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Column 1063a remuneration of up to £10,000. It is an incredibly cost-effective organisation in terms of the public service it provides.
There are a number of Scottish connections with the board. For a long time, Lord Reith--
I was saying that Lord Reith was on the board in the 1960s and there is Sir William Ryrie now. There are some vacancies on the board. There is one woman on the board, but I will reflect on the comments made during the debate. It is important that the CDC reflects wide interests, but it is an organisation that needs to make important investment decisions. As hon. Members recognise, it needs to have the expertise necessary to make those decisions.
I do not think that the hon. Member for Hampstead and Highgate meant to be critical of any of the CDC's projects, but I do not think that any project has ever drawn criticism from an overseas Government, from a non- governmental organisation or from anyone in the House. If there has ever been such criticism, I hope that hon. Members will draw attention to it subsequently. The projects that it has carried out have commanded broad support.
As to what the CDC has been called--
Ms Glenda Jackson rose --
Mr. Baldry: Allow me to finish my point, and I will give way. What the CDC has been called has been subject of considerable debate over the years. Clearly, an Act of Parliament started the Commonwealth Development Corporation, and it has been part of our contribution to the Commonwealth. It is now generally accepted that it is called the CDC.
If the hon. Member for Workington (Mr. Campbell-Savours) looks at the annual report, he will find it hard to see the Commonwealth Development Corporation spelt out in full. It is known as the CDC. Bearing in mind what some of my hon. Friends have said about promoting the CDC, I do not think that changing its name again would help. Everyone knows it as the CDC. It is recognised around the world as the CDC, and it does a good job.
Ms Jackson: I did not intend any of my contributions to be critical of the CDC, or any of its past projects or projects in which it will engage in the future. I was concerned that, in an increasingly dangerous, highly competitive and ruthless world, it should be given assistance by the Government and this House by being allowed to take on board and, if necessary, having written into its strictures and structures, that an element of consideration for abuses of human rights should be part and parcel of its thinking.
Column 1064One or two technical points have been mentioned. Several hon. Members referred to market rate borrowing. It is a long-standing principle that public sector bodies should not generally borrow on their own credit at a higher cost than that at which the Government can borrow. The matter has been considered thoroughly a number of times, and rejected on value-for-money grounds.
One or two hon. Members asked whether we were confident that the CDC felt it had sufficient powers. It is clear from the examples cited today that the CDC is involved in a wide range of activities throughout the world. I understand that it is considering some further activities, which it is not as yet confident are within its powers. Clearly, we are working closely with the CDC to resolve any problems and avoid any unnecessary constraints on its work.
Mr. Worthington: When the Minister reads his comments in the Official Report tomorrow, he will see that they mean nothing to anyone. He said, in effect, that things were being considered and that decisions would be made in the future. As we have asked about constraints on the CDC's work, it would be useful to know precisely to what issues the Minister was referring.
Mr. Baldry: There are a number of activities in which the CDC thinks it would like to invest, but it is not entirely confident that its present statutory powers cover them. That is a matter of discussion between us and the CDC.
Clearly, we do not want there to be any unnecessary constraints on its work. It is in the nature of things that, as financial markets change and as the possibilities of involvement in various operations change, the opportunities available to the CDC are increasing all the time. The original legislative framework for the CDC was set up some time ago, but we want to ensure that the CDC can do what it would like to do.
The hon. and learned Member for Fife, North-East (Mr. Campbell) mentioned taxation. He asked whether we would be prepared to treat the CDC differently from other trading corporations in the public sector which are taxed on the same basis as private companies, but I do not think that there are good grounds for doing so. The nature of the CDC's activities is not sufficient reason for special tax treatment, and it would be very difficult to distinguish the CDC from other bodies doing worthwhile work in the developing world. I can tell the hon. Member for Clydebank and Milngavie (Mr. Worthington) that I should be happy to have a long debate about the World bank and the International Monetary Fund. It would be an interesting subject for a Wednesday morning debate if he cared to bid for one, but, in fairness to the hon. Members who wish to speak in the next debate about the Commonwealth, this is perhaps not an appropriate time to undertake such a debate.
Mr. Campbell-Savours: I have spoken to people in various parts of the world about the important issue of the CDC's name. In the event that the CDC developed a role in China, a country of 1,000 million people with immense
Column 1065tradition, would the Minister think it right for the CDC to go into such a market calling itself the Commonwealth Development Corporation? That is a simple question.
Mr. Baldry: In fairness, the hon. Gentleman was not listening. If he reads Hansard , he will see that I said clearly that the CDC is an organisation that is known and promotes itself as the CDC. I have no doubt that if it went into China, it would do so as the CDC. Last year, 80 per cent. of approvals were in the poorest countries, well above the targets agreed with Ministers. I shall gladly write to the hon. Member for York (Mr. Bayley) about the interesting matter of definitions--what constitutes a "poor" country or one of the "poorest" countries. Different organisations have different definitions, and it may be useful to reach an agreement on what the terms mean. However, there is no doubt that a large proportion of CDC's investments do go and will go to the poorest countries. At the moment, the figure is about 80 per cent.
Mr. Bayley: I thank the Minister for his comments. If, at some future date, the CDC starts investing in eastern and central Europe, those countries are likely to be among the remaining 20 per cent., or the "non- poor" countries. Will the Minister guarantee that the bulk of the fund--80 per cent. of CDC's investments--will remain in the poorest countries, however that is defined and whether their GNP is $700 or $1,500 per capita? The eastern European countries are richer than that.
Mr. Baldry: As I said, the CDC has not yet even applied to invest in eastern Europe or the former Soviet Union. If it were to do so, one of the things that we would have to consider is the fact that other organisations are already able to invest there, so the hon. Gentleman raises an entirely hypothetical point.
There is wide support for the CDC and the Bill, and I hope that the House will grant it a Second Reading with acclaim.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House.-- [Mr. Conway.] Further proceedings postponed, pursuant to Order [14 March].
Motion made, and Question put forthwith, pursuant to Order [19 December] ,
That, for the purposes of any Act resulting from the Commonwealth Development Corporation Bill, it is expedient to authorise-- (1) any increase in payments out of the National Loans Fund, the Consolidated Fund or money provided by Parliament resulting from provisions of the Act--
(a) increasing to £1,100 million and £1, 500 million respectively the sums of £750 million and £850 million specified in section 9A(2) of the Commonwealth Development Corporation Act 1978 ("the 1978 Act"); and
(b) removing the limit in section 10(1) of the 1978 Act on the amounts which may be advanced to the Commonwealth Development Corporation ("the Corporation") under that section;
Column 1066and any increase in payments into the National Loans Fund or the Consolidated Fund resulting from such provisions;
(2) the making of interest-free advances to the Corporation under section 10(1) of the 1978 Act; and
(3) the remission of the payment by the Corporation under section 12(1) of the 1978 Act of interest on advances under section 10(1) of that Act.-- [Mr. Conway.]
Question agreed to.
Considered in Committee, pursuant to Order [14 March.]
Question proposed, That the clause stand part of the Bill. 5.47 pm
Miss Joan Lestor (Eccles): I seek some clarification. No one is suggesting that there should be no investment in eastern Europe. The Minister has been helpful but the research document, which I am sure that we have all been reading with great interest, clearly states: "It is not impossible that the profits from past investments in the impoverished parts of Africa could be used to finance new investments in Eastern and Central Europe."
Our concern is that the profits made in Africa would be used somewhere else and that money that might have been invested there would be transferred elsewhere. Will the pot be large enough to prevent that from happening? Will the Minister give us some assurances on that point?
Mr. Jim Lester (Broxtowe): Does my hon. Friend the Minister agree that the CDC should claim additional funds only if it decided that it wanted to apply to operate in a completely different area such as eastern and central Europe? I hope that there is no suggestion that it should recycle funds from its existing portfolio so as to take on an area with such demands as central and eastern Europe.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tony Baldry): Hon. Members may have inadvertently been misled by the research document. It seems to have led them to believe that the CDC wants to invest in eastern Europe and in the former Soviet Union. It does not currently do so, has not asked permission to do so and, as far as I am aware, has no intention of asking to do so in the foreseeable future. As I have already said on several occasions, other bodies, such as the European bank for reconstruction and development, with a remit to promote investment in eastern Europe and the former Soviet Union, already exist. We would have to take all those factors carefully into consideration if we were to consider giving the CDC permission to invest in eastern Europe and in the former Soviet Union.
Mr. D. N. Campbell-Savours (Workington): I shall refresh the Minister's memory of what was said by Baroness Chalker in 1992. When he makes statements, he might try to reflect on that. She said: "there is a need for other expansion. I assure the Committee and the House that we are prepared, if necessary, to introduce primary legislation to expand the CDC's role. Subject to borrowing limits . . . there is nothing to stop CDC work in eastern Europe provided that there is sensible risk."
The now Baroness was thinking positively in 1992. She continued:
Column 1068"We hear less about the other republics, but we are doing our best to find out more so that we ensure that help within the general aid programme is sent where it is needed. More information will enable us to find out how the expertise of the CDC can open opportunities . . . The British private sector, backed by Government funds, has gone in to help to create a private sector and new systems in Russia and Poland and, although conditions are slightly easier there, in Hungary and Czechoslovakia, too, CDC has much of the sort of expertise that could be well deployed."--[ Official Report, First Standing Committee on Statutory Instruments, &c. , 4 March 1992; c. 11-13.]
That fairly positive statement was made almost three years ago to the day in Standing Committee. Yet, this evening, the Minister seems to be far more negative. Has there been a policy change in the Government's position? Has someone changed his mind since 1992? I think we are all united in our view that there should be investment in eastern Europe and in the former Soviet Union. Some of us, however, are concerned about how the investment will be funded and to what extent we can draw on capital markets in the west, borrowing and lending at commercial rates to enterprises in eastern and central Europe and in the former Soviet Union.
When the Minister replies, I hope that he will take into account the commitments that were given in a one-and-a-half-hour debate in Standing Committee, about three years ago, by the present Baroness Chalker.
Mr. Hugh Bayley (York): I understand from the Library brief that one of the proposals set out in the 1993 review was that there should be statutory change to allow the CDC to undertake consultancies not related to project investment. I am concerned that the Overseas Development Administration spends large sums on management consultants--generally United Kingdom consultancies--to advise on development strategies in the disbursement of the ODA's bilateral aid budget.
Surely it would make sense for a body with the expertise of the CDC to be able, in appropriate cases where it has relevant expertise, to offer to provide consultancy in respect of projects with which it is not concerned. In commercial--
The Chairman: Order. It is not for an hon. Member to ask why something is not in a clause. At present, we are concerned with what is in clause 1. The hon. Member may wish to raise certain issues on Third Reading or on other clauses in Committee that we have yet to debate, but for the moment we are dealing with borrowing limits.
Mr. Tony Worthington (Clydebank and Milngavie): I am left wondering whether the Bill is premature. There remain unresolved issues. At the same time, as I said earlier, some of us on the Opposition Benches feel
Column 1069disappointed that the Bill has not gone far enough. The Minister has referred to issues that have not yet been resolved, and it seems that there is doubt about whether they are within the competence of the CDC. That seems odd when we are considering a recently introduced Bill. I am convinced that the issues of competence relate to the CDC's competence to borrow from the commercial sector, for example. I ask the Minister to try to explain the real issues that are now before the Foreign and Commonwealth Office in determining the role of the CDC where there is doubt about its competence. Such an explanation would be valuable. It seems--
The Chairman: Order. Such an explanation might be valuable but our rules are clear: we must deal strictly with clause 1, which relates to borrowing limits. As I have said, the Bill can be debated on Third Reading. Some of the issues that are now being raised could most appropriately be introduced at that stage. For the moment, the Minister, along with Back- Bench Members, must restrict himself to borrowing limits.
Question put and agreed to .
Clause 1 ordered to stand part of the Bill .
Clause 2 ordered to stand part of the Bill .
Question proposed , That the clause stand part of the Bill.
"This Clause enables the Secretary of State to determine the remuneration, allowances and pensions of members of the Corporation".
Why was it necessary to propose the change that the clause would introduce, or is it a change? What was the motive in seeking to bring about the change and then removing the requirement for Treasury consent
"in relation to such matters"?
Perhaps I can understand the proposal to some extent because my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) and I were previously advancing related arguments on a more general basis. Why should determination of the remuneration, allowances and pensions of members of the corporation be changed in the way that is proposed?
Mr. Baldry: The members of the board of the CDC at present are all non-executive directors. Unlike all other bodies, the chief executive is not a member of the board. Therefore, there is no control over the level of remuneration of the chief executive. Under the proposals set out in the Bill, the chief executive will become a member of the board. As a result, and consistent with other public bodies, there will be some control over the remuneration of the chief executive. We do not envisage any increase in overall spending on the CDC as a consequence of those measures. We get extremely good value from the CDC in terms of the contributions that non- executive members make to
Column 1070the board. The clause is designed to ensure that arrangements are brought into line and are consistent with those that prevail in all other public bodies.
Mr. Campbell-Savours: Do I understand that the exercise of control in national health service trusts, for example, is no different from that in the CDC when it comes to the chairman's remuneration? In an odd way, an NHS trust is carrying out a similar function.
Mr. Forman: I am interested in subsection (5). I ask my hon. Friend the Minister to explain why it might be necessary to insert the "following paragraph", which is 5A. What special circumstances does he envisage in which it might be appropriate for the Secretary of State to approve compensation for someone who is ceasing to be a member of the corporation? Surely it is honour enough to be a member of the corporation. I am a great respecter of the CDC. Why should someone require or deserve compensation when ceasing to be a member of it?
With regard to the points raised by my hon. Friend the Member for Carshalton and Wallington (Mr. Forman), clause 3 ensures that the CDC is entirely consistent with regard to board structures, board remuneration and Treasury controls in respect of every other similar public body. There may well be circumstances when a person ceases to be a member of the board, and if the Secretary of State deems that there are special circumstances, in which it would be right that that person should receive compensation, that is a matter for the discretion of the Secretary of State. We do not envisage any immediate or likely circumstance when that will arise, but that brings the position into line with provisions in similar Bills. 6 pm
Mr. Forman: I hope that there is no question of having rolling two or three-year contracts for those people. My hon. Friend the Minister will be aware that in the private sector generally, under the influence of the Cadbury committee and so on, there is a strong move away from that kind of thing.
Mr. Baldry: It is pity that my hon. Friend is a late arrival to this debate. The tragedy is that we are in danger of not paying full tribute to the members of the CDC board who give very valuable service for very little remuneration. If my hon. Friend considers the
Column 1071annual report, he will see that all the existing directors of the CDC are non-executive directors. They make a considerable contribution and considerable public effort for a token remuneration. We are simply ensuring that the CDC is on a par with any other similar organisation within the public sector.
Question put and agreed to.
Clause 3 ordered to stand part of the Bill.
Clauses 4 and 5 ordered to stand part of the Bill.
Schedule agreed to.
Bill reported, without amendment; read the Third time, and passed.
Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Conway.]
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tony Baldry): This is a welcome and timeldebate. This week, the whole Commonwealth observed Commonwealth day. Here, at Westminster Abbey, Her Majesty the Queen, the head of the Commonwealth, attended a multi-faith service at which, for the first time since 1961, the South African flag was paraded with those of the 50 other Commonwealth members, and the flags of the Commonwealth fly today in Parliament square.
This weekend, the Queen returns to South Africa for a state visit. It will be her first visit since 1947, when she dedicated herself to the Commonwealth. South Africa's return to the Commonwealth family of nations marks a turning point, which I am glad the Foreign Affairs Select Committee has noted and remarked by undertaking its own inquiry into "The future role of the Commonwealth". Such work will help to focus our minds on what the Commonwealth can and cannot do. In New Zealand in November, Heads of Government from the Commonwealth will meet once again for their two-yearly conference, the first at which South Africa will have been present for over 30 years: 30 difficult years for the Commonwealth, now happily behind us.
The Commonwealth's origins lie in the supple relations that evolved between London and the dominions up to 1947. It is now a very different body that encompasses nations that are linked to the Queen as Head of the Commonwealth, but which have rightly chosen to make their own way in the world. The Commonwealth has helped them to do so. The Commonwealth was set up not to withstand change, but to reflect and to respond to it. The Commonwealth has no formal constitutional structure: it relies on conventions and procedures that evolved by consent.
The Commonwealth has no voting rights or international legal authority, but that very looseness is a great advantage compared to other international institutions, which were often set up with a single purpose in mind and which are now having to adapt to a vastly different post-cold war world. The inherent flexibility of the Commonwealth gives it a freedom to respond to the times, and to help take forward the best interests of a quarter of the world's people. The Commonwealth is as much an association of peoples as it is of Governments. The Commonwealth's organisations and peoples benefit from shared practices and beliefs, and not infrequently from the widespread use of English. The Commonwealth Secretary-General, Chief Emeka Anyaoku, well described the Commonwealth's central attribute as its ability
"to bridge racial, ideological and economic divides and inequalities, assisted by its common language and common heritage". We agree that the Commonwealth acts as a bridge in those ways. Commonwealth countries comprise over a quarter of the world's peoples, from the tundra of Hudson bay to the lush rain forests of Guyana; from the deserts of
Column 1073Australia and northern Nigeria to the olive groves of Cyprus. Every religion is represented, reflected in the Muslim, Jain, Sikh, Hindu, Jewish and Christian divines who spoke at Westminster Abbey on Monday, all subscribing to five Commonwealth affirmations, ending with a prayer for peace led by Mr. Gordon Wilson of Enniskillen, and a final affirmation:
"We affirm our common faith in the need to establish justice for every individual, and through common effort to secure peace and reconciliation between nations".
Our challenge is to translate those values into specific and beneficial actions.
Let me cite three down-to-earth Commonwealth organisations that daily put those values into practice in a concrete way. The first is the Commonwealth Foundation, which, on a budget of only £2 million, helps to keep alive and thriving a host of Commonwealth professional and other non-governmental organisations. It will hold its second NGO conference in New Zealand in June. We have helped to finance that meeting and believe it can do good work.
Well-known groups like the Commonwealth Games Federation and the Commonwealth Medical Association-- [Interruption.] I knew that the Commonwealth Games Federation would bring a cheer from the hon. and learned Member for Fife, North-East (Mr. Campbell). Those two bodies and others bring together peoples from across the Commonwealth, such as Commonwealth architects and Commonwealth dentists, to share professional expertise, ideas and experience.
The second organisation is the Commonwealth Parliamentary Association. We all know well the contribution that the CPA and parliamentarians make in promoting the cause of democracy, human rights and the rule of law. The CPA reaches beyond the Commonwealth to countries looking to join or rejoin.
The CPA provides invaluable assistance, guidance and training. Its involvement begins long before elections are ever planned; it continues through the pre-election and election processes, and it stays on to ensure that advice is available on the spot after elections. The UK branch alone provides vital training and support in parliamentary practice and procedure to some 50 Commonwealth parliamentarians each year through seminars in the UK. There is an unrivalled wealth of experience among its members from all the Commonwealth, which provides a vital link with overseas parliamentary systems through the overseas visits.
My hon. Friend the Member for Hereford (Mr. Shepherd)--the chairman of the CPA executive committee--reminded the House of the value of parliamentary workshops during the debate on the South Africa Bill last week. I share my hon. Friend's views on the usefulness and importance of such experience sharing, and my right hon. Friend Baroness Chalker and I will give his proposal for further support for CPA initiatives constructive consideration. If my hon. Friend and the CPA would like to talk to us about that, we would be interested to consider the CPA's ideas.
Thirdly, there is the Commonwealth Institute here in London. I am aware of the support that it enjoys in the House, but unfortunately its exhibitions have stayed still and visitor numbers have fallen off. Indeed, it looked