Condition for exercise of power to increase limit: report and business case

Commonwealth Development Corporation Bill – in a Public Bill Committee am 4:45 pm ar 6 Rhagfyr 2016.

Danfonwch hysbysiad imi am ddadleuon fel hyn

After section 15 of the Commonwealth Development Corporation Act 1999 (limit on government assistance), insert—

“15A Condition for exercise of power to increase limit: report and business case

(1) The Secretary of State may only lay a draft of regulations under section 15(4) before the House of Commons if he has also laid before the House of Commons the documents specified in subsections (2) and (3).

(2) The document specified in this subsection is a report submitted by the CDC to the Secretary of State giving an account, in respect of the most recently completed financial year, of—

(a) the investment activities of the CDC by country and sector, and

(b) the remuneration of staff, including anonymised information on individuals receiving a salary during the financial year in question in excess of £150,000.

(3) The document specified in this subsection is a business case for the proposed use of the new investment enabled by the proposed increase in the current limit at the time which includes information on—

(a) the expected market demand,

(b) the proposed sectors,

(c) the proposed locations, and

(d) the prospective development returns.

(4) In this section, ‘the current limit at the time’ means—

(a) prior to the making of any regulations under section 15(4), £6,000 million,

(b) thereafter, the limit set in regulations made under section 15(4) then in force.”—

This new clause would require any draft regulations to increase the limit on government assistance under section 15(4) to be preceded by the laying before the House of Commons of an annual report for the preceding financial year giving information on investment activities and remuneration and a detailed business case for the proposed additional investment.

Brought up, and read the First time.

Photo of Stephen Doughty Stephen Doughty Labour/Co-operative, De Caerdydd a Phenarth

I beg to move, That the clause be read a Second time.

I will not dwell on this new clause too long, because it simply states some of the arguments I made earlier about the sort of business case and rationale that my hon. Friends and I feel should be provided before significant increases in CDC’s capital receipts go ahead.

The new clause mentions expected market demand, proposed sectors, proposed locations and prospective development returns, as well as clear and transparent information on the investment activities of CDC and on remuneration. I have not dwelled too much on remuneration, but it bears looking at. Although the headline salaries of CDC’s chief executive and others have come down significantly, which I welcome, they are still substantial. The number of staff within CDC who are in the higher income brackets concerns me. I realise there is a trade-off here, and it is not a debate we will conclude today, but we should set out all that information clearly before Parliament authorises such significant increases of money.

I feel we have had a productive debate today on many of the issues. I welcome the new information that the Minister provided. It would be good to see some of that in writing, and perhaps through further amendments, but I still fundamentally feel that the increase is too big, with too much power being given to Secretaries of State. Who knows if the Minister will be in his place in the future? It is too much of a temptation, without clear safeguards.

I hope that other Members who join us on Report will look carefully at these issues. I have no doubt that my hon. Friends will table amendments for the whole House to vote on, in the light of information we have heard today from the Minister. Serious concerns remain. I do not think the Minister has made the case yet, and certainly not for this level of increase, but I do not intend to press the new clause to a vote.

Photo of Rory Stewart Rory Stewart The Minister of State, Department for International Development

With your permission, Ms Ryan, I hope to thank people more formally on a point of order, but this has been an excellent and testing debate. I will try to come back to that point.

We take the issues that the hon. Member for Cardiff South and Penarth has raised seriously. We have an online searchable database in which is contained all the remuneration, every investment decision and every fund, including the name, description, location and sector. The annual reports and accounts are now published with that information. We are pushing—he will see this in the new strategy coming forward—for even more transparency.

We already feel that CDC is a real leader among DFIs in the world, but that is not good enough. It is not good enough for us to be better than other DFIs. We can keep improving. After the evidence session, I had a conversation with Oxfam about the concrete proposals it has for more that we could do internally. We are very open to those kind of challenges. There are absolutely no issues from us or from CDC in trying to prove again and again that we are a world leader on transparency. I thank the hon. Gentleman for saying that he will withdraw the new clause.

Photo of Stephen Doughty Stephen Doughty Labour/Co-operative, De Caerdydd a Phenarth

I thank the Minister for his remarks. I think it would be helpful and more likely to gain support across the House were he to come back with a lower level of increase over a defined period and were he not to give those secondary powers. I do not think anyone is suggesting that there is not the potential for more good work to be done through CDC, but it is the question of the value and the caveats that need to be put in place before that goes forward. I do not think that the Government have made that business case yet. I look forward to hearing more from the Minister in due course, and I thank everyone who has taken part in today’s debate. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Photo of Rory Stewart Rory Stewart The Minister of State, Department for International Development

On a point of order, Ms Ryan. I put on record my enormous thanks to the Bill team, to the Doorkeepers, to Hansard, to the Clerks and to you for your chairmanship. Please put on record that we have explored all the amendments at great length and are finishing the Committee half a day early. In particular, I give huge thanks to all the Members—the hon. Member for Coatbridge, Chryston and Bellshill, my hon. Friend the Member for Congleton, the hon. Member for Cardiff South and Penarth, my hon. Friends the Members for Rochford and Southend East and for Bedford, the hon. Member for Glasgow North, my hon. Friend the Member for Gloucester, the hon. Member for Bradford East, my hon. Friend the Member for Stafford and the hon. Member for Edmonton—who contributed greatly to our debates. I also thank my hon. Friends the Members for Rochester and Strood and for Sutton and Cheam, the hon. Member for Wirral South, my hon. Friend the Member for Burton and the hon. Member for Ogmore for their attendance.

I will conclude with a personal note. I pay huge tribute to the level of scrutiny I have received from the hon. Members for Cardiff South and Penarth and for Glasgow North. I am extremely pleased, to be honest, that I am defending an institution that I am genuinely proud of and that does a genuinely good job. If I was not confident about the institution I am defending, it would have been extremely uncomfortable to be subjected to that level of expertise and scrutiny. I thank them so much for doing such a good job of holding us to account. I again thank the Clerks, the Doorkeepers, Hansard and everybody for allowing us to conclude half a day early.

Photo of Kate Osamor Kate Osamor Shadow Secretary of State for International Development

Further to that point of order, Ms Ryan. I want to tag on to the Minister’s remarks and thank everyone who contributed today. My hon. Friend the Member for Cardiff South and Penarth has worked tremendously hard, and I wanted to thank him for all his work and the scrutiny he has put the Minister under. I appreciate it, and it has helped the debate no end.

Bill to be reported, without amendment.

Committee rose.

Written evidence reported to the House

CDCB 01 The Rt Hon The Lord Boateng PC DL, Chair Africa Enterprise Challenge Fund, formerly Chief Sec HMT and High Commissioner to South Africa

CDCB 02 Nirmal Jain, Founder and Chairman, IIFL group

CDCB 03 Owen Barder, Center for Global Development

CDCB 04 Professor Ian Goldin, University of Oxford

CDCB 05 World Bank Group

CDCB 06 Zambeef Products PLC

CDCB 07 Graham Clark

CDCB 08 Lord Stern of Brentford, Kt, PBA, FRS

CDCB 09 Global Justice Now

CDCB 10 Christian Aid

CDCB 11 Private Infrastructure Development Group

CDCB 12 Rainbow Children’s Hospital and BirthRight

CDCB 13 Dr Rajiv Lall, IDFC Bank Limited

CDCB 14 ARM Cement PLC

CDCB 15 Mr. Ramesh Ramanathan, Chairman - Janalakshmi Financial Services, Ltd

CDCB 16 Paddy Carter and Dirk Willem te Velde, Overseas Development Institute

CDCB 17 John Gibb

Correspondence

Vasudevan, MD & CEO of Equitas Small Finance Bank, Chennai, India

Dr. BS Ajaikumar, Chairman & CEO, HCG Enterprises Ltd.