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Lord Judd: I hope that the noble Lord, Lord Trefgarne, will forgive me if I do not deal with all the points that he raised at this stage, because I am sure that Members of the Committee will agree that, in a very useful intervention, he has dealt with some of the matters which arise under subsequent amendments.

First, I turn to what the noble Lord, Lord Thurlow, said, in what I thought was a very considered and helpful intervention. He emphasised the tremendous record of good working relationships between CDC and Ministers and the importance of consultation. That is certainly my

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experience. It is part of the fine tradition which we all applaud. That is why it has worked well. But that is a tradition based upon the reasonableness of Ministers and Ministers' understanding of the issues in relation to development and the needs of countries with which the noble Lord is so well acquainted.

My anxiety is that we cannot be absolutely certain, particularly in the times in which we live, that that balanced reasonableness will always exist. I am worried that inadvertently, we shall open the way for people who have very different approaches to CDC's task. None of us has any anxieties about the noble Baroness opposite. We all know that she masquerades on those Benches but she belongs to us. We have no difficulty about that. But the difficulty is that she cannot be expected to be there for ever. We know also that quite often she has problems and difficulties in seeing that her priorities prevail. There are others elsewhere in government who sometimes undermine her intentions. For those reasons, we have raised the anxieties behind these amendments.

The Minister spoke—I said that she is a charmer and I thought that she was at her best this evening—about her joy in selling people what they want. I do not doubt that she gets tremendous satisfaction from selling people what they want. But that is not the issue. Which people are we talking about? Are we talking about the impoverished millions still in the third world whom we wish to bring in to participate in the real economy? That is a task to which the CDC has lent itself with distinction in the past. Are we talking about the overwhelming desire of millions of people in Africa, Asia, and Latin America who wish for nothing more than to be able to become productive? Or are we talking about business people in the third world who may not share that priority and who see business as an opportunity to maximise personal advantage? We need to be reassured about that.

The Minister referred to South Africa. She knew that she would strike a chord when she did it because she and I have a strong mutual interest in South Africa and the well-being of that great country. But it is not just a question of ensuring that businessmen or business interests in South Africa are helped; it is which businessmen and which business interests are helped and how far those interests and those business people are committed to the people as a whole and to ensuring that their businesses contribute to social development. That of course brings us to the essence of what is behind so much of the anxiety about change in the role of the CDC.

While we have such admiration for CDC's record in the past, there must always be a tension. That tension is between business disciplines, which we all applaud—a belief that the private sector has a real contribution to make—again, that is something upon which we are all agreed—the desire to help the private sector make that contribution effectively, and at the same time, the need to ensure that all that is attuned to the strategy of social development for the people as a whole and maximising the number of those who are put in a position in which they can find their own way forward by participating in the processes of self-generating development.

When I refer to what I might describe as that "necessary tension", I must say that I could not help being a little confused by what the Minister said this afternoon. Again,

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the noble Baroness emphasised her commitment to 70 per cent. However, if she will forgive me for saying so, what the noble Baroness glossed over is the fact that in 1994 it was 80 per cent. in the poorer countries. Therefore, that is a decline in the proportionate sense in the period of the business plan. I see that the Minister wishes to intervene. I give way.

6.30 p.m.

Baroness Chalker of Wallasey: I am much obliged. I am sorry that the noble Lord, Lord Judd, either misheard me or I was perhaps indistinct; indeed, only the record of Hansard will show which is the case. However, perhaps I may remind the noble Lord that the CDC has to operate within the ministerial directives which I set out in my statement to the House last year following the quinquennial review. Those directives stress the following: at least 70 per cent. of new investment should be in poor countries; and there should be a rate of return on capital of at least 8 per cent. The CDC has to meet both those objectives. Therefore it is no good the noble Lord, Lord Judd, quoting selectively, as he did when speaking to an earlier amendment, from the corporate plan on the objectives without mentioning its work for the other sectors. Both those objectives have to be achieved. I hope that we are now clear that at least 70 per cent. of new investment must be in poor countries and that a rate of return on capital of at least 8 per cent. must be achieved.

Lord Judd: I am most grateful to the Minister for her intervention. However, it still leaves unanswered—if the noble Baroness will forgive me for saying so—the fact that in 1994 the figure was 80 per cent. in respect of poorer countries. The Minister also referred to the target of at least 8 per cent. return; indeed, the CDC prides itself on doing better. In its corporate plan, it has set itself the objective of moving to 9.9 per cent. as I said when introducing the amendment. That is where the anxieties begin to arise because, inevitably, people begin to feel that the balance between the business discipline and the social purpose is getting out of hand. In that sense, it is inevitable that people will look most closely at what is happening.

Before I conclude, perhaps I may deal with one or two of the points raised by the noble Lord, Lord Trefgarne. He said that his Bill was not about changing the role of the CDC. I find that a bit disingenuous; indeed, it seems to me that the legislation is very much about extending and thereby changing the role of the corporation. The noble Lord should be proud that he is introducing a Bill which has purpose. It is not just a cypher, it is a real Bill with a real purpose. All we are saying is that, as the change takes place, we must be quite certain not just about what happens now but also about what may happen down the road.

I was both interested and reassured by what the noble Lord said about the emphasis on the "hands-on" approach by the CDC and about the importance of the creation of the managed business department within the corporation. Those are all good things. However, we have listened to all the arguments. There is much meat and much good intent there. We shall want to take the matter away and ponder carefully upon it. As I said, I do not in any way question the commitment of the present Minister; nor, I

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think, do I challenge the present leadership of the CDC. However, we do not want the CDC inadvertently to desert the distinguished and effective role that it has played in development as it chases after a new, glittering temptation of becoming a kind of investment bank. Of course, we made such points on Second Reading. In the present circumstances, I believe that it is important to look most carefully at what the Minister said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Trefgarne moved Amendment No. 4:

Page 1, line 7, after ("(2) (a)") insert ("of section 2 (purpose and powers of Corporation)").

The noble Lord said: When I spoke to Amendment No. 1 a few moments ago, I inadvertently jumbled the amendments to which I was also supposed to be speaking. I apologise to Members of the Committee for that fact. I should have said that I was speaking at the same time to Amendments Nos. 2, 4, 8, 12 and 16. We have of course now dealt with Amendment No. 2 and are currently dealing with Amendment No. 4. Moreover, in a moment or two we shall be dealing with Amendments Nos. 8, 12 and 16. However, the arguments are not the same. They are simple drafting amendments. The earlier amendments commended themselves to the Committee. I hope that that will be the case with Amendment No. 4. I beg to move.

On Question, amendment agreed to.

Lord Trefgarne moved Amendment No. 5:

Page 1, line 9, leave out from ("words") to ("in") in line 10 and insert (""creation, promotion, expansion, reorganisation or rationalisation").

The noble Lord said: Again, as I said earlier, the amendment is not one of substance. However, perhaps I may speak at the same time to Amendments Nos. 9 and 18, which are related. As I explained on Second Reading, the purpose of Clause 1(2) and (3) of my Bill is to remove the limitation in the present CDC Act on the corporation's purchasing of existing shares, securities or assets which severely inhibits the role that the corporation should be playing in facilitating projects involving rehabilitation, buy-outs, buy-ins or similar unbundling exercises which are likely to continue to constitute a significant part of CDC's new investment, particularly in Africa.

On further examination, it was felt that the words "regeneration" or "reconstruction" did not fully and clearly reflect the variety of projects which need to be covered. It was also felt to be neater and more consistent to the scheme of the present CDC Act not to include a definition of "reconstruction" within Section 2 of the 1978 Act, but rather to list it in a different style as one of the provisions supplemental to Section 2 along with the others in Section 4 of the Act.

The words, "promotion" and "expansion" are already contained in Section 2 of the legislation. The words added to my Bill are, "creation ... reorganisation [and] rationalisation". The word "creation" was added because the Bill removes the present distinction between new and existing enterprises. The word "reorganisation" is defined as including corporate or financial reconstruction, while

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rationalisation recognises the variety of situations in which the CDC may be involved in different projects involving existing enterprises.

I repeat that the clause, with its proposed amendments, is intended to give CDC more flexibility, in particular to enable it to purchase existing shares, securities or assets. On the basis of that explanation, I hope that Members of the Committee will agree to Amendment No. 5 and those subsequent to it that I have mentioned. I beg to move.

On Question, amendment agreed to.

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