To ask the Chancellor of the Exchequer what has been the impact on the public finances of financing capital projects under the private finance initiative rather than entirely from public funds. [18527]

The PFI is delivering better value to the taxpayer, better services to the public sector and new business opportunities for the private sector. The PFI entails real transfer of risk and responsibility to the private sector, and on that basis has been shown to improve value for money. That is why it was endorsed by the IMF as a welcome innovation that has the potential to increase the efficiency with which services are provided to the public".

Is my right hon. Friend aware that the private finance initiative is making a huge contribution to projects in the national health service? Does he agree that ending its use in the NHS would add substantially to public expenditure, and would that not be precisely the effect of the Labour party's policies?

Yes. There is fundamental confusion about that in the Labour party. Its document "Renewing the NHS" states: We strongly disapprove of the Government's efforts to dragoon hospitals and health authorities into tying themselves up in long-term private finance contracts.

Mr. Robert Hughes:

Hear, hear.

"Hear, hear," says the hon. Gentleman, most helpfully. That is the truth. Labour Members are, and always have been, against real PFI in the health service. They always say that they are against any transfer of management responsibility, and that it is necessary for real PFI.

Why has none of the major hospital PFI schemes yet been completed? The Government said in the Red Book that there would be £2.5 billion-worth of investment under the PFI next year, but only £1.3 billion had been committed by last December. What is the present shortfall in the amount committed to the PFI, and what will the Government do to bridge the gap and provide desperately needed investment in hospitals and other public services?

The deals are big, complex and very important, but they will be sorted out. The hon. Gentleman may like to watch this space.

Does my right hon. Friend really believe in Labour's apparent conversion to the merits of private finance, given that, only six months ago, its deputy leader thought that PFI was a furniture store?

To be fair to the deputy leader of the Labour party, he claims to have invented the PFI. Unfortunately, however, he did not: he invented something very different. He just thinks that letting public authorities borrow is private finance. It is not; it contributes to the public sector borrowing requirement. That is the fundamental misunderstanding in the Labour party.