Commonwealth Development Corporation Bill

Paul Scully Excerpts

Programme motion: House of Commons & 3rd reading: House of Commons & Report stage: House of Commons
Tuesday 10th January 2017 Commons Chamber

[Stephen Twigg]

The focus and priority needs to be on poverty alleviation. At the beginning of my speech, I gave the example of a project we visited—the hon. Member for Mid Derbyshire (Pauline Latham) reinforced the point. That project undoubtedly delivered things beyond poverty reduction, but at the heart of that investment and its impact was the reduction of poverty. Keeping the reduction of poverty in mind is a useful lodestar for DFID when it approaches the work of the CDC. I would need some persuading that a project should be funded that did not have some connection to the alleviation and reduction of poverty.

Let me now turn to the issues of scrutiny that were referred to by my hon. Friend the Member for Ilford North (Wes Streeting). The recent NAO report, as was rightly said by the hon. Member for Bedford (Richard Fuller), revealed that the target development impact score is on average being met, but only on average. The CDC is making some investments that fall below the target. Some 23% of investments since 2013 have fallen below the target score based on their investment difficulty and propensity to generate employment. Given that the objective stated in the CDC’s current investment policy is to

“focus its investments into the geographies and sectors where there is the most potential for development impact”,

it is unclear why the CDC is investing in projects that achieve lower scores. So I say to the Minister that, along with a more robust approach to measuring development impact, I would like a minimum threshold for impact implemented in the new investment strategy.

As with all DFID spending—and, indeed, broader aid spending by other Government Departments—the International Development Committee will scrutinise very closely the CDC’s work in the months and years ahead. It is vital that we ensure the British taxpayer gets value for money for every pound spent on international development. As has been said on all sides of the House, the CDC has become more transparent following the Committee’s 2011 report and the NAO report in 2008, but more can still be done to ensure that money is being spent as well as possible. One way that could be achieved—I ask the Minister to explore this—is to allow the Independent Commission for Aid Impact to play a bigger role, for example carrying out a regular assessment of CDC investments, allowing scrutiny so we can really ensure full effectiveness and value for money of the programmes in which the CDC invests.

I think we can say that the CDC has been a world leader among development finance institutions in publishing details of its investments since 2012 under the International Aid Transparency Initiative. That is very welcome, but I suggest it would improve transparency further if it published similar details on its entire active investment portfolio, including those made prior to 2012. I ask the Minister to address that point when he responds to the debate. That would enable greater scrutiny of the CDC’s entire portfolio and hopefully provide assurance to the public that all the CDC investments are focused where they need to be: on the goal of poverty reduction.

In conclusion, I believe that the CDC has helped the UK to be a leader in global development, but as with any area of Government spending we need to ensure that every penny is going where it can have the greatest effect: the right places and the right people delivering value for money for the taxpayer. One way to achieve that is by regular scrutiny of the CDC, including by Parliament. I give a commitment that the International Development Committee will play its role in ensuring that we scrutinise and hold to account both the Department and the CDC as the additional money is allocated. Most importantly, as with all areas of development spending, we need to ensure that the ultimate goal is poverty alleviation and eradication, and that we never lose focus on that.

[Paul Scully (Sutton and Cheam) (Con)]

Thank you, Madam Deputy Speaker. I am grateful for your generosity in allowing me to contribute for a short time.

The CDC has a really important discrete role in our international development portfolio. There are few organisations with the skills and abilities to manage such risk in the most difficult markets. Often, it will bring an economic frontier country, area or sector the opportunities leading towards a risk profile that more established and traditional investment vehicles can get involved in. That is to be welcomed. It supports more than 1,200 businesses in more than 70 developing countries to create jobs.

We discussed a number of issues in Committee, including the fact that investments are not necessarily direct. Amendments tabled both in Committee and on Report address whether that serves to divert resources from the least-developed countries. I would say that it is sometimes necessary to invest in opportunities in other countries as long as the outcomes go to the most needy and the least-developed countries. At the end of the day, that is what we are trying to do with our international development effort.

As many Members have said, it is important to concentrate on our core goals and the SDGs. In Committee, the Minister was explicit in saying he did not believe we needed more legislation. The International Development (Official Development Assistance Target) Act 2015 already enshrines in legislation the need to focus on poverty reduction and the SDGs, and they are already enshrined in DFID’s own principles and processes, so I do not believe that we need to have yet more primary legislation.

On the limits referred to in relation to some of the amendments, we have to remember this is effectively an enabling Bill, which is why it is so short. It is not an immediate call to spend. It is not a case of saying, “Here’s £6 billion tomorrow and then we’re going to raise it further the day after.” The Bill simply seeks to bring the CDC in line with other organisations that have similar requests of Departments. In Committee, the Minister said that any requests for money would have to be subject to DFID’s strategy and have to have a robust business plan that was considered fully before any money was handed over. That can easily be done on a departmental level. I totally agree with my colleague and Chair of the International Development Committee, the hon. Member for Liverpool, West Derby (Stephen Twigg). As a new Member, I look forward to being able to scrutinise the work of CDC.

I note that the CDC has changed. I agree with my hon. Friend the Member for Bedford (Richard Fuller) that some amendments address problems that may not occur or rehearse old problems from before 2010 when the then Secretary of State reorganised the CDC. I do not support amendments on problems that may or may not happen, or have happened in the past but have been largely sorted out. The CDC has moved from pre-2010 looking at low impact, high return investment programmes, to a far more proactive viewpoint to ensure we take into account the SDGs and poverty reduction. I will be scrutinising that along with my colleague the Chair of the Select Committee, but I will not be supporting the amendments, for the reasons I have set out. This can best be done at Department and Committee level through post and pre-decision scrutiny. In conclusion, I look forward to the Bill becoming an Act.

[Stephen Doughty]

I rise to speak in favour of new clause 7 and the other new clauses and amendments in my name and those of my right hon. and hon. Friends.

It is fantastic to see so great a consensus in the room around the 0.7% aid target and Britain’s role in international development—in contrast, perhaps, to the shriller debate in the media in recent weeks. It might surprise those hon. Members who have criticised my amendments that there is actually much agreement around the role of CDC; I believe it has a vital role to play—I made this clear in Committee, as I am sure the Minister would acknowledge—in the wider portfolio of our international development effort and in the spending of our official development assistance.

I would like to thank my fellow Co-operative party MPs and the shadow Front-Bench team, as well as other Members from across the House, for adding their names to many of my amendments. It shows the level of very reasonable concern around the many unanswered questions concerning the priorities and operations of CDC. Those questions need to be addressed before we can countenance such a large increase in the official development assistance resources it receives from DFID. I am not suggesting that CDC should not get any more resources—it has reached the cap of £1.5 billion set in 1999 and clearly needs some increase and headroom to expand its activities—but it is worth recognising that it has coped well by recycling resources within itself, partly thanks to some of the investment successes it has enjoyed.