INTERNATIONAL DEVELOPMENT ASSOCIATION ORDER, 1960 (Hansard, 21 July 1960)

§ THE MINISTER WITHOUT PORT-FOLIO (THE EARL OF DUNDEE)
My Lords, in the Bill on the International Development Association which we debated on May 17 your Lordships will remember that in the third clause power was given to Her Majesty to issue an Order in Council, subject to Parliamentary confirmation, giving immunities and privileges to the staff of the International Development Association which are provided for in Article 8 of the Articles of Agreement. Those Articles are identical with the corresponding Articles of that part of the Bretton Woods Agreement which relates to the International Bank's immunities and privileges, and your Lordships will remember that the staff of the International Development Association is to be identical with the staff of the International Bank. I beg to move that the Draft International Development Association Order, 1960, be approved.

§ LORD PETHICK-LAWRENCE
My Lords, I have no wish to delay the passage of this Order but I should like to satisfy myself on one point. The noble Earl has already said that the main object of this Draft Order is to give the same immunities as under the Bretton Woods Agreement for the Monetary 585 Fund. That is perfectly satisfactory. I do not know whether I shall be in order if I ask one further question. As I understand it, this institution has been established in order to make money available for under-developed countries. Can the noble Earl tell us the actual procedure by which the money is obtained? Do the countries which give subscriptions to this fund ask that certain moneys should be given to some needy country, or can anybody come to the fund? How, in particular, is the fund managed? If that question is in order, perhaps the noble Earl would answer it, either to-day or, perhaps, in writing.

§ THE EARL OF DUNDEE
My Lords, all this Order does is to confer diplomatic immunities on the staff. I think I explained on Second Reading the stages by which subscriptions are to be paid to the International Development Association, and out of the money subscribed by member countries the Association will then issue loans to Governments or other people in underdeveloped countries. They may ask for a guarantee from the Government concerned. The procedure will be the same as that observed by the International Bank, except that the terms on which loans can be issued under this new Association are much easier than the terms of loans from the International Bank. The Association may waive interest and so on.

§ LORD OGMORE
My Lords, there is one point I should like to put to the noble Earl: it is on Section 9 of the Schedule. It seems to me that this goes a good deal further than mere diplomatic immunity to the staff. Section 9 says: (a) The Association, its assets, property, income and its operations and transactions authorised by this Agreement, shall be immune from all taxation and from all customs duties. The Association shall also be immune from liability for the collection or payment of any tax or duty. If the Association, for example—merely for example—undertakes certain trans- 586 actions, we will say in Uganda, involving development there on which a large amount of tax may be payable, what is the situation? Under this wording the Uganda taxpayer would not be able to receive from the Association, as I read it—although I may be wrong of course—the benefit of any tax whatsoever; the Association would, in fact, be getting away with quite a large amount every year in respect of tax which the Uganda taxpayer ought not to bear. I quite understand the position with reference to the servants of the Association; naturally they fall in line with other international bodies. But at the moment I fail to see why, if the Association itself makes a considerable profit in a territory, it should not bear its normal share of taxation with regard to its operations in that territory.

§ THE EARL OF DUNDEE
My Lords, all I can say to the noble Lord is that the privileges conferred are exactly the same as those already enjoyed by the officials of the International Bank, who will, incidentally, be the same people. I do not think there is any difference.

§ LORD OGMORE
My Lords, I thought I explained that I was not talking about the officials. I agree with regard to the officials; I am not making any complaint about the officials. I am talking about the Association itself. Your Lordships will see that this Order, as I have read out, seems to suppose that the Association, in connection with its commercial activities, will not be liable far any taxation or customs or excise duties. I should like to know if that is so, or if I have misread it.

§ THE EARL OF DUNDEE
My Lords, the object of the Association is to help under-developed countries and it does not trade or try to make any profit. It is simply the same as the International Bank, except that its loans can be issued on easier terms.