§ 7.2 p.m.
§ Lord Skelmersdale
My Lords, I beg to move that this Bill be now read a second time. We now know, after the speeches we have just listened to, that we have been allotted only this dinner hour, a maximum of one hour, to discuss the Bill and another piece of business, and that by agreement through the usual channels we are to get this Bill through all its stages in that time. I hope I can rely on the co-operation of noble Lords to achieve this worthy objective.
I chose that phrase deliberately. That part of the Government's revenues which are given to overseas aid—around £1 billion—is, I believe, one of the most important and valuable parts of our contribution to international well-being, with, naturally, a spin-off to our own economy. Within this, the Commonwealth Development Corporation is, I submit, one of the most effective of all agencies anywhere in the world. Other noble Lords will no doubt wish to eulogise it, but, for my part, I will only say that it has been spectacularly successful in its statutory aim of assisting developing countries in the development of their economies through investment in projects which can 777 be either in the public or private sectors and which will increase the wealth of the territories concerned. These projects have to yield a reasonable return to the corporation because of its statutory duty to secure that its revenues are not less than sufficient to meet its costs. This it has done with such success that it has for many years made a profit on its investments which it has been able to plough back into further development projects.
The main objectives of the Bill are simple. They are to revise the corporation's temporary borrowing limits and replace them with a less rigid system and also to increase their overall borrowing limits to enable them to sustain the level of investment for which the demand exists and which both the Government and the corporation itself want to see met further. This will provide them with borrowing limits which should be adequate until the end of the decade.
Clause 1 amends Section 9 of the 1978 Act so as to enable the Commonwealth Development Corporation to borrow from the National Loans Fund. Similar provision now exists in legislation dealing with other public corporations. It would make available to the corporation an alternative source of funds should the Government at some future date prefer market borrowing to be undertaken from the National Loans Fund rather than, as at present, from the private sector. It does not mean that this Government envisage that the corporation should be required to borrow at market rates from the NLF instead of at concessionary rates from the aid programme.
Clause 2 increases the limits on the borrowing powers of the corporation. Section 9 of the Commonwealth Development Corporation Act 1978 sets the existing limits to the amounts the corporation may borrow temporarily and otherwise. The temporary borrowing limit has remained at £ 10 million since the corporation was established in 1948. It has hitherto needed to make little use of these borrowing powers because its internal liquidity has largely been sufficient to meet short-term financing needs. It has, however, sought an increase in the temporary borrowing limit, first, because the original limit is now much reduced in relation to the scale of its operations and, secondly, in order to give it greater freedom of manoeuvre in relation to the timing of the market borrowing. While there is not an immediate requirement for an increase in this temporary borrowing limit, the need for such a step may well arise in the near future. It is therefore proposed to bring the provision for temporary borrowing into line with that now commonly used for public sector bodies, by amending the 1978 Act to enable the Secretary of Sate, with the consent of the Treasury, to set a limit on temporary borrowing from time to time.
The limit in respect of sums borrowed otherwise than temporarily was set in 1948 at £100 million and was last raised in 1977 to £500 million, extendable by order to £570 million. Since the Government recently gave the corporation authority to borrow commercially as well as under the aid programme, the CDC'S estimated total borrowings could well approach the £500 million limit within three years or so. The Bill therefore raises the overall borrowing limit—including temporary borrowing and borrowing by subsidiaries or where the CDC has incurred a contingent liability—to £750 million, extendable by order by the 778 Secretary of State, with the consent of the Treasury, up to a maximum of £850 million. As I said, these should provide adequate borrowing powers until the end of this decade.
The rest of Clause 2 is consequential, as is Clause 3, which, within the new overall borrowing limit, increases the limits within which the corporation may borrow from the Secretary of State to £700 million, extendable by order to £800 million.
I should like to conclude by expressing the appreciation of the Government, and I am sure of this House, of the splendid way in which the Chairman of the CDC, the noble Lord, Lord Kindersley. the board and the staff are maintaining the very high standards set by their predecessors over more than 30 years. This Bill will assist the corporation to continue the very real contribution which it makes in the developing countries, and I trust that it will receive the approval of the whole House. I beg to move.
§ Moved. That the Bill be now read a second time.—[Lord Skelmersdale.]
§ 7.9 p.m.
My Lords, I am sure we are grateful to the noble Lord, Lord Skelmersdale, for the way in which he has introduced the Bill. He seemed to do so with rather more zest than did his colleague in another place because on that occasion Mr. Marten said:This is a horrible piece of legislation".
§ That at least struck me as unusual for a Minister when introducing a proposition to the House. But we know what he meant. He meant that it is a Bill which is largely technical, full of figures and dry-as-dust financial provisions. That is what he meant when using the word "horrible".
Those who are acquainted with the work of the Commonwealth Development Corporation, including myself, know very well that behind the technicalities and the statistics is a human story. Indeed, there are thousands of human stories in the many successful development projects which the CDC has sponsored throughout the third world. As the chairman of the corporation, the noble Lord, Lord Kindersley, said in the latest report of the corporation;
CDC has a substantial balance sheet but its prime asset is people".
§ I have had a number of opportunities over the past 15 years or so to know that that is very much the case. I have been involved with the work of the CDC and I have viewed it in three different ways. Back in 1969, when I was a Minister at the Ministry of Overseas Development, it fell to me in another place to deal with a Bill very similar to that with which the House is now dealing. Secondly, during 1975 when I was in neither House of Parliament I had the valuable opportunity of serving on the board of the CDC for a short period and I found that to be a most enlightening experience. But perhaps most important of all from the point of view of first-hand knowledge was that during a visit to Malawi I saw a number of the CDC projects in that country and I met a number of members of the dedicated staff which the CDC is fortunate to employ. When one sees the type of project that the CDC is successfully operating one comes away full of praise for the work it is doing.779
§ It was of interest to me that the Members of the sub-committee in another place which investigated the work of the Commonwealth Development Corporation also went to Malawi and apparently looked at the same projects as I had the pleasure of seeing. As I have mentioned the report which came from the sub-committee of the Foreign Affairs Committee in another place, I should like to ask the Minister whether he knows when we are likely to get the Government's reply to the many valuable recommendations which the Members of another place put forward in this report. It may be that they have already made their reply and I have missed it, but I think not. It would be valuable if the Minister could let us know either now or in some other way. because it might give your Lordships' House the opportunity for a short debate on the CDC which might compensate to a degree for the limited time that we are able to devote to this particular Bill at this particular time.
I have looked through the recommendations in the report of the sub-committee of the Foreign Affairs Committee and it seems to me at first reading that the long list of recommendations that they make could be implemented without any further legislation. If that is so, then I see no difficulty in agreeing—as we have agreed—to facilitate the quick passage of this particular Bill through the House. But it would be regrettable if, having done that, it meant that any of the recommendations of the sub-committee were held up for lack of further legislative opportunity. In particular—and I should like the Minister to comment on this either now or in some other form—the subcommittee put forward the following recommendation in terms of financial programmes. I am quoting from paragraph 135 of their report:
We recommend that consideration be given to providing the CDC at least three years in advance with a formal rolling programme. This should state the minimum level of advances from the aid budget and authorised commercial borrowing which the CDC can expect, and should indicate the maximum level of funding on which it is likely to be able to draw from these two sources in those years".
§ That struck me as a very sensible proposition that was being put forward by the committee. I just wonder whether it will be possible—at first reading it seems to me that it would be possible—to implement that recommendation within the parameters of the financial provisions that are being made in this Bill. But, if not, then it is regrettable that there may be a delay because this Bill is going through in the way it is.
§ In general, I am clearly, from what I have said about the valuable work of the corporation, thoroughly convinced that the CDC deserves the backing of Parliament in the way in which this Bill proposes. Periodically since 1948, as the noble Minister pointed out, under Governments of both persuasions, the CDC's borrowing powers have been raised, and for two reasons. First to meet the demands of inflation which has been going on throughout that period; and secondly—a happier situation—because the CDC has had an expanding programme. My noble friends and I certainly support the present Bill on those grounds as a further step in financial provision for the CDC, and I suppose that I need say little more than that about the financial provisions.
§ However, it occurred to me when I recalled the 1969 780 Bill for which I had some responsibility, that the ceiling of borrowing at that time was £225 million and the figure proposed a little more than a decade later in the present Bill is £750 million. That struck me as a rather strong comment on the decline in the value of money in little over a decade. But equally I hope—indeed. I feel sure—that it reflects that the CDC has been pursuing an expansionist policy on progressive lines, and that of course is to be welcomed.
§ I should like to make a few general comments about the role of the CDC as I have seen it over the last 15 years or so. I recall that in the 1969 Act. to which I have referred, we gave the CDC power to operate in countries other than Commonwealth countries. Up to that point it had been limited to countries within the Commonwealth. I see from the latest report of the corporation a lengthening list of such countries which are outside the Commonwealth network. That is all to the good, although I notice that the House of Commons sub-committee seemed to have doubts about it. I personally certainly have no doubts. I think that it is one aspect of the way in which the CDC has adapted its operations over the years to meet the needs of a changing world.
§ Of course, the Commonwealth aspect is still of great importance—great psychological importance if nothing else—but from an economic and social point of view I suggest that the differentiation between Commonwealth and neighbouring non-Commonwealth countries is becoming less sharp. I am sure that it was right that the CDC should be given the extra freedom to which I have referred.
I remember also that during the short time that I was on the CDC board we were much exercised about the choice of priorities in the operations of the corporation. I recall that the Ministry of Overseas Development itself at that time was reshaping its policies to ensure that more should be done in the rural sectors of the economies of the developing countries; and also—and this was a matter which my right honourable friend Dame Judith Hart had very much at heart—that aid should be directed towards those countries most in need. I was, therefore, glad to read in the general manager's review in the latest report the following sentence:
CDC will aim to place not less than half of its new commitments in the poorer developing countries and also not less than half in renewable natural resources projects.".
§ That reads very well and I hope that the CDC will indeed be able to fulfil that welcome intention. Indeed, I would be happy if they would increase it above the 50 per cent. mark.
§ The need for that kind of priority in development work has recently been underlined in a report by M. Pisani, who is the Development Commissioner in the European Communities Commission in Brussels. His report, in a document which I think has had too little notice taken of it either in Brussels or elsewhere, points out that the current world crisis is accentuating the differences between the different groups of developing countries. On the one hand, we have the oil exporting countries and those that are newly industrialised; and on the other, we have the poorest countries which have neither oil nor new industries, and the gap between those two groups of developing countries is becoming wider.781
§ M. Pisani's paper says that aid is not going to those who need it most. He quotes that in 1979 middle-income countries were receiving bilateral aid to the tune of 12 dollars a head against only 5 dollars a head for the poorest countries. That is why, taking M. Pisani's analysis, I am glad to read that the CDC is putting emphasis on its work in the poorest countries, and that is why I hope it will increase that emphasis still further.
§ I conclude with a further reference to the speech with which the Minister for Overseas Development introduced the Bill in another place. He was full of praise, as we all can genuinely be, for the work of the CDC. But then he went on to bemoan the fact that he could not do as much as he would wish, or indeed as the CDC would wish, to help that work forward. And why? It was, he said, because of the many other claims on the aid programme. I have a simple suggestion to make which I hope the noble Lord, Lord Skelmersdale, will perhaps pass on to his colleague in another place. I think that my suggestion might help him out of the dilemma which seems to be causing him some pain. The answer to his dilemma, I suggest, is simply that the Government should increase the aid programme.
§ 7.24 p.m.
§ Lord Seebohm
My Lords, I shall be very brief. I find it very difficult to believe, in spite of comments that may have been made by the noble Lord, Lord Houghton, or perhaps in the other place, that anyone who knows anything about the CDC could possibly object to this Bill. Over the years the CDC has acquired a unique expertise and experience in tropical agriculture and, what is even more important, has gained the confidence of the governments concerned. There have, I think, been many well-intentioned projects in the past which have failed to do any good for the particular reason that they do not have the confidence of governments.
There is also much talk in your Lordships' House about the volume of aid. I believe that the basic problem of development of the third world is not necessarily a financial one. Far too little talk has been on the actual needs of these countries, and I hope that we may have a debate on that in due course. It is only partly, and sometimes not at all, a financial problem.
For 20 years I was a director, and for many of those years chairman, of the Barclays Overseas Development Corporation. In all those 20 years we worked alongside the CDC. It was a very interesting experience. Both of us had to learn very much the hard way and we made mistakes, some of them very expensive ones. But we both learnt a lot and, as I have said, both the CDC and the Barclays Overseas Development Corporation gained experience and expertise which I do not believe any other similar agency in the world has.
I remember in the 1960s, when I was in Nigeria, meeting a very high-powered consultant from America who had been sent out by USAID to advise them on the direction in which they should place their aid. He told me, to my great disappointment, that he was not going to recommend any agricultural projects. He said "If we can get a manufacturing base in 782 Nigeria"—and he used the phrase that they used in those days—"we shall get a trickle-down which will bring prosperity to the rest of the country". This has proved completely false, and I am afraid that in many places they still use the phrase, "Let us work on a trickle-down basis", which I think is an enemy to all development. That is not the philosophy of the CDC. The CDC goes for the improvement and development of agriculture and tropical crops, without which I believe we may in a comparatively short time see the third world more or less coming to a complete halt, possibly with starvation and bankruptcy.
Recently there has been an initiative by the European Parliament over four African countries, which I believe the noble Lord, Lord Skelmersdale, may mention later on. The initiative says that if they require help in food production, they can have it. I should be interested to know whether there has been any response to that from those countries. But if they do respond, I very much hope that the CDC will be allowed to enter into these projects, because nobody could do it better.
Finally, I find it cumbersome that we must have a Bill coming through two Houses to provide this sort of finance. I well remember being chairman of Barclays International—I wish I still was—and I believe that if the chairman and general manager came to see me even for £250 million the conversation need not have taken longer than about a quarter of an hour. Next day they would have had a one-paragraph letter, and that would be that. However, I think that there is some hope that the CDC may be able to get money from the private sector in due course, and if that is so, I very much welcome it. But tonight let us not quibble about the method; let us get the Bill passed.
§ 7.28 p.m.
§ Lord Hatch of Lusby
My Lords, first, I should like to add my voice to that of my noble friend Lord Houghton in protesting at the lack of time which has been given to all the stages of this Bill. I do not in any way criticise the noble Lord, Lord Skelmersdale; I know that it is not his responsibility. But it is a denigration of the importance of this Bill that it has to be passed through all its stages within 40 minutes. If that is put down to the responsibility of the usual channels, then it is time we had different usual channels.
During the last 30 years or so I have had the pleasure and privilege of visiting many CDC projects. I well remember almost 30 years ago being taken to see a great pine forest that was being grown in Swaziland, where you could see the pine trees from their very early growth through to their full maturity. I have no doubt at all that every Member of this House now—and I stress now—will be in favour of this Bill and a supporter of the CDC.
It was not always the case. After all, this is a public corporation. At its inception there was a great deal of cynicism and criticism from the Conservative Party. Indeed, even the present Government, despite the continued success of the CDC, as one of their first measures, made a cut in the funds of the CDC which in real terms amounted to 34 per cent. I should like to ask the noble Lord who is to wind up the debate: has 783 that 34 per cent. cut at the beginning of this Government's life yet been restored, or will it be restored when this Bill becomes an Act?
The CDC is, above all, a bridge between aid and investment. It should be considered as investment. In Questions I have asked in the House I have failed to get through to Members on the Front Bench opposite that this is not a hand-out; that the CDC has always made a surplus every year of its operations. In putting money into the CDC we are indeed investing not only in the development of the poorer countries and thus providing greater purchasing power for them to buy our goods, but also into our own industry. I hope that that lesson has now been learned, as I believe it probably has been by the noble Lord, Lord Skelmersdale, who, as my noble friend Lord Oram said, opened this debate with so much more enthusiasm than his honourable friend the Minister in another place.
I should also like to take up the point that has just been made by the noble Lord, Lord Seebohm. It is, I agree entirely, of the utmost importance that agriculture, the development of agriculture, and agricultural renaissance should precede industrialisation; that industrialisation should be built, as it has been in every successful country, on the surplus provided by agriculture. The CDC is one of the major institutions in this country supporting and developing the agricultural strength of the poorer countries. The more we can do to facilitate and expand the activities of the CDC, the better will be the health of the economies of the developing countries.
I should like to say to the noble Lord, Lord Seebohm, that although I would agree with him that this lesson has by no means been universally learnt by developing countries, it is being increasingly learnt, and there are more and more developing countries that are putting their emphasis upon food production and rural development. The other great benefit which the CDC is giving in its services to the developing countries is the work that it does in technical and managerial training. This is again of enormous importance, particularly in the agricultural world, to the developing countries.
On the other hand, I want to make one point to the noble Lord, Lord Skelmersdale. There have to be some political criteria at least in the field of human rights in both investment and in aid. I have not time tonight to go into the details of the criticisms which have been made of the CDC scheme in the Philippines, but I hope that the noble Lord who is to reply will spend some little time on at least assuaging our fears about the way in which the CDC has conducted itself in the Philippines, and the place that that project is taking so far as the people of the Philippines are concerned.
I should like to ask the noble Lord another question. The report of the Select Committee suggests that there are years in which the CDC pays more back to the Government than it receives from them. I believe that this is to reduce the debt of the CDC, but I should like to hear from him what happens when the CDC makes a surplus and pays it back to the Government. Would it not be better to increase the funds of the CDC from their trading surplus?
784 In short, it is not enough for us all to join together in unusual unanimity in support of-the Commonwealth Development Corporation. It is one of the major arms of what I again have been trying to get through to Members on the Front Bench opposite: the economic policies which can reverse both the British and the world recession by increasing the purchasing power and the wealth production of the poorer countries. We need to not just praise the CDC but to give it greater opportunities. It needs expansion, not to be judged simply on commercial standards.
Here I have one criticism to make of the Select Committee's Report. In paragraph 70 on page XXV of the report the Select Committee of the Foreign Affairs Committee states:To the extent that the CDC acts as a catalyst in promoting the activities of UK companies interested in investing overseas, we consider that it has a valuable role. We think, however, that there may be more scope for project identification to help UK industry to invest in some of the more developmentally important areas of the economics of developing countries, and we suggest that the CDC examine whether it would be possible to put more energy into this type of activity.My Lords, it is not more energy that is needed. The CDC has plenty of potential energy. It is more money that is needed, and it is more money that is needed from the Government.
This brings me to the point made by the Minister of State in another place in the debate on this Bill on 7th December. The Minister, Mr. Marten, said, at column 780:Advances from the aid programme were £30 million in the financial year 1981–82 and are expected to be £34 million in 1982–83. I have informed the CDC that, subject to parliamentary approval. I hope to be able to increase that to £37 million in 1983–84.I would ask the noble Lord who is to wind up one question: do those figures take into account inflation? If not, they are reductions at the present level of inflation. If they do not take into account inflation, they have already been reductions over the past year. They are reductions this year; they will be reductions next year. I should like to know from the noble Lord whether his honourable friend in another place is putting forward a proposition that the Government are going to increase in cash terms, but reduce in real terms, the funding of the CDC from the aid budget.
Finally, I wonder whether the noble Lord will have time in winding up to discuss the more philosophical question of whether the CDC is rightfully within the framework of the aid programme. Should it not be a part of the Department of Industry, where it would have the benefit of escaping from the constant aid cuts of this Government, and perhaps find a greater understanding of its contribution to the development of the economy of this country and of the developing world?
§ 7.40 p.m.
§ Lord Skelmersdale
My Lords, I regret that the business of the House is precluding us from discussing the affairs of the Commonwealth Development Corporation more fully. However, without offering a debate on the subject, it is possible that the House may decide to debate the whole subject of overseas aid, of which the corporation, as has been said, is an important and successful part, and in my view—to 785 answer immediately a point raised by the noble Lord, Lord Hatch—should remain. On this occasion I can put my hand on my heart and, in all honesty, thank noble Lords for their concise speeches. I shall try to answer all the points in the short time available, but, if I leave any out, perhaps I may write to the noble Lords concerned.
The noble Lord, Lord Oram—how nice that it was he who spoke from the Opposition Front Bench tonight—asked, with his great authority as an ex-Minister at the ODA, whether we should be able to debate the report specifically and, if so, when. The report was printed, as he knows, only on 19th October and was embargoed, which means that the Government did not have it until 7th December. I must tell him, therefore, that although it might well provide an opportunity for a debate, like Pooh, the Government are still pondering the matter and will take a little time yet on it.
Several noble Lords mentioned the reasons for the Bill, especially the noble Lord, Lord Oram, and I would agree with him that they are inflation and a product of the CDC's own success. I am glad to see that the noble Lord agrees with the Government on the subject of inflation, at least so far as it affects the overseas aid budget, and is prepared, at least on this occasion, to condone what I can only describe as our valiant drive to reduce it. I am sure he is as happy as I am at what we have achieved so far, and I hope he agrees with me that with a bit of luck we shall continue with the steady decline in the inflation rate.
The noble Lord spoke yet again about Mr. Pisani. Some time ago he was kind enough to say that he and I would both profit from reading each other's speeches. During the time of this debate I have cast half an eye on the Official Report of this House for 6th December, col. 7 and following, when the noble Lord asked me a Question specifically about Mr. Pisani. I am glad to see, therefore, that he is carrying on his own PR work, but I am afraid I have nothing to add to the answers I gave on that occasion.
The noble Lord, Lord Oram, concluded with a suggestion that the Government should increase the aid budget and asked if I would relay that to my right honourable friend. I have said from this Box on several occasions since I have been lucky enough to be dealing with these matters that as soon as the country can afford it and we get into an equable state—which I am afraid is still some way off—we shall do precisely that. Thus, the point has already been taken, though I shall certainly add the noble Lord's voice to mine.
The noble Lord, Lord Seebohm, suggested that one reason for the success of the corporation was that it had had the confidence of successive Governments since 1948. I agree with him and I am grateful to him for having fleshed out my comments on its success in my opening speech.
The noble Lord, Lord Hatch, started with a complaint backing up a point made earlier by the noble Lord, Lord Houghton. I must tell him that it is my feeling that the time spent on a subject is not necessarily a measure of its importance. I can think of many pieces of legislation and other things in this House which my right honourable friend currently in post at the ODA would almost certainly regard as trifling, and I do not normally use that expression.
§ Lord Houghton of Sowerby
Yes, my Lords, but sometimes one measures importance by the degree of attention given to it. The point is that it is important, but it will be seen to be important if we give more attention to it than the opportunity given during supper time in this House by a virtually empty Chamber, while most noble Lords are busily occupied in refreshment elsewhere.
§ Lord Skelmersdale
My Lords, I take that point, as does my Chief Whip, but I still think that the time given to speeches does not necessarily reflect either the time spent on generating those speeches or the importance of a particular subject.
The noble Lord, Lord Hatch, asked in effect whether the limit should be increased or reduced, to which I would say, No; the proposed limit has been set with a view to allowing continuing contribution by the corporation to the development of poor countries and should be adequate for eight to 10 years. Parliament should then have the opportunity to consider again. One must give Parliament that sort of opportunity—to reconsider the budget from time to time—and an increase in the limit would not of itself mean an increase in the corporation's level of activity; it depends on advances to the corporation from the aid programme or the level of its other borrowing which the Government approve from year to year in the light of public expenditure and (I am sure the noble Lord, Lord Bruce, will agree with me) public sector borrowing requirement considerations.
The existing limit, as we have heard, was fixed at the time of the corporation's creation in 1948 and, as I said earlier, may soon become inadequate. It is now usual for a statutory corporation's limit to be fixed from time to time by the Secretary of State, with the approval of the Treasury, to provide the necessary flexibility to enable the corporation to manage its affairs and control its liquidity efficiently as circumstances require. That they are efficient, at it, I do not think any of us should be in doubt.
The noble Lord, Lord Oram, referred to the split, if you like, between the corporation's role in the Commonwealth and outside it and I must say that he is partly responsible for that, since the 1969 Act, to which he referred, gave authority to operate in foreign as well as Commonwealth countries. But at the end of 1981 84 per cent. of its investments were still in Commonwealth countries and, at the same date, 68 per cent. of its investments were in the poorer developing countries defined as those eligible for IDA funds.
My Lords, the way the Minister has spoken in the last few sentences seemed to imply that I was critical of the possibility of the CDC operating in other than Commonwealth countries. I certainly was not and I said the opposite. I approve of it. I would not call it a split and I willingly accept responsibility for having introduced it.
§ Lord Skelmersdale
My Lords, in no way did I think, or I hope suggest, that the noble Lord was critical. I thought he was eliciting information which I was glad to give, and I hope he will accept my reply in that light.
787 Before concluding I should refer to the matter raised at length in the Commons, and raised again this evening by the noble Lord, Lord Hatch, about the project at Mindanao. As my right honourable friend the Minister said in another place on 7th December, during the debate on Second Reading, he has seen reports recently on the situation in the project area by the Catholic Institute for International Relations, and the separate report by Amnesty International. He takes these reports very seriously indeed and sincerely respects the concern of those who have written to him. He is equally conscious of the valuable contribution which the corporation's participation could make to really worthwhile development in the area and the benefits which it could bring to some of the poorest inhabitants of Mindanao. On 30th November my right honourable friend met a group of concerned Members of Parliament and representatives of voluntary organisations, together with representatives of the corporation, to discuss the issue. It was a constructive and helpful meeting, in which those who have doubts about and criticism of the corporation participation in the project nevertheless expressed their appreciation of the openness with which the corporation had conducted this particular affair. Noble Lords will know that all projects with a capital sum involving more than half a million pounds are by convention referred to the ODA, and this will continue.
On the subject of surpluses, I would say that the corporation does not pay back to the Government surpluses earned on its revenue account. These are retained by the corporation, and add to its self-generated funds for further investment. So I think that the noble Lord was wrong on that point.
In my opening speech I referred briefly to my noble friend Lord Kindersley, the current chairman of the corporation, but since its inception many noble Lords have served it in their various ways, either directly by serving on the board, or indirectly in Parliament. They have all given the corporation devoted and enthusiastic service, which makes it in quality, if not in sheer volume, one of the most effective aid agencies, national or international, in promoting lasting and genuine development in the poorer countries of the world. I have no doubt that other noble Lords will fill their places in the future—not just yet, I hope, in the case of my noble friend—and, with the aid of this Bill, will ensure that the corporation continues its amazing track record. My Lords, I beg to commend the Bill.
§ Lord Hatch of Lusby
My Lords, before the noble Lord sits down, will he answer the point I raised as to whether the increase announced in another place in relation to aid funds, over the last two years and for next year, takes into account inflation? In other words, is it an increase, or is it a decrease?
§ Lord Skelmersdale
I am sorry, my Lords. My information is that the rise in cash to provide, for example, £37 million in 1983–84, represents an increase in the Commonwealth Development Corporation's share of the aid programme. I anticipate that the noble Lord will not be very happy with that answer and, if I may, I shall write to him.
§ On Question, Bill read a second time: Committee negatived.
§ Then, Standing Order No. 43 having been suspended, pursuant to Resolution, Bill read a third time.
§ Lord Skelmersdale
My Lords, with my renewed thanks to the House, I beg to move that this Bill do now pass.
§ Moved, That the Bill do now pass.—(Lord Skelmersdale.)
§ On Question, Bill passed.