Bank for International Settlements (Immunities and Privileges) Order 2021

Lord Collins of Highbury Excerpts

Wednesday 10th February 2021 Grand Committee

[Lord Collins of Highbury (Lab)]

My Lords, I, too, welcome this statutory instrument. The Bank of England said in its press release at the time:

“The decision to establish this centre is a reflection on the UK’s position as a world leader in innovation and technology”.


However, as the noble Baroness, Lady Wheatcroft, said, the BIS is also responsible for promoting stability, so I hope that the Minister will be able to respond to her question about the new bitcoin currencies that are developing and establishing themselves. Certainly the press reports on Elon Musk are pretty worrying.

Like the noble Lord, Lord Kirkhope, and the noble Baroness, Lady Northover, I would be interested to hear about this issue. They referred to the fact that 62 countries were part of the system of BIS, which represents 95% of world GDP. What are we doing to ensure that the membership is expanded and built on?

I have some specific questions in relation to the host country agreement. First, as the noble Lord, Lord Kirkhope, said, the specific powers to create these regulations are contained in Section 12 of the International Development Act 2002, and it is the first time that these powers have been used. Can the Minister advise whether any further regulations are required, for example in the exercise of powers under the International Organisations Act 1968?

Noble Lords have referred to the exemptions, which appear to be in line with international precedent. Nevertheless, there are security implications there. Can the Minister assure us that the Government will work closely with those managing the new hub to ensure that no individuals seek to abuse those exemptions?

The other area that is specifically excluded and where no immunity is conferred relates to road traffic accidents. Can the Minister confirm whether such an exemption has been included in previous immunity agreements or this is a new policy?

Turning again to the host country’s agreement and comparable agreements in the BIS, I wondered whether there were any differences that the Minister would draw to noble Lords’ attention. For example, I note that the 1998 agreement with the Hong Kong Administration does not exempt the hub office from all taxes, which are exempt in the UK agreement. Is this a relevant difference, or is it something that we need to understand better?

The noble Lord, Lord Kirkhope, mentioned that the Explanatory Notes refer to the fact that the new hub is the result of a bid by the Bank of England, and other noble Lords referred to this bidding process. Obviously, that has policy implications. Is there any intention, or has there been an opportunity, to publish the details of the bid so we have a bit of transparency and accountability—particularly if this is an issue where we will be seeking to attract other similar institutions to London?

At the end of the day, we must welcome the fact that we have this hub and that it will promote and include innovation in this field. However, one of the broader issues regards how we finance our contributions. Are there any additional issues with the source of the finance and whether it comes out of our ODA budget? Of course, one thing that all noble Lords are completely focused on at the moment is the size of that cake and how it is being reduced by the decline in the size of the economy, but not least also the policy decision to move from 0.7% to 0.8%. I hope that the Minister can assure us that the Government’s priorities will not be affected by this decision.