Draft Bank for International Settlements (Immunities and Privileges) Order 2021

James Duddridge Excerpts

Tuesday 9th February 2021 General Committees

[The Chair]

Before we begin, I would like to remind Members to observe social distancing; I think everyone is sitting where ticks indicate availability. Mr Speaker has stated that masks must be worn when Members are not speaking. All notes should be sent to [e-mail].

[The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (James Duddridge)]

I beg to move,

That the Committee has considered the draft Bank for International Settlements (Immunities and Privileges) Order 2021.

The Order has been negotiated as part of a host country agreement to support the establishment of the new Bank for International Settlements Innovation Hub in London. The order is required so that the United Kingdom can fully comply with its obligations as host country under the host country agreement.

In 2020, it was announced that the Bank of England was successful in its bid to host the hub in the UK. It will conduct research on the emerging trends in financial technology and help the global central banking community ensure that innovation does not negatively impact on consumers and the stability of the financial system. Of course the UK is a leader in FinTech, and the sector is worth more than £11 billion annually to the UK. It is a success and that is largely based on the UK’s policy and regulatory expertise on innovation in the financial sector and FinTech. London’s selection very much reflects that success.

The order includes limited immunity for legal processes in respect of staff in relation to their official acts and certain tax exemptions. Those immunities ensure that public funds supporting international financial institutions, such as the Bank for International Settlements, are spent purely on the delivery of their work, and do not simply add to the tax revenue of the country. They were part of a bid condition to host the Bank for International Settlements. Our hosting of the BIS hub is good news for the UK, and to host this beneficial organisation is a success for the UK.

The order simply sets out the logistics to allow the Bank for International Settlements to establish itself in London, and I commend the order to the Committee.

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[James Duddridge]

I thank the hon. Gentleman for his constructive approach, and his helpful questions.

On abuse of diplomatic status, the immunities provided would not include parking charges. The immunities and privileges relate to the organisation in pursuit of its activities, not to individuals nor their families.

There is no cross-over between the terms of this limited order and any plans relating to ODA or IDA in any way, shape or form.

In terms of other BIS hubs, the only difference in terms of immunities and privileges is that we have tightened the terms of the order, given recent cases. I am aware of no other differences.

The flow of money to the BIS hub is through the Bank of England, but certainly we will not spend ODA on that hub, so there should be no confusion whatsoever about that: I am leading on this statutory instrument because it is an immunities and privileges order. In terms of the accountability of FinTech, its impact is largely positive although I acknowledge that there are some negative aspects. I will pass on the hon. Gentleman’s comments in that respect to Her Majesty’s Treasury, which leads on this in a departmental sense, although the Bank of England is the member organisation of the BIS.

The hon. Gentleman made a very good point about wider membership of the BIS. As I said earlier, the hub will have an effect on the developing communities, which in many ways operate in less of a regulatory environment but are moving at faster pace, so the more countries we can bring into the BIS, the better.

Question put and agreed to.