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Commonwealth Development Corporation

Volume 15: debated on Monday 14 December 1981

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32.

asked the Lord Privy Seal what payments or repayments of capital, interest, dividend and tax have been made to Her Majesty's Government by the Commonwealth Development Corporation in each of the last five years.

The Commmonwealth Development Corporation has no equity capital, and no dividend payments are therefore made to Her Majesty's Government. Repayments of capital, and payments of interest and tax to Her Majesty's Government were as follows (the figures are given in thousands to the nearest thousand pounds on the basis of Government financial years; the CDC's own financial year is the calendar year):

£000s
Financial yearCapital repaymentInterest paymentTax paid (net)
1976–773,0098,409554
1977–789,46412,4983,303
1978–793,96412,376(657)*
1979–806,2477,37990
1980–8114,03514,421467
* Credit.
The capital repayment figures for 1977–78 and 1980–81 are higher by some £5·7 million and £7 million respectively as a result of early repayments agreed at the CDC's request. The interest payment in 1979–80 was affected by a consolidation of outstanding loans leading to some of the interest originally due in 1979–80 being paid in 1978–79.

35.

asked the Lord Privy Seal what conclusions he has reached on the review of the Commonwealth Development Corporation.

The essence of the reply is that, subject to review of the CDC's actual financial requirements in each of the next three years, the Government will permit the CDC to borrow in foreign currency up to £15 million a year, and, with Parliamentary approval, would make advances from the aid programme of £34 million (cash) in 1982–83 with a planning figure of £37 million (cash) in 1983–84. The information is as follows:

1. An interdepartmental group of officals, including representatives of the Commonwealth Development Corporation, has undertaken a comprehensive review of the CDC's role and activities in the light of the Government's general aid policy. The Government endorse the review's conclusion that the CDC plays a valuable developmental role and will continue to have a particular part to play in helping bring about progress in the natural resources sector of poorer countries. The Government and the CDC have also agreed that it should exercise greater flexibility, within the objectives laid down in the Commonwealth Development Corporation Act, in the allocation of its investments among the countries and economic sectors in which it is empowered to operate though it will aim to make not less than half its new commitments in poorer developing countries and also not less than half in renewable natural resources projects.
2. Subject to normal review of the CDC's actual financial requirements for each year, the provision of finance for the CDC: will be as follows. There would, with Parliamentary approval, be an increased level of advances from the aid programme on concessional terms of £34 million (cash) in 1982–83 compared with £30 million in the current financial year. I propose a planning figure of £37 million (cash) for 1983–84. In each of the next three financial years the Government would also permit the CDC to borrow in foreign currency on approved terms with a Government guarantee within a limit of £15 million a year for on-lending in foreign currency.
3. The total financial resources thus available to CDC, including a certain number of disposals and other self-generated funds, should enable it to invest in real terms at a level comparable with that it achieved for most of the 1970s. The Government believe that the resources available will enable CDC to continue a substantial investment programme for the benefit of developing countries.