Mr. Smith: The right hon. Gentleman is of course right to say that savings are important for this country. What he should take account of, though, is not simply the net savings ratio, which, as the pre-Budget report shows, is set to grow on the basis of the policies for stability that we put in place, but what is happening to the overall level of savings, the gross level of savings, which is robust. Moreover, very importantly, the 1999 figures for the long-term level of savings, the most recent year's figures that we have, show that gross savings were £3 billion higher than in 1996 and £5 billion higher than in 1995.
Mr. Oliver Letwin (West Dorset): On 14 December, when I asked the Economic Secretary much the same question--reported at column 792 of that day's Hansard--as my right hon. Friend has asked, the House heard what can only be described as a rather meaningless burble. Can the Chief Secretary now answer some straight questions? First, is the savings ratio, which he described as set to rise, at its lowest level for 37 years or not? Secondly, does he or does he not accept that instead of creating an endowment society, in which people save to be independent, his Chancellor's policies of proliferating means tests have destroyed the incentives to save for millions of people?
Mr. Smith: The answer to the hon. Gentleman's first question is yes. On what is happening to household finances, he and his colleagues would do well to make a rounded assessment, because what is happening--and this is the experience of ordinary, hard-working families at whom Opposition Members sneer--is that we have rising real living standards, going up very much faster than under the Conservatives; household wealth at record levels; and household debt as a proportion of that household wealth actually falling. So consumers, householders and hard-working families are very much better off than they were under the Conservatives. It is our platform for stability and sustainable growth that provides the best basis for savings in the future, not the cuts, stop-go, boom-bust instability offered by the Conservative party.
The Chancellor of the Exchequer (Mr. Gordon Brown): Public sector net investment is set to double over the period 2000-01 to 2003-04 to some £18 billion. Detailed plans on how this additional spending will be delivered are set out in the recently published departmental investment strategies.
Mr. Casale: I thank my right hon. Friend for that reply. May I tell him that, for my constituents in Wimbledon, the extra spending has led to the building of two new accident and emergency units at St. Helier and St. George's hospital, and to the refurbishment of the Northern line and of South Wimbledon station, while capital investment in schools in Merton this year is £230 per pupil, in contrast to £15 per pupil in 1996-97? But is it not also the case that it is only as a result of our policies for economic stability that we can make such capital investment in a sustainable way, and is there not a sharp contrast with the Opposition, who have nothing to offer other than further privatisation, cuts to services and the failed economics of boom and bust?
Mr. Brown: My hon. Friend is right. Thirty-eight hospital developments are taking place around the country, 242 accident and emergency departments are being modernised, and 86 walk-in centres for the health service are being developed. The national health service development is £3.8 billion of new investment. In addition, as my hon. Friend rightly says, 17,000 schools have now benefited from the new deal investment, and thousands more schools will get the modernisation that is necessary. The whole country knows that none of that would have happened under the previous Government.
Mr. James Paice (South-East Cambridgeshire): I am sure that the Chancellor would not wish to be tarred with the same brush as his right hon. Friend the Member for Hartlepool (Mr. Mandelson), as being the cause of the House being misled. Will he reconsider his earlier answer and confirm that the yield of tobacco tax is lower than in the first year of his chancellorship?
Mr. Brown: I did not mislead the House. The figures for tobacco will be published in the usual way. We devoted the money in the Budget anyway on the basis of our estimates for the year, because we did not want a situation in which the health service did not get the money till the end of the year. The Conservative Opposition went into the Lobby, voted against the increase in cigarette taxation, and would not have given the health service money. They must explain to the country why they keep saying that they will spend as much as we do on the health service, yet they have deprived it of several hundred millions pounds-worth of investment, and would do so every year.
Mrs. Claire Curtis-Thomas (Crosby): Will my right hon. Friend comment on the benefits associated with the Office of Government Commerce, with specific reference to the savings that will accrue to the Department?
Mr. Brown: There have been a number of major changes in the Treasury, with the creation of the Office of Government Commerce and the extension of the public and private finance initiative. The result is that about £13 billion of private sector investment is taking place in the public services. Instead of substituting private investment for public investment, we are complementing public investment with additional private investment. That is one of the reasons why more money is going into the schools, and why we have been able to start 38 hospital plans, and it is one of the major reasons why we can announce the biggest-ever investment in transport, which is £180 billion of private and public investment over the next 10 years.
None of that could have happened under the Conservative party, which is dedicated to cutting public investment in those areas. The Opposition will soon have to explain in each constituency around the country why they would scrap hospital developments, why they would scrap the school developments, and why they would not go ahead with the road developments. When they return to their constituencies at the weekend, they will know clearly that that is the issue on which the two parties will be locking horns over the next few months.
Mr. Michael Jack (Fylde): The Chancellor may be aware that the publicly owned Covent Garden Market Authority wishes to invest in improving its facilities for the benefits of the people of London. Will he therefore explain why the latest annual report and accounts of that public organisation show it being forced to lend £2.3 million to an unnamed local authority, rather than being permitted to use that money for the purposes of investment in its facilities?
10. Dr. Lynne Jones (Birmingham, Selly Oak): When he expects to announce his proposals to improve the clarity of the treatment of risks and benefits in the construction of the public sector comparator and assessment of value for money for private finance initiative proposals. 
The Financial Secretary to the Treasury (Mr. Stephen Timms): We expect the full capital appraisals review, announced in the 2000 spending review, to be completed by the end of March. That will pave the way for any subsequent changes to the way in which public sector comparators are constructed to make the handling of costs and benefits clearer.
Dr. Jones: I thank my hon. Friend for his answer, which seems to indicate progress with honouring a commitment given to the Treasury Committee last June. As my hon. Friend will be aware, both the Treasury
Mr. Timms: I can reassure my hon. Friend that value for money is the key consideration in choosing between private finance and conventional public procurement. Under the arrangements that currently apply, the Arthur Andersen/London School of Economics study showed that private finance initiative solutions are beating their public sector by 17 per cent. on average. For example, six of the 38 hospital projects currently under way in the biggest hospital building programme that the NHS has ever had are conventionally funded. In each case, the choice is made on precisely the basis of value for money that my hon. Friend advocates. That is the right approach, and we have taken it.
Mr. David Heath (Somerton and Frome): Is the hon. Member for Birmingham, Selly Oak (Dr. Jones) not absolutely right? Is there not plentiful evidence from audit studies over many years showing that the public sector is very poor at commissioning and managing capital projects, whether for central Government, the NHS or local government? Are there not plenty of studies, which the hon. Gentleman has chosen not to quote, questioning the cost-effectiveness of those PFI schemes that have proceeded? Is it not time that we had a clear comparator that showed us whether we are getting value for money in the expenditure of public funds?
Mr. Timms: I think that the hon. Gentleman's point argues against the conclusion that he draws from it. There are indeed considerable benefits to be gained from bringing in the skills of the private sector in planning and managing construction projects in the public sector--for example in the health service. We are realising those benefits through the approach that we have taken.