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Miss Lestor: It is hysteria.

Mr. Foulkes: My hon. Friend understands the hysteria of Conservative Members. It is--[Interruption.] I thought that I might stir up some Conservative Members.

We are worried about "unshackled", a word that has been used by Ministers. It has been used in the context of the corporation. In other contexts, it is a euphemism for the removal from the state sector of an effective tranche of public sector finance, which finds its way instead into the hands of financial vultures who make a quick killing at other people's expense.

I reiterate the words of my hon. Friend the Member for Eccles. We want the Minister to give us some assurances that the financial vultures will not benefit in this instance. The Minister has told us that the Government do not want the corporation to be yet another bank, but, as my hon. Friend the Member for Eccles said, the membership of the corporation's board is similar to the membership of a bank's board. Will the Minister tell us something about the board's membership? We have had some discussion with the present board members and with Baroness Chalker about getting on the board people who are especially interested in development. I would appreciate some assurance from the Minister this evening.

I want also to emphasise something my hon. Friend the Member for Eccles said. We firmly believe that the CDC has a distinct and expanding role to play in a Government-directed overseas aid programme. That is why we have had some discussions with the CDC about the role that it will play under the next Labour Government. As my hon. Friend said, we will continue those discussions to see how we can develop the role of the CDC positively to help the development of the countries concerned.

From our discussions with CDC members, we have gathered that it will continue to build on the good work that it has undertaken over the years. However, the need for the Government to retain a close interest in the way in which public bodies operate must always remain. I hope that the Minister can give an assurance when he replies this evening that the Government and the ODA will work closely with the CDC and continue to take an active part in the future. The passage of the Bill should not be a signal for any kind of disengagement by the ODA from the oversight of and co-operation with the work of the CDC.

The Opposition are worried about the dangers of progress towards privatisation, because we have seen that happen to other organisations. Indeed, the water quangos

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have not been privatised yet in Scotland but if, heaven forbid, another Tory Government were elected, they would be ripe for privatisation. I notice that the hon. Member for Hexham (Mr. Atkinson) is nodding. He obviously agrees that if another Tory Government were elected, that is exactly what would happen. We are worried that the Government might be testing the waters for fattening the company and selling it off, so it would be helpful and reassuring for all those involved in development if the Minister were to give an assurance that the Government do not intend to move in that direction. If I am more sceptical than some of my hon. Friends, it is through experience.

As my hon. Friend the Member for Eccles said, the Labour party accepts that the private sector has an important part to play in development. We have never denied that. We want a genuinely indigenous private sector, not a dependent private sector. We must ensure that capital flows remain in the developing world and are not siphoned away from the developing world so that it becomes increasingly dependent on foreign investment. Such a scenario can be envisaged if the financial managers and City fly-boys prevail over the genuine managers and those involved in development who have experience of running businesses in the developing world. We expressed that concern last year in similar debates on the CDC. The CDC has been very thorough in its briefings to us and it has assured us that the hands-on element that has served it well over the years will not be lost to the excesses of privatisation and the financial markets.

The CDC has, carefully, found a niche for itself in promoting investment over the years. Both the Opposition and the Government have acknowledged that this evening. Attempts to move into areas run by bigger fish--other organisations that are doing a good job--would be a dereliction of the CDC's duty to its original purpose and its current role. I hope that that role will be assured into the future. Any change would inevitably result in the CDC having to compete on terms that are not favourable to the enhancement of the developing world.

I cannot understand why, despite repeated requests by the Labour party, a Bill that would allow projects such as the Commonwealth private investment initiative, but would not give the CDC powers as wide as are proposed today, could not have been drafted quickly to avoid wasting parliamentary time. The Labour party is going along with the extension of powers today, but we need assurances from the Minister. We are going along with the Bill because of the enthusiastic support given by Commonwealth countries, through their high commissioners and directly, to the CPII.

I hope that the Minister can reassure us on the points that have been raised in today's debate. While we have reservations about the extent to which the CDC will be given freedoms by the Bill and the fact that the Government have lessened its role in the future, we wish it every success in the CPII.

Development for countries, especially in Africa, must be appropriate to their needs, and should be without exploitation. It is important, as my hon. Friend the Member for Merthyr Tydfil and Rhymney said, to recognise the new role of the Commonwealth. We do not accept that the physical colonialism of the past should be

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replaced by financial colonialism. With those reservations, we are prepared to go along with the Second Reading of the Bill this evening.

6.45 pm

Mr. Hanley: We have had a useful and interesting debate on the Bill. I expected there to be support from both sides of the House for the work of the CDC and I was not disappointed. Hon. Members have raised a number of points and I wish to deal with them.

The hon. Member for Eccles (Miss Lestor) mentioned that few resources go to the poorest countries. I have to admit that private sector flows are low, but they have increased significantly recently. The flows concentrate on a small number of middle-income countries, mostly Latin America and east Asia. Sub-Saharan Africa and south Asia account for 30 per cent. of the world's population, but attracted only 2 per cent. and 4 per cent. respectively of private sector money in 1992-94. During that period, however, the CDC invested 50 per cent. of its investments in those areas, which augments the private flows.

The hon. Members for Eccles and for Carrick, Cumnock and Doon Valley (Mr. Foulkes) mentioned privatisation of the CDC. Following the last quinquennial review, it was confirmed to the House in May 1994 that the CDC was being retained in the public sector, and that remains the Government's belief. I am happy to confirm that the present position--in which the CDC is a public corporation run by the board in a framework of targets agreed with Ministers--is the right one.

Much has been said about why the new powers were not included in the original Bill. After what became the Commonwealth Development Corporation Act 1995 had been introduced last year, we concluded that we could not add measures to it within the long title. That is why Lord Trefgarne introduced a private Member's Bill in the other place. Two hon. Members stated that that Bill failed because of lack of Government time, but it failed because of a mistake by Labour Front Benchers. It is amazing how they will not apologise for having killed the Bill off and instead try to make some high-minded excuse about a matter of principle. It was not a matter of principle: it was a mistake.

Miss Emma Nicholson: The Minister may not know that I tried to speak in the CDC debate last year. I was firmly told by the Conservative Whips that the Government did not want anybody to speak from the Conservative side in favour of the CDC.

Mr. Hanley: It was not that the Government wanted no one to speak in favour of the CDC; quite the reverse. The hon. Lady might not remember, or her memory is selective. The deputy chief Whip of the Labour party objected to the Bill, rather as the Opposition objected to the Hong Kong (War Wives and Widows) Bill just 10 days ago. They did so by mistake, and I am pleased that, today, both sides of the House have recognised the wisdom of the Bill and that we have been able to put the matter straight.

Miss Lestor: There has been a feeling of agreement for much of the evening, but we did not make a mistake; it was quite deliberate. The Bill was not killed off, but

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opposed, because we were not receiving the assurances that we sought about the future of the Bill and the CDC. We are receiving those assurances tonight.

Mr. Hanley: I have heard that one before. Here, at least, we have a Bill that has now worked, and we have shown that progress can be made when two or more people who are friendly towards a Bill's objective act together sensibly in the interests of those whom we are all trying to serve. I pay tribute to the hon. Lady for the fact that we are now discussing this Bill, and I believe that, God willing, it will be given its Third Reading as well. Let us leave the other issues to history, which is where they ought to be buried.

The hon. Lady mentioned the "poor country" target. We need to allow the CDC to play a role in countries where it usefully can, but we should also remember that the target for poor countries relates to countries eligible for International Development Association funding. The definition of a poor country involves a per capita income below $1,300 in 1992. We must allow the CDC to play a role wherever it can, but some countries may fall outside that limit.

South Africa, in particular, is not defined as a poor country for our present purposes. Other countries, such as Namibia, Botswana, Jamaica, Fiji, Belize and some small Caribbean Commonwealth islands do not fit the definition of a poor country, either, but are helped by the CDC. In all cases, the CDC targets areas and sectors that may have difficulty gaining access to other sources of finance, or helps to diversify economies. That allows some diversification of risk in the portfolio.

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