Examination of Witnesses (Questions 133-139)
BARONESS VADERA,
MR MARK
LOWCOCK AND
MS SALLY
TAYLOR
10 JANUARY 2008
Q133 Chairman: Good afternoon, Minister,
and to your team in front of us again. For the record, if you
would introduce the team?
Baroness Vadera: I think you are
very familiar with Mark Lowcock; he is Director General and Sally
Taylor is the head of the International Financial Institutions
Team.
Chairman: We have two members who have
a declaration of interest. Robert Smith.
Sir Robert Smith: I should declare my
interest as a shareholder in RTZ and in Shell as relevant to this
inquiry.
Hugh Bayley: I should let the Committee
know that I am a member of the Executive of the Parliamentary
Network on the World Bank (PNoWB).
Q134 Chairman: Thank you for that.
We had a letter this week from the Secretary of State regarding
the directors of the World Bank and the IMF[1]
saying that the government has decided that in future the UK will
have a full-time Executive Director of the Bank and a separate
full-time Executive Director to the IMF but will retain a single
office "which will enable us to continue to take a consistent
approach to handling issues that arise in and/or affect both institutions."[2]
I am sure you will be aware that I had informally raised this
with the Secretary of State, but when we were in Washington we
raised it formally both with the UK delegation and with the World
Bank management. The UK delegation robustly defended the merits
of the status quo and the World Bank diplomatically took the view
that it was entirely a matter for the UK to decide how to deploy
its rights and responsibilities to the Bank, although I think
in past times they have suggested when the UK government has been
a little bit chiding of the Bank or the accountability of the
Bank that it was something that the British Government might wish
to look to when they take up their full time role. So could you
give us an indication of what led to this decision, what were
the factors that influenced it and when it will take effect?
Baroness Vadera: It has been something
that people have talked about over time and it has always been
a balanced decision. On the one hand the view that was taken thus
far, which I think was for those circumstances pretty much the
correct view, was that there is a merit in having a joint ED[3]
and in particular it enhanced the influence of that ED on both
boards, and certainly from my previous experience I saw that there
was a significant impact, for example in the IMF, in its understanding
and the influence we had on its understanding of the situation
of low-income countries in particular. So there was the unique
strength that came from that and it was only us and the French
that had that position; but then it was always a trade-off between
having people who were able to focus entirely on Bank business.
I think over the period when it came to the decision about the
funding it was again a moment to reconsider where we were significantly
increasing our funding. We were asking of the Bank quite a lot
of things in terms of new challenges, things that you have talked
about in the hearings here on climate change, but also on certain
reforms within the Bank that actually, given the funding we were
providing and given the amount that we were asking of the Bank,
the trade-off was such that we should move to a separate ED. But
because we want to maintain the advantages that we have had so
far we have decided that we should have it as a joint office to
maintain that level of unity and coordination that exists currently,
and giving us a joint voice which gives us quite a unique strength,
I think.
Q135 Mr Singh: I think we all welcome
this move but given the huge increase in contribution and rating
to the IDA[4]
and given that that is one of the reasons, I suppose, that we
are having a full-time Executive Director, why are we not increasing
the staffing levels in the joint office because presumably there
will be a greater workload now?
Baroness Vadera: I would not necessarily
agree that there would be a greater workload in the sense that
the Bank Board only meets the number of times the Bank Board meets.
We were looking at the ED very much in the sense of somebody who
was focused, somebody who could talk to, for example, the President
of the World Bank, and that was really much more behind our thinking.
Mark, would it be true that we would as a result increase by one?
Mr Lowcock: Yes, that is correct.
Baroness Vadera: The jobs will
be increased by one because that is the new ED.
Q136 Chairman: So we will still have
a substitute, will we, for each?
Baroness Vadera: The Alternate
for the Bank ED will be somebody from the Treasury, which is another
way of maintaining that cohesion that we wanted to keep. The Alternate
for the IMF ED will remain from the Bank of England.
Q137 Sir Robert Smith: But what is
the rationale for not taking up the full complement of Bank-funded
policy advisers?
Baroness Vadera: I think that
the office believes that it is not just covering the ground but
is considered to be a leader in the way it covers the ground,
so I do not think it feels the need to have them, but I do not
know if Mark wants to add anything to that?
Mr Lowcock: No, that is exactly
right. We think that the team we have put in place is the right
team for the role and of course each office for each shareholder
is paid for from the budget. So one thing that we are also sensitive
to is the overall cost to the board, which, given the number of
Chairs and the size of each office, is a significant issue.
Baroness Vadera: To add to the
question that Sir Robert Smith is asking about, how it will be
done, there will be a process of competition for the appointment
of the ED.
Q138 Chairman: So when is this likely
to take effect?
Baroness Vadera: Ministers will
obviously not be involved in the process so again maybe I should
suggest that Mark answers, but there will be a process kicking
off for the appointment of the ED.
Mr Lowcock: We will advertise
it very soon. Because of the seniority of the post we will ask
the Civil Service Commission to be involved, and then we will
select somebody and it will depend when that person is available.
My best guess is that by the summer at the latest we will have
a new ED in place.
Q139 Chairman: For clarity, does
that mean the existing Directors in post and sub-Alternate will
have to apply, or what will that mean for them? I should make
it clear that the Committee had no criticism of the people in
place; it was the mechanism of the role. So what effect does it
have on them?
Mr Lowcock: Caroline Sergeant,
who you know, who has done a terrific job for us as the Alternate,
in fact would have done four years by this summer. She was planning
in any case to come home this summer, so that means that the two
new posts, the Director post and the Alternate post would need
to be filled then anyway.
1 International Monetary Fund Back
2
Ev 59 Back
3
Executive Director Back
4
International Development Association Back
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