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 the 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.
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Fundamentally, this debate is about choices when it comes to spending these precious and relatively small amounts of development assistance. We have a wide range of routes by which we can spend the money. We can spend it bilaterally; through multilateral agencies; through NGOs; through joint work with other Departments; and through vehicles such as CDC. For me, however, the fundamental question is about the balance between, and the coherence of, all those things. Are we coherent in terms of the countries in which we operate, the ways in which we operate, the sectors in which we operate and, as the Chair of the Select Committee, my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg), just said, in the focus on poverty eradication for those who most need it?
Clearly, we cannot address all the concerns on Report today, and I do not want to reiterate too much the arguments made in Committee and on Second Reading, so I will speak only briefly to my amendments, some of which are probing amendments seeking clearer answers from the Minister about the Government’s plans. He said some helpful things in Committee that I hope he can elaborate on further. I want to focus today on three main areas: first, the volume of the Government’s proposed new investment for CDC; secondly, CDC’s continued use of tax havens; and, thirdly, its continued investment in sectors that do not appear to cohere with—indeed, often appear to run counter to—the wider agenda of our development spending. It is absolutely right that we are able to question these things.
CDC needed only £1.5 billion of capital investment from the UK Government between 1999 and 2016, and therein lies my fundamental concern: how can we justify upping the cap to £6 billion and then to £12 billion by statutory instrument? The Minister made some helpful comments in Committee confirming that it would not all happen in one year but would be spread over a longer period, but the fact remains that the explanatory notes to the Bill make it clear that this is about accelerating spending over this spending round in response to forecast market demand, although we are yet to see any of the projections of market demand.
I agree with the Chair of the Select Committee that it would have been much better had we had a clearer plan—not perhaps a detailed business plan but some assessment of the market demand in the sectors we could be investing in and of the potential development impact—before agreeing the new headroom for CDC.
The Government and CDC admitted in evidence to the Committee that it was the Government who came up with the figure; it was not a request from CDC. If there is this forecast demand and if CDC is in need of such an injection of resources—potentially a tenfold increase on its funding over the past 16 years—it strikes me as odd that this figure should have been plucked out of the air. It would have been much more helpful had the Government set out clearly the reasons for providing for a limit of £12 billion through secondary legislation.
In that regard, we have tabled some very important amendments. New clause 2, in the name of my hon. Friends on the Front Bench, rightly calls for a business case. I hope that the Minister will explain further how the process around a business case will work and what scrutiny role Parliament will have in seeking to understand what is being proposed before resources are drawn down by CDC. What scrutiny opportunities will Parliament have to ask the important questions we have all raised? Crucially, can CDC absorb this funding? We are talking about a potentially very significant increase. Were we proposing such an increase for an NGO or other multilateral development institution, there were be howls of fear around its capacity, staffing and planning processes to cope with the uplift. There is a real danger—whether it be CDC or another organisation—that if the resources it receives are massively increased without that degree of planning and staffing needed to ensure that it is done effectively and transparently, the resources can be skewed and not get used in the most effective way.