ALTERATION OF LIMITS ON BORROWING ETC. (Hansard, 16 March 1995)

§ Miss Joan Lestor (Eccles)
I seek some clarification. No one is suggesting that there should be no investment in eastern Europe. The Minister has been helpful but the research document, which I am sure that we have all been reading with great interest, clearly states:
It is not impossible that the profits from past investments in the impoverished parts of Africa could be used to finance new investments in Eastern and Central Europe. Our concern is that the profits made in Africa would be used somewhere else and that money that might have been invested there [...]ould be transferred elsewhere. Will the pot be large enough to prevent that from happening? Will the Minister give us some assurances on that point?

§ Mr. Jim Lester (Broxtowe)
Does my hon. Friend the Minister agree that the CDC should claim additional funds only if it decided that it wanted to apply to operate in a completely different area such as eastern and central Europe? I hope that there is no suggestion that it should recycle funds from its existing portfolio so as to take on an area with such demands as central and eastern Europe.

§ The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tony Baldry)
Hon. Members may have inadvertently been misled by the research document. It seems to have led them to believe that the CDC wants to invest in eastern Europe and in the former Soviet Union. It does not currently do so, has not asked permission to do so and, as far as I am aware, has no intention of asking to do so in the foreseeable future. As I have already said on several occasions, other bodies, such as the European bank for reconstruction and development, with a remit to promote investment in eastern Europe and the former Soviet Union, already exist. We would have to take all those factors carefully into consideration if we were to consider giving the CDC permission to invest in eastern Europe and in the former Soviet Union.

§ Mr. D. N. Campbell-Savours (Workington)
I shall refresh the Minister's memory of what was said by Baroness Chalker in 1992. When he makes statements, he might try to reflect on that. She said:
there is a need for other expansion. I assure the Committee and the House that we are prepared, if necessary, to introduce primary legislation to expand the CDC's role. Subject to borrowing limits … there is nothing to stop CDC work in eastern Europe provided that there is sensible risk. The now Baroness was thinking positively in 1992. She continued:
1068 We hear less about the other republics, but we are doing our best to find out more so that we ensure that help within the general aid programme is sent where it is needed. More information will enable us to find out how the expertise of the CDC can open opportunities … The British private sector, backed by Government funds, has gone in to help to create a private sector and new systems in Russia and Poland and, although conditions are slightly easier there, in Hungary and Czechoslovakia, too, CDC has much of the sort of expertise that could be well deployed."—[Official Report, First Standing Committee on Statutory Instruments, &c., 4 March 1992; c. 11-13.] That fairly positive statement was made almost three years ago to the day in Standing Committee. Yet, this evening, the Minister seems to be far more negative. Has there been a policy change in the Government's position? Has someone changed his mind since 1992?
I think we are all united in our view that there should be investment in eastern Europe and in the former Soviet Union. Some of us, however, are concerned about how the investment will be funded and to what extent we can draw on capital markets in the west, borrowing and lending at commercial rates to enterprises in eastern and central Europe and in the former Soviet Union.
When the Minister replies, I hope that he will take into account the commitments that were given in a one-and-a-half-hour debate in Standing Committee, about three years ago, by the present Baroness Chalker.

§ Mr. Hugh Bayley (York)
I understand from the Library brief that one of the proposals set out in the 1993 review was that there should be statutory change to allow the CDC to undertake consultancies not related to project investment. I am concerned that the Overseas Development Administration spends large sums on management consultants—generally United Kingdom consultancies—to advise on development strategies in the disbursement of the ODA's bilateral aid budget.
Surely it would make sense for a body with the expertise of the CDC to be able, in appropriate cases where it has relevant expertise, to offer to provide consultancy in respect of projects with which it is not concerned. In commercial—

§ The Chairman of Ways and Means (Mr. Michael Morris)
Order. The clause relates to borrowing limits.

§ Mr. Bayley
I am asking the Minister, Mr. Morris, why the consideration to which I have referred did not form part of the clause. It is—

§ The Chairman
Order. It is not for an hon. Member to ask why something is not in a clause. At present, we are concerned with what is in clause 1. The hon. Member may wish to raise certain issues on Third Reading or on other clauses in Committee that we have yet to debate, but for the moment we are dealing with borrowing limits.

§ Mr. Bayley
I am guided by you, Mr. Morris. I shall resume my place.

§ Mr. Tony Worthington (Clydebank and Milngavie)
I am left wondering whether the Bill is premature. There remain unresolved issues. At the same time, as I said earlier, some of us on the Opposition Benches feel 1069 disappointed that the Bill has not gone far enough. The Minister has referred to issues that have not yet been resolved, and it seems that there is doubt about whether they are within the competence of the CDC. That seems odd when we are considering a recently introduced Bill. I am convinced that the issues of competence relate to the CDC's competence to borrow from the commercial sector, for example.
I ask the Minister to try to explain the real issues that are now before the Foreign and Commonwealth Office in determining the role of the CDC where there is doubt about its competence. Such an explanation would be valuable. It seems—

§ The Chairman
Order. Such an explanation might be valuable but our rules are clear: we must deal strictly with clause 1, which relates to borrowing limits. As I have said, the Bill can be debated on Third Reading. Some of the issues that are now being raised could most appropriately be introduced at that stage. For the moment, the Minister, along with Back-Bench Members, must restrict himself to borrowing limits.