HL Deb 19 March 1991 vol 527 cc594-6

8 p.m.

Lord Reay rose to move, That the draft order laid before the House on 11th March be approved [14th Report from the Joint Committee].

The noble Lord said: My Lords, the draft order was approved in another place on 13th March. Your Lordships will remember that the House approved the European Bank for Reconstruction and Development (Immunities and Privileges) Order 1990 on 25th July 1990. That order gave effect to the immunities and privileges set out in Chapter VIII of the agreement establishing the bank. The order before the House today will revoke the 1990 order and replace it with fresh provisions. The immunities and privileges set out in the agreement establishing the bank, previously given effect to by the 1990 order, and the new privileges and immunities accorded in the headquarters agreement negotiated between the bank and Her Majesty's Government, are now consolidated in the draft order before us. The order, when made, will enable the United Kingdom to grant to the bank, its officers and employees, experts performing missions for the bank and representatives of members of the bank these privileges and immunities.

I informed the House on 25th July last year when privileges and immunities for the bank were first debated in the House that the Government would be presenting the order now before us for approval once the negotiations for a headquarters agreement for the bank were completed. The headquarters agreement was laid before the House in draft on 7th February as Command Paper 1440. The order requires the approval of each House under Section 10 of the International Organisations Act 1968 before it can be submitted to Her Majesty in Council.

The order needs to be formally made at the meeting of the Privy Council tomorrow so that the headquarters agreement may be signed at the inaugural meeting of the bank on 15th April—a most important occasion, which will be attended by my right honourable friend the Prime Minister, by President Mitterrand and by several other heads of state or government. The agreement will enter into force on signature. It is for this reason that the order is before the House today.

When presenting the 1990 privileges and immunities order last July, I explained that the privileges and immunities set out therein had been accepted by all the prospective members of the bank as necessary to enable the bank to fulfil its purpose and function. All member countries of the EBRD will grant the bank these immunities and privileges. The House approved the 1990 order and the privileges and immunities set out therein. Those privileges and immunities are now reproduced in the draft order and include certain exemptions from duties and taxation for the bank and certain immunities from seizure for its property. The officers and employees of the bank are exempted from taxation on the salaries paid to them by the bank (although they will pay an internal tax for the benefit of the bank) and they will be immune from suit and legal process in respect of their official acts. Legal status is conferred on the bank by the order.

In a number of respects the draft headquarters agreement goes beyond the agreement establishing the bank; this is because there are certain matters which are obviously not especially relevant to the membership of the bank as a whole but are of particular concern to the bank and to the United Kingdom as the host state, in their mutual relations. The headquarters agreement gives immunity to the bank within the scope of its official activities from legal proceedings, subject to specified exceptions, and inviolability for the bank's premises. Persons connected with the bank (which includes officers and employees, experts performing missions for the bank and representatives of members of the bank) are granted varying privileges and immunities according to their status. Those who are British citizens or permanent residents of the United Kingdom receive, however, only the essential minimum privileges and immunities to enable them to perform their official functions.

I should explain that the original of the draft order before us was withdrawn and relaid on 11th March to take account of a point raised by the Joint Committee on Statutory Instruments. A second paragraph has been added to Article 6 of the draft order to reflect the last sentence of Article 6.2 of the draft headquarters agreement negotiated between the Government and the bank. This article regulates the inviolability of the bank's premises. A second point concerning this article raised by the joint committee was addressed by the department in a further memorandum sent to the committee. The joint committee completed its consideration of the draft order on 12th March.

In conclusion, we are satisfied that the privileges and immunities accorded under the draft order are necessary to fulfil our obligations under the agreement establishing the bank and the headquarters agreement. The House may rest assured that the privileges and immunities accorded are no more than are necessary for the effective operation of the bank in London and that they are granted in accordance with the limitation imposed by the International Organisations Act 1968, as amended, under whose provisions the order is made,

Finally, I am delighted that the bank has chosen London as the location of its headquarters; it will be the first multilateral development bank to be based here. We think that this will be good for the bank and good for London. The establishment of this new bank represents the commitment of the international community to support the process of political and economic reform in Central and Eastern Europe. Your Lordships will no doubt join me in welcoming the bank to London and wishing it every success in its endeavours. I beg to move.

Moved, That the draft order laid before the House on 11 th March be approved [14th Report from the Joint Committee].—(Lord Reay.)

Lord Richard

My Lords, I shall be very brief in response to the noble Lord, Lord Reay. First, on this side of the House we welcome the fact that the bank is coming to London. Secondly, we accept that the immunities and privileges set out in the order are 64indeed necessary for the proper operation of the bank. Thirdly, in view of what is going to happen in the Privy Council tomorrow, the noble Lord will no doubt be not surprised, though I hope relieved, to hear that we shall certainly not be opposing the order tonight. This is not the occasion on which one should debate the bank itself, or the way in which the bank will operate. I shall ask the noble Lord two questions. I do not expect answers from him tonight, however, so he need not be too worried about that. Perhaps he will be kind enough to note the following points and write to us, because they are matters of some concern.

It would be interesting to have some further information as to how the bank's limited funds will be allocated. It would also be helpful if we could know by whom the bank's limited funds will be allocated. At present, as I understand it, members will have equal votes on general policy matters, but on finance some members will be more equal than others. We should welcome at least some further indication from the Government on these two points at an appropriate stage. Subject to that, we support this order.

Lord Reay

My Lords, I am grateful to the noble Lord for the welcome he has given to the order. He has posed two questions but has kindly given me the option of replying to him in writing, which I think it will be best if I accept. On that basis, I should like to offer to do so.

On Question, Motion agreed to.

The Earl of Strathmore and Kinghorne

My Lords, I beg to move that the House do now adjourn during pleasure until 8.55 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.9 to 8.55 p.m.].