Draft Asian Infrastructure Investment Bank (Initial Capital Contribution) Order 2015

Jamie Reed Excerpts

Monday 19th October 2015 General Committees

[Mr Jamie Reed (Copeland) (Lab)]

Briefly, the Government’s policy of engagement with China, as well as the direction of travel inherent within that, which I broadly support, is clearly a high-wire act. Everyone in the House should seek to support it. China, too, has enormous economic ambitions. Those familiar with the new rulers of the country will understand the Made in China 2025 programme that is in place. The Chinese intend to transform their economy beyond all recognition in the next 10 years, which is a huge undertaking that is already under way.

The content of the draft order should really have been the subject of an Act of Parliament, not simply put in a little-scrutinised instrument such as the one before the Committee today. That is something we will all come to regret.

The draft order represents an initial contribution, as the Minister outlined. When will the other contributions be expected? What kind of amount will we be expected to contribute in future? What assurance will the Minister give to those millions of working families about to lose £1,300 as a result of Government policy that—

[The Chair]

Order. That is absolutely nothing to do with the draft order.

[Mr Jamie Reed]

I absolutely obey your strictures, Mr Gray.

Finally, will the Minister provide us with some reassurance on the attitude of our colleagues in the United States towards our heavy investment in the bank?

--- Later in debate ---

[Greg Hands]

The Government have in place a number of procedures. Such contingent liabilities have been around for some decades. For example, the UK has been a contributor to the International Monetary Fund since the 1950s, and an interesting question might be whether the Opposition’s position is to continue being a contributor to the IMF, given that they voted against that in the previous Parliament. I will not dwell on that, however.

My hon. Friend the Member for Stafford asked why the World Bank is dealt with by the Secretary of State for International Development and the AIIB is dealt with by the Chancellor. That is a divide across various international financial institutions. The Treasury deals with the IMF, the European Investment Bank and others that focus on the market, whereas DFID concentrates on the World Bank, the Asian Development Bank and so on. The purpose of the AIIB is to support economic growth, which is clearly within the Chancellor’s remit, bearing in mind that we are talking about infrastructure.

My hon. Friend also asked about climate finance. The president-designate of the AIIB, Mr Jin, has made it clear that his vision is for a “lean, clean and green” bank; and the UK is at the table helping to make those decisions, by being an early contributory member. My hon. Friend’s point about the parliamentary network of the 57 countries was interesting, and we will reflect on whether there should be a parliamentary network in a similar way to what can happen for other multilateral institutions. I will perhaps write to him about that.

The hon. Member for Copeland asked whether there should be primary legislation, but the Opposition cannot have it both ways. They cannot claim that the orders result from their own Act—the International Development Act 2002—and at the same time question why there is no primary legislation. Perhaps they should get their position in order first.

[Mr Reed]

The Minister knows that I hold him in significant respect and regard, but does he regret that we are rushing to push through a complex and important measure to satisfy the need for a press call with the Chinese premier tomorrow?

[Greg Hands]

I disagree about that. We announced in March that we would be joining the bank, and I think October is a reasonable time for us to be debating that in the House of Commons. I do not personally feel that that seven months to join a multilateral institution is particularly rushed.

The hon. Gentleman asked about the position of the United States. The US was initially a little sceptical about joining the AIIB, but its tone softened in recent months, and at the recent Chinese state visit to the US, a joint statement said:

“Both sides acknowledge that for new and future institutions to be significant contributors to the international financial architecture, these institutions, like the existing international financial institutions, are to be…operated…with the existing high environmental and governance standards”.

To go back to the hon. Gentleman’s earlier point, the measure was scored in the summer Budget. He had a perfect opportunity to ask more questions between 8 July and today about the operation of the bank.

We have had a good debate today. I have been heartened by the wider recognition that, to continue building a strong economy in this increasingly globalised world, building productive relationships is vital. Our commitment to the AIIB is a classic win-win situation, with all sides benefiting. Countries in Asia and the Pacific will have many more of their infrastructure needs—very pressing needs, in some cases—delivered. Those are business opportunities that UK companies are ideally placed to make the most of.

Question put and agreed to.