhys-Jones, remained silent on the issue.

A Gibraltar government spokesman then tried to defuse the situation by saying that “the issue is now technical, not political,” and that experts were working on it. But the chief minister immediately contradicted him.

The latest bilateral meeting on the fishing issue took place last Friday. Things seem to have calmed down since May, when Spanish fishing boats were being harassed by Gibraltar patrols to prevent them from casting their nets. That is why Picardo’s statement came as a surprise.

During the visit by the royal couple, seven bobbies kept photographers out of the way as the Earl and Countess of Wessex advanced down a packed Main Street. Union Flags were everywhere to be seen as people took pictures with cameras, cellphones and tablets.

There are more people on the streets and the reason for that could be the tension”

“There are more people on the streets and the reason for that could be the tension,” said the government spokesman. “We are British and they are our royalty. That’s reason enough to be happy today,” concluded Angelique Ruiz, 28.

“I like the royal family because they keep the country united,” added Richard Morris, a 28-year-old tourist from Hull.

But Spanish authorities have described the royal visit as “unfortunate,” coming as it does in the middle of the fishing dispute. Previously, Queen Sofía of Spain opted not to attend a Diamond Jubilee celebration dinner in Britain, in protest over the situation.

“Spain already made its stand clear following the violent episodes in the waters of Algeciras Bay, and given the circumstances, it was decided that the queen would not go,” said a source at the Spanish Foreign Ministry.

The Spanish government also formally protested to the British ambassador in Madrid, Giles Paxman.

But that is not the only dispute between Spain and Gibraltar. Spain has also gone before the European Commission to appeal against Gibraltar’s new tax regime, claiming it is incompatible with European legislation.

The Gibraltar Income Tax Act 2010, says Spain, is a cover for state subsidies that are prohibited under EU law. The new rules reduce corporate tax from 22 percent to 10 percent (it is around 30 percent in Spain and 28 percent in Britain) and it is only applied to income originating in Gibraltar. Spanish authorities say this is an incentive for companies to register in Gibraltar and do business in Spain.

Although Gibraltar has been arguing for years that it is no longer a tax haven, there is little doubt that the new regime seeks to attract companies with the lure of lower taxes.

The official presentation of the act stated that, combined with the absence of taxes on capital income, wealth and property, the abolition of taxes on most forms of investment is a powerful lure for citizens and companies wishing to relocate from jurisdictions with greater fiscal pressure.

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