To ask the Chancellor of the Exchequer if he will estimate the cost to the United Kingdom economy of converting to the euro. [9515]

To ask the Chancellor of the Exchequer what estimate he has made of the costs to the United Kingdom Government of transition from the pound to the euro. [9526]

The Government have not yet made any full assessments of the transitional costs to the Government or to the economy of introducing the euro. We will make an assessment of such costs at the appropriate time as part of the assessment of whether the United Kingdom should participate in the single currency.

As we must decide this year whether to join the euro, and as the cost of doing so would run to many billions of pounds because all business systems, computers and shop tills would have to be changed, does my right hon. and learned Friend think that a welcome contribution to the debate, which I know that he wants, would be to make and publish such estimates? Have estimates been made of the direct cost to Government Departments such as the Inland Revenue, Customs and Excise and so on? If so, will he undertake to publish them at an early date?

If the euro were to go ahead on the timetable contemplated, and we were to join, Government Departments of the sort that my right hon. Friend cited would not have to change their accounting systems until 2002, when notes and coins are intended to be introduced. We are in close contact with the banking and retailing world and a great deal of consultation has taken place. When the sensible time comes for making a full assessment of the choice facing the United Kingdom, things such as compliance costs will obviously be relevant. By then, we should be able to produce some reliable figures and estimates.

Would not the costs be very considerable? In the 1960s, the Government decided to decimalise five years before D-day and the relevant legislation was on the statute book four years before. Why does the Chancellor think that the country can make this momentous and irreversible decision, with euros coming to the United Kingdom in January 2002 and the pound disappearing in June of that year, in less time than it took the country to decimalise in 1971?

Member states are considering the precise transitional arrangements. The British Government are contributing to the necessary rules and regulations that would govern the transition to make it less expensive and to reduce the costs to an acceptable level. As I said, on the strictest interpretation of the timetable, we are talking about a changeover of notes and coins by 2002. At the moment, the sensible thing is to wait and see precisely what the transitional arrangements will be and to continue discussions with banks and retailers. Banks and many financial houses will have to change their systems anyway if the euro is formed by other countries, because I expect much trading in the euro to take place in the foreign exchange markets in the City of London.

Does my right hon. and learned Friend accept that the cost of introducing the euro, which everyone accepts will run into billions of pounds, will have to be paid for by increases in taxes and prices? If we have the same experience as we had with decimalisation, conversion prices will be rounded up. Will not the introduction of the euro therefore result in a significant increase in inflation, pushing up prices and feeding into higher wages and costs?

I think that it is an argument; I am not sure that it is a fact. I agree that it is perfectly legitimate to claim that there will be substantial transitional costs; the Government must be in a position to estimate them and will do so at the sensible time when we face the choice. I well remember taking part in the controversy about decimalisation. The debates were still going on when I first arrived in the House. My only recollection of decimalisation is that, after much agitated debate running up to it, the changeover was almost a non-event.

Following the discussions in Dublin on the euro, its costs and other matters, the Health Secretary said that he favoured renegotiating our position in Europe and was supported by the Prime Minister, who said that he favoured renegotiation. This morning, the Chancellor said that he does not think that that means renegotiating. Who speaks for the Government? Does the Chancellor support the Prime Minister's position on renegotiation?

We have a clear position on negotiating in the context of the intergovernmental conference. We have produced a White Paper, and have set out a clear negotiating position. I have not the first idea what the Opposition's view of any of that is; they have not produced any such document, and this is one of the many areas where it is not possible to get any straight answers out of them.

To ask the Chancellor of the Exchequer what economic measures he is taking to encourage small businesses. [9516]

The main contribution that the Government can make to a successful small business sector is to provide a stable macro-economic environment, with low taxation, limited regulation, and support and guidance where necessary: this we are doing.

I welcome my hon. Friend's reply. Does she agree, however, that the economic stability and excellent prospects that small businesses now enjoy, and the help given to them in the Budget with business rates and corporation tax, will be put at risk if the electorate are foolish enough to take a leap in the dark and vote the Labour party into government?

My right hon. Friend is right: he has made an important point. The major criterion that all small businesses want us to achieve is a stable economic environment, and they now have that. It is also important to note that we now have uniform business rates because, before they were introduced, too many Labour-controlled local authorities continued to put up rates, thus milking dry companies in their areas and inhibiting their ability to employ and foster. It is not surprising that small businesses are so worried about the Labour party's policies.

Is not one of the additional burdens borne by small business men the extra cost of value added tax on fuel? Will they not have been rather upset, if they voted Conservative at the last election having been assured that there would be no VAT on fuel, to find that it was immediately imposed?

That just shows how little the hon. Gentleman knows about small businesses. They claim the VAT back. What they are very worried about is the question of the minimum wage and the social chapter, with which they know the Labour party is threatening them.

Is my hon. Friend aware of any proposals to give control of business rates to local authorities? Does she think that, were that to happen, business rates would go up or down in councils controlled by Opposition parties, such as Hinckley and Bosworth borough council in my constituency?

My hon. Friend raises the issue that worries so many businesses. When their local authorities were controlled by Labour, they felt that they were having to pay far too much for far too few services—and, what is more, statistics prove that they were absolutely right. The Labour party's promise that it would return small companies to local authorities for business rating purposes shows just how little the party knows about companies, and shows why companies justly fear its policies.

To ask the Chancellor of the Exchequer how many people he estimates will pay inheritance tax in the current financial year. [9518]

It is provisionally estimated that inheritance tax will be paid on around 18,000 transfers on death and in lifetime in the current financial year.

As a Lancashire Member, I congratulate the Minister—another Lancashire Member—on his elevation to the Privy Council.

In a spirit of camaraderie, I thank the hon. Gentleman for his kind good wishes on my appointment to the Privy Council. I listened to what he had to say, but it contrasts starkly with what the hon. Member for North Warwickshire (Mr. O'Brien) said last year in the Standing Committee considering the Finance Bill. At that time, he confirmed your party's wish for more millionaires to be created, and seemed to confirm some interest in the creation of wealth; but you show your usual nasty attitude to that wealth passing down—

Order. Privy Councillors do not behave in that way.

I apologise, Madam Speaker—the heat of battle must have got to me.

Does my hon. Friend agree that 2 per cent. of estates being subject to inheritance tax is 2 per cent. too many? The trouble with inheritance tax is not that it was designed to raise revenue for items that must be financed by the state, but that it was devised as a way of punishing people for having money in the first place. It is a thoroughly un-Conservative tax and it should go at the earliest opportunity.

My hon. Friend puts his finger on an important point. It is worth considering the history of estate taxes, or estate duty as it was once called. Such taxes were relevant when the tax base was not as it is today. Today, we have taxes on income, earning and consumption; the time has come for us to make progress on our long-term objective of removing inheritance tax, as and when we can afford it.

To ask the Chancellor of the Exchequer if he will make a statement about the economy in the north-west of England. [9519]

The north-west is sharing fully in the success of the British economy, which is enjoying a combination of low inflation, falling unemployment, low mortgage rates and rising living standards not seen for a generation.

I thank my hon. Friend for that reply. Does it not show that, thanks to the Government's economic policy, north-west England is now one of the most competitive and successful economies in the most competitive and successful country in western Europe? Would it not be crazy to throw all that away on new Labour, new failure?

My hon. Friend is correct. Unemployment in the north-west has fallen to its lowest level for more than six years and average weekly pay is the second highest in the country. May I turn my hon. Friend's attention to some of the figures relating to Blackpool? It is, as he knows, the country's premier tourist resort, with more visitors per year than Portugal and more hotel beds than the whole of Greece. The Labour party's recipe of a minimum wage, the social chapter and more red tape would damage jobs in my hon. Friend's constituency and would damage the United Kingdom's tourist industry.

Is the hon. Lady aware that chambers of commerce in the north-west have stated that they are more concerned about the level of interest rates and a competitive pound than about anything else? Although I welcome the decision by the Chancellor of the Exchequer to overcome the fears of the Governor of the Bank of England, will the hon. Lady ensure that my points about the competitive pound are fully taken into account, bearing in mind the need for manufacturing industry in the north-west of England?

I can assure the right hon. Gentleman that that is one of the factors that my right hon. and learned Friend the Chancellor takes into account when setting interest rates. The right hon. Gentleman will also be aware that we receive many representations from business, commerce and individuals about all aspects of the British economy. I can assure him that they are delighted by our inflation performance. They are also delighted that our interest rates are low, mortgage rates are at their lowest level for almost 30 years, more people are in work and we have a lower unemployment rate than any other major European country. That is the sort of economy that we have created in this country—one in which companies can prosper and thrive and individuals can expect jobs and achieve improved living standards.

I welcome the influence of my right hon. and learned Friend the Chancellor of the Exchequer and his resistance to the blandishments of the Governor of the Bank of England when urging him to increase interest rates. Such resistance has made a direct contribution to the healthy economic situation in north-west England. In my constituency of Macclesfield, unemployment is down to 3.2 per cent. and we have recently had the fine announcement of the second runway at Manchester airport. Only last October, Vauxhall announced investment of more than £300 million in Merseyside, which I hope will go some way to offset today's unfortunate announcement by Ford at Halewood—a decision that I deeply regret.

I agree with my hon. Friend that any job losses are regrettable. In its statement today, Ford says that it is improving the plant's competitiveness to secure its long-term future, but the future for everyone in this country is a stable economy—an economy and economic policies that ensure the job creation that we are currently witnessing. Recently published figures show that we are creating about 10,000 jobs a week; we are prepared to continue to do so. It is vital for everyone in the country.

Will the hon. Lady confirm that earlier today the Chancellor described the loss of jobs in the north-west at Ford's Halewood plant as a case of

"You can't win them all"?

That question was uniquely silly, especially the quotation that the hon. Gentleman attributed to my right hon. and learned Friend the Chancellor of the Exchequer. As I said, all job losses are regrettable. I find them regrettable, as do my right hon. and learned Friend and the Government.

To ask the Chancellor of the Exchequer if he will make a statement on the level of taxation in (a) the United Kingdom and (b) the rest of the European Union. [9520]

The overall burden of taxation on the economy in the United Kingdom was 35.75 per cent of GDP in 1995–96. This represents one of the very lowest levels in Europe and is below that of France, Germany and Italy.

Does my hon. Friend—whose honour Conservative Members very much welcome—agree that taxation must be a matter for member states, that our policy has enabled us to achieve lower personal and business taxation, details of which I invite him to give us, and that it is not in Britain's interests to give up that control?

I thank my hon. and learned Friend for his kind personal comments. On his last point, I hope that I can satisfy him by reminding him of what my right hon. and learned Friend the Chancellor said to the House of Lords in the EMU inquiry on 28 March 1996:

"I personally strongly take the view that taxation policies are decisions for the member states of the European Union and should remain so."

Do not considerable disparities persist between VAT in different nations of the Community? For instance, do not France and Germany impose a minimum of 15 per cent. VAT on children's clothing, fuel and water?

I do not know what to make of the hon. Gentleman's question. He accuses the Chancellor of not dealing with the central issue, but for once Radio 4's "Today" programme concentrated on asking the Chancellor about the excellent performance of the British economy. My right hon. and learned Friend offered good information about inflation, low interest rates and falling unemployment—the things that really matter in this country to those who are working and exporting to the rest of Europe.

Will the Minister confirm that the British Government would veto any Franco-German proposal to make taxation a matter of common concern within the Community institutions? Will we stand against any compulsory increase in income tax to bring this country into line with France and Germany, and will he confirm that higher income tax would not be a price worth paying for a single currency?

That, I think, is a hypothetical question—[Interruption.]—for the very simple and straightforward reason that no such proposal as my right hon. Friend describes exists.

Will the Minister confirm that the Chancellor has told the House:

"one of my options must be to extend the VAT base. The main candidates are food, children's clothes, transport, sewerage and newspapers."?

"A powerful case for each of them can be made".—[Official Report, November 1993; Vol. 233, c. 940]

We started the day looking into the gutter and we have just had another example of the kind of gutter, negative politics that the Opposition told us they were not going to indulge in.

"It has never crossed my mind to put VAT on food and it hasn't crossed my mind now."

Will the Minister remind the Opposition that the sixth directive, which called for harmonisation of VAT, was agreed in 1977 when there happened to be a Labour Government? Does he agree that the real threat of VAT on food could arise only from a European Court challenge to a legal procedure that the Government have been using since 1 January—and that that could happen whether a Conservative or a Labour Government were in office?

I entirely agree with my hon. Friend's last point. The House will have taken careful note of his other points; but the greatest threat to our position in respect of Europe comes from the Opposition.

To ask the Chancellor of the Exchequer if he will make a statement on the amount of VAT collected in the last year for which figures are available. [9521]

The net amount of VAT collected in the financial year 1995–96 was £43,069 million.

On the radio this morning the Chancellor, when asked about the Tory record on VAT on fuel, said that the Labour party was using a quotation about VAT on fuel from somebody at the time of the 1992 general election. Clearly, the Chancellor has nothing but contempt for that somebody and regards that somebody as being of no importance or influence and easy to disregard. Can the Minister confirm that the Prime Minister is that somebody?

With regard to that and to the campaign launch this morning—[Interruption.] If hon. Members give me a chance, I shall be delighted to answer the question. I remember that when the Leader of the Opposition got his job, he cast his eyes to heaven and said that he would not indulge in infantile yah-boo politics, yet this morning he signed off his VAT on food campaign, which is so catty and silly that it makes demon eyes look cerebral and spiritual by comparison.

Does my hon. Friend agree that we have one of the least burdensome VAT regimes of all European Union countries? Will he confirm that 40 per cent. of consumer expenditure in this country is free of VAT, that we want to keep it that way and that the worst prospect for that would come about if we ever agreed to the harmonisation of VAT rates in Europe?

Yes.

Is the Minister aware that jobs in my constituency and throughout the United Kingdom could be put at risk by the proposed two-tier insurance rate of 17.5 per cent. and 4 per cent., granting special concession and privilege to the retail sector as against the rental sector, which services about 3 million in the less well-off sections of our community? Will he undertake to meet representatives of rental companies and hear from them how he can continue to achieve the same VAT revenue to the Exchequer while maintaining level competition between the two sectors?

The hon. Gentleman makes some valid points. I am meeting representatives of the travel industry and the insurance industry next week. There has been widespread VAT avoidance by those sectors. In the interests of taxpayers in general and of services such as health, education and law and order, which are significantly funded by VAT and on which almost all hon. Members understandably want more to be spent, we must not allow industries to create large VAT loopholes that will put at risk the revenue for those important services. Nevertheless, the hon. Gentleman makes an important point. I will meet the various interests and industries involved to see whether anything can be done to ensure that the system works fairly and to avoid the tax loopholes that have undoubtedly been created.

Will my hon. Friend confirm that the vibrant UK economy that we are enjoying results in people having more money to spend, and that the advantage of VAT, rather than direct taxation, as a principal means of raising revenue is that people pay tax as they spend? They make the choice, whereas with direct taxes they do not have a choice. That is a great advantage and it makes our economy what it is today.

My hon. Friend is right. It is important to remember that VAT is not levied on items that form a significant part of the budget of the less well-off.

Will the Minister tell the House why we should trust his undertaking that VAT will not be imposed on food? The Chancellor said this morning that that had never crossed his mind—those were his words. Will he explain, therefore, why on 30 November 1993 in the Budget statement, at column 940 in Hansard, the right hon. and learned Gentleman described the serious options and the "powerful case" for extending VAT to "food, children's clothes, transport, sewerage and newspapers."—[Official Report, 30 November 1993; Vol. 233 c. 940.]

The hon. Lady should probably have continued the quotation to put it in context. I think that her question is marvellous. I never thought that I would stand at the Dispatch Box—[HON. MEMBERS: "Go, then."]—and listen to a Labour Front Bencher make such a heartfelt plea against tax rises. It shows that 17 years of Tory rule have not been in vain. The deputy leader of new Labour's throwing a temper tantrum at the suggestion that he should give a fiver to a tramp proves that, while new Labour may demonstrate admirable enthusiasm for Tory policies, it might be extrapolating a little too far.

To ask the Chancellor of the Exchequer if he will make a statement on the ratio of national debt to gross domestic product, relative to those of other EU member states. [9522]

The United Kingdom's ratio of gross debt to gross domestic product at 53.75 per cent at the end of March 1996 is one of the lowest ratios of general Government gross debt to GDP in the European Union.

Does my right hon. Friend agree that his answer simply serves to underline the British economy's stunningly good performance relative to that of the rest of Europe? Will he confirm that our ratio also compares well with those of Japan and the United States?

The country's debt figures represent a main source of pride for the Government. We must consider what has happened during the past 20 years. In 1970, we had the worst debt to GDP ratio of the big countries in Europe. In 1975, we were still the worst performer. We began to catch up in the 1980s and in 1996 we were the best performer. I confirm the accuracy of my hon. Friend's comments about Japan and the United States: we have a lower debt to GDP ratio than both of those countries.

Will the Chief Secretary confirm that national debt has doubled under the present Prime Minister and now costs every taxpayer about £1,000 a year? Does he agree that that represents a disgraceful mismanagement of the country's finances?

The hon. Gentleman makes a silly point. The base year of 1990 saw the lowest level of national debt since 1915, when the Liberals joined the national coalition and began to finance the war by borrowing. It was not until 1990 that we had debt under control again. Another way of putting it is that, in 1990, we had by far the lowest debt level of any western country. That enabled us to look after public services during the recession and, at the end of it, still have the lowest debt of any big European country.

Will my right hon. Friend confirm that if the European countries that are hoping to form the first wave of a single currency were able to meet the debt to income ratio required by the convergence criteria only through a gross fudging of their financial accounts, that would be an unsustainable basis for a single currency and it would be highly desirable for this country to have no part of it?

My hon. Friend is entirely right. If countries were to think it wise to try to join a single currency by using accounting devices that counted for one year only, they would join an ultimately unstable single currency. I am sure that that will form part of the judgment that Ministers take in the Council of Ministers at the appropriate time.

Will the Chief Secretary acknowledge that, under the present Prime Minister, British national debt has risen faster than that of any other member state in the European Union except Germany, which is coping with reunification? Against that background, and as the Conservative and Labour parties have pledged to reduce or abolish taxation, there is a natural question in the minds of the electorate about how they will keep debt down without introducing other measures of taxation. We want an exchange, not of insults, but of information regarding exactly which taxes Labour and the Conservatives will put up.

The hon. Gentleman is right to contrast the approaches of the Government and the Opposition. The Government will maintain low tax and debt burdens by controlling expenditure. There is not the slightest chance of the Labour party's doing that.

Is not it remarkable that this country probably nearly meets the convergence criteria for joining the single currency but, according to polling data in The Daily Telegraph, is the country most vehemently opposed in principle ever to joining the single currency? Is not it a fact that good management of the economy, as evidenced by the statistics on national debt, is a good in its own right to be pursued in the interests of the British people, not the interests of creating a single currency in which they have no confidence?

My hon. Friend is exactly right. The policies that my right hon. and learned Friend the Chancellor has been following are right for the economy and are pursued because they are right for the economy. One of the things of which the Government can be proud is the fact that we will have an entirely free choice, thanks to the Prime Minister's opt-out, about whether to go into a single currency. The economic strength of the country will mean that we shall be able to choose on the basis of wider considerations.

To ask the Chancellor of the Exchequer what additional sums have been paid as a result of changes in VAT since 1992. [9524]

The net revenue effect of various changes to VAT coverage since 1992 is estimated to be £870 million in the current financial year.

Will the Minister confirm that, because of the Government's imposition of VAT on domestic fuel, many pensioners are forced to pay the highest premium to heat their homes? Has he calculated the cost of that in human terms and to the national health service, as many pensioners, especially in my constituency, are forced to cut back on heating in cold weather?

The hon. Lady makes a point, but this could be a good moment gently to remind her and Opposition Members that, for many years, Labour's energy policy was to burn expensive and relatively dirty coal. Labour denigrated our policy of allowing cleaner, cheaper gas, which has resulted in falling energy costs and cleaner air. I am surprised that Labour Members are so shameless that they can come to the House, after pursuing that policy, and declare that they are worried about the cost of energy for the less well-off.

Surely the impact of extending VAT to domestic fuel has been outweighed by the price cuts arising from the Government's policy of privatisation. Is it not also the case that the parties in the House that voted against privatisation were therefore voting in favour of dearer energy prices for pensioners and others, and that those who support a windfall tax would also bring about dearer fuel prices for pensioners and others?

My hon. Friend is exactly right. Even including VAT, power prices are lower than they were. Gas prices alone have fallen by 19 per cent. in real terms. The less well-off have also been protected by compensating rises in benefits.

The House will have noted that the Chancellor has not answered any questions on VAT today. How can we believe a Chancellor who says that he never contemplated extending VAT to food when he specifically mentioned it in his 1993 Budget? How can we trust a Chancellor who says that somebody promised not to extend VAT in the 1992 election when not only was that somebody the Prime Minister, but we have film of the Chancellor of the Exchequer sitting next to the Prime Minister when he gave that commitment?

How can the House and voters trust a shadow Chief Secretary who, in response to a Scottish nationalist amendment proposing a reduction in VAT on fuel from 8 per cent. to 5 per cent, said that it was a

"cynical ploy from a desperate party"—[Official Report, 23 January 1995; Vol. 253, c. 49.]

To ask the Chancellor of the Exchequer what steps he intends to take to deter company car users from driving unnecessary miles to obtain tax advantage. [9527]

It is for employers to ensure that unnecessary business mileage expenses are not incurred. However, the needs of the genuine high-mileage business traveller are recognised in the current company car tax regime.

I congratulate the Government on their very sensible policies on reducing unnecessary car usage, but is my hon. Friend aware that independent tax advisers tell their clients with company cars to contrive to drive more than 18,000 miles a year, even if that is unnecessary mileage, because they will thereby benefit from the discount at 18,000 miles? Will my hon. Friend reconsider the policy with a view to finding a better way of allowing heavy usage—necessary mileage—while not encouraging unnecessary driving?

My hon. Friend makes an important point. We have no plans substantially to change the current taxation regime for company cars. Transport 2000 raised the matter with us, questioning whether unnecessary business mileage was in sum being increased to achieve tax breaks. No evidence of such usage could be found. There is anecdotal evidence, but overall I do not believe that there is widespread abuse.

To ask the Prime Minister if he will list his official engagements for Thursday 16 January. [9545]

This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Will the Prime Minister explain why tens of thousands of my constituents are finding it extremely difficult to pay their energy bills this winter? Why did he impose value added tax on their fuel bills when he promised the nation that there would be no increase in VAT? Will he explain why people should suffer from cold this winter because of his imposition of VAT on their fuel bills?

The hon. Gentleman should know that, during the past few years, the price of fuel has been steady at the worst. The real price of some fuels has fallen as a result of the privatisation of the energy industries. The hon. Gentleman will recall, when last there was a Labour Government, that the price of fuel was rising at a rate of 30 per cent. a year.

May I thank my right hon. Friend for his support for my private Member's Bill, which is aimed at countering drug abuse in clubs, and is to have its Second Reading tomorrow? Did he manage to make any further progress in the war on drugs during his visit to the Indian sub-continent? What is his reaction to the comments made today by Brian Harvey of East 17, who says that Ecstasy makes people feel better and that he takes up to 12 tablets a day?

I have not read the comments about Ecstasy, but I regard any comments of that sort as wholly wrong. Drug taking, whatever the drug may be, tends to lead on to hard drugs. We have seen often enough the tragedy that then occurs.

Does the Prime Minister accept that, before the last general election, he gave a categorical pledge not to extend value added tax, and that after the election, in the first Budget, he did indeed extend VAT? Is that true or false?

I think that we all know what the right hon. Gentleman is saying. The right hon. Gentleman is seeking to justify the crude and untruthful campaign that was launched this morning—a campaign that he knows is simply scaremongering and which will not persuade the British people. We now know very clearly where the negative campaigning comes from and who encourages it.

Perhaps we can return to the question and see whether we can have an answer. I think that we are entitled to draw attention to the Prime Minister's record and to draw an inference from it. Did he stand at that Dispatch Box and promise not to extend VAT—yes or no—and did he then extend it in the first Budget after the general election, yes or no?

The right hon. Gentleman is mistaken in the imputations he is trying to make. It is the Labour party—not the Government—that has made £30 billion of spending commitments, and it is the Labour party that would need to raise tax or break the promises that it has made to the people. The Government have set out our tax proposals, our expenditure plans and our declining borrowing requirement. It is the right hon. Gentleman—not the Government—who has questions to answer.

If the Prime Minister is so confident in his denials, after 22 Tory tax rises since the general election, and if, as he constantly tells us, he is raring to go in an election campaign, why does he not experience a rare moment of decisiveness, call the general election—call it now—and let us all put our arguments to the verdict of the people?

That campaign will come, and I look forward to it, but if the right hon. Gentleman is so concerned about tax levels and wants to cut them, perhaps he will tell us which of his spending commitments he would cut.

On a point of order, Madam Speaker.

What public expenditure would be reduced under a Labour Government? What expenditure has the Labour party opposed? Which of our tax reductions has it supported? The right hon. Gentleman says one thing, but his entire record shows that he does another.

rose—

Points of order come after Question Time.

If my right hon. Friend wanted to raise a substantial amount of money in the next tax year, would he tax savings by restricting personal equity plans and tax-exempt special savings accounts, tax pensions by taxing pension funds and increase pensioners' electricity and gas bills with a windfall tax? Is not the truth that the Chancellor has published his tax proposals in public, whereas the Labour party is considering proposals in private?

My hon. Friend makes his points extremely clearly. We know that the windfall tax would pay, were Labour given the opportunity, for all sorts of goodies—there is a larger number of them every day. We now hear rumours that the windfall tax would be illegal. If, as has been said, the Labour party has legal advice to the contrary, let it publish that legal advice. What did the right hon. Gentleman say when asked about the windfall tax? He stated:

"Well, we haven't given a figure on that because we said that's something that has to be and should be, I mean this would be … ".

On a point of order, Madam Speaker.

I think that I can anticipate the hon. Gentleman's point of order.

This is rubbish.

I shall hear the hon. Gentleman after the statement. I ask him to resume his seat.

Will the Prime Minister confirm that it is Government policy to be ready to join a single currency on 1 January 1999, and that they are willing to do so if it is in the nation's interest?

We will keep our options open, which is the entire purpose of the opt-out. We will make preparatory plans—which has been our position since, at Maastricht, some time ago, we established the opt-out.

Is my right hon. Friend aware of widespread support among the British public for more stringent penalties against persistent offenders, as proposed in the Government's Crime (Sentences) Bill? What conclusions does he think that the public will draw from the Labour party's abstention on the Bill and all Liberal Members' voting against it? Is it not a fact that only the party of government is in favour of measures against criminals?

I am shocked by that rare difference between the would-be coalition partners on this subject. Not just on this Bill, but on a series of recent law and order Bills, the Opposition, despite what they have said, have voted against the Government's tougher law and order measures. By their votes they should be judged.

To ask the Prime Minister if he will list his official engagements for Thursday 16 January. [9546]

I refer the hon. Member to the answer I gave some moments ago.

The Prime Minister has stoutly refused to own up to his 1992 pledge not to extend VAT to fuel. Conservative Members may not like it, but the Prime Minister is demeaning his office by repeatedly refusing to answer the question. Bearing in mind his shifty performance this afternoon, does he understand that the British people simply do not believe his promises on VAT?

I wonder what makes me suspect a degree of co-ordination in Labour questions. Is it perhaps the guilty look on the hon. Gentleman's face? The Labour party is seeking to smear in a crude campaign about the Government's plans for the next Parliament. It simply will not wash.

Can my right hon. Friend find time today to study the statement by Commissioner van Miert on the proposed alliance between British Airways and American Airlines and the threat—implicit threat perhaps—of fining the United Kingdom Government if they permit that alliance to go ahead? Surely it is a fundamental freedom for a national airline to decide in its commercial interests with whom it may or may not have an alliance anywhere in the world.

I am aware of the Commissioner's comments on the alliance, which were made within the framework of the existing structure of air services. I find them very strange when it has been made clear that the British Airways-American Airlines alliance can go ahead only if airline services are liberalised. The present position is that the Director General of Fair Trading will consider the Commission's views with any other views that he has received when he prepares his advice to my right hon. Friend the President of the Board of Trade. It will be for my right hon. Friend to decide whether to clear the alliance.

To ask the Prime Minister if he will list his official engagements for Thursday 16 January. [9547]

I refer the hon. Member to the answer I gave some moments ago.

Can I now have a straight answer from the Prime Minister? Does he recall saying before the last general election that he had no plans to extend the impact of VAT? Why should anyone believe him now?

I refer the hon. Gentleman to several of my earlier answers.

To ask the Prime Minister if he will list his official engagements for Thursday 16 January. [9548]

I refer my hon. Friend to the answer I gave some moments ago.

This question is not about VAT. I have not been included in the Opposition's little scheme. I should like the Prime Minister immediately to introduce compulsory homework on basic economics for Labour politicians. They believe that they can spend £30 billion without there being massive tax increases or massive increases in borrowing. Does he agree that the electorate will not want to risk trading an improving economy and shrinking unemployment for the economic paralysis and tax hikes that will certainly come about if the nightmare happens and a Labour Government are elected?

My hon. Friend has hit on an extremely good idea. If Labour Members did their homework—particularly the shadow Chancellor—they would learn that Labour's sums do not add up. They cannot promise £30 billion of expenditure and at the same time say that they will not increase taxation.

It will end in tears.

What an excellent expression. It will end in tears. I strongly suspect that it will. The reality is that people will rumble the fact that Labour Members cannot keep those promises without putting up taxes. They cannot promise £30 billion in that fashion. If they ever formed a Government, Labour would be the same old tax raisers that they always have been.

Will the Prime Minister acknowledge the depths of dismay being felt on Merseyside as 1,300 Ford workers face redundancy, despite having won for their plant the company's in-house award for achievement and quality of production just a few months ago? Does he accept that his Chancellor's comments this afternoon that

"You can't win them all"

My right hon. and learned Friend said—if the hon. Lady had quoted him fully—how much he regretted that decision, and so do I. It is surprising that Ford has decided to move; it flies in the face of most investment decisions, which are moving to the United Kingdom. That should not hide the fact that Ford's new investment in Jaguar is worth 5,000 jobs and that it plans a further £2.6 billion of investment by 2000 and a lot of other investments.

On a point of order, Madam Speaker.

I am sorry to repeat for the third time that, under our procedures, I can take points of order only after private notice questions, statements and applications under Standing Order No. 20. There is a statement, and I have to hear a Standing Order No. 20 application. Perhaps the hon. Gentleman will wait his time.