HL Deb 19 December 1985 vol 469 cc904-6

12 noon

The Minister of State, Foreign and Commonwealth Office (Baroness Young)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Baroness Young.)

On Question, Motion agreed to.

House in Committee accordingly.

[THE LORD ABERDARE in the Chair.]

Clause 1 [Amendments of Commonwealth Development Corporation Act 1978]:

Baroness Young moved the following amendment: Page 2, line 37, leave out from ("(3A)") to ("and") in line 40 and i n sert— ("Immediately after any guarantee is given under subsection (1A) above or any sum is issued for fulfilling such a guarantee, the Secretary of State shall lay a statement of the guarantee or, as the case may be, a statement relating to that sum before each House of Parliament.") The noble Baroness said: This is a small technical amendment. It concerns the ways in which financial transactions concerning the Secretary of State's guarantees of borrowings by the Commonwealth Development Corporation's subsidiaries are reported to Parliament. At present, under the Commonwealth Development Corporation Act 1978, the Treasury may guarantee the borrowings of the corporation itself. The Treasury has the duty of laying a statement of the guarantees so given before Parliament immediately after the guarantees are given and of laying before Parliament a statement relating to any sums issued in fulfilment of such guarantees as soon as possible after the end of the financial year in which the sums are issued, and of any subsequent financial year during which any liability in respect of the sums so issued is at any time outstanding. This requirement, which stems from the fact that any monies needed to finance these guarantees may be issued directly from the Consolidated Fund, will continue in respect of any guarantees given by the Treasury in respect of the corporation's borrowings.

Under the terms of Clause 1(5)(a) of the present Bill, the Secretary of State is empowered to guarantee the borrowings by a subsidiary of the corporation. It is intended that this clause will make it possible for a subsidiary to borrow at lower interest rates than would otherwise be possible. However, subsection (5)(b) of Clause 1, as at present drafted, provides that the Secretary of State shall inform Parliament of guarantees given and sums paid out to meet a guarantee, in exactly the same way as the Treasury does in respect of funds provided from the Consolidated Fund.

This is inappropriate. The Secretary of State's funds are those provided by Parliament for his own statutory purposes and are therefore subject to the normal Supply procedure. Nevertheless, in this particular case we consider it proper for the Secretary of State to inform Parliament as soon as he has either given guarantees or provided funds in support of those guarantees. It is, of course, most unlikely that such guarantees will be called. But if they are, this clause ensures that Parliament will be told at the earliest opportunity and will be able to question the Secretary of State about the circumstances leading to the provision of public funds. I beg to move.

Lord Oram

In view of the cordial nature of the exchanges on the previous Bill, I am glad that there is nothing in this amendment that causes me to detract from the atmosphere then generated. It is, as the noble Baroness has explained, a technical matter. I assure her that it is completely non-controversial so far as this side of the Committee is concerned. I thank the noble Baroness for explaining the matter so clearly. It is obviously a good thing that Parliament should be informed and that this amendment should so provide. As the Bill stood originally, that would not have been proper, as I understand it. Clearly, anything that enables Parliament to call such guarantees into question, if necessary, is a good thing. I accept fully the amendment as moved.

On Question amendment agreed to.

Clause 1, as amended, agreed to.

Remaining clause agreed to.

Bill reported with an amendment.

House resumed.