An Illegal Air Terminal?

I have no doubt that Gibraltar's Air Terminal needed improvement. I also have no doubt that before spending 75,000,000 Euros, the GSD Government should have resolved Gibraltar's energy problems. Energy, in the form of electricity generation, is the lifeline of Gibraltar and its economy. No electricity equals no economy, today we are relying on skid or "emergency" generators. I have asked the question, how is this to be resolved, over and over again without a reply being forthcoming from any political party but importantly not the GSD Government who have been in power for the past 16 years. 

Now, to add to the issue of bad prioritisation of expenditure, I wonder how people will feel if I were to suggests that the new Air Terminal has been built illegally? That is what I will argue in this blog because it is a prime example of a lack of good governance in Gibraltar. It would be right to say that an argument of illegality on many projects could be made against most past governments of Gibraltar. There is now one major difference: the new Constitution. In the past Governors have had more power, under the new Constitution, the GSD Government have been the first Government to have had more power: with power comes responsibility.

There is a basic requirement under the British system of government that everything must be done according to law. This requirement applies equally to a government, by which I mean the executive arm of government. In Gibraltar (because we have a subsidiary Parliament) this means that an Act of Parliament is required to authorise a government to do anything. The additional layer to this rule is that "... government should be conducted within a framework of recognised rules and principles which restrict discretionary power." (Wade - Administrative Law 5th Edition). All of these are the core principles that underpin parliamentary democracy. It is the basis of the principle of Parliamentary Supremacy, which in Gibraltar is only curtailed by the Constitution. 

It is only by this principle of the Rule of Law that power flows back to the people through the medium of an election and so underpins democracy. It is only by the strict adherence to this most basic of rules that a government is accountable to the people who elect it. It is through parliamentary debate and questions that Minister are brought to account in a democracy. The only other remedy is recourse to the Courts because governments and Ministers are equally liable for injury as any citizen if they act outside their powers granted by  law. This is known by lawyers as acting ultra vires.

Let me now turn to the issue of the new Air Terminal. Armed with this very basic knowledge of Administrative and Constitutional law, which any lawyer worth his salt will know, I decided to research how the construction of the new Air Terminal had been authorised by law. Lo and behold I have discovered that there is no law that allows the Government to build an air terminal. It seems to have been built in exercise by the GSD Government of a power that it does not have in law. Its construction has never been authorised by Parliament. It seems to have been built on the basis of Ministerial diktat worthy of Soviet Russia or maybe even Franco's Spain.

Having come to this conclusion, I decided to consider the potential repercussions of this situation. The first, undoubtedly is that it undermines all the principles of democracy because it sidesteps the democratic safeguard provided by Parliament. The second is that it is palpable and incontrovertible evidence (if any further evidence were to be needed) of a breach of the 1996 GSD promise of open, transparent, accountable and democratic government. The third is an analysis of the potential financial consequences of such a huge mess.

In order to unravel this huge mess I went first to the new Constitution. Government Finances are dealt with in Chapter VII of the New Constitution. This deals with the requirement that all government revenues (except as authorised otherwise by an Act of Parliament)  have to be paid into the Consolidated Fund. No money can be withdrawn unless charged on the Consolidated Fund by the Constitution or an Act of Parliament or as permitted by an Appropriation Act. Neither the Constitution nor any other Act of Parliament charges the expenditure to construct an Air Terminal on the Consolidated Fund. Therefore this throws us back to an Appropriation Act.

Section 69 of the Constitution requires the Minister for Finance to prepare and lay before Parliament "... estimates of the revenue and expenditure of Gibraltar ...". It is this provision that founds the basis of an Appropriation Act, which is what authorises withdrawals of government expenditure. I went, therefore, to the Appropriation Act 2011. Sure enough, no mention of expenditure for a new Air Terminal, but there was an "Improvement and Development Fund" amounting to £95,887,000. One assumes that the cost of the new Air Terminal is included in this figure.

The question that then arises is, is this appropriation sufficient legal authority to permit the GSD Government to construct an Air Terminal? I can only answer this question with a "NO". First an Appropriation Act only authorises withdrawal of expenditure and not the doing of any act. Second, I would refer the reader to the words that I emphasised in bold in the immediately preceding paragraph. Only expenditure that is "... of Gibraltar ..." can be authorised by an Appropriation Act. How can the  expenditure on  the illegal and so ultra vires construction of an air terminal be " ... expenditure of Gibraltar ..."? It cannot be precisely because if it is illegal it is not "... for Gibraltar ...". If I am right (I believe that my legal analysis is correct), then, the inclusion of any expenditure in the Appropriation Act for the Air Terminal is an attempt to fund an unconstitutional act and so also illegal and ultra vires.

What are the repercussions of this illegality? In my view the first is that, under section 74 of the the new Constitution, the Principal Auditor has the exclusive and unfettered duty to audit and report on the public accounts of Gibraltar. An audit includes a requirement to ensure the legality and vires of any expenditure. In this regard those who have had anything to do with any illegal expenditure should bear in mind the provisions of section 68 of the Public Finance (Control and Audit) Act. This section makes any public officer personally liable for improper or illegal expenditure, if the Financial Secretary considers that it has been incurred negligently, carelessly or by the default of any public officer. Readers should bear in mind that Ministers are also public officers.

The second repercussion is that under the new Constitution the responsibility to ensure good governance in Gibraltar lies with the UK Government and is exercised through the office of the Governor. I ask myself, can it be good government to be governed outside the Rule of Law? If my argument is correct (I believe it is) it cannot be good government for the construction of an air terminal at a cost of 75,000,000 Euros to have been undertaken without the authority of a law. At the very least it undermines Parliamentary Supremacy and so democracy.