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Mr. Roger Casale (Wimbledon): We have heard arguments before from the right hon. Gentleman about the cost of the changeover plan and the cost of central Government, for example. But does he agree with the right hon. Member for Kensington and Chelsea (Mr. Portillo), the shadow Chancellor, who has said that all the extra money spent on public services is money unwisely spent? If he does, will he come with me to Wimbledon to identify where he thinks that the extra money is being wasted or spent unwisely? For example, is it being wasted on the new accident and emergency unit at St. Helier hospital or on the refurbished Hillcross middle school? Is it not more sensible to spend public money--taxpayers' money--on investing in public services such as health and education, rather than on the cost of social failure and rising Government debt, as was done under the Tories?

Mr. Heathcoat-Amory: Yes, of course I agree with the hon. Gentleman. That is where we want to spend the money. I was saying that that will not happen if £3 billion is diverted into a national handover plan for the euro. We do not know the figures because the Government will not disclose them. In written questions, I have asked for the estimated costs of changing over to the euro. The Government say that they have no idea, even in the public sector. So outside estimates have been made by Chantrey Vellacott, an accountancy firm. It has come up with a figure of £36 billion for the economy as a whole. That includes more than £3 billion just for central Government Departments. It said that it was difficult to make an estimate


That being so, it took a cautious approach.

The Government are committed to something but they do not know what it will cost. Apparently it is not in their estimates--but perhaps it is. We should be told. Either the Chancellor does not believe that it will ever happen so it is not in his estimates or he believes that it will happen and has budgeted a sum for it. If so, where is it?

Mr. Nicholas Soames (Mid-Sussex): Is my right hon. Friend aware, on the important point about the changeover plan, that in France and Germany, where large sums of public money have been spent on the changeover, the Commissioner with responsibility for the euro said the other day that despite these large sums, the effect appeared to be negligible? If a large sum is being spent to no great effect, does my right hon. Friend agree that it should be accountable through the Public Accounts

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Committee or the Select Committee on the Treasury so that the House may examine with great care how the money is being spent?

Mr. Heathcoat-Amory: I agree with my hon. Friend. If the Government are launched on a project that will cost more than £3 billion just for the public service, according to an estimate, and if they have agreed in principle to undertake that expenditure because they want to join the euro, I think that the House is entitled to scrutinise that estimate and have it explained. All my inquiries have met with responses from the Minister that the Government have no idea and that they have made no calculations. That is the height of irresponsibility, and I agree with my hon. Friend the Member for Mid-Sussex (Mr. Soames).

The Chief Secretary claimed that he had a strategy for productivity in the economy. He wants to make the United Kingdom a global leader. How does he reconcile those words with the news this morning that Veritas, one of the world's largest software companies, has put on hold its investment plans because of doubts about the Government's intentions in the high-tech sector, and particularly about their taxation plans?

The Financial Secretary to the Treasury (Mr. Stephen Timms): I am glad that the right hon. Gentleman has referred to Veritas, which is the fourth largest software company in the world. Will he confirm that, contrary to what he has just said, Veritas is announcing today the creation of more than 2,000 new jobs in the UK, and that it has chosen to locate its European headquarters in the UK? I have the press release in front of me.

Mr. Heathcoat-Amory: That is a predictably misleading version of events. Rather than listen to the Chief Secretary, we can hear from the man who is running the company, Mr. Philip Bousfield, who is a senior vice-president of the worldwide operation. He has said that the company has halved its original investment plans because of uncertainty about the climate for high-tech investment created by inappropriate taxation. That is what the company is saying, which is rather different from the version given to us by the Chief Secretary.

Mr. Timms rose--

Mr. Heathcoat-Amory: The Financial Secretary has had his chance and he has given his version of events. I have given the company's version, and it is rather different.

To return to the comprehensive spending review, the Chancellor said that this review--the second one--would be different. He said that the new resources that he was funding would be tied to results; they would be tied to output and performance. However, we have heard all that before. That is exactly what we were told in July 1998 when he announced a similar degree of extra spending on public services. At that time, he said that the spending would be tied to public service agreements set out in departmental objectives that had to be met. He portentously said:


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Let us consider one or two examples. In the foreword to the document on public service agreements entitled "Public Services for the Future: Modernisation, Reform, Accountability", the Prime Minister gave one of the objectives as


We were told that that would be done


with an additional £250 million. It is not a demanding target to cut the rate of growth in crime when the Government inherited a crime rate that was falling, but that is what they have done. They have turned a decrease in the level of crime into the increase that was announced this week.

There is an even bigger mystery about the targets for immigration controls and asylum seekers. That document, which was released in 1998, could not have been clearer. To be fair, it was absolutely specific. The aim was:


More than that, the Government were definite that the time taken to reach decisions about asylum applications would be two months by the Home Office and a further four months maximum by the adjudicator--six months in total.

Two years later, we ask ourselves what has happened to that specific target. Therefore, we turn to the Home Office annual report for 1999-2000 and we find that the objective has completely disappeared. There is no reference to it whatever. On page 46 of the departmental report, all the those targets about


have become "Target to be developed". On page 47, we are told that


It is a little bit late for that. However, the real point is that a specific target announced by the Government, which would be overseen by a big, new Cabinet Committee and the fact that money would be taken from Departments that failed to meet their targets have been forgotten.

Mr. Loughton: My right hon. Friend is right. Is he aware of ever having seen the minutes of this great new Cabinet Committee that would oversee all the targets and audit all the functions? Is he aware of any Department that has not had its money released because it failed to meet any of the targets that were promised two years ago by the Chancellor? Has any of that happened, or was it all just a load of flannel?

Mr. Heathcoat-Amory: The Cabinet Committee and the new penalties have vanished and all been forgotten. It was all talk. If that happened in 1998, we are entitled to ask whether the same will not happen in 2000 and beyond.

Many other targets were set. For example, Customs and Excise was going to


Has it succeeded in that? Tobacco duty is a good item to consider. It was forecast to raise £8.9 billion in 1999, but the actual amount that Customs raised was £5.7 billion.

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That is a gap of more than £3 billion between what the Government said that Customs would collect and what it actually collected a year later. That is another target that has vanished. Will the Minister tell us whether any money has been taken away from Customs and Excise and the Treasury as a result?

Mr. Ian Stewart (Eccles): The right hon. Gentleman referred to vanishing acts, and he will know that the Leader of the Opposition spoke to the conference of the Confederation of British Industry in 1999 and gave a tax guarantee of sorts, which he said was based on a moral argument. We hear that that tax guarantee has all of a sudden vanished, so does that mean that it was based on an immoral argument? What will happen because of the Conservatives' spending cuts, which will mean a loss of £25 million to my constituency? What does the right hon. Gentleman say to my constituents about the removal of that money?


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