What assessment the Treasury has made of the (a) advantages and (b) disadvantages of private finance initiatives. [66514]

The private finance initiative is one of the forms of public-private partnership by which the Government are harnessing private sector finance, innovation and management skills to modernise our infrastructure and improve public services. This Government, unlike the previous Government, are making the PFI work in areas such as the NHS. Since the election, we have signed £4 billion of PFI deals.

Will the Treasury investigate reports that a PFI secret deal led to three Edinburgh hospital buildings and their land being sold off to a private consortium, which stands to make £200 million by developing the land for housing, and will collect £30 million of public money per year for 30 years to build a new hospital, which will never become public property? Is it not a scandalous misuse of public money to encourage public asset stripping and privatisation of the NHS?

Those are more rightly matters for my right hon. Friend the Secretary of State for Scotland. However, there are no PFI secret deals. This Government, unlike the previous Government, have opened up the whole process of PFI, so that local communities, the staff affected by the deals and the public who are served by the facilities that are built through the PFI have the right to know from the outset what the PFI is delivering for those communities. Unlike the previous Government—who managed to spend £30 million on lawyers' and accountants' fees in the NHS to try to get the PFI going, but did not build a single hospital—this Government have launched the biggest single new hospital building programme that the NHS has ever seen. We should be proud of that record.

The experience of my constituents in the village of Hodnet—who want a bypass built by means of the PFI—directly contradicts the previous two replies from the Minister. As soon as the Government came to power, there was a review, new rules were laid down and the bid was prepared. However, another review has been launched. When will this reviewing stop, and when will clear guidelines be laid down so that people know where they stand?

As usual, the Tory party is living in a dream world rather than the real world. The Government have signed £4 billion of PFI deals since the general election. What is more, during the next three years, we will sign a further £11 billion of PFI deals to modernise our health service, to improve standards in education and to improve the infrastructure that the hon. Gentleman talks about in local communities such as his own.

May I welcome the fact that the Government have been able to go ahead with the building of a new Edinburgh Royal infirmary? The people of my constituency and my part of Scotland have been waiting for that for years and years. Does my right hon. Friend agree that it is rather bizarre that my hon. Friend the Member for Falkirk, West (Mr. Canavan) regards that as a scandal? It is very good news.

My hon. Friend—[Interruption.] Hon. Members should stop chuntering for a moment. My hon. Friend is absolutely right. We fought the general election on a manifesto commitment to reinvigorate the PFI, and that is precisely what we have done. The consequence is being felt in communities up and down the land, and not just in terms of the NHS. We have signed our first PFI deals in the education sector for new schools to be built—including in the constituency of my hon. Friend the Member for Falkirk, West (Mr. Canavan), where Falkirk council has concluded a PFI deal to replace five existing schools, with £65 million of new investment. There is more investment to come, with £350 million of PFI deals in the schools sector during the next three years. That is an important and successful record. In addition, not only are we making the PFI work, but we are doubling the public sector net investment in our economy, so sadly neglected by the Conservative party.

Pursuant to the right hon. Gentleman's answer to the hon. Member for Falkirk, West (Mr. Canavan), will the Minister answer a straightforward question? Does he believe that one disadvantage of the PFI system is that improvements in the public infrastructure will never become part of public ownership?

Of course not. These deals are only given the go-ahead in the first place if it is demonstrated that they provide better value for money than the public sector comparator. There are strict rules about such deals in education and in health. Unlike the previous Government, we have been completely open about the comparisons between the public and private sector options to build.

If he will make a statement on his plans for public spending on health and education for the next three years. [66515]

The Government's spending plans for the next three years on health and education were set out in the comprehensive spending review White Paper, "Modern Public Services for Britain: Investing in Reform". We are providing money for modernisation, and we will invest an extra £40 billion in health and education in the coming three years.

May I give my right hon. Friend some figures about local services? The comprehensive spending review will bring £30 million to local health services in Brighton and Hove, and already more than £1 million has been spent on local schools. That is desperately needed finance on health and education, which we were denied under the previous Government. The Labour party wants a just and fair approach to public spending, which the comprehensive spending review provides. Will my right hon. Friend confirm that this party intends to continue that approach in the forthcoming Budget?

First, I can tell my hon. Friend that this Government's third Budget will be announced in the afternoon of Tuesday 9 March. Secondly, on health and education expenditure, the average spending per constituency on education over the next three years will be £200 million, and on health, the average in the same period will be £236 million. In May, the electorate will be able to choose between a Conservative party that would not spend that money—and which says that our plans are reckless and mad—and a Labour party that will invest in health and education, and keep its promises.

If the reports of above-inflation increases in pay for nurses and teachers are correct, they are to be welcomed, after years of basic and phased awards. However, does the right hon. Gentleman accept that the amounts being reported amount only to a catch-up, not to real increases? Will he ensure that the funding for the increases is transferred from the contingency reserves to ensure that the quality of education and health elsewhere is not cut?

I shall answer the question about pay, but let me point out to the Liberal Democrat Treasury spokesman that, whereas his party's election manifesto asked that £1.8 billion a year be spent on education, to a total of £5 billion over three years, the Government will spend £19 billion—four times as much—over the same period.

The Liberal Democrat manifesto also said that the party would spend £700 million a year on the health service, and a total of £2 billion over the next three years. I can tell the hon. Gentleman that the Government will spend £21 billion over that period—10 times as much. I shall take no lectures from Liberal Democrats about meeting our fiscal rules and increasing public expenditure.

On public sector pay, I can tell the hon. Gentleman that we shall continue to be disciplined on public spending across the board. We will meet our fiscal rules and show the firm discipline set out in our three-year plans. The Government's policy has always been driven by the need to recruit, retain and motivate in the public services. However, we will not compromise our hard-won reputation for economic competence and fiscal prudence.

I acknowledge the major increases that my right hon. Friend has earmarked for school services, but will he tell us how the Government will ensure that every extra pound allocated goes into the classroom and towards the provision of teachers? Does he audit the expenditure of the moneys by local education authorities? Sometimes the impression is that my right hon. Friend allocates the money, but that it does not go straight into school services.

My hon. Friend raises an important point. Not only have we allocated £20 billion to education and £20 billion extra to health, but we have set in place public service agreements that will ensure proper monitoring of the targets and value for money.

The Conservative Opposition said that it was wrong for the Government to scrap the assisted places scheme and to put that money into cutting class sizes for children aged five, six and seven. However, 100,000 pupils now benefit from that measure, and we will keep our promise that all children will be in classes of fewer than 30 pupils. Equally, we will keep our promises to improve numeracy and literacy, to increase the staying-on rate in schools, to get half a million more people in further and higher education and to provide lifelong education. We will do exactly the same for health. The Government will not only invest the money but, as my hon. Friend requested, we will ensure value for money.

May I welcome the Chancellor' s announcement of expenditure on health and education over the next three years? The £200 million will make up for a shortfall on past spending in Northern Ireland. Will the Chancellor seek to ensure that trusts budget properly for community care so that we can overcome bed blocking and make proper use of residential care?

My right hon. Friend the Secretary of State for Health is making sure that health and social services organisations work together, and I am sure that that will also be the case in the Northern Ireland Office. I was pleased to announce a few months ago our Northern Ireland initiative to help underpin the peace process with economic improvement. Every person who is long-term unemployed in Northern Ireland will benefit from the new deal, and Northern Ireland will pioneer the extension of the new deal to that group. In addition to extra money for health and education, we are ensuring that opportunities are available for the hon. Gentleman's constituents to get back to work.

Has my right hon. Friend read today's report from the Institute for Fiscal Studies, which concludes that the Government are on course to meet their borrowing and spending targets, and will avoid recession? The report comes in the same week in which a KPMG report on my part of the country concluded that Norfolk was in good shape to face any increased business pressures from the continuing effect of the strong pound and turbulent world markets. I read yesterday of a similar outlook for business in London. Is my right hon. Friend encouraged by that evidence that his policy of economic stability is working despite the efforts of the Conservative party to talk us and wish us into recession?

We are steering a course of stability in a troubled world economy. The measures that we have put in place, including the independence of the Bank of England—opposed still by the Conservatives—were the right measures to create a long-term framework for monetary and fiscal stability. My hon. Friend is right about the shadow Chancellor, the right hon. Member for Horsham (Mr. Maude), who said that our plan to spend £40 billion on health and education was a reckless spending spree. The right hon. Gentleman said that we had lost control, that we were spending through the roof year after year, and that it was madness to embark on our spending programme. I ask Conservative Back-Bench Members to tell the shadow Chancellor that they agree that health and education deserve the extra £40 billion.

There are widespread rumours, most recently in yesterday's Mirror, that in order to fund higher social security spending, the Government intend to abolish tax relief on mortgages, which would cost the average mortgage holder £240 a year in extra taxes. Is that yet another example of the Government's creeping stealth taxes, or can the Chancellor reassure home owners that he has no such plan?

First, the shadow Chancellor is already on record as proposing the abolition of mortgage tax relief. Secondly, social security spending rose by 4 per cent. a year under the Conservative Government, to pay for unemployment. Under us, it is rising by less than 2 per cent. a year for the next three years.

The difference is that we are investing in proper services for the elderly and for children. The Conservatives wasted money paying the bills of unemployment. The Conservative Treasury spokesmen should be applauding the Government: the first 200,000 people are joining the welfare-to-work programme, 50,000 young people have jobs and youth unemployment has fallen by 41 per cent. However, they are against even the new deal. The Conservative party is not fit for Government, and it is not fit for Opposition either.

If he will make a statement on progress with his plans to help working families on low incomes. [66516]

What measures he is taking to increase the net income of those in low-paid work. [66529]

The Government have introduced a number of measures to increase the net income of low-income families. Measures include the introduction of the national minimum wage, reform of national insurance contributions and the introduction of the working families tax credit.

Together, those reforms will provide a guaranteed income for families in full-time work of £190 a week, or £10,000 a year. More than a million people will benefit from the working families tax credit.

I thank my right hon. Friend for that answer. His measures to help low-income families will help hundreds of families in my constituency and throughout east Kent. Those people will have been astounded and horrified that the Tories and Liberals opposed the working families tax credit on Monday. Will he promise to examine each year his minimum income guarantee and increase it when he can afford to? Does he agree that what the Tories mean by putting clear blue water between our two parties is that, because they intend to scrap the working families tax credit, they mean to become, even more than now, the party of the rich, and use their clear blue water to trap low-income families in poverty?

My hon. Friend is right, but even rich people are against the Conservative party now. On his constituency point, 100,000 men and women in the south-east of England will benefit from the working families tax credit. Throughout the country, more than 1 million people will benefit. For the first time, this country will have a minimum family income of £190 a week, or £10,000 a year, and income tax bills will not be sent until £220 a week, or £11,000 a year, is being earned. That is a major advance. The country will want to know why the Conservatives oppose the new deal, the minimum wage and now the working families tax credit. Even Sir Winston Churchill supported minimum wages. Why is the Conservative party now against fairness for people in work?

The one in nine families in Don Valley who will benefit from the working families tax credit will welcome the opportunity to earn £10,000 a year. Does my right hon. Friend agree that it is nothing short of scandalous that the Opposition opposed the minimum wage, the working families tax credit and the new deal, which has halved youth employment in my constituency? I hope that the next time that he is in South Yorkshire, he will take the opportunity to hammer home the message that the Conservatives are the party of poverty and mass unemployment, and that we are the party fighting social injustice.

Most people will agree that the behaviour of the Conservative Opposition in opposing the working families tax credit does no credit to their traditions. In Yorkshire and Humberside, 125,000 families will benefit from its introduction next October. When people understand that there is a minimum family income of £10,000 a year for all who can work and that work pays more than benefits, they will see that we have made a big advance in employment, social security and tax legislation.

Does the Chancellor of the Exchequer agree with the right hon. Member for Birkenhead (Mr. Field) that the working families tax credit offers huge bonuses for dishonesty? Why does he think that the United Kingdom will succeed where Canada failed? A similar system had to be withdrawn there because of massive fraud.

If the hon. Gentleman is an expert on north America, perhaps he will consider the experience of the United States economy, where people have benefited from the earned income tax credit after its introduction by a Republican Administration and its extension under a Democratic one. Our people will want to know why something supported by Ronald Reagan is unacceptable to the hon. Gentleman. That is a lurch to the right even for this Conservative party.

Does the Chancellor accept that in the areas with the lowest average incomes in these islands, such as South Yorkshire, Merseyside, Cornwall and Wales, people look to objective 1 funding from the European Union to boost local economies? Will he confirm that up to now, the UK has taken only one third of the money available from those funds and will he categorically assert that matching funds will be available, over and above current expenditure, to ensure that those areas maximise the benefit of European funding?

I hope that the right hon. Gentleman welcomes the fact that when I was in Wales on Monday, I was able to announce that modern apprenticeships, which will help the industrial economy of Wales, will be extended from 9,000 to 15,000 people there. Thus apprenticeships, which were dying out under the previous Government, are not only back but modern, and a 50 per cent. increase will be achieved.

In all the European negotiations, we shall protect the position of the regions and argue their case. Some 65,000 families in Wales stand to benefit from the working families tax credit and from the minimum wage, which will be introduced in April.

Low-paid people in my constituency welcome the national minimum wage and the working families tax credit. They also welcome the Government's measures to keep inflation low, to increase child benefit and to reduce VAT on fuel. Their message to my right hon. Friend is that he has done an excellent job. Will he assure them that he will continue to do so?

I am glad that the working families tax credit is welcomed in the north-west, but it is not welcomed by the Conservative party. On the "Today" programme, the shadow Chancellor said:

"The first thing that should be done is to abandon these crazy plans to increase costs on business. The minimum wage is one of them".

The 2 million people who will benefit from the minimum wage in April will never vote Conservative again.

What representations he has received on the possibility of Britain entering the exchange rate mechanism. [66517]

If he will make a statement on Britain's future relationship with the European exchange rate mechanism. [66530]

The Government have no intention of rejoining the exchange rate mechanism.

I thank the Chancellor for that answer. If he does, however, intend to keep open Britain's options of joining the euro in 2002 or before, how does he plan to ensure that Britain complies with article 109j of the Maastricht treaty, now article 121 of the Amsterdam treaty?

The hon. Gentleman should know that the resolution that came out of Amsterdam said clearly:

"Participation in the exchange-rate mechanism will be voluntary for the Member States outside the euro area."

I believe that that answers his question. Any questions about the Maastricht treaty would be better directed to the shadow Chancellor, who signed it.

My right hon. Friend will know that the Bank of England has already signed an agreement with the European central bank called "ERM II", which is effectively the new exchange rate mechanism. We are, therefore, already in the new exchange rate mechanism and the bands will narrow as we approach 2002. How does that affect the Government's neutrality on the single currency?

I must correct my hon. Friend: the Government have no intention of rejoining the exchange rate mechanism. We are not part of it.

If the Chancellor wants guidance on this important article of the Amsterdam treaty, formerly the Maastricht treaty, may I remind him that it requires not membership of the ERM, but observance of the normal fluctuation margins provided for by the ERM for at least two years? That obligation is in the treaty, and the Government will be obliged to follow it if they wish to keep that option open. Does he agree that it is a serious requirement for any country that aspires to join the single currency?

The right hon. Gentleman should read what was said at Amsterdam. The Amsterdam European Council resolution of June 1997 said:

"Participation in the exchange-rate mechanism will be voluntary for the Member States outside the euro area."—

[Interruption.] I know that Conservatives are obsessed about every detail of treaties, but I remind the shadow Chancellor that he signed the Maastricht treaty.

That provision is still in the treaty, and it is there for a serious purpose: to ensure that, before an economy joins the single currency, it shows the right degree of exchange rate stability. Therefore, at some stage the Government will have to change the Bank of England Act 1998 in order for the Monetary Policy Committee to shadow the euro rather than pursue a domestic inflation target.

indicated dissent.

The Chancellor shakes his head in a complacent and dismissive way. Does he agree with Gavyn Davies of Goldman Sachs, who said that, at some point—[Interruption.] The new Chief Secretary should listen, because the Government will have to deal with this point if they insist on railroading the country towards a single currency. Gavyn Davies said:

"at some point the Bank of England will have to be told to 'shadow' the euro (instead of inflation) for a two-year period to stabilise exchange rates ahead of joining".

Does the Chancellor agree with that?

The shadow Chancellor is right on one thing: it will be the Labour party that has to deal with those matters right into the next century, because we shall be in government and the Conservatives will be out of government. As for the resolution of Amsterdam, let me repeat:

"Participation in the exchange-rate mechanism will be voluntary for the Member States".

I have said clearly to the right hon. Gentleman that we have no intention of rejoining the ERM. It is only the Conservatives who are obsessed by the ERM, and we now know why that is: when the right hon. Gentleman was at the Treasury, the Conservative Government took us in, and we had to leave ignominiously as a result of their mistakes.

I welcome my right hon. Friend's comments on the ERM, but is he aware that the later the date set for our entry into the euro, the more difficult will be the conditions applied to us? Will he take that into account when deciding that date?

I set out the Government's position on economic and monetary union in October 1997 and I see no reason to change that position. In principle, we are in favour of monetary union and being a part of it, subject to the economic tests that I have set down being met. I have said that it is not a realistic option to join in the current Parliament, but that we shall consider it in the next Parliament and apply those economic tests. Incidentally, in October 1997, I also said that we had no intention of rejoining the ERM, and I am absolutely consistent on that as well.

What plans he has to repeat the comprehensive spending review. [66518]

The comprehensive spending review was a root-and-branch examination of departmental programmes to ensure that public spending was directed to the Government's priorities during the remainder of this Parliament and beyond. A further review will take place in 2000, when the plans set out in the comprehensive spending review will be rolled forward for the next three financial years.

Will the Minister admit that the Government made a blunder when they stuck to the Tory spending plans for the first two years? Does he accept that the results of that blunder have been real pay cuts for teachers and nurses, worsening morale and recruitment difficulties? Will he promise not to repeat that blunder when he repeats the spending review?

As usual, the Liberals want to have their cake and eat it. I thought that the hon. Lady was rising to thank the Government for the extra investment in her constituency: Somerset county council's standard spending assessment is to rise by 6.5 per cent. from April this year—[HON. MEMBERS: "Oh."] There is more: Somerset health authority's spending is to rise by 3.8 per cent. in real terms from this April. When we entered government, we had to take tough decisions because of the reckless mess in which the Tories had left us, but the fruits of that are now being seen in the fact that we shall meet our tough fiscal rules while maintaining our commitment to extra investment in our schools and hospitals from April this year.

The comprehensive spending review was a splendid initiative which released billions of pounds for our health and education services. My question relates to the national register of assets—those bits and pieces, lay-bys and so on, around the country that the Government allegedly no longer need to own. New Covent Garden market is valued at about £45 million, but its being sold off will do tremendous damage to the fruit, vegetable and flower market in central London. Will my hon. Friend reconsider the issue, perhaps with his colleagues in the Ministry of Agriculture, Fisheries and Food?

I was not aware that my hon. Friend had a constituency interest in New Covent Garden market—perhaps he is a frequent visitor. I can tell him only that any sale has to meet strict value-for-money tests.

Why do we have to wait until 2000 for the new comprehensive spending review? Should not it be initiated right now, starting in the right hon. Gentleman's own Department? How come the son of the manse has suddenly abandoned his frugality and started chartering aeroplanes and helicoptering around Bangkok? What about his right hon. Friend from across the Pennines, the Minister for the Cabinet Office, who appears to have acquired the soubriquet "Concorde Jack"?

Of all the serious questions—health, education, employment or social security—that the hon. Gentleman could have raised at Treasury Question Time, he and the Conservative party have not a word to say because they think that our spending plans are reckless. It is about time that they came clean about which schools would close, which hospitals would close and which social security spending would be cut. We know that they would get rid of the minimum wage and the working families tax credit, with dire consequences for millions of people.

On the hon. Gentleman's question, he knows as well as I that there are strict rules governing the issue. We abide by those rules, which are the same as those that were applied when his party was in government.

Will my right hon. Friend bear it in mind that some Labour Members are not very happy about the fact that some people want to live the high life and fly in Concorde? I have been here long enough to see dramatic change on this issue, and 20 years ago, when the previous Labour Government were in office, the cry from Tory MPs was, "Why aren't Ministers flying in Concorde?"

As my hon. Friend knows, consistency has never been a Tory strong point.

That hardly relates to the issue, as I might have suspected.

What recent representations he has received regarding the withholding tax. [66519]

I assume that the right hon. Gentleman is referring to the draft directive on the taxation of savings. We have received a number of representations on that subject. Most have expressed their concern about the potential effect of the draft directive on the eurobond market. We share that concern and I have already made it clear that we believe that eurobonds should be excluded.

Bearing in mind what the hon. Lady said last December, if eurobonds are excluded, why have not the Government decided to veto the matter, or do they intend to show that it would introduce a system that would only increase transaction costs?

We have made it clear in the negotiations on the draft directive that we believe, first, that eurobonds should be excluded; secondly, that the best way forward is exchange of information and, thirdly, that we would not agree to any measure that would seriously damage Britain's interests. We are negotiating according to what is best for Britain.

Will the Minister confirm that the Government are opposed to tax evasion, that the withholding tax is an attempt to deal with tax evasion and that if the withholding tax is formulated to protect the eurobond market, it is worth pursuing? Does she share my view that on tax co-ordination, the Conservative party is suffering from selective amnesia, given that in the early 1990s, under Norman Lamont, the previous Government agreed to VAT proposals in the most substantive measure of tax co-ordination that this country has ever had?

I agree with my hon. Friend's point about the importance that the Government place on effective international action on tax evasion. However, in negotiations on the draft directive, we have continued to make it clear that exchange of information is the best way forward, and I repeat that eurobonds should be excluded from the draft directive.

On the consistency of Conservative Members, it was the right hon. Member for Wells (Mr. Heathcoat-Amory) who signed the memorandum and introduced proposals to the House on the VAT rate of 15 per cent. Before that, the deputy leader of the Conservative party also signed that memorandum. They do not have mere collective amnesia—it is verging on dishonesty—about what they did in government.

Order. I am sure that the hon. Lady will want to withdraw that accusation.

I was referring to the dishonesty of a Government, Madam Speaker, and I was not for a moment inferring that individuals were dishonest. Of course I withdraw the remark.

Will the Paymaster General, whom I congratulate on her new title, assure the House that she understands that transaction costs represent as much of an invisible threat to the competitiveness of the City of London as withholding tax represents a visible threat?

We have continually made it clear as a Government—as I have in answering questions in the House—that protection of the European financial markets, especially the City of London, is very high on the Government's agenda. We would not agree to anything that seriously damaged that market.

The hon. Lady has rightly said that she wants to protect the eurobond market, but does not the fact that that market consists of unregistered bearer bonds make her favoured solution of information provision impossible? Does not she accept that information sharing is as damaging to the City as a withholding tax? Will she make it clear that the Government will veto any such proposal?

I think that the hon. Gentleman misunderstands the proposal. Although I am repeating myself, I shall make it clear again that we want eurobonds to be excluded from the directive and will not agree to anything that either seriously damages the City of London or is not in the best interests of the British economy. The hon. Gentleman is slightly confused in his questioning. Perhaps he would tell the House whether he thinks that eurobonds should be within the draft directive or agrees with us that they should be excluded?

If he will make a statement on the launch of the euro. [66520]

rose—[Interruption.]

Order. Something has been said that I did not hear. [Interruption.] I did not hear whether any hon. Member used a term of abuse. [Interruption.] Order. Was it Mr. Gibb? [HON. MEMBERS: "Yes."] I believe that you insulted half the population, Mr. Gibb, by referring to "stupid" women. As I happen to be a woman, I would like an apology from you.

If I inadvertently insulted an hon. Member, I withdraw the remark.

The Government welcome the successful launch of the euro, which reflects the extensive planning and preparation carried out by Governments, firms and institutions. In the City of London, conversion procedures were completed with no serious difficulties. Over the conversion weekend, some 30,000 London staff were involved in adapting systems and preparing for the successful start of euro trading. I am sure that the whole House will want to join me in praising their efforts. It is thanks to them that London is ready to be the leading international centre for euro trading.

Does my hon. Friend agree that British business very much welcomes the Government's approach to European monetary union, believing it right that business be helped to prepare for the euro? Does she agree with me, and, indeed, firms in my constituency, many of which are major multinationals, that to follow the Conservative party's policy of turning our backs on Europe would be not only disastrous for the United Kingdom economy but totally barmy?

I entirely agree with my hon. Friend. A successful euro will be good for Europe and good for Britain. I welcome the fact, as I know he does, that the information campaign that we ran last year doubled awareness among small and medium businesses of the need to prepare for the euro, and trebled the number of businesses that are making preparations. Given that half our trade is with the euro area, it is essential that every business, in his constituency and across the country, takes advantage of the opportunities that the euro creates.

The hon. Lady's extraordinarily smug reply about the City of London's preparations had absolutely nothing to do with the Government, and more to do with the City's effectiveness and primacy in world markets. Does she agree that, despite the fact that, naturally, more businesses are aware of the euro, the Government need, with greater vigour, to redouble their efforts in order to ensure that many more businesses receive practical help in understanding the nature of the euro's impact on them?

I am sorry that the hon. Gentleman apparently did not wish to join me in congratulating the City of London on its success in preparing for the euro, but I am pleased that he supports the efforts that we have been making to urge business to prepare, and I am glad that he supports the very practical steps that the Treasury and its departments are taking to ensure that business has the information that it needs—[Interruption.] The hon. Gentleman should listen to the reply. We shall continue to do everything necessary to ensure that British businesses prepare for the euro and are successful in trading with the euro currency area. I am just sorry that the hon. Gentleman is not interested in helping British business succeed.

Is my hon. Friend aware that many firms in Northamptonshire—not major multinationals, but quite small firms—already have euro bank accounts, and are working with the euro and effectively regard it as a working currency here? Is she aware of the KPMG report that showed that only 5 per cent. of city firms support the Conservatives' option on entry to the euro, and that some 30 per cent. support the Government's option? Does she agree that the pretence—encouraged by the Conservative party—that the euro is preventable is profoundly damaging for the economy and this country's interests?

I am very aware of the great interest that my hon. Friend takes in this subject, and I am sure that businesses in her constituency are grateful for the help that she has given them. I entirely agree with her about the need to ensure that businesses are fully involved in making a success of the euro, and I agree that the Conservative party has effectively moved from being simply against the euro to being against Europe.

Are the Government aware that, yesterday, the Bank of America decided not to proceed with additional commitments to the City because of uncertainty over British entry to EMU? Following that decision and the earlier loss of the German bond market from the LIFFE—London international financial futures exchange—market to Frankfurt, what further evidence do the Government need that British exclusion from EMU is deeply damaging to the interests of the City of London?

Yesterday, at a meeting—chaired by my right hon. Friend the Chancellor—of the Standing Committee on Preparations for the Euro, it was clear from what the Governor of the Bank of England and representatives of the City of London said that, as I said earlier, the City of London is taking every advantage of the opportunities created by the euro, and will continue to ensure that it meets competitive challenges and retains its position as the leading international centre for trading in euros.

While I congratulate the Government on the attitude that they are taking and on the way that they are trying to prepare industry for the opportunities of the euro, does my hon. Friend agree that it is in the national interest to join sooner rather than later?

The Government's position on joining the euro was set out in the statement made to the House by my right hon. Friend the Chancellor in October 1997. The central test must be whether joining a successful single currency is good for the British economy, good for British business, good for jobs and good for the City. As my right hon. Friend said in that statement, there is no realistic prospect of being able to make that judgment before the next election. However, we are ensuring that preparations are in hand, so that we can take a decision early in the new Parliament.

If joining a successful single currency would be clearly and unambiguously good for this economy, of course, in principle, it must be right to join, but the economic tests must be met. Extraordinarily, the Conservative party takes the view that, even if joining the single currency were good for British business and good for jobs, it would still oppose joining.

If he will make a statement on the harmful tax measures referred by the UK Government to the code of conduct working group on harmful tax competition. [66521]

As I said in my answer of 17 December 1998 to the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), the measures from the UK are international headquarters companies, special tax measures for the film industry, enterprise zones, 100 per cent. first-year capital allowances for small and medium enterprises in Northern Ireland, and roll-over relief for balancing charges arising on the disposal of shipping.

That does not imply that the measures are actually harmful under the code. Discussions on these and other measures are proceeding. International holding companies are due to be abolished this April, following decisions made earlier by the Government. The Government are confident that the other four measures are not actually harmful within the meaning of the code, and are robustly making the case.

Can the hon. Lady tell us the details contained in the measures on her list with regard to the British shipping industry, British enterprise zones and the British film industry? When will she publish in full the details of the measures on the list? Will she give the House a guarantee that before she signs away any of the House's competence on tax matters to be decided here behind closed doors, she will have the courtesy first to debate those measures with hon. Members?

The measures have already been published in a written answer on 17 December 1998, and I have repeated verbally today the measures listed in the UK's name. With regard to my right to sign away anything on behalf of the Government, I do not have such a right. I am subject to scrutiny in these matters, and I am sure that the House will ensure that that takes place.

May I urge my hon. Friend to tackle tax competition where it is harmful to British interests? I draw to her attention the corporation tax regime in the Republic of Ireland, which offers a selective tax concession on new company profits where there is new inward investment. That is harmful tax competition which damages inward investment opportunities in the north-east of England and, I might add, in the north-east of Ireland.

General rates of corporation tax are not included in the scope of the code. I can tell my hon. Friend that the code of conduct working group is looking at measures and their impact, and at whether they encourage artificially the location of investment, distorting the allocation of real investment. That deals with my hon. Friend's point. It is not only the European Union that is examining these issues—the Organisation for Economic Co-operation and Development and the G7 are doing so too.

In that context, may we have an absolute assurance that the Government will veto all attempts to harmonise direct or indirect taxation?

We will always protect the British national interest. We have repeatedly made that clear in the House.

Does my hon. Friend agree that competition on corporation tax between nation states in euroland is a good thing, as it brings about a more competitive average rate in Europe to attract inward investment? Will she fight to ensure that competition on corporation tax in Europe continues?

The simple answer is yes. The priorities for the European Union must be employment and competitive markets. That is what we should be taking forward.

Does the Minister accept that the entire exercise is extremely dangerous? Unfair tax competition is simply another term for low taxes enjoyed by this country, which give us an advantage in the European and global market. Some of the measures to which the hon. Lady referred were passed in the Government's first Finance Bill, yet their measures are already under scrutiny in the secret group that she chairs. That shows that what the Government do in one Finance Bill they have to unravel in another. Will she ensure that she keeps the House fully informed about the measures, and will she announce today that she will adopt a policy of vetoing wherever possible any undermining of our tax advantage, which was built up over many years by this Government—by this party?

That was nearly a compliment for the Government, and congratulation on our economic strategy.

I say to the right hon. Gentleman again that general rates of corporation tax are not included in considerations within that particular group. I also remind him that the previous Government signed a resolution at the ECOFIN Council of November 1992, when they said that

"consideration is urgently needed of possible remedies to"

the problems of unfair tax competition. That is precisely what is happening, and the right hon. Gentleman should not look for conspiracies everywhere, although I understand that there are a few going on in his party at the moment.

What assessment he has made of the effects of reducing inheritance tax in return for concessions. [66522]

The conditional exemption scheme assists in the protection and preservation of assets of appropriate heritage quality and secures reasonable public access to them.

I congratulate my hon. Friend on her new post, and also note that we have an increasing number of women in the Treasury team, which is a big contrast to the Conservative party.

Will my hon. Friend bring her traditional vigour to the question of the concessions that have been given for access to land, because that has been one of the great rip-offs? People have offered access to land, on a very limited number of occasions, in return for reductions in inheritance tax. That was looked at again during consideration of the previous Finance Bill, and new provisions were put in. How many new negotiations have taken place under the new provisions, and does she agree that it would be better to get rid of those concessions and simply have a right of access to all mountain and moorland, for all the public?

I know of the great interest that my hon. Friend has taken in that issue for a long time. He is right to say that the conditional exemption scheme rules were strengthened by the previous Finance Bill. Detailed rules are being drawn up at the moment, because the assets have to be listed so that the public can get information about them. It is absolutely right to strike a balance between maintaining and preserving our heritage in terms of land and buildings and making absolutely sure that the public—who pay for the tax referral—gain advantage for that.

My hon. Friend rightly pointed out the problems that the Opposition face. I thank him for his warm welcome to my new post, and I note that there is not one woman Conservative Member of Parliament in the Chamber.

rose—

Apart from the hon. Lady. [Interruption.] I know how excited Conservative Members are about inheritance tax, but they should not get so excited that they forget that the hon. Lady, whom I warmly welcome, has been present for only the last two minutes of Question Time. It is hardly surprising, given the lack of representation of women, that the Conservative party's internal polling shows that it is widely out of touch with the British people.

If he will make a statement about the overall level of public spending on the major public services for the next three years. [66523]

Over the next three years the Government will spend an extra £40 billion on modernising the United Kingdom's health services and on raising standards in education.

The spending increases on our key priorities are in the context of prudent expenditure plans overall. Spending is now linked to achievement of clear objectives and targets, as set out in the public service agreements for each Department.

I thank my right hon. Friend for that answer. My constituents warmly welcome the extra money that the Government have put into our vital public services. That means that, because my constituents are under Enfield and Haringey health authority, we have had an extra £3 million to deal with waiting lists. Our waiting lists will be down by 3,000 by March. The extra £2 million of winter pressures money, which is a new development introduced by this Government, has meant that, over the past two winters, our accident and emergency departments have coped well and have not had to close their doors at any point.

Will my right hon. Friend guarantee that he will pay absolutely no heed—no heed at all—to the Conservative party's proposals, which would cut public funding, damage my constituents and damage the people of Britain?

Yes, I can give my hon. Friend that commitment. Her constituents are now seeing the benefit of this Government's prudent management of public finances, and extra investment will be made from April this year. The question that they are all asking is "What on earth would happen to the health service and our schools if, heaven help us, the Conservative party ever returned to power?"