Inter-American Investment Corporation (Immunities and Privileges) Order 2022

Lord Bruce of Bennachie Excerpts

Thursday 3rd November 2022 Grand Committee

To conclude, in granting these immunities and privileges and taking up membership in IDB Invest, the UK will be better placed to influence a major pool of development finance in a region of strategic importance. I beg to move.

[Lord Bruce of Bennachie (LD)]

I thank the Minister for that introduction. We appreciate that the consolidation of the bank’s arrangements has led to this situation; that is perfectly understandable.

I will raise just one or two questions. The Minister said the bank aligns with UK aid, but on previous multilateral assessments the bank has not performed as well as other international institutions and international banks in a number of areas, particularly on inequality and gender issues. It has improved on climate change, which the Minister will be particularly pleased about, but can he indicate the extent to which the bank aligns and the extent to which the UK can influence it? We have a UK director—I assume we still have—and it would be interesting to know what his or her brief is and what they are looking for, given that we are a very small shareholder in the bank. The UK and the bank worked together on the green bond initiative. I wonder how that has developed and whether it could develop further.

With the bank operating here, is there a particular objective to being in the UK? Its interests clearly are not here. Is it about raising money? Is it about partnerships? It would be helpful to have some idea of the bank’s interests in being in the UK.

This is a small point, but I see that the Scottish law is different. Just for clarification, given that the Scottish Government have been consulted and have agreed, is there any significance to this? Will the passing of instrument and the relevant legislation in the Scottish Parliament ensure, from the bank’s point of view, that the UK operates as a homogeneous whole and that there are no differences? An international bank such as that might have some trouble if there were internal differences.

We have just had an election in Brazil, which has been welcomed by many people, particularly on climate issues. Again, I am sure the Minister will be very supportive of that. I suppose the question is: is there an opportunity for the bank to refocus and reprioritise? To the extent to which there is, does the UK have some capacity to shape that so that it matches UK aid objectives?

As an aside, UK aid objectives are somewhat confused and reduced at the moment, but I very much welcome the reappointment of Andrew Mitchell as the Development Minister attending Cabinet, because I know from his past record that he will certainly want to ensure that UK development aid gets back to where it has been, not just in financial terms but in quality and impact.

The Inter-American Development Bank is not the most important vehicle for UK aid and development but, given that we are part of it, it is important that it aligns and that we use whatever influence we have to help shape it. I will be grateful if the Minister is able to give us any flavour of that.

[Lord Collins of Highbury (Lab)]

My Lords, I thank the noble Lord for those questions. I shall not repeat them, although I was going to cover some of the issues myself. One thing that struck me, which the Minister mentioned, was that, when we presented the treaty in 2018 to join the bank, the associated impact assessment stated that secondary legislation would be required to grant immunities and privileges. I am not at all surprised that we have this SI, but I am slightly interested to know why it is happening four years later. Just to pick up the point, it would be good to better understand what prompted it to come now.

The Minister mentioned that there was no physical presence of the bank in London, but is there going to be? If there is going to be, what are the reasons for that? Is it something that we can positively influence and shape? We heard from the noble Lord about how we might be able to have influence, even as a minor shareholder. He is absolutely right to draw attention to the election in Brazil and the fact that there will be a greater opportunity to push the green agenda. Given that the Amazon is the lungs of the world, it is even more important that we focus on that.

I have just a couple of technical points. When SIs of this nature have come up before, particularly as part of privileges, I have asked the specific question about road traffic offences and immunities and whether they are part of those privileges. I hope that the Minister can reassure us on that. On the question of physical presence, if he is expecting there to be one, is there any anticipation about the number of officials who are non-UK citizens who might be here?

In conclusion, I agree with the comments that have been made. This is positive news; we welcome this, and we certainly welcomed the treaty and our engagement with the bank in 2018. In its original presence, it has been around since 1984, and the more we can influence it, the better. Such investment has an important role to play in development and reaching the UN’s 2030 agenda on sustainable development goals. We certainly welcome these regulations, which should allow the corporation to contribute to that.