Third Standing Committee on Delegated Legislation
Monday 24 June 2002
[Mr. Peter Pike in the Chair]
Draft Specialized Agencies of the United Nations (Immunities and Privileges) (Amendment) Order 2002
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Denis MacShane): I beg to move,
That the Committee has considered the draft Specialized Agencies of the United Nations (Immunities and Privileges) (Amendment) Order 2002.
The Chairman: With this it will be convenient to consider the draft United Nations and International Court of Justice (Immunities and Privileges) (Amendment) Order 2002.
Mr. MacShane: These two orders were laid before the House on 12 June 2002, together with the explanatory memorandums now required for all affirmative statutory instruments. They are similar, and provide for refunds of insurance premium tax and air passenger duty to the United Nations and to the International Labour Organisation that have been paid in the exercise of their official activities. Thirty-five international organisations already have relief from IPT and APD under existing legislation: international organisations of which the United Kingdom is a member and which have headquarters or offices based in the United Kingdom and others, although not based here, to which we are legally obliged to give relief from such taxes and duties. The United Nations and the International Labour Organisation will bring the total to 37. Unlike with the majority of the other international organisations, with these two there were legal complexities that had to be resolved first.
Refunds of IPT and APD are given to meet our international obligations. It is established international practice that a state should not tax other states through the intermediary of an international organisation, and that the host state should not derive undue fiscal advantage from the presence on its soil of an international organisation.
IPT is levied on buildings, on household contents and on vehicle insurance policies. Some areas of insurance, such as life, pensions and permanent health insurance, are exempt. Basic liability to pay and account for the tax rests with the insurance company.
APD applies to all passengers departing from UK airports, irrespective of when or where the ticket was acquired. APD is collected by the carrier or agent issuing the ticket and charged to the customer at the time of purchase. Rates vary, depending on whether the destination is within or beyond the European Economic Area and on the class of travel. Both IPT and APD were introduced in 1994.
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These orders confer only those privileges and immunities that we are internationally obliged to confer, and will allow us to treat the United Nations and the International Labour Organisation on the same basis as the 35 similar organisations.
I am satisfied that the orders are compatible with the rights contained in the European convention on human rights. I trust that they will have the support of all members of the Committee.
The Chairman: Before I call Mr. Duncan, I should make it clear that only the first order has been moved but the debate is on both orders. Once we have disposed of the first order, the Minister will formally move the second.
Mr. Alan Duncan (Rutland and Melton): Thank you for your guidance, Mr. Pike. I also thank the Minister for his introduction; he proved what we all know, that after lunch it is wise not to try to say parentheses, especially so many times.
We have no dispute with the orders and do not wish to detain the Committee. As the Minister said, they confer exemption from insurance premium tax and air passenger duty on the ILO and the International Court of Justice. As the Minister said, everyone accepts the practice that states do not tax other states through international organisations or seek to benefit fiscally from such organisations being based in their country. It therefore makes sense to agree to the orders.
The content of the orders already applies to 35 other international organisations based in the United Kingdom. In addition, under the 2001 exchange of notes, it was agreed to interpret our obligations in this way. I understand that, for both orders combined, we are talking only about the small sum of perhaps £5,000 in lost revenue so far. The Minister will be pleased to hear that I have only two simple questions. First, will he write to me detailing the other 35 international organisations to which the explanatory memorandum says the provisions already extend? Secondly, is the Committee right to think that there is no retrospective element in the provisions and no liability to refund premiums or tax paid previously?
Mr. Menzies Campbell (North-East Fife): I concur.
Mr. MacShane: If it is appropriate, and to avoid reading into the record the names of the 35 organisationsówith or without brackets or whatever that is in LatinóI can hand the list to the hon. Member for Rutland and Melton (Mr. Duncan) in a friendly way across the Floor of the Committee. I understand that this is the last legislation necessary to accord refunds of IPT and APD, so I do not think that it involves any retrospective element.
Question put and agreed to.
Draft United Nations and
International Court of Justice
(Immunities and Privileges)
(Amendment) Order 2002
Mr. MacShane: I beg to move,
That the Committee has considered the draft United Nations and International Court of Justice (Immunities and Privileges) (Amendment) Order 2002.
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May I correct myself slightly? All the tax and duty will have been collected and will now be repaid to the ILO and the UN. However, there has been proper bookkeeping, so that money has already been allocated in Foreign and Commonwealth Office accounts for that purpose, on the understanding that the order would be made.
Question put and agreed to.
Committee rose at twenty-three minutes to Five o'clock.
The following Members attended the Committee:
Pike, Mr. Peter (Chairman)
Campbell, Mr. Menzies
Duncan, Mr. Alan
Duncan, Mr. Peter
Harris, Mr. Tom