If he will raise measures to address world debt at the G7 meeting next month. [151542]

When he will next discuss the proposed international finance facility with his counterparts in the other G8 countries. [151551]

I am pleased to say that next week in America the G7 group of Ministers will consider the issues of debt sustainability and the British proposal to tackle ill health, illiteracy and poverty, and to raise the necessary finance for aid and debt relief through the international finance facility. We will hold a conference on these issues with the Churches and non-governmental organisations on 16 February in London, and a Paris conference to heighten support for the facility, with more than 60 countries invited, will be held in April.

I thank my right hon. Friend for that answer and for the steps that he is taking to tackle world debt, particularly as I know that he has been very busy in recent days.

I am grateful to my hon. Friend; I know that he has taken a long-term interest in these matters. Twenty million people have already died from HIV/AIDS and 40 million people are infected with it. We are the second-biggest contributor to the global fund, which is investing not only in the prevention of AIDS, but also in tackling tuberculosis and malaria. We spent £270 million last year directly on fighting AIDS around the world. At the same time, we are a contributor to GAVI—the Global Alliance for Vaccines and Immunisation—which is a private-public partnership, with Bill Gates and the Gates Foundation in particular. I talked to him in London only this week about these matters. We shall continue to do more to tackle a scourge that requires extra resources, treatments at cheaper prices and the build-up of capacity in health care systems. We have spent £1.5 billion in all those areas since we came to power.

I welcome the steps that the Chancellor is taking to take the international financing facility further forward, but will he assure the House that that will not detract from the UK's continuing efforts to increase the percentage of our gross domestic product that we allocate to international aid? In the spending review this year, will he consider taking further steps to increase the percentage of UK GDP allocated in that way up to the 0.7 per cent. target called for by the United Nations?

This could be a very expensive Question Time indeed. I shall look into my hon. Friend's representations. He knows that we shall have increased the percentage of aid from 0.27 per cent., which is what we inherited, to 0.4 per cent. by 2006. He knows, too, that we are part of the Monterrey consensus, where the European Union has agreed that collectively the amounts of aid would be 0.39 per cent. by 2006 and where America has pledged an extra $5 billion to $7 billion to raise the amount of aid.

What will be the likely cost to British banks of the proposal to write off Iraqi debt, consequent on our invasion of that country?

This relates to question 4, which deals with the issue of Iraqi debt and I shall come to that when that question is called. I can tell the hon. Gentleman, however, that Iraqi debt is in the order of $120 billion and only about $1 billion of that is owed to Britain. Under the Paris Club terms, much of that would be written off. Iraq owes money mainly to Russia, Germany and France, not to Britain.

In view of the great importance of this work to many sections of the House, would the Chancellor like to express his pleasure at the remarkable change in fortune this week of the Prime Minister, which means that, in all probability, the Chancellor will be able to stay in his present post for the rest of this Government in order to see it through?

Silly question.

Absolutely. But is it not typical of the Opposition that when we are discussing world debt and the international finance facility, the right hon. Gentleman, who knows better, should reduce it purely to matters of personalities?

My right hon. Friend knows that I believe that the Labour Government's record on world debt has been excellent during his period as Chancellor of the Exchequer. Does he believe that we can now make real progress with the G7 in not only continuing what this country has been doing so positively, but tackling the issues of fair trade? It is very important indeed that we not only relieve debt but give those countries an opportunity to participate in fair trade in the world.

I am grateful to my hon. Friend. He, too, has taken a great interest in these matters in recent years. At the G7 meeting next week in Florida in America—where I understand the weather is a bit warmer—we shall be discussing not only debt and the international finance facility, but trade. It is imperative that the main developed countries relaunch the world trade talks. That is in the interests of Europe and America, and of the developing countries. It is imperative also that we clear away the difficulties that arose from what were called the Singapore clauses. It is imperative too that steps are taken to deal with agricultural protectionism. I shall press my G7 colleagues and propose that we take an initiative to show that we are serious in persuading people that these trade talks, which have been stalled for too long, should get going quickly; and I believe that I shall have all-party support for that.

I understand that to qualify for debt relief under the initiative it is necessary for third world countries to increase the amount that they spend on poverty reduction, so there is a bit of a paradox there. I understand that they get quite a bit of that money from donor countries, but I further understand from a written answer that the Chancellor gave me a few days ago that there is a shortage of supply in the money coming from those donor countries. What can he do to increase that supply?

For the heavily indebted poor countries initiative conditions to work, the debt that has to be paid must be reduced substantially. I believe that the average payment of debt by those countries was 27 per cent. before the HIPC initiative and it is now 11 per cent., so there is a huge reduction in the amount of debt interest payments that those countries have to pay, and obviously it is a result of $70 billion of debt being wiped out under the initiative. It is not a requirement but it is morally, economically and socially right that those countries direct the resources to education and health. Sixty-five per cent. of the money that is obtained as a result of reduced interest payments goes to education and health—the vast majority to education. Uganda, for example, can now say that every young child will get primary education and that there will be schools for them to go to.

If he will make a statement on progress towards implementing the recommendations of the Myners and Sandler reports. [151544]

The Government are currently reviewing the progress that the occupational pension industry has made in implementing the recommendations of the Myners report. We are continuing to implement the recommendations that Ron Sandler proposed.

I thank my hon. Friend for that reply. I recognise the Government's policy to encourage saving, and both the Myners and the Sandler reports contained proposals for reducing obstacles to saving and making it easier. Cash individual savings accounts have proved to be very popular, especially with low-income savers who are reluctant to part company with their savings in case of emergencies. Why, therefore, does the pre-Budget report reduce the annual ceiling on ISAs from £3,000 to £1,000? Is that not inconsistent with general policy?

I am glad that my hon. Friend draws attention to the success that ISAs have been, both in widening access and in encouraging low-income groups to hold savings in that form. I can confirm to him, however, that the Government announce in the pre-Budget report that we intend to review the treatment of ISAs so that all Sandler's stakeholder medium-term products and life insurance products will be brought into the stocks and shares component of ISAs from 2005. My hon. Friend makes a representation on the limits, and of course my right hon. Friend the Chancellor will have heard what he says and I am sure will reflect on it.

Will my hon. Friend reflect on the recent evidence by both Myners and Sandler to the Treasury Select Committee about the current structure of the financial services industry? They both characterised it as having excessively weak consumer power, because of the lack of transparency in the products and the fact that there are too many complex products, so that it is almost impossible for anyone to discern any meaning from the information about them. Moreover, those who make the products are far too concerned about distribution mechanisms and sales, and therefore leave consumers no power. That is a form of market failure. Will my hon. Friend look at that and see what the Treasury could do to restructure the market, in order to make it much simpler and easier for people to put their money into some of those products and make the products more trustworthy?

My hon. Friend makes an extremely important point. We asked Ron Sandler to look at the structure of the retail savings industry to see how it could be made more efficient and transparent. He concluded that the current structure of the market was far too opaque and complex for consumers to be properly served. That is why we are now working with the Financial Services Authority to introduce the suite of Sandler stakeholder products, which would shift the burden away from the sales process and protect the consumer by building that protection into the product itself. I believe that the consumer will be much better served once those products are introduced.

What discussions are being held with European Union Finance Ministers about providing debt relief to Iraq. [151545]

Iraq's debt to the international community stands at approximately $120 billion. In a country that is oil rich, with approximately 100 billion barrels of oil, the population has an average income per head of less than $2 a day. The United Kingdom view is that creditors will have to write off the vast majority of Iraq's debt to restore economic sustainability, and we are in discussion with many of our international partners, who share that view.

Does my right hon. Friend share my view that debt relief is a vital ingredient in rebuilding the Iraqi economy? The loans to Saddam financed his wars, his palaces and the oppression of ordinary Iraqis. Is not Iraq's reconstruction crucial, and must we not get rid of the millstone of Iraqi debt?

I am grateful to my hon. Friend, who I know has taken an interest in the matter of Iraqi debt. Iraq has the second largest reserves of oil in the world, so it is potentially very rich. It is also true, however, that the population's average income is less than $500 a year, which is less than $2 a day. Because of that, we need to take action to correct the position of Iraq. Not only does Iraq have $120 billion of outstanding debt, but it also has compensation claims to honour in relation to Kuwait approaching $80 billion. That is why we propose that, through the Paris Club, debt be written off, and why we have also said that it should be the vast majority of Iraq's debt.

My right hon. Friend the Chancellor rightly said a few minutes ago that there is a huge Russian debt. In the circumstance that much of the Iraqi oil industry is out of date and has Russian equipment—as indeed is true of the water facilities—if the oil industry is to be modernised, what discussions are going on with the Russians as to how we can co-operate to get it moving again?

I believe that when the G7 meets next week in Florida and becomes the G8, with Russia present, we shall have a discussion on issues related to Iraq and reconstruction. More partners are being drawn in to try to help with reconstruction. I shall write to my hon. Friend after the G8 summit in Florida. It is also true that the backlog of repairs—whether in health, education or water, or generally in infrastructure—is, as my hon. Friend suggested, massive. That is why we cannot wait, and the Government have already set aside some $800 million as our contribution to reconstruction.

What representations he has received on the performance of the Financial Services Authority; and if he will make a statement. [151546]

Treasury Ministers have received a large number of representations, particularly in the context of the two-year review of the Financial Services and Markets Act 2000, on the performance of the FSA.

Is the hon. Lady fully satisfied with the performance of the Financial Services Authority in terms of its recent and ongoing discussions with Standard Life? First, is any credence at all to be given to suggestions that information about those discussions was briefed to the press by sources within the FSA? Secondly, has she considered whether there is anything inherently anti-mutual in the new liquidity requirements that are part of those discussions? Do the Government have a position on whether companies should be in mutual ownership or be plcs?

The hon. Gentleman makes a number of detailed points. As I set out in my written answer to Parliament, the FSA has total operational responsibility for regulatory decisions and independence under the Financial Services and Markets Act 2000. However, the FSA has kept the Treasury regularly informed of developments at Standard Life, under the terms of the memorandum of understanding between the Treasury, the FSA and the Bank of England. Of course I cannot comment on press speculation, but I can confirm to the hon. Gentleman that the Treasury has consistently supported the development of the mutuals sector by supporting private Member's Bills, which updated the legislation for industrial and provident societies. The new realistic accounting rules have been widely welcomed by the industry—by mutuals and non-mutuals alike.

Does my hon. Friend agree that the FSA should take a lead on personal finance education and that even the increased amount, £120,000—out of a budget of £200 million£is not very much? As it is a priority identified by the FSA, surely the industry and the FSA should be putting serious money into educating the people of this country about personal finance.

My hon. Friend makes an important point. Indeed, that was one of the issues raised by Ron Sandler when he looked at the functioning of the long-term retail savings market. The FSA has taken his recommendation seriously. It has set up a financial capability steering group, of which I am a member, to look at such issues from first principles. I am sure that the FSA will now take forward a proactive agenda on those issues.

Did the Minister see the comments last week by Callum McCarthy, the chairman of the FSA, who talked about what he called dangerous levels of household debt? Can the Minister say precisely who is responsible for determining sustainable levels of household debt and new flows of credit? Is it the FSA, which has identified the problem but disclaims responsibility? Is it the Bank of England, which meets next week and has also disclaimed responsibility for asset markets and debt? Who is responsible for the problem?

The Treasury and the Government have responsibility for the macro-economic environment in which consumers and the industry operate. The FSA has a specific responsibility for financial stability, but the Government's record on economic matters is one of which I am proud.

What the revenues to the Exchequer were from the climate change levy in (a) 2002 and (b) 2003. [151547]

The climate change levy raised £863 million for the Exchequer in 2002. Provisional receipts for the whole of 2003 will be published by the Office for National Statistics in February's "Financial Statistics".

I thank my hon. Friend for that response. In 1999, the reason that we introduced the climate change levy was to meet the obligations under the Kyoto agreement. Will he explain to the House why we apply the climate change levy to the nuclear power industry, which does not produce CO₂? Will he consider removing that unfair burden from the nuclear industry, because it is a major problem for that industry at the present time?

I pay tribute to my hon. Friend, particularly for his role as chairman of the all-party parliamentary group on nuclear energy, but I have to disappoint him. He is right to say that we announced the introduction of the climate change levy in 1999, but we made it clear that nuclear generation would not be exempt from the levy, and we have no plans to change that position now. The reason is that the levy is not a carbon tax; it is a tax on energy use, designed to encourage not only greater energy efficiency, but the development of new renewable forms of energy generation, such as solar, wind and wave power, which is why those are exempt from the levy and why the nuclear industry is not.

When the Government introduced the levy, they said that it would almost certainly be fiscally neutral. Why is the CBI now saying that the net annual cost to manufacturing is running at £142 million? That is hitting smaller firms particularly hard, and with offshoring growing apace, can the Minister do anything to make the levy fiscally neutral?

From the start, the levy was designed to be fiscally neutral to the Exchequer, but it is not possible to make it fiscally neutral for each and every sector. Let me make it clear that there is no financial gain to the Exchequer from the climate change levy. All revenues are recycled back: first, through the 0.3 per cent. cut in national insurance contributions that benefited all employers; and, secondly, through a series of energy efficiency programmes and support, ranging from enhanced capital allowances to the work of the Carbon Trust. The hon. Gentleman is concerned about the position of businesses in competition with those in other countries. There is an 80 per cent. discount on the levy for those that are exposed to international competition and that are intensive energy users in sectors that are willing to negotiate with the Government to improve energy efficiency.

In line with the principles of green taxation that my hon. Friend's Department set out in last year's publication, does he intend to review further the operation of the climate change levy to ensure that its proceeds add positive leverage to the reduction of industrial CO₂ emissions by supporting more directly the development of lower-emission and renewable industrial energy practices?

I can tell my hon. Friend that we keep all taxes constantly monitored and under review. Above that, we are undertaking a full review of the first couple of years of the operation and impact of the climate change levy. That review is being led by Customs and it will indeed take account of the kind of factors about which he is concerned.

If he will compensate Equitable Life policy holders. [151548]

As I said in my written answer of 26 January, the Treasury intends to publish Lord Penrose's report in full as soon as possible. I shall make a full statement to the House at that time.

Does the Minister recall the Chancellor, when he was in opposition, criticising the then Government for delaying payments to elderly, distressed savers following the failure of financial regulators in the Barlow Clowes case? If Lord Penrose reports that regulators failed investors in Equitable Life, will the Chancellor take the very same action that he advocated so vociferously when he was shadow Chancellor?

The hon. Lady may choose to prejudge Lord Penrose's report, but I will not. I am afraid that she must be patient and wait until it is published.

Does the Minister agree that the problems with Equitable Life stem from bad management and a loose regulatory regime under the previous Conservative Government? Would she care to outline what steps this Government have taken to avoid any repetition of the situation?

My hon. Friend will know that the Government took action to set up the Financial Services Authority, the financial services compensation scheme and the financial services ombudsman. On the detailed matter of Equitable Life, I am afraid that he, too, will have to await Lord Penrose's report.

Lord Penrose's report will deal with whether the Treasury has fallen down in its job as regulator of the industry. However, we have the extraordinary situation in which the Treasury has the power to edit the report before it is published. The Financial Secretary says that it will be published in full, but she has also made it clear that it will be edited for legal reasons—as she puts it. I do not think that that will do. The situation is worrying hundreds of thousands of Equitable Life policyholders and annuitants, for whom the report is the only hope of justice. Some of them have told me that what is going on is like handing the man in the dock an advance copy of the judge's summing up for him to edit. A fortnight ago, I told the Financial Secretary that she could allay those concerns easily by handing the full report to the Chairman of the Select Committee on the Treasury—he is in the Chamber now—who could check whether the editing would be reasonable. I ask her once again: why will she not hand the full report to the Chairman of the Treasury Committee?

I am afraid that the hon. Gentleman is making allegations that he cannot sustain; he is also prejudging the content of the report. I have informed the House on several occasions that we intend to publish the report in full at the earliest opportunity. He must await the publication of the report.

It is perhaps a reflection on my constituency that I have many constituents who have been caught up in the whole Equitable Life debacle. They, too, are awaiting the publication of the Penrose report. I hope that the Minister will accept that my constituents are concerned because they are not especially well off and several have lost a great deal of money. Could the whole process be speeded up so that they can get a resolution to the difficulties that they face?

I understand the point that my hon. Friend makes, and of course I sympathise with the distress suffered by many Equitable Life policyholders. Naturally, we will publish the report as soon as possible.

Whether he expects to meet his public sector deficit forecast this fiscal year; and if he will make a statement. [151549]

An updated assessment of public finance projections will be available as usual in the forthcoming Budget on 17 March.

Does the right hon. Gentleman agree with yesterday's statement by the Institute for Fiscal Studies that, because of current deficits, the Government must increase taxation or reduce growth by 2006–07?

No, I do not agree, and I do not believe that the hon. Gentleman has studied fully the IFS green budget. Had he done so, he would have seen that it confirms the sustainability of UK public finances when underpinned by low levels of debt. We would never be able to enjoy those low debt levels if we had adopted the tax-and-spend policies espoused by the Liberal Democrats.

What assessment have Treasury officials made of Liberal Democrat proposals for tax commitments on the one hand and spending commitments on the other? What effect would they have on the deficit? If the deficit increased, what reduction in public expenditure on health and education would be necessary, given the amount of public expenditure that would go on debt repayment?

Order. The hon. Gentleman should not ask the Minister questions about Liberal Democrat policy—[Interruption.] Well, perhaps it would be better for him to write to the Liberal Democrats to find out.

I certainly would not want to ask any hon. Member to wait that long.

The right hon. Gentleman really ought to reflect on his own party's record in government. Under the stewardship of a Tory Chancellor of the Exchequer, net debt was about 44 per cent. of GDP. The reality is that the Government remain on track to meet their fiscal rules over the economic cycle on the basis of our cautious assumptions, which were clearly stated in the pre-Budget report. IFS projections confirm that the golden rule will be met in the current economic cycle.

That was a wonderful assembly of unanswers to my question. Let me put it to the Chief Secretary another way. He will have noticed, as we have, that it is not just the IFS that is on to this. The International Monetary Fund and the Organisation for Economic Co-operation and Development, which are not employees of the Conservative party, the Liberal Democrats or anyone else in the House, have also come to the conclusion that the Chancellor's present level of borrowing and his present path of spending will mean—not in this cycle, to which the Chief Secretary referred, but in the next cycle—that he will need to raise taxes if the Government are re-elected. Is the Chief Secretary arguing that that is not the case?

I am glad that the right hon. Gentleman now admits that we will meet the golden rule in this cycle. That is a new departure for him—he has urged us to introduce policies that would involve a cut in our current spending plans and that would move us towards 35 per cent. of GDP, which would be disastrous for the economy and the country at a time when we are investing in the very public services that were grossly run down when his party had stewardship of the economy.

I do not know whether I will be able to persuade the Chief Secretary to engage in a genuine discussion of an important matter; he is so attached to policy-based evidence making that he is reluctant to engage in evidence-based policy making. Would it not be simpler for the Government to admit that the IMF, the OECD and the IFS have all concluded that in the next cycle—that is, after the election—the Government, if they are re-elected, will have to raise taxes? That is a serious problem that needs to be debated. Does he accept that it would be better if he admitted it, so that the public out there, who want us to have a serious and rational debate, could see us having a debate about whether it is in the interests of this country to raise taxes?

I shall resist the right hon. Gentleman's blandishments, but I urge him to have a serious and rational debate posited on the fact that we will meet our fiscal rules—fiscal rules to which he was never prepared to submit his party when it was in government. If he had done so, his party would never have met them, but if it had tried, at least we would not have had the net debt of about 44 per cent. of GDP that we inherited. We were paying back the debt that the Conservative Government had accumulated. They were paying more on interest than on health, education and transport, and we have had to deal with all that they abysmally failed to do.

Will my right hon. Friend confirm that the largest number of public sector jobs involve nursery staff, doctors, teachers and teaching assistants, and that the real route to dealing with the matter is by cutting the share of administration costs?

My hon. Friend makes a good point. He will welcome the steps taken by my right hon. Friend the Secretary of State for Health to cut administration costs and headquarters costs. My hon. Friend will also welcome the steps that we are taking as a Government, using the good offices of Sir Peter Gershon, to make sure we build that into the up-coming efficiency review.

What recent discussions he has had with business representatives regarding the potential for reform of stamp duty land tax on leases. [151550]

What steps he is taking to alleviate the effect of the new stamp duty land tax on leases on businesses. [151554]

Following consultation with representatives of interested parties, substantial changes were made to the stamp duty land tax charge on the rental element of new leases, which will be of special benefit to small and medium-sized businesses. This means that all commercial leases, which would have been liable to stamp duty land tax under the original proposals, have now benefited from a £1,500 reduction.

Yes, but independent evidence suggests that the average pub licensee will face a tenfold increase in their tax bill, from £600 to £6,000. How on earth can that be justified?

I do not accept that. In the commercial sector 60 per cent. of all leases will be exempt from stamp duty land tax. That compares with only 9 per cent. of leases that were exempt under the previous stamp duty regime.

The professional association suggests that independent children's homes are facing a fourfold increase in stamp duty. When the original provisions were introduced, was it the Minister's intention that a sector so important to the most vulnerable members of our community should be hit in that way?

I know that the hon. Gentleman follows these matters closely, and he has demonstrated his interest in them a number of times in the House. All homes under the threshold are exempt. That has been clearly laid out in the House by my right hon. Friend the Chief Secretary and my hon. Friend the Financial Secretary.

What effect will the charge have on farmers on annual leases?

The Treasury has been discussing with the Department for Environment, Food and Rural Affairs the extent of the changes with regard to the stamp duty land tax. DEFRA is fully aware of the requirements under the proposals in the legislation, and the matter will be taken forward.

If he will make a statement on employment levels and the effect of unemployment on the economy. [151552]

Some 1.7 million new jobs have been created since 1997, helping to create growth on target of 2.1 per cent. last year. The latest figures show that the claimant count is now just 3 per cent., that the labour force survey rate is 4.9 per cent., and that we have the lowest unemployment since the 1970s. For the first time in 50 years, unemployment in Britain is lower than in the euro area, Japan and America together.

Since 1997, where have the majority of new jobs been created—in the public sector or in the private sector? In the public sector, where I hope that the Chancellor will continue the drive to cut waste, where exactly have the new jobs been created?

I can tell my hon. Friend that 1.7 million jobs have been created, and that 1.2 million jobs have been created in the private sector. Of the jobs created in the public sector, 90,000 are classroom assistants, 20,000 are teachers, 50,000 are nurses, and there are nearly 20,000 more doctors and 10,000 more policemen. Before we made that investment, the lack of nurses, doctors, policemen, teachers and classroom assistants was holding back our public services and our country.

I congratulate the Chancellor on the policies that have been pursued, which have created so much opportunity and employment across the United Kingdom. We in Northern Ireland are enjoying the lowest levels of unemployment and the highest levels of employment in my lifetime. However, I plead with him to take account of the high costs of public liability insurance, which is crippling small businesses in Northern Ireland. Will he bear in mind the fact that success in creating employment in Northern Ireland is largely in the hands of small employers, many of whom cannot afford to pay the huge insurance costs that have been asked for and have simply sold off their businesses, making many people unemployed?

I am grateful to the hon. Gentleman. We are concerned about employers liability insurance. It has been raised with the Treasury, and the Financial Secretary has had discussions with business. If the hon. Gentleman wishes to lead a delegation to the Treasury to go through the issues again, we are prepared to listen to his representations.

Is my right hon. Friend aware that in some parts of the country, particularly mine, the historically high levels of employment have created something of a problem of success—a skills shortage? What is he doing to increase skill levels, especially for those who have been excluded from jobs previously, and for women who are returning to work and want to become teachers and nurses, but face difficulties because the student finance and benefits systems do not work well together, or they find it hard to get child care?

I know that my hon. Friend has taken an interest in the development of the new deal. There are 1 million more people in training now than in 1997 and we are endeavouring, through the university for industry—now called Learning Direct—employer training pilots, modern apprenticeships and the new deal, to give young people a guarantee of training, and every adult who does not have the skills that are necessary for a modern economy the chance to get them. We are making that investment, especially through the new deal. It is a tragedy for the country that the Conservatives oppose and would abolish the most successful employment programme in our history.

The rising tax burden is, as we have heard, hitting jobs in shops, clubs, bars and hotels, especially through stamp duty land tax. Yet Treasury Ministers seem unaware of what is happening. In a written answer last week, the Financial Secretary told me that stamp duty land tax would

"prevent the avoidance of stamp duty that was formerly common in commercial transactions".— [Official Report, 19 January 2004; Vol. 416, c. 1030W.]

Order. Front-Bench Members get some elbow room.

Yet—[Interruption.] This question is important—it is about jobs—so I hope that the Chancellor will listen. Despite the Financial Secretary's statement, we learn that business representatives have been told completely the opposite by the leading civil servant in this area—the director of the Stamp Office. He told business representatives that

"avoidance of duty on leases" is "not currently a problem."

First, that was the subject of the previous question. Secondly, all hon. Members who consider the matter objectively know that there must be a level playing field between leases and purchases, and that we must take action on distortions, especially avoidance that loses revenue that should not be lost to the Treasury. As for the hon. Gentleman's claims that jobs are being lost in record numbers in a series of sectors, he should examine the figures, not least those for the constituency of the shadow Chancellor, where unemployment is 0.9 per cent. The Conservative party should go back to the drawing board, support the new deal and scrap the vicious right-wing policy to abolish it.

Is not it a matter of great pride that in former coalfield areas such as my constituency, where in 1997 there were 500 long-term unemployed adult males, the figure is now 60? The Chancellor should be congratulated on that. However, is he aware of the number of people in former coalfield areas who suffer from long-term limiting illnesses, that exclude them from the labour market? In Featherstone, Hemsworth, South Kirkby and South Elmsall in my constituency, 28 per cent. of the adult population are excluded from the labour market through the legacy of the coal mining industry. Can the Chancellor help those people who want to return to work to do so, and offer care to those who cannot?

I am grateful to my hon. Friend for his work to help redundant miners back to work. Work is being done in many constituencies in the area through the reconstruction plans and coalfield regeneration plans to get many people who would otherwise be long-term unemployed into jobs. That is happening throughout the country. Hon. Members will be interested to know that long-term unemployment has fallen by more than 70 per cent. and that long-term youth unemployment has also fallen by more than 70 per cent. In the mid-1980s, there were 350,000 young people in that category, but now there are fewer than 5,000—that means that an average of eight people per constituency are unemployed for more than a year. In the shadow Chancellor's constituency, there are 10 long-term unemployed people over 25.

What assessment he has made of the likely change in investment in residential property as a consequence of his proposed changes to (a) self-investment and (b) self-arranged personal pension schemes. [151553]

The Government's technical paper, "Simplifying the taxation of pensions: the Government's proposals", proposes allowing pension funds to invest in all types of investments, including residential property. The impact of this change, if introduced, will depend on the extent to which trustees and administrators decide that residential property is a suitable pension scheme investment.

Will not any conscientious tax adviser advise investment that yields greater returns—for example, in areas such as my constituency, where house price inflation was 30 per cent. last year? Does the Financial Secretary believe that there will be any regional variation in the rate of investment in housing? What would be the impact of that new money on local housing markets and the ability of first-time buyers to participate?

Clearly, the overall impact of the changes will depend on how attractive an investment property is seen to be. Concerns have already been expressed that property will not hold its value over the longer term or perform as well as the equity markets. I know that the hon. Gentleman has a particular concern about second homes being bought in Wales, and I understand that. I have checked this point, and a tax charge would apply if second homes were used for private purposes, so there would be no new incentives to buy second homes in Wales through that channel.

What progress has been made with respect to debt relief for the poorest countries. [151556]

Twenty-seven countries are already receiving more than $70 billion of debt relief, of which 10 have completed the process. Seven others have not yet received debt relief because they are in conflict; a further three have not done so due to internal instability and governance issues; one other has not applied. A number of other countries, including Sudan, Liberia and Congo, should enter the debt relief process soon.

Does the Chancellor agree that the greatest leverage that we could have on the problems faced by the poorest countries would be provided by giving them greater opportunities to trade with us? What prospect is there of driving forward such an agenda with our principal allies?

I am grateful to the hon. Gentleman for raising the issue of trade in the context of debt relief, because we all know that what is needed for countries, especially those in Africa, to move forward is a combination of debt relief, the necessary aid and, most importantly, the development of their economies. That requires them to be able to trade with the developed countries, which is why there is a premium on reopening the world trade talks; that is in everyone's interest. There was an American initiative only a few days ago, and we are hoping for a positive response in greater detail from the European Union. The matter will also be discussed at the G7 in Florida, and there was a meeting of Trade Ministers just before Christmas to consider some of the issues. I hope that we can move forward very quickly, and I believe that once the Singapore issues are cleared from the deck and there has been movement on agriculture, it will be possible that this will genuinely become what was originally called the Doha development round. That means development helping developing countries.

Will my right hon. Friend the Chancellor build on his truly remarkable achievements on debt by bearing in mind in his discussions with the G7 and G8 countries, the World Bank, the International Monetary Fund and so on, the problems of the countries that experience genocide, such as the Democratic Republic of the Congo, which he mentioned? If those countries can make the most of their mineral wealth and share it widely, we shall achieve not only poverty reduction but the millennium goals, to which he is absolutely committed.

I am grateful to my right hon. Friend. He has spoken on these issues over many years and visited many of the countries that he is asking us to consider. I have added Congo to my list, although it was previously not regarded as a country that would ever qualify for the heavily indebted poor countries process. However, conflicts are being ended in Congo, Sudan and Liberia. Because of that, although it will cost the international community substantial amounts of money—running into billions of dollars for those three countries—to give the debt relief, it is right that they should be offered the chance to be part of the process. It is also right that we should help them to reconstruct their economies after conflict, and, in particular, that we help them to get their health, education and other social services systems moving so that their people can genuinely see that out of conflict, there is a way forward.

Has the Chancellor of the Exchequer considered the terms of the report produced by IMF researchers towards the end of last year, which suggested that the heavily indebted poor countries initiative could be running into difficulties? The report concluded:

"Unless HIPCs improve their primary fiscal positions or grant financing is sustained at current, or possibly higher, levels, debt sustainability in HIPCs may prove elusive"

I am grateful to the hon. Gentleman for raising the issue of what will happen now in the IMF and the World Bank. The issue of debt relief will not and must not be forgotten. That is why, when I chair the IMF committee that will meet in Washington in April, and when the World Bank development committee meets, we shall consider that very issue raised by the IMF report. We shall discuss whether we can reach agreement on what is called topping up—that is, getting more money for the poorest countries at the point at which their debts are being written off—and on taking into account some of the changes that have taken place. For example, in some cases commodity prices have collapsed, and in others there have been problems in relation to trade.

If he will make a statement on funding the NHS through general taxation. [151557]

This Government are firmly of the view that the most efficient and equitable way of funding the NHS is through general taxation—an NHS that is free at the point of use.

I thank my right hon. Friend for that very pleasing reply. Is he aware that Airedale general hospital is not only an excellent facility but is the biggest employer in my constituency? The vast majority of those employees are doctors, nurses and those giving essential support such as cleaners, maintenance workers and medical secretaries, without whom the medical care so much appreciated by my constituents could not be given.

I am grateful to my hon. Friend for the care and attention that she pays to health care services in her constituency, whether that means a magnetic resonance scanner or mental health services. The whole NHS team, including the ancillary and support workers whom she mentioned, have enabled us to deliver 450,000 more operations a year than took place in 1997, 15,000 of which were heart operations and 90,000 of which were cataract operations, as well as 8,000 more hip replacements and 12,000 more knee replacements. Each of those numbers is higher than in 1997. That is good news, and it is achieved only by the sort of team working of which my hon. Friend is so supportive in her constituency.

I should perhaps declare an interest in that my brother is a GP in north Yorkshire. Will the right hon. Gentleman tell the House what the additional cost to the taxpayer will be of the out-of-hours service for GPs in north Yorkshire from 1 April, and of the additional costs under the working time directive of training and recruiting more doctors, particularly in the mental health sector of the NHS?

Certainly, I will write to the hon. Lady on the specific costs in relation to north Yorkshire. I am sure that she will fairly appreciate and give credence to the fact that none of those improvements could be achieved were we to adopt the spending policies advocated by Conservative Members.

Does my right hon. Friend agree that any attempt to suck general taxation funds out of the NHS and use them to subsidise the private health sector would be disastrous for the NHS? Is that not a classic example of a cynical ploy that would attack the health of the nation and mean that the many would end up funding the privileges of the few?

My hon. Friend makes a fair point. That is precisely the policy that Conservative Members seem to be suggesting. It would involve a dead-weight cost of some £1 billion, which could be met only by cutting back on the gains that we have made for the NHS since 1997. That would be an absolute disaster, and would add still further to the inequalities in health that we inherited from the stewardship of the Conservative party.

When he will publish revised forecasts for the public finances. [151561]

An updated assessment of public finance projections will be available as usual in the forthcoming Budget on 17 March.

May I repeat the question that I asked the Prime Minister yesterday, to which I got a hopeless non-answer? Why are the balance of payments deficits and fiscal deficits now totally out of control?

The current account deficit in 2002 stood at 1.8 per cent. of GDP, well below past peaks. In 1989, under the hon. Gentleman's Government, the current account deficit reached more than 5 per cent. of GDP. As far as the public finances are concerned—the second deficit—he may know that the deficit in America is between 5 and 6 per cent., in Japan it is 7 per cent., in Germany and France it is 4 per cent. or more, and in Britain it is 3.2 per cent. I ask him to recall that the deficit in the early 1990s under the Conservative Government was not 3.2 per cent.; it was more than 8 per cent.

Is it not the case that while many countries continue to suffer from the global recession—France and Germany cannot even stay within the European Union stability pact—this country is investing more in public services against a background of economic growth? We have our public finances under control, and recent reports by the OECD, the IMF and the World Bank demonstrate that the British economy and public finances stand up well to any international comparison, despite the attempts by Conservative Members to talk down not only the British economy but the achievements of this Government.

We meet our fiscal rules, which would never have happened under the previous Government, and we will not engage in public spending cuts. If the shadow Chancellor persists in saying that he will announce public spending cuts because people say that our spending is horrifically too much. I know what the people of this country will say to him.