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Future of CDC

I thank the hon. Gentleman for that intervention. CDC opens up the opportunity to do a lot of things differently in the future that could unlock funding from a variety of different sources. That will be a mark of its success. We also recommend that CDC should try to invest funds where private capital otherwise might not go—or not on a scale or on terms that would meet the needs of the poor. There is plenty of evidence throughout the world that some market opportunities do not always attract adequate investment because they are regarded as unfashionable or remote, or because their benefits are counter-intuitive. One example from the not-too-distant past, and from quite close to home for me, is the Highlands and Islands Development Board. An interesting thing about the board is that it invested in its heyday in stimulating new companies and initiatives across the highlands and islands region. I remember the chairman of the board giving evidence to a Select Committee. When he was asked what return the board made on its investment, how many losses and bad debts it had and how that compared with the private sector, he answered, in summary, ““Actually, our rate of return and bad debt is almost exactly the same as in the private sector.”” That prompted the question, ““Well, why do we need you, then?”” and he answered, ““Because the private sector wouldn't go where we went.”” That is classically the case with CDC. It will and can go to places where investment might not otherwise be made, but where genuinely positive economic returns can be secured. [Interruption.] I am glad that my hon. Friend the Member for East Surrey (Mr Gyimah) has found his right place in the Chamber. I hope that he might catch your eye in due course, Mr Walker. It is right that a development finance initiative such as CDC should have, in addition to such priorities, an investment code that meets the Department's environmental, social and governance standards. That code should be used not as a barrier to attracting funds, but as a means of effectively certifying the quality of investment and attracting money from investors who want to meet certain high standards. There are examples of ethical investment funds in the UK. People with such investments want to invest their money in ways that have particularly beneficial social outcomes. I am certain that people will want to invest in ways that deliver benefits to the poor, but they will also want to know that it is being done in a businesslike and commercial way—not through a charity, but through an organisation designed to create sustainable economic development. One problem with and criticism of a fund of funds is that, by definition, it creates long lines of communication and limited direct control. Many transactions are happening at a long remove. Given that it is a development finance institution, it is therefore necessary, first of all, to ensure that the impact is properly assessed and measured. We have called on the Government to ensure that that is done more effectively than in the past. A proper assessment should be made of what jobs were created, whether they were quality, permanent jobs, and whether those jobs were adequately paid. That is the essence of sustainability as well as of the pro-poor benefit of the investment. The same applies to transparency. People need to know where the money is being invested and whether it is being invested in appropriate things with which people feel comfortable. They need the assurance that its primary outcome is benefiting poor people. That point raised a debate in the Committee about what people should be paid. It is somewhat embarrassing that the CDC has suffered criticism for that in the past. Given that its primary purpose is to help the poorest people in the world, high rates of remuneration and bonuses for its executives create an uncomfortable anomaly that needs to be addressed.