Gibraltar is represented in the European Union, having been the only British Overseas Territory which joined the EC under the British Treaty of Accession (1973).
The Government of Spain continues with an irredentist territorial claim to Gibraltar, which was ceded in perpetuity to the British Crown in 1713. In a referendum held in 2002, a proposal for shared sovereignty was overwhelmingly rejected by the Gibraltar electorate with 99.5% voting against. The sovereignty issue remains an important factor in local politics.
Gibraltar has a number of political parties which have developed to address local issues. Gibraltar's political activity takes place in a framework of a parliamentary representative democratic, whereby the Chief Minister is the head of government, and of a multi-party system. Gibraltar is an overseas territory of the United Kingdom, with full internal self-government under its 2006 Constitution. The preamble to that Constitution repeated from the 1969 constitution states that "Her Majesty's Government will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes."
Unlike most other British territories, Gibraltar has not been offered independence by the UK. It has been suggested that this is on the grounds that the Treaty of Utrecht, under which Spain ceded the territory to the British Crown, states that, if the British Crown should ever wish to dispose of Gibraltar, it must first be offered to Spain. However, the Gibraltar Government has pointed out at the UN that Article 103 of the UN Charter overrules and annuls this "reversionary clause".
Neither the United Kingdom nor Spain seem keen to test the legal status of Clause X of the Treaty of Utrecht in court. The remaining parts of the treaty that regulated such things as the slave trade, and the transfer of Minorca to the British, have become obsolete.
Spain argues that Gibraltar's status is an anachronism, and that it should become an autonomous community of Spain, similar to Catalonia or the Basque Country. It also argues that the principle of territorial integrity, not self-determination applies, drawing parallels with the British handover of Hong Kong to the People's Republic of China in 1997. However, at the same time, successive Spanish governments have refused to countenance the handover of their north African enclaves of Ceuta and Melilla to Morocco. The Junta de Andalucia (Andalucia's elected regional government) believes that Gibraltar should be integrated into its regional autonomy.
The Gibraltarians continue to assert that they are British not Spanish . At the same time, the British Government continues to state that there can be no change in the status of Gibraltar without their democratic consent .
The Gibraltar Government has asked the UN Committee of 24 to refer the issues to the International Court of Justice for an advisory opinion, but Spain has lobbied against this. The Gibraltar Government has also invited the Committee to visit the territory, but so far, despite no objection from the United Kingdom, they have not done so .
The 2006 constitution further increases the level of self-government in the territory, and the colonial status of Gibraltar is now considered to be over. In a letter to the United Nations describing this, the British Ambassador states that "I do not think that this description would apply to any relationship based on colonialism."
All parties support Gibraltar's right to self-determination, and reject any concessions on the issue of sovereignty.
The Gibraltar Parliament (previously the House of Assembly) consists of seventeen elected members, and the Speaker. Under the electoral system of partial bloc voting used since 1969, voters must choose ten candidates, who need necessarily not be from the same party but usually are. The winning candidates are then chosen by simple plurality; consequently, a party seeking to form a government stands ten candidates, and the party that forms the government is usually successful in having all ten of its candidates elected; the remaining seats are usually won by the 'best loser' which then forms the opposition. The last election was held on October 11, 2007.
In June 2006 the Progressive Democratic Party (PDP) was formed and announced it will be presenting a full slate of candidates and enters the political arena as "a fresh, positive and modern alternative," to both the ruling Gibraltar Social Democrats and the Opposition GSLP/Liberals.
The Progressive Democratic Party declares it is founded on several basic pillars;
It was originally known as the Gibraltar Housewives Association, and subsequently, in the early eighties it was changed to the Gibraltar Women's Association keeping in with more modern times that not all women were just housewives.
The open and challenging campaigns this NGO has put to the fore of Gibraltar issues has meant that it has become established as a leading Gibraltar human rights organisation.Although it still defends sexual minorities it is also highly active on issues regarding the disabled, British residents' rights, and issues regarding the protection of children against sex abuse amongst others. This has encouraged other sectors of the community to bring forward their issues in an equally forthright manner; for example the growth of Gibraltar's environmentalist and disabilities movements. In a way, this NGO phenomenon is perhaps the most interesting political development in Gibraltar since the foundation of the Association for the Advancement of Civil Rights (AACR) in the 1940s as a result of the WWII experience.
The VOGG is a long running group which has the objective of defending the rights of Gibraltarians against external threats. It engages in public debate, and protest action where appropriate. As a non-political pressure group, its members represent a wide cross section of the community.
It was particularly active in canvassing a "no" note in the 2002 referendum, when it toured the housing estates with a loudspeaker van and invited guests from all parties to address residents, culminating with the Chief Minister at Convent Place, after the result was announced.
In March 2006, Jack Straw, the UK Foreign Secretary announced in the British House of Commons that the details of a new constitution had been agreed. There are some differences between the draft constitution and the one to which the UK agreed, namely that the Governor's title will remain unchanged, and that the Police Authority will remain independent of the Government of Gibraltar.
In December 2006 Gibraltar was granted a new constitution, providing a modern constitutional relationship between Gibraltar and the United Kingdom, not based on colonialism. The constitution does not in any way diminish British sovereignty of Gibraltar, and the United Kingdom retains its full internal responsibility for Gibraltar, including Gibraltar’s external relations and defence, and the Member State responsible for Gibraltar in the European Union.
Writing to the Spanish Foreign Minister, Jack Straw stated:

After several months of political wrangling, the Gibraltar Government published the draft Constitution Order, which includes the existing preamble promising that there would be no transfer of sovereignty against the wishes of the Gibraltarians and a new addition explaining the status 
Based on this wording and the Statement of the Minister for Europe in the House of Commons, the Gibraltar Opposition now support the new Constitution 
The proposal was put to the people in a referendum and approved. The constitution took effect in 2007 and 29 January declared a public holiday in celebration.

However, the British Foreign Office rejected the idea in 1976, along with independence, on the grounds that any further constitutional reform or decolonisation would have to take into account the so-called "Spanish dimension". Many in Gibraltar, including the present Government, have also argued against integration on the grounds that it would mean the surrendering of many existing powers of self-government.
While there is still considerable emotional attachment to the idea of Gibraltar being British, its citizens want to participate in the new Europe of the future.
This would give Spain a symbolic constitutional role in Gibraltar, but would not go far enough for Spain towards effective Spanish control of the Rock. Even a symbolic role would be a step too far for most Gibraltarians.
This was the first UK election in which Gibraltar participated. The Conservative Party took 69.52% of the vote, which has generally been interpreted as a protest against the handling of Gibraltar by the Labour Party. The Conservatives also campaigned more strongly, with the support of the Gibraltar branch of the party and a visit from the party leader Michael Howard.