Ethical Investments

David Taylor (North-West Leicestershire) (Lab/Co-op)
3. What ethical criteria are applied to investment decisions made by CDC Group plc.

The Minister of State, Department for International Development (Mr. Gareth Thomas)
CDC capital is invested in accordance with CDC’s updated investment code. It aims to ensure that CDC applies appropriately strong environmental, social and governance standards to its investment decisions. Specifically, it prohibits CDC investment in businesses involving hazardous products, endangered and protected wildlife, the production and trade of arms, gambling, pornography and tobacco products.

David Taylor
The United Nations, Hillary Clinton, NGOs and others have called for urgent investment in food production to relieve poverty in the developing world, yet CDC executives enjoy a bonus culture that would be the envy of Fred Goodwin. Will the Minister apply ethical tests to the CDC decisions that have led to just 5 per cent. of the development money received from the UK taxpayer going into agricultural projects, yet much more into financial services, shopping malls—

Mr. Speaker
Order. May I say to the Back Bencher of the Year that he is deservedly Back Bencher of the Year, but that was a “War and Peace” question, and I do not want “War and Peace” questions.

Mr. Thomas
My hon. Friend is right to highlight the need for more investment in agriculture, as other hon. Members have done in previous questions. We are working closely with the Americans. In particular, the G8 and others have committed more than $20 billion over the next three years for food security and agricultural development. We are committing some £1 billion over the next three years. With reference to CDC, it has invested in 33 agri-businesses, as well as a series of other businesses in Africa and other developing countries. We need it to continue to invest in those businesses to help to generate more jobs so that developing countries can plot their own path out of dependence on aid.

Mr. Andrew Mitchell (Sutton Coldfield) (Con)
But the damning National Audit Office report last year found that Ministers failed to demand real evidence of the impact of CDC, and that this multi-billion business was overseen by the equivalent of just one and a half full-time members of staff from the Department. What is the Minister doing to get his act together and ensure that CDC delivers on the key development objectives that we expect?

Mr. Thomas
Unusually for the hon. Gentleman, he somewhat exaggerates the findings of the NAO report. Since its publication, we have put in place a further series of steps to respond to the NAO’s concerns—in terms not only of monitoring pay, but of ensuring that there is independent verification of CDC’s investment code. We have further asked CDC to shift more of its total investment into low-income countries and, particularly, into sub-Saharan Africa.