RT HON
CLARE SHORT,
MP, MR
BARRIE IRETON and MS ROSEMARY
STEVENSON
Mr Robathan
60. I am conscious of the time and we have
discussed the supervisory framework and indeed you have mentioned
this development focus. I am particularly interested in your monitoring
and reporting procedures. Do you think that the current monitoring
and reporting procedures are adequate to ensure transparency,
accountability and maintenance of the CDC's development focus
in the future and will these same procedures remain in place?
(Clare Short) I will have to bring in officials
on current monitoring procedures in that I am focused on the new
institution. I could not answer the tax question about now because
my own engagement has been with the new institution we are creating.
In the future, as I have said, transparency and accountability
will be in the nature of any public company with the added accountability
to Parliament for the use or non-use of the Golden Share and I
am satisfied that if we get our entrenchment of the ethical code
and the proportions of investment right that will be adequate
and transparent. As for existing transparency and accountability
can I bring in Barrie Ireton.
(Mr Ireton) I suppose almost by definition we
believe that the existing arrangements are satisfactory. You and
your colleagues have raised an important point that we have not
thought through yet which is the precise nature and extent of
the reporting of the new partnership, say, to publish certain
things, to report in certain ways to the Annual General Meeting
in order that the success of the partnership and its impact on
development can be looked at.
(Clare Short) That would be the reporting of a
normal company. We have thought about that. I think there is a
question about reporting to Parliament and our Annual Report (following
Andrew Rowe's questions) that we ought to be thinking about and
we ought to be saying if all is well, "We think everything
is satisfactory and therefore there has not been any need to use
these powers." The room for argument would be if you took
the view that it was not satisfactory and the Government should
have used these powers, but we need to give more thought to that.
61. This leads very neatly into the last
question. Obviously there is more work to be done and more thought
to be given and we accept that entirely, but do you have a timetable
for legislation and coupled with that—you have asked for
advice—are there any plans to publish a draft Bill?
(Clare Short) We hope that will be as soon as
possible. We are bidding for the next Parliament.
62. Right.
(Clare Short) And that is not settled yet so I
probably could not tell you if I knew the answer but nobody knows
the answer. Publish a draft Bill? The Bill as we are currently
thinking is going to be very simple. There is the question of
previous privatisation models which created a kind of holding
company as part of the procedure. There is a complication with
CDC because it has holdings in many countries around the world
and you would have to make changes for each bit of that ownership.
So we are thinking of proceeding straight to giving the assets
of CDC to the new company. Is that right?
(Mr Ireton) Under the classic old-style privatisation
the Secretary of State through legislation was normally empowered
to establish a new company under the Companies Act and then transfer
the assets from the old statutory corporation to the new company.
We are envisaging asking for legislation that would transform
the existing CDC into a Companies Act company.
(Clare Short) The reason being the ownership of
assets overseas otherwise they would all have to be in turn transferred
and it would be a very complex procedure so we have got that additional
challenge compared with other privatisation models. The reason
I am saying it is a complex and interesting point at this late
stage is it means the legislation will be very simple. It will
not be a complicated Bill. The complications are in the ethical
code, the principles of the proportions, the questions that you
are looking at now. The Bill itself will be very simple.
(Ms Stevenson) It will certainly be very technical.
Chairman
63. It sounds as if you are going to give
yourself powers under subsidiary legislation which Parliament
as a whole would be very interested in, I think.
(Clare Short) No, it is just we are not going
through this intermediary stage that other privatisations have
because so many assets are owned in other countries and therefore
you would have to have a transition everywhere there is ownership.
Presumably that is in the briefing we have given you. Again, we
are looking for the best solution. There are no hidden motives
in what our intentions are. Therefore, the Bill itself will be
simple; the complications are in all these other questions we
have discussed this morning.
Chairman: In the detail.
Barbara Follett?
Barbara Follett
64. Secretary of State, given the importance
that the Department puts on the role of women in development,
I wonder if there is something you could bring influence to bear
on within the CDC. If you turn to page 78 of their Annual Report
there are 40 names in the management structure and unless Innes
Meek is a woman there is not a single woman involved in the management
structure of the CDC.
(Clare Short) I do not think it is quite as bad
as that but it is certainly far from satisfactory. Yes, I do take
an interest in these matters, as you know, and I think you should
put these questions very firmly to the CDC when they appear before
you later today.
Chairman
65. Thank you very much indeed, Secretary
of State. I envisaged a very interesting subject intrinsically
but it is also of course a pioneering effort in that we are introducing
new concepts, are we not, with the private-public partnership
and indeed you have told us this morning a new form of development
finance category in the general framework of the financial graticule
of companies and other forms of business in this country. So thank
you very much indeed for your very interesting evidence this morning
and we look forward to talking to CDC and working with you on
this issue.
(Clare Short) Can I just say it is work in progress
and any proposals or suggestions that the Committee make we will
be very grateful for and look at in great detail because we want
to get this right together. The intention is clear and we want
to do it as well as possible. Secondly, I understand there is
quite a lot of international interest in what we are doing. The
task of getting more private sector investment into the countries
that are not receiving it is crucial to securing development.
If we get this right it might well be taken up by others so it
is important intrinsically but it could be a model that is used
more broadly.
Chairman: Thank you
very much.
| 
