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Mr. Waldegrave rose--

Mr. Prescott: Wait a second. I assume that the Post Office is not to be included.

Mr. Waldegrave rose--

Mr. Prescott: I will give way because I cannot have the right hon. Gentleman scratching his head any more.

Mr. Waldegrave: The right hon. Gentleman has obviously not read the Red Book. The first £2.5 billion comes from the second-tranche sales of Railtrack. Even if the Labour party was in office, it would get that sum. There is £1.5 billion next year of which £500 million is predicted to come from the national air traffic service. If the right hon. Gentleman was in power, would he sell NATS?

Mr. Prescott: No--[Interruption.] Wait a minute. There is no doubt that the receipts from past privatisations will be part of our Treasury. Judgments about any further revenue from privatisations will be made at the appropriate time. Is the Post Office to be part of the privatisation receipts? I assume that the answer is no.

The Deputy Prime Minister indicated dissent.

Mr. Prescott: Okay. Is the privatisation of London Underground to be part of the receipts? There is £2 billion involved in that. Are we right to assume that the money raised in the sale of London Underground will be used for investment? That is what was said in a letter from the Secretary of State for Transport to the Prime Minister. Is that correct?

The Deputy Prime Minister: The right hon. Gentleman knows that the answers to those questions have already been provided. The London Underground receipts, and any policy consequences of the Royal Mail, are not included in the Red Book figures, but it is clear that significant figures are included--£1.5 billion--so the right hon. Gentleman must either privatise or find the money somewhere else. It is apparent from his speech that he has not the first idea which is the answer.

Mr. Prescott: It is not absolutely clear where all the receipts will come from. No doubt that will be part of the debate in the election.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich): My right hon. Friend might like to know that there is some confusion on the Government Benches. I have just received an answer from the Minister for Transport in London. I asked:

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    The answer reads:

    "The British Railways Board has yet to finalise the sale of Railfreight Distribution."

Another answer on another specific case reads:

    "I will answer these questions shortly."

Far from the confusion being on our side, the real problem is that the people who are selling the assets have no idea what they will get for them.

Mr. Prescott: My hon. Friend makes a telling point. The Secretary of State for Transport, in his letter to the Prime Minister, was concerned about whether the money was to go to the Treasury or to his Department, or to be used for investment; that was the heart of the letter, and we shall watch any developments with interest.

Usually the Government take the line that the private finance initiative principle should be extended. We have all discussed the PFI, but the Government have not been very successful in implementing it, and certainly not on the scale that they envisaged. As I understand it, the financial agreement for the hospital that was announced at the last Budget--we were promised one every month at the time of the Budget before last--has not yet been completed. Perhaps the Chief Secretary can tell us whether the financial agreement for the first hospital has been completed.

Mr. Waldegrave: I believe that the process leading to a successful conclusion is imminent, and I am sure that the right hon. Gentleman will welcome it. Let me put the question back to him: is he in favour of the PFI in the health service? The hon. Member for Islington, South and Finsbury (Mr. Smith) is not, and has said that it is privatisation. The PFI cannot take capital projects into the private sector unless there is a transfer of management control. As I understand it, the right hon. Gentleman and the hon. Member for Islington, South and Finsbury have both ruled that out.

Mr. Prescott: It is clear that, while there are ups and downs and targets, the target to which I referred has not been achieved. The Tories promised at the Budget before last that there would be a hospital every month under the PFI; by the last Budget there had not been one; it was then announced that the agreement had been signed that day; and now we are told that it has not been completed, so we know that it was just a charade and a con.

We have always made it clear that the PFI in the health sector is more concerned with capital and buildings than with clinical services. The Chief Secretary knows the arguments well.

Mr. Jacques Arnold: On a point of order, Mr. Deputy Speaker. The hospital to which the right hon. Gentleman refers is the one that will serve my constituents. I can assure him that the contract has been signed.

Mr. Deputy Speaker: Order. That is nothing to do with the Chair.

Mr. Prescott: Thank you, Mr. Deputy Speaker. It has nothing to do with the hon. Gentleman's hospital either: it was in Norwich. The hospital announced by the

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Chancellor has still not been completed, and people wait in beds in the alleyways because of the inadequacies to which I was referring.

I have been a fan of the private finance initiative, because it was helpful to use capital investment by private funds in public industries when they were nationalised. I advocated it for quite a time, but it was The Economist that described the inadequacies of the PFI programme implemented by the Government as "a dog's breakfast". The programme has failed to get the important resources from the private into the public sector.

I will pray something else in aid of the PFI. The Chief Secretary must know that in 1994 the Government, led by the Deputy Prime Minister, tried to privatise the Post Office. We ran an effective campaign against that privatisation and the public made it clear that they did not want it.

In November 1994 the Chancellor of the Duchy of Lancaster wrote to the Prime Minister about a meeting to discuss how exactly they might privatise the Post Office. They had various options before them, one of which, "the BP option", was to allow the Government to have shares in a company and let it borrow privately. The second option was called "the Prescott option". That is an interesting name for an option on a Cabinet paper. I bet not many people around the table wanted to put their hands up to vote for that. However, the minute makes it clear that quite a few were in favour of it.

The minute says:

Why did the Government reject it? The minute says:

    "many colleagues took the view that 'the Prescott option' would seriously undermine our whole approach to privatisation in the past and in the future: no-one was prepared to argue strongly in its favour."

They were not prepared to accept that a publicly owned industry could borrow privately, but it was only their stupidity about privatisation and Treasury rules that prevented it.

The idea is not unique: British Airways did exactly the same thing when the Deputy Prime Minister was Secretary of State for Transport. The Government haul out different rules for different industries. There is no reason why the Prescott option could not have been accepted.

Mr. Douglas French (Gloucester): Will the right hon. Gentleman give way?

Mr. Prescott: No, I want to make this point.

If the Government's option is no longer to privatise the Post Office, there must be another option. Does that mean that the public sector Post Office can now borrow privately? That was the Prescott option, and if that is what the Government intend to do, it is an interesting comment on what they said last week--that if the public vote Blair, they will get Prescott. Now, if they vote Major, they get the Prescott option on the Post Office anyway.

My proposal is now in a Tory party manifesto. Is that the Government's intention? If so, they could have done that for every public sector industry, creating greater

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investment and more jobs and improving public services. Their failure to do so exposes their ideological obsession with selling off assets at great profit to their people in the City, at the direct expense of the taxpayer and at some cost to public expenditure. That is the charge that we lay against them. The Deputy Prime Minister does not seem prepared to give us an inkling of what the formula for the Post Office will be.

The Deputy Prime Minister: There are 20,000 post offices in the country and 19,000 of them are in private ownership.

Mr. Prescott: Presumably the right hon. Gentleman means that a publicly owned company is a plc--a public limited company. It is still publicly owned, is it not?

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