As always, I agree with almost everything that the hon. Member for Clydebank and Milngavie (Tony Worthington) said. I start with a confession of past errors. I think that I made a mistake, when I had the responsibility that the Minister now has, when I, in effect, allowed the Commonwealth Development Corporation to change its name to the CDC. Presentation is sometimes important, and, with the benefit of hindsight, I think that making that change resulted in the organisation losing some of its focus.

The background is simple. In about 1996, the Commonwealth Development Corporation came to Baroness Chalker and me, as we had ministerial responsibility for it at the time, and said, "Look, there are many poor countries not in the Commonwealth and many Commonwealth countries that are not poor. Our present remit prevents us from investing in poor countries not in the Commonwealth. The geographical spread of Commonwealth countries is not even across the world - there are many Commonwealth countries in the Caribbean but few in Latin America. Please may we have the freedom to invest in poorer countries?" That made eminently good sense, so the legislation was amended to enable the Commonwealth Development Corporation to invest in poorer countries, wherever they might be. The logical consequence was that it asked to change its name to the CDC. I think that that has, in part, lost it its development focus.

I shall be slightly more critical than the hon. Member for Clydebank and Milngavie about the CDC's present performance because the concerns need to be put on the table, and that will give the CDC and the Minister the opportunity of rebutting those points if they can. I think that everyone in this House supported the Prime Minister when he said recently to the Nigerian National Assembly that Britain has a special responsibility to Africa and that aid is needed to invest in creating capable states, to encourage economic growth and to invest in public services. However, I am concerned that the direction of the CDC is not to invest in the areas that one would see as consistent with the Prime Minister's comments. It is not investing in education or in agribusiness, in which 85 per cent. of people in poorer countries work and in which they look more likely to succeed in trade.

I entirely agree with the hon. Member for Clydebank and Milngavie about that. We see the CDC investing away from poorer countries, away from sub-Saharan Africa. Investment by the CDC in that region in the last two years for which figures are available, 1998-2000, fell by 13 per cent. Some countries have seen investment collapse completely. Malawi, which received �9 million of CDC investment in 1996, now receives none at all. Swaziland received �19 million from CDC investment in 1996, but by 2000 it was receiving absolutely nothing. Investment by the CDC in sub-Saharan African countries has plummeted in recent years by more than �30 million.

The CDC's annual report claims that the reason for the change is that

"CDC believes that if it is able to achieve its mission of realising attractive returns to shareholders this will have the effect of also assisting social development".

I am at a loss to see how getting attractive returns for UK shareholders per se will necessarily assist social development in poorer countries in Africa. Until it can be demonstrated to the contrary, the suggestion must mean that CDC directors have simply decided to put profit before any poverty focus. As my hon. Friend the Member for New Forest, East (Dr. Lewis) said a few moments ago, part of the concern is that, if the CDC is no longer looking for shareholder returns on equity investments of between 6 and 8 per cent. but of at least 20 per cent. to attract partners, it is not surprising that it has decided not to invest in agribusiness and agri-economy, which are very important for poorer countries.

The CDC's directors have created some of the problems. Through equity investment, they have created a financial return hurdle that is too high. The CDC now needs to increase its return considerably to attract private investors. Indeed, in the corporation's report in 1997, the chief executive said:

"The returns will need to be enhanced, and this will require us accepting risks in the businesses in which we invest for a commensurate increase in rewards."

Equity in developing countries is elusive. As the Secretary of State for International Development admitted in evidence to the International Development Committee, equity is a scarce resource in many developing countries. In its eighth report to the previous Parliament, the Select Committee concluded:

"Until the downward trend in the Commonwealth Development Corporation's returns is significantly and sustainably improved, it seems unlikely that the Public/Private Partnership will be a commercially viable venture."

Unfortunately, the warnings of the Select Committee have proved to be the case. Equity investments at the CDC have gradually increased since 1998; in contrast, return on capital employed at the CDC has dramatically dropped from 3.6 per cent. to a deficit of 4.7 per cent. during the same period. Even more staggeringly, the operating profit after tax fell from �57 million in 1999 to a deficit of �41 million a year later. Those figures do not make the CDC look like a sustainable business. Obviously, the downward trend considerably affects its ability to attract private partners.

One is concerned about some of the projects that the CDC has invested in. For example, it now appears that the Konkola project in Zambia faces a �20 million loss, unless it can find a new owner to replace Anglo American, which pulled out last month. A little while ago, I received a letter on the issue from the executive vice-president of Anglo American, who gave several reasons why they had withdrawn. One questions why the CDC continued to invest in the scheme, and other examples of similar projects raise questions about the CDC's collective judgment in investing.

Also, questions are raised about the CDC's commitment when one considers where it is closing offices and opening new offices. It is closing offices in countries such as Uganda and the Ivory Coast but opening offices in places such as Egypt and Mexico. The Economist noted last year that the CDC was moving from agri-economy to property and banks:

"New regional offices, manned by people who know more about making deals than growing pineapples, have opened in Egypt, China and Mexico."

Why is the CDC opening a new office in China? Admittedly, China contains a large number of poor people, but it does not contain the poorest of the poor. Its gross domestic product rises by about 9 per cent. each year. It is even excluded from the World Bank progress reports on the 2015 targets, to avoid distorting G8 countries' performance. I suspect that the only reason that the CDC has opened an office in China and closed offices in sub-Saharan Africa is that it hopes to make a better return on capital in China.

Recently, I was told by a former employee of the CDC:

"Additionality is off the CDC agenda - almost all technical expertise has been fired - agriculturalists, business managers, engineers. Even the environmental specialists have gone!"

How on earth does the sacking of engineers and environmental specialists enhance the social development that the CDC professes? It does not. The former employee - a perfectly rational person, who I have known for more than 10 years - continued:

"Dedicated development orientated business men have been substituted by a cosy coterie of ex Bankers and naive expensively educated MBAs. Is this the Goldman Sachs of the developing world?" Hon. Members should be concerned by both those statements on the direction in which the CDC is going.

The Secretary of State has a golden share in the CDC which was one of the earlier parts of this country's work in helping poorer countries - the better part of the legacy of the Attlee Government of the post-war years. I hope that the Minister will reassure the House that he and the Secretary of State are taking a close interest in what the CDC is doing, to allow confidence that that is still part of the Department's work in tackling poverty in the poorer countries of the world. Otherwise, the CDC will simply become another venture capital fund - there is a venture capital fund called CBC. One wants to be confident that the CDC will not become just like any other fund in the City of London, running no fewer risks or gaining no more rewards.

We have always been very proud of what the Commonwealth Development Corporation has achieved. Of course, it was right that it could help poorer countries outside of the Commonwealth, but we hope that Ministers are confident that the CDC is determined to help people in poorer countries and is not just concerned with the return on its capital.