Finance Bill

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Mr. Tyrie: I thank the Minister for that reply, which was erudite, thorough and well informed. I did not make myself clear; I thought that implementation had been delayed EU-wide for a year. If I am mistaken—

John Healey indicated assent.

Mr. Tyrie: The Minister is nodding. I think I read about that somewhere or other while briefing myself for today's debate. I shall take another look and drop him a line.

The Minister referred to the large number of other measures intended to help the shipbuilding industry, through more modern assistance, improvements in the skills base, R and D and other methods. Has he put a cost to those measures, and will he share it with the Committee, either now or later?

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John Healey: Why wait? In June 2001, we launched a four-year project with the shipbuilding industry. The total funding committed to the project was £6 million, £3 million of which has been paid. It is called the Link shipbuilding research project and it is paid through the Shipbuilders and Shiprepairers Association. It is designed to help the work force and the yards by combining academic studies with masterclasses tailored to the needs of the yards involved.

In my statement of 12 January, I made it clear that we are setting up sector skills councils, a new way of bringing the commitment of industrial sectors and the trade unions together to build a skills base for those industries. The new sector skills council that covers shipbuilding, but that goes more widely, is preparing a sector skills agreement. If it is approved, it will draw £500,000 of direct support from the Government. In my statement, I also committed an additional £500,000 to help build the skills base in the shipbuilding industry. Those are the sums that we have committed over recent years.

As I explained in my more general comments, that is the focus of the support that we now regard as being appropriate for the industry of the future.

Question put and agreed to.

Clause 306 ordered to stand part of the Bill.

Clause 307

Ending of shipbuilders' relief

Question proposed, That the clause stand part of the Bill.

Mr. Tyrie: This is an interesting little clause. It will give the Government, and particularly the Treasury through its executive agencies the Debt Management Office and National Savings and Investments, or whatever it calls itself now, the power to spend money in preparation for the possible introduction of the single currency. I shall resist all temptations to broaden the debate.

I have a few basic, simple questions. We have been unable to obtain answers to similar questions about departmental spending in preparation for the euro in other areas. In fact, the official Opposition have been hard at it trying to find out what is involved, and I have a raft of parliamentary questions illustrating the extent to which the Government have stonewalled. I hope that we can get some more accurate answers, at least in respect of the two Departments to which the clause directly refers. How much will they spend, is there a cap, has the Treasury worked out what would be reasonable, and how would that money be allocated? Whenever such parliamentary questions have been asked in the past, they have not been answered, but the answer given refers the inquirer to the third outline national changeover plan, which of course does not give the answer; it gives an answer for Departments that do not concern us here today. Only three Departments have published a cost, which is £30 million. We want to know how much will be spent.

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We want a clear justification from the Minister on why we should agree to such open-ended powers. After all, the provision will enable the Treasury to spend any amount of money on the euro indefinitely. That is an unusual way to go about running any spending programme, even in the Treasury.

I do not know whether I am the only person who reads explanatory notes, but I was rather taken by paragraph 4, which says:

    ''the Chancellor announced that there would be 'paving' legislation to allow departments to make further, targeted investments as necessary for preparations for the possible introduction of the single currency.''

I wondered what the word ''investments'' was supposed to mean in this context, as if we are guaranteed a return if we spend money to prepare for the single currency. An investment that does not secure a return seems to me to be an abuse of the word ''investment'', and the complete collapse of language arrives shortly afterwards. Indeed, that has happened in a wide area of so-called public sector investment: when one scratches it, one finds that it is spending on salaries or other tasks and not investment in any normal understanding of the word.

I should be grateful if the Minister could tell us how much will be spent, what it will be spent on and how much, if any of it, will be capital spending, which could, at least in theory, call itself an investment. Does the Treasury intend, even though it is not to be put in statute, that the amount spent should be time-limited? Although this goes beyond the scope of the clause, will she, while she is at it, encourage other Departments to publish their figures for the amount that they are spending? Quite reasonably, the public want to know, and they are being denied an opportunity to find out.

Mr. David Laws (Yeovil) (LD): I support the hon. Gentleman's comments, without wanting to take the debate too wide. We are entitled to know, if the Government are making provision to spend money on euro preparations, whether the money will go for any purpose or will go down the drain. We know that there are differences in the Government over the commitment to join the euro. We know that the Prime Minister is enthusiastic; we are not so sure whether the Chancellor is. We are entitled to establish whether the clause and some of the other measures that the Government are putting in place to spend money on euro preparations are simply a sop to the Prime Minister to keep him happy and to maintain his conviction that at some stage we might join the euro.

The Chancellor is increasingly giving the impression that there is an alternative model of macro-economic management for Britain, which is the one that he has established since 1997, and that, frankly, we might never join the euro. If that is the case, it is utterly pointless to spend large amounts of taxpayers' money simply to keep the Prime Minister happy. I hope that the Minister will let us know today how strong the Treasury's commitment to the euro is and whether she believes that, within, say, the next 10 or 20 years—quite a generous time horizon—we will have joined the euro or whether this is all about stringing along the Prime Minister.

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The Chairman: Before I call the Minister, I should say that I think there is a danger of our going rather wide. This is an enabling clause: it does not commit the Government to expenditure. We will be able to debate elsewhere in the House proposals for such expenditure, as and when they arise. The clause is merely enabling and we should treat it as such.

The Financial Secretary to the Treasury (Ruth Kelly): I value your guidance, Sir John. I shall not get drawn into a long debate about euro preparations or our policy towards the euro. It is better if I deal with the clause, which, as you rightly pointed out, is an enabling clause. It authorises the United Kingdom Debt Management Office and National Savings and Investments to incur expenditure in preparation for the possible introduction of a single currency. As hon. Gentlemen well know, that assumes that the UK passes the five economic tests, that Parliament approves a decision and that the issue is put to the people in a referendum.

In his statement to Parliament on 9 June 2003, the Chancellor announced that there would be paving legislation to allow Departments to make further targeted investments as necessary preparations for the possible introduction of a single currency under those conditions. The clause achieves that targeted investment for the Government borrowing functions of the Debt Management Office and National Savings and Investments. As the hon. Member for Chichester (Mr. Tyrie) pointed out, the public sector had invested £36.8 million in preparing for a possible UK changeover, to the end of December 2002, the last time for which figures are available.

Mr. Tyrie: When that was published, a Minister pointed out that that figure referred to only three Departments. I am not sure where that was said.

Ruth Kelly: If the hon. Gentleman had more patience, he would have heard that I was about to give him more detail on how that money had been spent. The majority was spent in three critical path Departments, those that are likely to be most affected by the possible introduction of the euro. Those are the Inland Revenue, where £18.7 million has been spent, HM Customs and Excise, where £7.1 million has been spent, and the Department for Work and Pensions, which has spent £8 million.

The size of the task faced by those Departments meant that, if we were to be in a position to prepare and decide, they had to make that investment early. Otherwise the cost of a possible changeover would have been absolutely huge. The amount of money spent early reduces the total cost.

The clause allows the DMO and NSI to reduce the risks associated with a possible changeover by making small, targeted investments on euro preparations. It is up to the individual Departments, together with the DMO and NSI, to present a business plan for approval that says how the money would be spent, but we have clear evidence that, in the euro area, early planning reduces costs and the associated risks of changeover.

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We are not talking about significant sums but about much smaller sums than those involved in the three critical path Departments. It is impossible to say with accuracy what the figure will be. Sometimes it is a question of preparing systems in a slightly different way than would otherwise have been the case and of building in euro compatibility—for example, by investing in new IT systems—where that represents value for money.

Given the key role that both the DMO and NSI play in our Government debt management and some of the issues that need to be considered, which were set out by the Bank of England in its ''Practical Issues'' City changeover plan, it is important that we prepare early to reduce future risk.

 
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