Examination of Witnesses (Questions 60-63)
LORD CAIRNS, DR ALAN GILLESPIE, MR RICHARD LAING, MS GILLIAN ARTHUR
TUESDAY 2 JULY 2002
60. I am sure you are in touch with officials in different countries and so on but really what I was trying to get a feel of where and to what extent the Secretary of State as your major shareholder intervenes. Is it that you have to present your corporate plan to her on an annual basis? How does the Secretary of State impact on your decision-taking?
(Dr Gillespie) I would say that we see her in the formal context of presenting our plan and results in a set piece. I would say beyond that we have a remarkably frequent level of interaction. From memory I have been with her on CDC matters four if not five times so far and, as Parliament would have noticed around the time of press comment on the CDC, she was intensely interested and supportive of what we are doing, and commented as such. Frankly, I feel we are immensely privileged to have the level of personal interaction with Clare Short that we do, and now with Suma Chakrabati as well.
61. You are a billion pound business operating almost exclusively in developing countries. You, Lord Cairns, talked a little bit about the need for agricultural subsidy reform in developed countries, but as a big business trading in developing countries, what advice would you give the government and perhaps Pascal Lamy who negotiates on our behalf in the Doha Trade Round in terms of what is needed to maximise the revenue that your businesses generate through increased trade opportunities?
(Lord Cairns) I think the most important thing is market access. If you are going to have any one issue it is the ability for the companies and the countries in which we operate to have total free access to the markets of the developed world. That is what would be number one and second is that there should be an ending to the subsidised exports of goods coming from the OECD areas. If these countries could be put on a level playing field, we would be so much further ahead. You talk about Doha. As I understand itand I was not there although in a different role I did suggest the role the Commonwealth might take and it was adopted by the Commonwealth in the meeting which took place in Durban just over two years ago and was an adopted common position right across the Commonwealthin Doha, getting agriculture on to the agenda, as I understand it, was extremely difficult and only took place at the last moment by, as I understand it, strong intervention from the United States as well as our own government. I do not know what is going to happen as a result of, some three or four months later, the US government giving huge amounts of subsidies not to small farmers but to very large ones, and the willingness, or not, of the European Union to continue to take up the cudgels within the WTO discussions. I have to say I doubt this and many of the governments in countries that I am talking to about this on a very regular basis also doubt it. I am going rather off the subject of CDC but you have got me on to a hobby horse: the short answer is a much more complete access and an ending to subsidised exports. The world price of sugar is now, what, 5 to 6 cents. We produce it in Swaziland at about 8.5 cents; the European Union produce it at 24 to 25 cents. We are successful in Swaziland because we have a quota into Europe and into the States and, to some extent, into South Africa and that is what makes it work but, with a world price of 5 cents, possibly the Brazilians can grow it more cheaply than we can in Swaziland. Nobody else in the world can, yet there is something like a 25 to 30 per cent premium of the production cost of sugar in the second cheapest country in the world over the world price, and that is distortion on a massive scale.
62. I think we may well be doing an inquiry into trade during the next Parliament.
(Lord Cairns) Goodie!
63. Thank you to you and your colleagues, Lord Cairns. I hope it has been a helpful exercise for you to help set out the issues as seen by the CDC. I suspect that colleagues will have a number of questions that we will put to the Secretary of State which will give her the opportunity to come back to us on any questions and, indeed, any other matters on CDC and its future. We do as a Committee collectively travel overseas quite a bit and we also individually travel quite a bit to developing countries, so I think we may all tie a knot in our handkerchiefs and, if we find ourselves in countries where the CDC is involved, we might come and visit some of these various enterprises as well.
(Lord Cairns) Thank you. We all love talking about CDC and we would love to see any of you wherever you are and at any stage, even if you are not travelling, if you want to come and talk to us about individual issues you will find we may get quite boring after a while, but we will enjoy it anyway!
Chairman: Thank you.