HC Deb 10 December 1997 vol 302 cc994-5
3. Mr. Flight

When the change in status of the Commonwealth Development Corporation to a public-private partnership will take place. [18423]

Clare Short

I am keen to mobilise new investment through the Commonwealth Development Corporation in the neediest countries in the world as soon as possible, but there are many steps to be gone through, not least to deal with the need for new legislation.

Mr. Flight

Are the Government willing to consider bringing private sector shareholders into the CDC, given that they would help to confer the benefits to which the right hon. Lady has referred? If so, what kind of shareholding might the Government wish to retain, and—potentially—what kind of outside parties would they want to bring in? I think that the House should know where the Government are going.

Clare Short

I am sure that the House should know where the Government are going. My right hon. Friend the Prime Minister spoke about the matter at the last Prime Minister's Question Time and, I believe, the one before that, so there are no secrets; clear statements have been made.

As the hon. Gentleman should know, I have reviewed the CDC's work. It is a very important instrument to secure investment for countries that are not attracting private flows. We want to increase those flows and to use the CDC as a bridge to draw in more. I have therefore looked at the CDC's structure. Because it is wholly Government-owned, it is not allowed to raise private finance because that would count as Government borrowing. I want it to be restructured in a way that will allow the retention of a substantial Government share while leaving the majority of the corporation in private ownership. That will enable us to raise additional flows of investment while leaving a golden share that will entrench the corporation as a development institution encouraging investment in the poorest countries.

Those are the proposals and they are being scrutinised. As the hon. Gentleman will know, there is much detailed work to be done and after that we must introduce legislation; but I hope to do all that.