Select Committee on International Development Minutes of Evidence


Examination of witnesses (Questions 120 - 126)

TUESDAY 1 FEBRUARY 2000

THE RT HON RICHARD CABORN, MR VIVIAN BROWN and MR JOHN R WEISS

  120. Are you intensively lobbied?
  (Mr Caborn) By backbench MPs, yes.

  121. That was not the question.
  (Mr Caborn) I gave the answer to that question, which is every night when I go into the lobby.

  122. Mr Brown is not in the lobby.
  (Mr Caborn) He is not the Minister, I am the Minister, and that is the question that was asked.

  123. Is the Department intensively lobbied?
  (Mr Brown) That we should become a separate agency?

  124. By large corporations?
  (Mr Brown) No, we are not excessively lobbied on our support for the customers with whom we write business. Primarily what we are concerned about is the way in which they place contracts to small and medium sized companies. Mr Weiss has talked about the range of activities we are undertaking and many of the large contractors with whom we are doing business are not United Kingdom based contractors, they are large internationally based contractors and the UK is seeking to persuade them to place a wide range of medium and small sub-contracts in the UK and we are successful in that.
  (Mr Caborn) Can I just say, Mr Chairman, that ECGD is there to promote British business. I accept all the constraints that are placed upon that, I accept that fully, but it is there as a tool to help enhance the wealth creating base of this nation. That is what it is there for, primarily defending the taxpayer as well. Let me also say that we have some very, very professional staff who give every confidence in the ECGD. I do not agree with all of the judgments they give me but I have to make that judgment as a Minister and so does Stephen Byers. It is a very professional lot down there. It is one of honesty and transparency of doing business of which we as politicians ought to be proud. They will work under the direction of politicians and they do that very professionally indeed. As far as I am concerned, I think ECGD has got to be looked at. That is what the mission statement is about. The status has got to be looked at. We have to make it a proactive tool forgood when it is sometimes portrayed as a tool for bad. As far as I am concerned, that is my job as Minister. Do not forget that it is there to promote British interests and British wealth creation and well-being. If it is not doing that it is not a tool we ought to be using.

  125. What about the ECGD Advisory Council
  (Mr Caborn) The ECGD Advisory Council is there to advise on the professionalism of the judgments people make. Its members are professional people and they give of their time free and come along and work in the interests of United Kingdom Limited, as indeed many Advisory Committees do in British Trade International on Regional Selective Assistance. We have a very good rapport with the private sector, who offer real professionalism and bring that professionalism by and large in the interests of United Kingdom Limited.

  126. You gave a very interesting answer in a question in Hansard on 24 January where you were asked to list for each member of the Advisory Council how much ECGD business has been undertaken in respect of which the respective members had a declared financial interest.[10] Two members of the Advisory Council are employed by banks which have interests of more than £1 billion worth of ECGD business, David Harrison of Lloyd TSB had £281 million of business and David McLachan of National Westminster plc had £794 million. To somebody reading that, that looks like a conflict of interest.
  (Mr Caborn) There is a conflict of interest all round. One could go through pretty well every advisory body and say if they are not giving advice from the quarter or experience that they work in why have their advice? We do that with Regional Selective Assistance and a whole series of advisory boards. There are very clear ground rules laid down as we have with declarations of interests for MPs. There are clear Chinese walls put up. In terms of any involvement of their bank in a country or country assessment, which is the thing that we actually involve them in most, then they would not take part. I will ask Mr Brown to say exactly how that operates.
  (Mr Brown) What we are talking to the Advisory Council for is to give their professional view from the point of view of banks and exporters, particularly in emerging market exports, about whether or not we are assessing the creditworthiness of countries accurately and the underlying system of also trying to take account of corporate risk and portfolio risk and following best professional practice. I think your answer about the conflict of interest is that there are no papers going to the Advisory Committee as a group which are about individual projects. We consult individual banking persons, including Mr Harrison on a bid or planned project to see whether or not the judgment we have made about underwriting accords with their own judgments. We make absolutely clear and sure that the project on which we are consulting them are not ones in which their banks are involved.

  Chairman: We will leave it there, Minister. Thank very much, and Mr Weiss and Mr Brown, for answering our questions. We would hope to give a big input into your reassessment of the Mission Statement of the ECGD and we hope we will be helpful to you in coming to a conclusion on those discussions and also of course on the issue of the Ilisu Dam, which I do not think we have heard the last of.


10   H.C. Deb, 24 January 2000, cc.41-2W. Back


 
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