My Lords, I beg to move that the Committee consider the Asian Infrastructure Investment Bank (Immunities and Privileges) Order 2015. The order was laid before the House on 12 October, and it gives authority for immunities, privileges, reliefs and exemptions to this new international organisation, also known as the AIIB, under the International Organisations Act 1968.
Before going into the details of the order, I would like to set the context by saying a few words about the bank and its link with our prosperity objectives.
These recognise that, as we continue our business-led recovery, one of our greatest strengths is our openness to global markets. The fast-growing markets of the emerging economies are becoming ever more important to global trade, British business and our values. The United Kingdom must continue to play a significant role in developing these markets, as well as the global economy. Equally, we must expand into areas where we are economically under-represented.
China is at the heart of this. Last week’s state visit by the President of China demonstrated the scale of the opportunities that lie in deeper co-operation between our two nations. A key component of opportunity and growth in Asia is and will continue to be infrastructure. Requirements for infrastructure in Asia are estimated to expand substantially over the next 10 years: the Asian Development Bank estimates the value of these at $8 trillion. Satisfying this need is not only vital for driving growth and increasing living standards in the region, but will benefit the whole global economy, creating new opportunities for British business.
The UK has expertise in areas ranging from green investment, infrastructure and engineering to accountancy and project management. Add to that our world-leading position in finance and we see that a host of businesses around the country and across a variety of sectors are well-placed to take advantage of the opportunities offered by the world’s fastest-growing economies. There are also significant opportunities for the financial sector in London. This order ensures that London is in a strong position to take advantage of opportunities that arise from the AIIB.
Key to enabling effective support for infrastructure development in the region is ensuring that the AIIB is well-established as a high-quality and well-functioning international organisation. That is why the United Kingdom has taken such a strong role in supporting the AIIB. Our announcement in March this year of our desire to become a prospective founding member was the first by any major western country. Germany, France and many others have now followed. There is significant advantage in being involved from the beginning. Working to shape the bank in the British interest and ensuring that it follows the model and learning of other established institutions will help the new bank to meet the highest governance standards for an international institution.
I turn now to the details of the order. The formal laying of the treaty in Parliament under the Constitutional Reform and Governance Act 2010 was undertaken on 4 September. This order is part of the UK’s ratification and provides the privileges and immunities to enable the bank to function as an international organisation in the United Kingdom. This is part of the requirements laid out in the articles of agreement signed in June for the UK by the Commercial Secretary to the Treasury, and is in line with requirements in other international organisations of which the UK is a member.
The order applies to the whole of the United Kingdom. However, some provisions of the instrument do not extend to, or apply in, Scotland. A separate Scottish Order in Council has been prepared to deal with those provisions within the legislative competence of the
Scottish Parliament and has been laid before it. We will of course take a significant interest in the bank’s operations. We have been and will continue to be active players. I beg to move.