As the hon. Gentleman knows, I shall certainly bear in mind what he says. At present, the proposed Council decision is not likely to come back perhaps even until the October session of the Foreign Affairs Council. Obviously that is a matter that I shall consider with great care. It is subject to negotiation, but, given the work that has been done earlier in the year to prepare for this stage, I suspect that there is unlikely to be any great diversion from what we have already seen and what we know.

I should now address the significance of the two orders that I ask the House to approve tonight. The articles of agreement signed by the Chancellor on 29 May were presented in Parliament as Command Paper 1116 on 28 June. The orders commit the United Kingdom to certain obligations which I ask the House to approve tonight before we can move to the ratification of the articles of the agreement.

I should like to discuss the subscription order first. The total authorised stock of the bank will be worth 10 billion ecu. The United Kingdom will subscribe to 85,175 shares in the new Bank—a total subscription of 851·75 million ecu, or about £600 million. That makes us equal-second largest contributor, along with France, the Federal Republic of Germany and Italy—that is, the four largest European Community members—and Japan. The largest shareholder will be the United States of America, with 100,000 shares

Much consideration was given to the question of what share of the capital should be paid in if the bank was to make an effective contribution to economic development. We think that the agreed figure of 3 billion ecu, or 30 per cent. of the capital stock, is the right one for the bank's initial operations, given that bank finance is intended to act as the catalyst for the generation of private investment.

Thirty per cent. of our subscription will thus be paid in, and the remainder will be callable, so our paid-in shares will be for 255·5 million ecu, or about £190 million. That will be payable in five equal annual amounts, the first of which must be made within 60 days after the articles have been ratified by the necessary two thirds of members and the agreement enters into force. Half our subscription can be paid in cash, and half in promissory notes. Each cash payment and each note would therefore be for just under £20 million.

As my right hon. Friend the Member for Bristol, West (Mr. Waldegrave) told the House on 2 July, we agree with the recommendation of the Foreign Affairs Select Committee in its recent report on Foreign and Commonwealth Office/Overseas Development Administration expenditure that our subscription to the EBRD should be paid out of the aid vote for eastern European support and not from the money voted for our contributions to multilateral organisations. Those funds, like our other assistance for eastern Europe, are additional to and quite separate from our traditional aid programme. I can assure the House that our support for eastern and central Europe is not at the expense of developing countries. The Government entirely agree that this should not be so.

As the House is aware, the new bank is to be based in London. There was a great deal of interest by other members in the question of location; and good cases were indeed made for several other European cities. I am very pleased, however, that London's advantages were clearly acknowledged to be compelling, when the final choice was made. I am sure that this will be good for London and for the bank. I should like to pay tribute to the negotiators, who put so much hard work into ensuring that the bank should come to London.

As a member of the bank, we shall, of course, need to grant it certain immunities and privileges. The draft order will give effect to the immunities and privileges set out in chapter VIII of the articles of agreement, and attested to by all signatories as necessary to enable the bank to fulfil its purpose and functions. All member states will grant the bank these immunities and privileges. The order will confer legal status upon the bank and give it certain exemptions from duties and taxation; its property will also enjoy certain immunities from seizure.

The officers and employees of the bank will be exempt from taxation on the salaries paid to them by the bank, although they will pay an internal tax for the benefit of the bank, and they will be immune from suit and legal process in respect of their official acts.

While the order cannot come into force until the date on which the agreement establishing the bank comes into force—that is, after ratification by members with two thirds of the total voting power—it is important that the draft order be approved now so that the United Kingdom can ratify as proposed.

We shall also need to negotiate a headquarters agreement with the bank, as an international organisation to be established in this country. This headquarters agreement will set out in detail the immunities and privileges of the bank and its employees, within the limits imposed by the International Organisations Act 1968, and will require a further order to be approved by the House when negotiations are completed.

The headquarters agreement, once approved by Parliament, will not have effect until the bank comes into existence, but as host nation, we would of course wish matters to be settled before entry into force of the articles of agreement. We would therefore expect to return to the House with the second order as soon as possible in the autumn.

The United Kingdom is already home to several important international organisations, but this is the first multilateral development bank to be established here. In basing the bank in London, the international community acknowledges and signifies its intention to make use of London's continuing pre-eminence as a financial centre. The bank will be able to draw on unrivalled banking expertise, and will be a part of the most important financial market in Europe.

This is not only to the advantage of the bank; we think that it is of tremendous benefit to the City also. Even the healthiest of bodies can benefit from new blood; and great institutions must attract important new players if they are to stay out in front. The location of the bank in London, with close access to its investors and its customers, is to our mutual credit and advantage. I look forward to the further strengthening of British financial involvement in central and eastern Europe.

That is why the Government have pledged support to the new bank in finding a home in London. We have already, at Mr. Attali's request, arranged a lease on temporary premises at Broadgate in the City, and the bank's transitional team of experts will start operations from there next month. We have also engaged a firm of London surveyors to help the bank locate a permanent headquarters, and I understand that steady progress is being made. The choice of a building is for the bank itself; I hope that an announcement will be possible soon on the bank's permanent location.

I should like now to put these detailed comments into context, by saying something of the purpose of the new bank. The EBRD is a notable first in another area too, which is of greater historical significance than those mentioned so far. The Government have insisted from the start of negotiations to establish the bank that it should make an explicit commitment to promoting democratic principles and acknowledging the importance of economic and political progress.

That commitment is clearly stated in the bank's articles. The countries of eastern and central Europe have missed out on 40 years or more of the developments which we have experienced in the free world. Events of the past year have confirmed the essential health and vigour of the democratic spirit; but economic well-being is not easily or quickly restored.

It is worth a brief look at article 2 of the new bank's articles of agreement to see how it is intended to help. It intends To promote, through private and other interested investors, the establishment … of productive, competitive and private sector activities, in particular small and medium size enterprises … To mobilise domestic and foreign capital and experienced management"—