I beg to move amendment No. 68, in

clause 22, page 11, line 16, leave out subsection (3).

This relates to the public funds of Gibraltar. There are bound to be financial provisions in a Bill of this kind that should be marked in italics, having regard to the constitutional position vis-à-vis the House of Lords. Such matters are more properly and effectively dealt with by the House of Commons. The provisions that are listed in subsections (1) and (2) are set in italics. In subsection (3), which is where Gibraltar comes into the equation, matters that pertain to the United Kingdom exclusively are italicised but those that pertain exclusively to Gibraltar are not. I am sure that the Minister will have a note to explain why that should be so.

Let me put forward one or two thoughts on the matter as I read it myself. Subsection (4) states:

''Subsection (3) applies to—

(a) an order under section 11;

(b) regulations under section 16; and

(c) regulations under section 7 of the 2002 Act.''

We have been through those extensively. We certainly do not need to repeat them. They are broad and they have a lot of adverse implications in the context I have already explained. Where the subordinate legislation would bite in respect of the Consolidated Fund in relation to the United Kingdom as a whole, in other words where it would affect this Parliament, I would have no specific point to make. I may reflect on that, but I do not doubt that a proper provision would need to be made in order to ensure that the money that was found related to that part of the Bill that affects the United Kingdom directly.

The problem is that where the Bill deals with the deployment of the public funds of Gibraltar, the UK legislative statutory instrument that would be employed under subsection (3) would require the use of money that is the public funds of Gibraltar. That is rather curious to say the least. The public funds of Gibraltar are deployed and deployable under and in respect of the financial arrangements within the House of Assembly. It does not come back to this Parliament to determine how and where it will spend its money. The Bill seems to be making provisions that are constitutionally unexpected and unreasonable because

they impinge on deployment of the Gibraltar public funds.

As I understand it, no United Kingdom statutory instrument, order or other legal provision has purported to deploy or commit Gibraltar public funds since decades before Gibraltar acquired its first modern constitution in 1964. We are talking about something that goes back an extremely long way. That is a reflection of our deep concern that, in order to deal with the hybrid situation of a combined region, powers are being taken that invade the constitutional propriety of Gibraltar in an unnecessary fashion.

The Minister has raised the question of proportionality on a number of occasions. For example, when discussing the name of the combined region, she mentioned size and we discussed the question of proportionality and why the words ''and Gibraltar'' would be conveniently put after the name of the electoral region, which has yet to be decided upon. I do not know the exact number of people in each of the regions—it will vary, because there is no fixed number. However, when considering the relatively small number of people in Gibraltar, I ask myself how much money will be charged to the Consolidated Fund for Gibraltar in proportion to the combined region as a whole; I am thinking of taxation and the amount of money that would need to be found for the Gibraltar end of the equation.

We require a clear explanation of that. It seems to me that a case can be made the Gibraltarians not having to pay any money out of the consolidated fund of Gibraltar. I have said what I need to say for the moment, and I would be interested to hear what the Minister has to say in reply.

First, it is clear that any electoral process has its costs and those costs must be met. The provisions of clause 22 are a necessary part of the Bill. Secondly, I do not entirely agree with the hon. Member for Stone that Gibraltar should be excluded from the responsibility of paying for the electoral arrangements within Gibraltar—any more, for instance, than Frome, which is of a comparable size, should be excluded for making the necessary electoral arrangements for my election. The same applies to the MEP. We are not excluded, and it is not immediately apparent why Gibraltar should be.

The hon. Gentleman is right to ask whether Parliament has the power to make an order that draws on the Consolidated fund for Gibraltar via a statutory instrument. We have primary legislation due to the constitutional position, but I am not sure that it is not an ultra vires power. I would certainly be much happier if the provisions for financing the electoral arrangements, as between Gibraltar and the rest of the combined region within which Gibraltar falls, were dependent on conformity of approach; and it should be for the House of Assembly of Gibraltar to bring forward the moneys and the regulation that brings it into effect. It is clearly a devolved matter, not a matter reserved to Parliament and the Government through statutory instrument. I have some unhappiness with the way in which the budget of Gibraltar is pre-empted

by regulation from the House in this instance. The Minister might explain that more fully to the Committee.

Clause 21(3) provides the powers to make detailed arrangements regarding the financial authorisation set out in subsections (1) and (2) and by the words in italics in subsection (3). The provisions in italics were the subject of the money resolution. By agreeing to subsections (1) and (2) and the words in italics in subsection (3) in that resolution, Parliament has given its authority in principle for the expenditure of those funds.

I shall set out the Government's intention in that regard and then explain why clause 22(3) has been so drafted. Clearly, elections cost money. The expenses of the local returning officer and the registration officer for Gibraltar must be met. It is our intention that that should be achieved in the same way as it is achieved in the United Kingdom. In European elections, the returning officer's expenses—the bulk of the expenditure for an election—should be met by the UK Consolidated Fund. In other words, the UK Government will pay for the returning officer in Gibraltar, as it pays for the returning officer in the UK. The registration officer's expenses, however, are met locally.

Although that is understandable, does the Minister agree that, in principle, legislation should be passed in Gibraltar to deal with that situation, rather than being dealt with by a statutory instrument in this Parliament?

The orders under the Bill and the regulations relating to European parliamentary elections will need to set out how these matters should be dealt with as a consequence of Gibraltarians being included in the European parliamentary elections. I am sympathetic to considering what legislation could be passed in Gibraltar. As I have made clear earlier, we are keen for as many of the legislative provisions as possible to be dealt with in Gibraltar by the House of Assembly. However, we need to be sure that the money can be spent. That may mean that it is appropriate for money to be paid into the Consolidated Fund of Gibraltar and then spent on the local returning officer. That is why the Bill allows for money to be paid and expenditure to be met by a Minister of the Crown, and for a sum to be paid into the Consolidated Fund or the Consolidated Fund for Gibraltar, but also for sums to be paid out of the Consolidated Fund for Gibraltar. The wording in the Bill provides the flexibility to put the arrangements into practice.

I am happy for as much as possible to be done locally. Clearly, we need to discuss further with the Government of Gibraltar how that can be done. The Bill provides for limited powers in connection with the European parliamentary elections. It will not apply to anything else. We are talking only about the expenses of returning officers and registration officers. The provisions are limited in scope, but they are drafted in such a way as to ensure that, in practice, the money gets to the right place.

So that we can be absolutely clear, let us imagine a hypothetical and extraordinarily unlikely position. Let us suppose that a statutory instrument were made that required the making of payments from the Consolidated Fund of Gibraltar, and the Government and House of Assembly of Gibraltar declined to make those payments. What would the constitutional position be? Would a Minister here, on the basis of this proposed legislation, be able to insist on the payment being made?

That would depend entirely on the way in which the powers were applied. We have not put any such detail in the Bill because such matters will depend on discussions with the Government of Gibraltar about the best way to effect the provision. Nothing in the Bill sets out how we would respond to the situation that the hon. Gentleman has described, or even whether there would be such financial arrangements in the first place.

Clearly, we do not anticipate such a situation. The Government of Gibraltar, in all discussions, have been keen to ensure that their people can vote in the European parliamentary elections. Obviously, to meet our obligations, we need to ensure that the people of Gibraltar can vote, and financial arrangements and provisions will need to reflect that. However, it is not possible to answer the hon. Gentleman's hypothetical question without further discussions with the Government of Gibraltar on the best arrangements for ensuring that the money gets to the right place.

I am sorry to intervene again, but that is the whole point. The Minister says that the point of the provision is to ensure that the money gets to the right place. I am asking whether, in the event of a conclusion not being reached, a Minister of the Crown here would have the power to draw money down from the Consolidated Fund of Gibraltar, for example, in the case of a dispute. She says that she is not sure of the answer, which raises the question of what the provision is for. Clearly, what is needed is an agreement between the Government of Gibraltar and the British Government. There is not a scintilla of doubt in my mind that that will be reached easily, but the question in principle is whether, under a Bill passed by this Parliament, money can be taken from the Consolidated Fund of Gibraltar without a change in the constitutional arrangements.

As I have said, that would depend on the way in which the powers were set out and what regulations or orders were made under the clause. If a statutory instrument were made that required payments from the Government of Gibraltar's Consolidated Fund, and those payments were not made, that would be unlawful. The outcome would depend on what was set out in the statutory instrument but we have not, at this stage, drawn up any such statutory instrument. We have not discussed that further, as we will need to, with the Government of Gibraltar.

The hon. Gentleman is completely right to say that the provision will depend on agreement to make things happen in practice. We have set out the principles relatively clearly, stating that the same arrangements should apply as those that apply across the rest of the

United Kingdom, with a similar balance between local expenditure and expenditure by the UK Government. We need simply to ensure that there is enough flexibility to put the financial arrangements into place in practice.

On that basis, and given that without subsection (3) we would find it difficult to put any of the financial arrangements into practice, such as ensuring that we can pay for Gibraltar's returning officer, I ask the hon. Member for Stone to withdraw the amendment.

I am grateful to the Minister. I understand that her conclusion is that if the House of Commons passes a statutory instrument requiring payment from the Consolidated Fund of Gibraltar, and if the Government of Gibraltar did not make that money available, they would be acting unlawfully. In other words, the financial devolution implicit in the constitutional arrangements for Gibraltar is subject either to primary or secondary legislation in this House, and Gibraltar would not be in a different position from, for example, a local authority in the United Kingdom if it acted outwith the provisions of a statutory instrument passed by this House. That is what the Minister has given me to understand.

As I have said, that is an entirely hypothetical situation. I do not see any practical difficulties with the provision, but it is helpful to know that the colonial ties that bind us to Gibraltar are as strong as ever and that there is no doubt that the House of Assembly and the Government of Gibraltar do not have an inherent power to use the Consolidated Fund of Gibraltar as they wish. They are always subject to the fiat of a Minister of the Crown in the United Kingdom supported by a parliamentary instrument.

I am not so convinced that that situation is entirely hypothetical. Apart from anything else, we do not actually know whether the disagreements that could arise would result in a court having to adjudicate. That is an uncertainty rather than a hypothesis.

One thing is certain: the Minister has said, without mentioning any timing, that certain discussions have taken place on these matters between the Government of Gibraltar and, I assume, the Lord Chancellor's Department. It is quite clear that the principles that arose from those discussions have led to concerns about the matter and not managed to assuage the concerns of the Government of Gibraltar. That is a matter of fact, otherwise I would not have put forward my points on it today.

Despite the Minister's attempts to dispel concern with principle and constitutionality, that absence of concern is not, I am afraid, shared by those with whom I have discussed the matter in Gibraltar. They have not raised concerns because of a hypothesis, nor just to be difficult, but because a genuine issue of principle lies at the heart of the matter. I have heard the Minister's comments and I invite her to write to me—and perhaps also to the Chief Minister of Gibraltar—explaining how the provision is supposed to work, in

the hope that that will add something to the discussions that have already taken place, to which I was not a party and the contents of which I am not aware.

It might then become clear that the problems in the circumstances that have been referred to can be overcome, but at the moment it is not for me to stand here and say that the people to whom I have spoken are wrong. As the hon. Member for Somerton and Frome has pointed out, and as I have said, matters of constitutional principle are involved. There is a question of why the problems here were not resolved at an earlier stage than this Committee. For example, they were certainly not raised on Second Reading. If we can be provided with further explanations, perhaps we can return to the matter on Report.

I have, then, certain caveats. I made the same point about returning to the subject on Report under the previous amendment, because a similar principle applied there: how far discussions have managed to elucidate the issues lying between the Government of Gibraltar and the Government of the United Kingdom.

Just to clarify that point for the hon. Gentleman, we certainly expect to have extensive discussions on the financial aspects. They have not been discussed in any detail with the Government of Gibraltar at this stage. Considerable discussions need to take place on money issues.

I am extremely glad to hear that. I do not want to try to trip the Minister up, but, as she was putting the arguments to the hon. Member for Somerton and Frome, she referred to discussions. I know that discussions in general have been taking place, but the key question in relation to the amendment relates to the financial questions—the Consolidated Fund of Gibraltar and so on. However, we have been through all that.

I conclude by saying that I am prepared to withdraw the amendment, with the strongest reservation that constitutional issues are involved. I have been given an indication by the Minister that these matters have been under discussion. Even if we were to press the amendment to a Division, we would not win in the Committee, but there are issues that we may need to return to and, I sense, will return to on Report. With those strong reservations, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 ordered to stand part of the Bill

On a point of order, Mr. Cook. I want to be clear. The note on the selection list indicates that we have already had a stand part debate on clause 23. In other words, there is no need for discussion because we have had it already.

I assure the hon. Gentleman that we discussed it ad nauseam.

I hope not.

Clauses 23 and 24 ordered to stand part of the Bill.