Tenth Standing Committee on Delegated Legislation
Thursday 15 July 1999
[Mr. Jim Cunningham in the Chair]
Draft International Copper Study Group (Legal Capacities) Order 1999
10 am
The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): I beg to move,
That the Committee has considered the draft International Copper Study Group (Legal Capacities) Order 1999.
The Chairman: With this it will be convenient to consider the draft International Organisations (Immunities and Privileges) Miscellaneous Provisions Order 1999 and the draft Intelsat (Immunities and Privileges) (Amendment) Order 1999.
Mr. Lloyd: I shall give a brief explanation of the three draft orders. The first was laid before the House of Commons on 21 May. It confers the necessary legal capacity to fulfil our obligations under the terms of reference of the International Copper Study Group, which the Government provisionally accepted on 5 June 1998.
The study group is an intergovernmental organisation and was formed in 1989 under the auspices of the United Nations. There are currently 17 member states, including France, Germany, Italy and the European Union. The headquarters are in Lisbon, where the study group meets formally twice yearly.
The Government have responded, through the Department of Trade and Industry, to the promptings of the United Kingdom industry, which believes that there is enormous value in membership of the group. It provides market transparency and operates as the forum which brings the industry and Governments together. The United Kingdom is among the world's top 10 consumers of copper and it is important that we are members of the organisation.
Mr. John M. Taylor (Solihull): In his preamble, the Minister told us that among the participating members of the study group were France, Germany, Italy and the European Union. He may wish to clarify that because France, Germany and Italy are members of the European Union. Is the same thing being said twice?
Mr. Lloyd: The initiative for our membership came from our own industry, so the initiative is United Kingdom based. It was in response to the needs of and requests from the United Kingdom copper industry that we have accepted the desirability and logic of joining the study group.
I cannot tell the hon. Gentleman what logic prompted the European Union to join the study group, but I shall try to clarify that before I sit down. If that is not feasible, I shall write to the hon. Gentleman.
Membership of the study group will ensure that the United Kingdom copper industry is not disadvantaged by the activities of the study group. If we are not at the table, we shall have no influence on the future direction of the group, and that could prevent us from deflecting the group from areas that are disadvantageous to our industry. It is a useful vehicle for regular dialogue on a variety of issues affecting copper and I hope that the Committee will accept that our membership is sound and sensible. If hon. Members wish to raise other matters, I shall try to respond to them.
The draft International Organisations (Immunities and Privileges) Miscellaneous Provisions Order and the draft Intelsat (Immunities and Privileges) (Amendments) Order were laid before the House on 30 June and 2 July this year respectively and are similar. The miscellaneous provisions order provides for refunds of insurance premium tax and air passenger duty to 26 international organisations listed in the schedule to the order. The IPT and the APD were both introduced in 1994. The proposed refunds meet our international obligations, and are standard for the type of international organisation listed in the order. It is established international practice that a state does not tax other states through the intermediary of an international organisation, and that the host state does not derive undue fiscal advantage from the presence on its soil of an international organisation.
The insurance premium tax is levied on buildings, on household contents and on vehicle insurance policies. Some areas of insurance, such as pensions and permanent health insurance, are exempt from the tax. Therefore, the impact of the order will be to exempt the international organisations from insurance tax on buildings and their contents, and on vehicle insurance policies. The order also includes minor amendments to some of the 26 orders that already exist, updating the names of organisations and the titles of their high officers.
The Intelsat order carries much the same impact for Intelsat as the miscellaneous provisions order does for other international organisations, in that it provides for refunds of insurance premium tax and of passenger duty. It also provides for relief from non-domestic rates and for exemption from United Kingdom social security provisions for members of its staff participating in Intelsat's social security scheme. That will not place its employees in jeopardy; it merely recognises the fact that as beneficiaries of the Intelsat scheme, they do not need to benefit from United Kingdom social security provisions. The order is necessary because of the location of Intelsat in the United Kingdom, itself a recent development.
The draft orders also confer a number of internationally accepted privileges and immunities. We have included only those that are strictly necessary in order for us to conform with our international obligations. commend the three orders to the Committee, and I trust that they will gain the approval of all Members.
10.7 am
Mrs. Cheryl Gillan (Chesham and Amersham): First, I welcome you to the Chair, Mr. Cunningham, and assure you that I do not intend to take up too much of the Committee's time.
However, following the Minister's fine introduction of the three orders, it would be remiss of me to let them slip through without any questions or comments from the Opposition side of the Committee. Secondary legislation can often slip through without being probed fully. The Minister may agree that that probably happened in many instances when he was a member of the Opposition under the previous Government.
Mr. Tony Lloyd: I am deeply disappointed at the suggestion that a great deal of secondary legislation slipped through unnoticed when I was a member of the Opposition. I trust that that was not a rebuke for my performance at that time.
Mrs. Gillan: If the cap fits, wear it.
In this country, most international organisations enjoy immunities and privileges by virtue of their being named in orders under the International Organisations Act 1968. The exceptions to that are the United Nations and the European Union, which enjoy immunities and privileges under separate legislation. However, from time to time there have to be new orders, either to confer immunities and privileges on new organisations or to modify existing arrangements. In this instance, the primary focus of the three orders is to exempt them from insurance premium tax and air passenger duty. My understanding is that immunities and privileges are granted to international organisations on a purely practical basis, to allow them to fulfil their functions. One of the purposes is to preserve the independence of action of those organisations, which should not be subject to any form of leverage by the host nation. However, I should like the Minister to answer my questions, which I ask in good faith.
The orders are made under existing primary legislation to remove taxes--the air passenger duty and the insurance premium tax, as the Minister outlined--which, I presume, will result in a substantial loss to the Exchequer. Will the Minister say how much IPT and APD--the Minister referred to refunds--will be repaid under the orders, and how much has been paid to date? What consideration was given to changing the primary legislation with regard to the two taxes? Are the two taxes especially critical to the independence of such organisations? Alternatively, was a decision taken to introduce a blanket exemption?
What is the reason for choosing the 26 plus two organisations? What other organisations were considered? Are organisations considered for this type of immunity and privilege on a regular basis? Why were organisations such as the Commonwealth Development Corporation, which we were discussing in the House last night, not included? That organisation would seem to operate in a similar sort of area as those organisations named in the substantive order. What consideration was given to the inclusion of certain international charities? The International Copper Study Group was picked out, but will the Minister tell the Committee what other study groups are provided with such immunity and privilege?
It would be comforting to the Committee to know that all of the organisations concerned are fully operational, fully recognised by other countries throughout the world, and regularly audited so as to provide accounting that is accessible by this Government and this country. We must ensure that, if special immunities and privileges are to be extended, all of the organisations that benefit are absolutely pukka.
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