That is an invitation to move on to the last group of amendments, which comprises new clauses 8, 9, 3 and 7, one of which relates to the issue of offshore financial centres. These are restrictions on what CDC itself can do. There is a suggestion that there should be an annual obligation on ICAI to produce reports on CDC. Then there are restrictions on the routes through which CDC can put its money, and there are attempts through the new clauses to restrict the sectors and the countries in which CDC can invest. Let me take them in turn.
On ICAI, we are very open to scrutiny. The CDC has been scrutinised by the International Development Committee, the National Audit Office and the Public Accounts Committee. We expect it to be scrutinised in that way and to be scrutinised by ICAI. We welcome scrutiny from ICAI. However, we do not think it is for the Government to impose obligations on an independent regulator. It should be for ICAI to determine its priorities and where it thinks the problems are, and to be able to apply its scrutiny accordingly. It may determine that an annual scrutiny of 10-year investments does not make sense and decide to do it more frequently, but that should be for ICAI, not for statutory legislation of this House.
4.15 pm
Moving on to offshore financial centres, it is important to understand that we do not put our money through tax havens if, by that, one means that the CDC is ever attempting to avoid tax or to conceal its activities. The CDC is not involved in that. The CDC invests only in offshore financial centres that have been approved by the OECD at its highest level. However, we take on board the points made by the hon. Member for Cardiff South and Penarth and others, and we will push the OECD to improve the standards further. We will, in our strategy, focus on these offshore financial centres, and we will only use them for two reasons. First, occasionally when we are investing, for example, in the Central African Republic, it may be necessary to protect UK taxpayers’ money by not putting all the assets of CDC
into jurisdictions where it may be difficult to secure that money. Secondly, we may do so in order to pool money from other investors. That relates to the suggestion that we should operate only through London. It would then be very difficult to convince other African investors to invest in funds in London because they would face triple taxation: taxation in country of origin, taxation in country of business, and taxation in London. We hope through CDC’s operations to ensure that every dollar we spend brings it $3, $5 or even $30 of additional money.
That brings me to the last two sets of restrictions proposed by the House, one of which is a restriction on the number of countries in which the CDC should invest. Again, we do not think it appropriate for primary legislation to restrict what the Department can do to respond to a flexible, changing world. We would not have imagined in 2010, for example, that there would be need in Syria. If the Bill stipulated that only low-income countries or least-developed countries could receive the money, the suggestion from the Chairman of the International Development Committee and his members that CDC should work in Syria, in Jordan, in Turkey and in Lebanon would be impossible to implement because it would be illegal under primary legislation. We need the flexibility to operate in a changing world and a world affected by conflict.
We also need to allow for the possibility that another Government—an SNP Government or a Labour Government—may take a different view on very poor people in countries like India. A lot of the very poorest people in the world live in countries like India. It is perfectly valid for a Government and its Department to discuss whether to put money into such a country, and they should not restricted in that decision by primary legislation. Finally, we have to think about the cross-border possibilities. A restriction that prevented us from putting money into South Africa, for example, would mean that we could not put money into Grindrod, a great South African company investing in ports in Mozambique, because we would not have taken into account the ability to undertake cross-border operations that benefit the world’s poorest.
I turn to the new clauses on the individual sectors in which we invest. This relates to the points made by the hon. Member for Bridgend (Mrs Moon). It is not appropriate for individual Members to ensure that we restrict such sectors indefinitely; it needs to be at the discretion of the Department to determine what those sectors are. The sectors listed in new clause 7 include private healthcare. I, and many other Members, have seen how private healthcare providers are able to reach some of the most needy people in the world who are not able to access public healthcare. In an environment such as Afghanistan, minerals can be almost the only driver of decent economic growth; there are very few other options available.
On real estate, we need to look at the people who construct the buildings, not the people who use them. Those investments in the construction industry are benefiting the people who build the buildings, which is why CDC makes the investments. On palm oil, we need to understand that in places such as the DRC, 20,000 indirect jobs are secured by the palm oil investment, as is decent investment in infrastructure and health. On renewable energy, it would be a great pity if the only
investments we could make in energy in Africa were in renewables. That would not be acceptable in a country that has struggled to build 6,000 MW of generating capacity over a decade. To rule out investments in natural gas would have a fundamental effect on the economic future of Africa.
To conclude, this has been an extremely thoughtful analysis, for which we are very grateful. The strategy will demonstrate that we have listened hard to all the points made on Second Reading, in Committee and on Report. We believe that this simple piece of legislation sets the right balance between economic development and the Department’s other forms of activity, and above all that the Bill will make a significant contribution to the lives of the world’s poorest people.
Question put, That the clause be read a Second time.