in the first session of the fifty-third parliament of the united kingdom of great britain and northern ireland commencing on the thirteenth day of june in the fiftieth year of the reign of


House of Lords

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Monday, 4th March 2002.

The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers—Read by the Lord Bishop of Lichfield.

Commonwealth Development Corporation

Baroness Gardner of Parkes asked Her Majesty's Government:

    How they intend to ensure that CDC Capital Partners, formerly the Commonwealth Development Corporation, continues its development work to support the poorest of the poor in the third world.

Lord Grocott: My Lords, the CDC has met the investment policy targets in 2001 and continues to mobilise private finance for investment in some of the poorest countries of the world. The Government will continue to support the CDC in this challenging process.

Baroness Gardner of Parkes: My Lords, I thank the Minister for that reply. Is it not a fact that the company has closed offices in most of the poorest countries and opened them only in richer countries, such as Nigeria and Mexico? Aid previously went directly to farmers, but instead that money is now being put into investment—into shares and businesses. That is surely not the way to help the really poor people, in Africa in particular, who farm and live off the land.

Lord Grocott: My Lords, the CDC operates within a clearly laid down investment policy. The important points of that policy include a requirement that the CDC should make 70 per cent of new investments, measured over a five-year rolling period, in poorer developing countries and that each year it should seek

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to make 50 per cent of new investments in sub-Saharan Africa and south Asia. Those are the parameters within which the investment policy operates and the CDC is meeting those investment parameters.

Lord Taylor of Blackburn: My Lords, who makes the policy for the CDC to carry out?

Lord Grocott: My Lords, that is laid down in statute. Ultimately, the investment policy of the CDC falls within a remit laid down by the Secretary of State, particularly with regard to the investment requirements that I spelt out. Noble Lords will acknowledge that whichever sections people come from, the Government's record on overseas development issues has been outstanding.

Lord Redesdale: My Lords, does the Minister agree that one reason why many noble Lords supported the passage of the Commonwealth Development Corporation Bill was that we saw it as a means of increasing the development potential of the CDC? The investment targets that have been set and the removal of offices from countries such as Mozambique give the impression that the CDC is now interested in profit rather than development criteria.

Lord Grocott: My Lords, offices open and offices close; there are changes. An office recently opened, for example, in Nigeria, which I am sure we all acknowledge is a country in which investment strategy is extremely important. I reiterate that the CDC is only one part of the Government's overall overseas development strategy—it cannot be seen in isolation. One of its key remits is to demonstrate that even in the poorest countries of the world it is possible to make commercial investments in order to attract increasing numbers of companies to do precisely that. In that respect, as part of the Government's overall development strategy, it is extremely important.

The Lord Bishop of Lichfield: My Lords, the issue that the noble Baroness raised about agriculture is very

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immediate to me—I so happen to have just come back from Uganda, where I served. There is no doubt that agriculture needs focused support in such countries. People want to work and till the land themselves, and agriculture is a crucial priority. What is the CDC's relationship specifically to the agricultural issue?

Lord Grocott: My Lords, agriculture is extremely important in development policy. However, it is not the only area in relation to which investment in developing countries is extremely important. For example, who is to say that the development of a particular agricultural business is more or less important than investment in the communications that will enable those products to go to market? I could read out the various headings of the CDC's investment portfolio. However, I reiterate that, as well as agriculture, there are many areas in which investment is important.

Baroness Trumpington: My Lords, does the change in name from "the Commonwealth Development Corporation" mean a change in purpose? Is Tanzania still included in the excellent work that the CDC was previously doing in the agricultural field? I feel strongly about the comments of the right reverend Prelate on the importance of agriculture from the CDC's point of view—that is the job that it was created to do. Does the Minister agree that it would be very sad if that job had changed?

Lord Grocott: My Lords, one of the key changes three years ago was to provide more emphasis on demonstrating to private companies that they can properly invest—and successfully invest—in some of the poorest countries in the world. That is precisely the point that my right honourable friend the Secretary of State Clare Short made at Second Reading of the Commonwealth Development Corporation Bill. She said:

    "If the CDC was bigger and could make investments that achieved a rate of return attractive to the private sector, it could demonstrate that the private sector could invest successfully in countries that it currently shuns".—[Official Report, Commons, 24/5/99; col. 40.]

Therefore, this is a very important part of the work of international development but by no means is it the only part.

The investment that takes place in many parts of Africa, including Tanzania, is extremely important. The CDC joint-manages nine funds in Ghana, Kenya, Tanzania, Mozambique, Zimbabwe, Mauritius and Zambia. Those countries are extremely important as part of the CDC's strategy.

Lord Craig of Radley: My Lords, the Minister will be well aware of the excellent work of the Commonwealth Partnership for Technology Management—CPTM—and the pioneering developments of smart partnerships. Will he seek to encourage and support links between CPTM and CDC on programmes designed to enhance transnational growth in southern

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Africa; for example, in developing the Maputo Corridor and peace parks in the region? I declare that I am an unremunerated fellow of CPTM.

Lord Grocott: My Lords, the noble and gallant Lord draws attention to an extremely important part of investment policy. Again, he refers to a part of Africa. I can only say time and again that at all levels—not only the Secretary of State and the Chancellor have been involved but the Prime Minister himself—the enormous importance that this Government attach to the development of Africa south of the Sahara and to putting right some of the wrongs of recent years has been emphasised. That strategy will continue.

Starter Homes Initiative

2.44 p.m.

Baroness Maddock asked Her Majesty's Government:

    Whether the progress of their Starter Home Initiative is satisfactory.

The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton): My Lords, last September we allocated £230 million in Starter Home Initiative funding to 95 schemes to help 8,000 key workers. In January we published bidding guidance for the remaining £20 million funding, which we intend to allocate in May to help 2,000 key workers. Schemes are now up and running in local areas. The first key worker completed an assisted house purchase last October.

Baroness Maddock: My Lords, I thank the Minister for that reply. He will be aware that since the scheme was announced many people believe that much of its value has been wiped out by house price increases in London and the South East. Of course, those increases are due to a lack of supply of affordable housing. However, does the Minister share my concerns that police and health authorities are continuing to sell residential properties in their ownership? When can we expect an evaluation of the scheme to be published?

Lord Falconer of Thoroton: My Lords, when we announced the scheme in July 2000, we said that 10,000 key workers would be helped. As I indicated, the £230 million already allocated helps 8,000 workers. The remaining £20 million, which will provide funds for key workers to put down as a deposit on a property, will help a further 2,000 workers. Therefore, we have been able to maintain the number of key workers that need to be helped. The problem for such workers in London, the South East and other areas of high demand is intense. I agree with the noble Baroness that all employers of key workers, including statutory employers, need to see how they can help to ensure that as many as possible of their employees are housed.

Evaluation is certainly planned but nothing has been commissioned yet. It is anticipated that research will begin in approximately January 2003 once more

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people have been through the scheme. That research will examine all aspects of the scheme, including the impact on staff retention and recruitment—plainly one of the vital elements of the scheme.

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