The UK government has pledged to give financial services firms based in Gibraltar market access until 2020, in a bid to give greater certainty to those living on The Rock.
Downing Street will work closely with the government of Gibraltar to design a replacement framework "to endure beyond 2020", which will be based on continued high standards of regulation, based on "modern arrangements" for information-sharing, transparency and regulatory co-operation.
On top of this, the deal includes an assurance that British citizens who live in Gibraltar will remain eligible for higher education home fee status at English institutions, enhanced liaison on environmental issues, and that Gibraltar can continue to refer an unlimited number of patients to the UK for free elective treatment.
The deal was agreed during a joint ministerial council between Brexit minister Robin Walker and the chief minister for Gibraltar Fabian Picardo.
Walker said: “Today we have agreed a positive package deal on issues surrounding our exit from the EU, once again demonstrating that we stand shoulder to shoulder with Gibraltarians in our unwavering commitment to the UK-Gibraltar relationship.”
City minister John Glen added: "We know the people and businesses of Gibraltar have been asking for certainty, and we have heard them. We are ensuring that Gibraltar’s access to UK markets will continue unchanged until 2020, even in the unlikely event of no deal being reached. This will give us the time we need to work with the Government of Gibraltar to design a new, modernised agreement, based on similar, high standards of regulation and enforcement.”
It comes as the UK negotiates for Gibraltar to be treated the same as Britain when it leaves the EU in March 2019, amid fears Spain could use its veto to force talks about the Rock's constitutional future.
The EU has repeatedly insisted Madrid can stop a transitional deal or future trade relationship applying to Gibraltar unless there is a Spain-UK agreement.