The Commonwealth Development Corporation Bill 2016-17 was introduced on 16 November 2016 and received its Second Reading on 9 June 2015. This Briefing Paper summarises the progress of the Bill; it complements Briefing Paper 7809 Commonwealth Development Corporation Bill 2016-17 that was prepared before the Bill’s Second Reading debate.
CDC Group plc (henceforth “CDC”) is a public limited private equity company owned entirely by the Department for International Development (DFID) that invests in businesses in developing countries to support the private sector and foster development. The financial assistance that the Government provides to CDC recently reached its legislated limit of £1.5 billion, so the Bill provides for an increase of this limit to £6 billion, with the potential for this to be extended further to £12 billion by statutory instrument.
Second reading
On 29 November the Bill passed its second reading in the Commons without a vote, and while the Bill received support in the debate, some concerns were raised. These ranged from past excessive executive pay, CDC’s failure to focus sufficiently on poverty-reduction, its reduced levels of investment in agriculture and infrastructure, its routing of investments through tax havens and the fact that a decision to increase the organisation’s capital would preceding the publication of its investment strategy for 2017-21.
Committee stage
There were two sittings at Commons committee stage, both taking place on 6 December 2016. There was a third sitting planned for 8 December 2016 but this did not take place.
The debate at the Committee stage focused on the two main provisions of the Bill. It first focused on the amount of the initial increase (to £6 billion), with amendments to change this discussed and withdrawn or negatived on division. The debate then turned to the provision that would enable the Government to further increase the limit to £12 billion by statutory instrument. A number of new clauses were proposed that would place conditions on this further increase relating to reporting on CDC’s performance, adherence to DFID’s partnership principles and the geographical and sectoral focus of CDC’s investments. These new clauses were subsequently withdrawn with one negatived on division.
No amendments or new clauses were carried and the Bill is going into report stage without amendment.