Draft International Bank for Reconstruction and Development (General Capital Increase) Order 2019 Draft International Bank for Reconstruction and Development (Selective Capital Increase) Order 2019 Draft International Finance Corporation (General Capital Increase) Order 2019

Stuart C McDonald Excerpts

Monday 15th July 2019 General Committees

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Sharma. I thank the Minister for his very thorough and wide-ranging introduction to the instruments. Like the shadow Minister, I do not intend to divide the Committee and I support the broad thrust of the proposals. The Minister referred to all the expertise that is on this Committee. I certainly do not count myself as being among the experts—I am slightly outside my comfort zone—but I have a couple of slightly geeky, lawyerly questions for the Minister.

The two draft orders that relate to the IBRD make perfect sense to me, because we can track through where those proposals have been approved by members by way of resolution. As far as I can see, however, the order relating to the IFC has not yet been approved by the membership of those institutions. Is it not slightly premature to bring the draft International Finance Corporation (General Capital Increase) Order 2019 before us? Essentially, we have been asked to approve payments of monies that have not yet been formally requested by those institutions. Could the Minister say something about why those IFC resolutions have been delayed? I have heard suggestions that it is related to the US blocking the resolutions until the rules have changed so that it retains a veto over future IFC capital increases. If that is the case, it would be interesting to know the Government’s position on that.

There is a second issue that I want to flag up. We have two instruments that relate to the IBRD, but just one that relates to the IFC; it is a general capital increase order, and there is no selective capital increase order. I understand that is because the UK will not get any additional shares as part of that rebalancing exercise, and therefore no payments of monies would be required. I totally understand that and have no reason to doubt that what is going on is perfectly fair, but it is slightly ironic that the one proposal going to the Royal Bank of Scotland that sees the UK’s share capital and voting influence being diluted does not require an instrument to come before MPs for scrutiny. As I say, I have no reason to suggest that anything untoward is going on, but we should have some alternative means of debating those proposals.

More broadly, I support everything proposed in the instruments, but there must be a question mark over whether the spending of such significant sums of money deserves slightly more interest than an albeit expert Committee on a quiet Monday evening in Parliament. These proposals were made several months ago, and I would suggest that we should have these debates in the Chamber and give the orders slightly more detailed scrutiny than we can give them in this short time span.