If he will list his official engagements for Wednesday 28 November.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

Veterans in my Constituency welcomed last week's news that priority health care is to be extended to them. However, many of the scars of war are mental and psychological, and I would like my right hon. Friend to tell me what he proposes to do to extend treatment to the soldiers, sailors and air force men affected by them.

I thank my hon. Friend for taking up the cause of veterans in her Constituency. She is absolutely right; last week the Health Secretary announced that veterans would be accorded priority treatment in the national health service, as they should be. He also announced that there will be a new community-based veterans' mental health care service, which will run for the next two years with independent evaluation. There are 150 mental health professionals working throughout defence, employed by the Ministry of Defence, and we are determined to do what we can to support not only our veterans but all those in our armed forces who do an outstanding job and to whom we owe a debt of gratitude and a duty of care.

The Prime Minister told us that he would deliver honest government, that he would be open, that he would end spin and restore trust, and that he would deliver competence. After the events of the last few days, can he honestly stand there and say that all over again?

That is why I have acted immediately to set up two inquiries. All of us on all sides of this House have an interest in integrity in the funding of political parties, and we should do everything in our power to ensure that political party finances are transparent and that everything is above board. That is why what happened was completely unjustifiable. It has got to be investigated as a matter of urgency. Two internal inquiries have been set up within the Labour party, and the Electoral Commission will investigate. I am determined to make sure that political party finances are above board.

The Prime Minister says he must do everything in his power, and he said yesterday that unlawful acts have taken place, so has he asked the police to come in to investigate?

That is a matter, as the right hon. Gentleman should know, for the Electoral Commission. The commission has announced an inquiry into this matter. We reported the matter to the Electoral Commission; we have told it that we are setting up two separate inquiries. The commission will run an inquiry and it is its decision as to whether the police are brought in. We are happy to co-operate in any way because, in my view, this is something that has to be cleaned up in the interest of the whole of public life, and I am determined to take that action.

The Prime Minister is wrong—it is not the exclusive competence of the Electoral Commission. I am asking him a simple question: if he thinks that something unlawful has happened, does he not have a duty to call in the police himself?

Under every convention, we report the matter to the Electoral Commission, which was set up under a law that we passed with the support of the other parties in the House. The Electoral Commission will decide whether the matter is for the police and we will co-operate in any way possible with it, the police or both. I say to the right hon. Gentleman that it is in everybody's interests for action to be taken against something unjustifiable. The procedures that were followed were not acceptable and any necessary changes in the law will be made. I believe that all parties have an interest in sorting that out.

The public will see the Prime Minister wriggling— [Interruption.]

Order. The right hon. Gentleman will be heard.

Thank you, Mr. Speaker.

Lord Ashcroft!

Mr. Skinner, be quiet, you know better. [Interruption.] Order. The hon. Gentleman is out of order and he knows it.

I can't hear him.

Order. I can hear.

We learned this morning that Jon Mendelsohn, whom the Prime Minister appointed, knew for a month about a situation that the Prime Minister called unlawful and unacceptable. How can that person possibly still be in post?

Mr. Mendelsohn has issued a statement clarifying what happened. On 3 September, he started employment in the Labour party. He has had no involvement in the donations that have been made. Those donations were happening for four years before he took office. That is why the investigation that should take place is the one that I have set up internally in the Labour party. The inquiry will be led by Lord Harries and Lord McCluskey, a senior High Court judge and a retired Bishop of Oxford. [Interruption.] We will do everything in our power, as the terms of reference have said, to show that the standards that will be followed in future are acceptable in every area of public life.

So is the Prime Minister telling us that Mr. Mendelsohn knew and did not tell either the Prime Minister or the police? Is that acceptable?

If I can put the right hon. Gentleman right, Mr. Mendelsohn says in his statement, which has just been issued, that he was led to understand by the general secretary of the party that this had been cleared with the Electoral Commission. That was the issue before him. He also says that he was unhappy in principle with those arrangements, and that he had approached one of the people involved and was seeking a meeting to sort matters out.

Mr. Mendelsohn started on 3 September. He was involved in none of the donations that were made. He is not the registration officer reporting to the Electoral Commission, but of course, if anything untoward has happened in that respect, it will be a matter for the inquiry and we will take whatever action is necessary to sort the matter out.

I have to say that the Prime Minister's explanation beggars belief. It takes us to questions about the Prime Minister's own integrity. Does he expect us to believe that someone whom even Labour Members believe to be a control freak was preparing for an election, sorting out the finances, sitting around the table with everyone who is caught up in the scandal, yet did not have the first idea about what was going on?

We have had 155 days of this Government: disaster after disaster, a run on a bank, half the country's details lost in the post and now this. The Prime Minister's excuses go from incompetence to complacency and there are questions about his integrity. Are not people rightly asking, "Is this man simply not cut out for the job?" [Interruption.]

rose—[Interruption.]

Order. The Prime Minister, too, must get a hearing.

The Labour party— [Interruption.]

Order.

Our party introduced legislation in 2000 to restrict foreign donors, register donors, have a comprehensive framework for elections and have an Electoral Commission, and we are ready to take any further measures. I hope that there will be all-party support so that everything in party politics is above board, including the use of third-party sources for donations.

As for competence, I remind the right hon. Gentleman that in 1992, he sat there when interest rates reached 15 per cent. Competence is the lowest interest rates for a generation, the lowest inflation for a generation, the highest employment for a generation, doubling investment in the health service, a minimum wage and properly financing education. We will continue to do our best by the country. [Interruption.]

Order.

While we let the hot air settle, may I tell my right hon. Friend that wind farms are enormously popular in my Constituency, with 80 per cent. of people responding to a survey saying that they think they are attractive, produce clean energy and tackle global warming? Will they have to continue to wait for the planning process to produce the wind farm that they want? Will we have to wait and listen to the windbags—[Hon. Members: "Hoorah!]—or will we get a wind farm?

I hope that all parties in this House will support the development of wind turbines, both offshore and onshore. That is the only way to meet our target for renewable resources, if it is going to be as high as the European Commission proposes it to be. I believe that there is a duty on all parties in all areas of the country to consider the development of wind turbines.

The House has noticed the Prime Minister's remarkable transformation in the past few weeks from Stalin to Mr. Bean [ Laughter ] creating chaos out of order, rather than order out of chaos. But amidst the administrative bungling and even the sleaze, does he not accept that the most damaging remark over the past week came from the services chiefs, when they accused him of wilfully neglecting the safety and welfare of the young men and women who serve in our armed forces?

At every point in the job that I am in, I will do everything in my power to defend and protect the security of our armed forces. I have to tell the hon. Gentleman that the defence budget is rising every year and will continue to rise, and that when we came into power the defence budget in Britain was the fifth largest in the world. It is now the second largest in the world. As for housing, we are spending £5 billion over the next 10 years on armed services accommodation, more than at any point in the history of the armed forces— [ Interruption. ]

Order. Before the hon. Gentleman rises, you have got to be quiet, Mr. Russell.

We know about the defence budget, because the Prime Minister signed £5 billion-worth of cheques for the Iraq war, but is not the truth at the end of it that the troops lack adequate equipment, adequate medical care and adequate accommodation? Is not the underlying truth that where the armed forces are concerned, fundamentally, the Prime Minister is not interested and does not care?

The chief of the armed services gave a briefing last week, saying that we were better equipped than ever before. That is why we have not only invested the money from the defence budget but, in order to meet the urgent operational requirements of our armed forces, particularly in Iraq and Afghanistan, invested an additional £6.6 billion above the defence budgets that have been announced. Whether it be for tanks, helicopters, night vision equipment, specific help for individual members of the armed forces in contacting their relatives or accommodation at home, we will continue to do everything in our power to help our armed forces do their duty.

In my local authority, the £300 million plus Building Schools for the Future programme is considered vital to accelerate the improvement of educational standards in the borough. Can my right hon. Friend reassure me that none of the money earmarked for that programme will be diverted to pay for schools providing surplus places in areas where they are not needed?

I think that my hon. Friend is referring to the debate that is now being held in the House between those who want to spend the £4.5 billion that has been allocated on Building Schools for the Future, which would renovate existing secondary schools and then primary schools, and those who want to divert the money from promises already made to secondary schools into building additional academies beyond the 400 that have been provided for. I believe that existing schools, to which commitments have been made, should have the investment made within them. This affects almost every Constituency in the country, and perhaps the Conservative party should think again.

How were the public moneys lent to Northern Rock funded? Where in particular did the Bank of England suddenly find a spare £25 billion?

As the right hon. Gentleman—[Hon. Members: "He is not."] As he will know, the Bank of England will make funds available in certain circumstances at the behest of the Treasury, by its agreement. That is what happened in relation to Northern Rock. I again ask Opposition Members to think again. They said at the beginning that they were overwhelmingly in favour of putting the money into Northern Rock. Last week, they said that they were against it. I believe that the weight of opinion in the country is that it was the right decision to save that company.

My right hon. Friend will be aware that there have been allegations from Members on this side of the House that a lot of the problems relating to binge drinking stem from supermarkets selling alcohol at too cheap a rate. The Licensed Victuallers Association now has documentary proof that certain supermarkets are selling alcohol at the cost of production. Will my right hon. Friend join me in condemning our supermarkets for selling alcohol so cheaply?

My hon. Friend might know that, last Wednesday, we held a seminar with members of the retail industry and also with people from the production industry—the brewing industry and the drinks industry—and people who are concerned about what is happening as a result of binge drinking. One of the concerns that was raised was the price of alcohol. Another was the special promotions that were being done by the supermarkets. Another was the intensive advertising by supermarkets, which is encouraging young people in particular to buy substantial quantities of drink. We also looked at whether the drinks industry could run promotion campaigns to educate young people about the dangers of binge drinking. We will be publishing a paper suggesting changes in the next few weeks.

In the face of the recent crises that have beset the Prime Minister, particularly this last one, he has told us that he learned about them only at the last possible moment. Why does he think that members of his Government—and, indeed, of the party that he purports to lead—are apparently so intent on keeping him in the dark?

When we have acted, whether it be on terrorism, on foot and mouth or on floods, we have acted when it has been necessary to do so and never refused to act. On party political issues, I will tell the House what I said yesterday: I first knew about this on Saturday evening, and I acted immediately.

North-East Derbyshire has seen a massive rise in youth employment and training since 1997. What is my right hon. Friend doing to ensure that all young people, especially those who have dropped out of all formal education, are given exactly the same opportunities?

I believe that it is right that every teenager should have some training so that they can get jobs for which they are employable. That is why, when we bring forward our measures to expand apprenticeships, to raise the education leaving age for people in part-time or full-time training or education to 18, and to increase the amount of funding for the new deal to enable it to help young people, I hope that there will be all-party support for those measures.

As he wanted so much, and for so long, to be Prime Minister, has the right hon. Gentleman been reflecting on the advice of an earlier, more successful, dealer in gold, King Midas, who warned that we should be careful what we wished for, as we might receive it in a poisoned chalice? Or is he planning to pass the chalice to his charming deputy?

I have had debates across the House with the hon. Gentleman over the years, and he has always been very generous in his comments to me until now. I hope that we can continue to agree that this job is an important job, and I will do it to the best of my ability.

Will the Prime Minister congratulate the UK world skills team, including Jonathan Bourne, who achieved the medallion of excellence and works for a building company in my Constituency? Does that success in the skills Olympics and the Government's massive expansion of apprenticeships and quality training indicate that in future young people will be able to fill the 600,000 vacancies in our economy and also improve not only their skills, but their job prospects as well?

My hon. Friend is absolutely right and I congratulate the company in her Constituency and its workers who have done so well. The skills Olympics will be held in Britain. We are determined that, at that point, we will have increased the number of apprenticeships, as my hon. Friend says, so that we can meet the vacancies that exist in our economy. There are 600,000 vacancies at the moment and I want young British apprentices to get the chance to fill them.

The Prime Minister may be aware of the recently launched Take Tourism Seriously campaign, but do the Government take tourism seriously? If so, why have they further cut the budget of VisitBritain by £17 million over the next three years?

I think that the hon. Gentleman will know that over the past few years, particularly when there have been difficulties, we have put more money into tourism to help the tourist industry flourish. I think that he can see that the numbers of people coming to this country—despite some of the difficulties we have had with terrorism and foot and mouth—reflect the intensity of the advertising, and we will continue to do that.

Will the Prime Minister congratulate Kevin Rudd, the new Labour Prime Minister in Australia, on his recent sweeping election victory and particularly on his speedy decision to ratify the Kyoto protocol? In view of this week's UN report calling for an 80 per cent. cut in CO2 emissions, will Britain and Australia now stand shoulder to shoulder in the war against climate change?

I have had the privilege of being able to congratulate Mr. Rudd on his election as the Prime Minister of Australia and I have also phoned the outgoing Prime Minister, Mr. Howard, to thank him for his work in the international community over the past 12 years. Mr. Rudd has announced that he is going to sign the Kyoto treaty immediately, which is in line with what we have done, and he has said that he will lead the way with us in seeking a post-2012 Kyoto agreement. I look forward to working with him against Conservative policies.

Given that there are many constituencies like my own, which incorporates west Cornwall and the Isles of Scilly, where last year five times as many properties were sold to second-home buyers as to first-time buyers, does the Prime Minister really think that it helps to give further millions in capital gains tax cuts to the wealthy to buy and have their second homes when many thousands of local families are desperate for and cannot afford their first?

But surely the answer is to build more homes, so I hope that the hon. Gentleman will support the plans that we have set down to raise the amount of house building in this country to 240,000 houses a year and to build 3 million homes by 2020. I know that building more homes is not a popular policy in the Conservative party, but to get affordable housing in every Constituency, we need to build more homes. That is what we will do.

Will my right hon. Friend join me in congratulating the Secretary of State for Innovation, Universities and Skills and the Department for Work and Pensions on changes to the 16-hour rule that will allow young people on jobseeker's allowance into full-time training? That will allow institutions such as the South Birmingham college construction centre, which has a waiting list of 2,000, to get people on to training and then into employment.

We are trying to remove every barrier to young people getting the chance of both training and jobs. Given the creation of educational maintenance allowances in addition to the removal of that aspect of the 16-hour rule, I still hope that all parties in the House will support our belief that every young person should have the chance to get at least some education until 18. The difference between us is that we believe in opportunity for all until 18 while the Opposition believe in opportunity just for some.

The Prime Minister told us that his decision not to call an election had nothing to do with the polls. He also told us that his change of policy on death duties had nothing to do with Conservative party policy, so why should we believe his account of the dodgy donors?

Because I do what is in the best interests of the country, and am prepared, with my colleagues, to make difficult decisions even when it is uncomfortable to do so. I think the right hon. Gentleman will recognise that during the year we have made difficult decisions, such as those on public sector pay, to get the rate of inflation down. That is why we, unlike many other countries, can look forward to stability and growth.

An increase in the number of apprenticeships is a key component of increasing the competitiveness of the United Kingdom economy, but some young people may be deterred from taking them up because of the very low rates paid by some employers. Will my right hon. Friend ask the Low Pay Commission to investigate whether there is any evidence that young people are being deterred, and if there is, will he extend the minimum wage regulations to cover all apprenticeships?

I will certainly ask the Low Pay Commission to examine the matter. Although it is independent, it will examine matters relating to the employment of young people as well as the elderly. I believe that our decision to create a minimum wage in this country is one of the biggest decisions by the Labour Government over the past 10 years.

Since we came to power we have increased the number of apprenticeships from 50,000 to 250,000. [Interruption.] The Conservative party does not like hearing about the successes with apprenticeships. The number will rise to 500,000 over 10 years. That is what the future of our country is based on. We will look at the remuneration and the education and training of young people, so that we can have the best training in the world.

What does the Prime Minister want for Christmas?

I want to— [Interruption.] I might have one day off.

After the fire on the Thistle Alpha offshore platform on Sunday, the Scottish First Minister said that health and safety should be devolved to the Scottish Parliament. Well, there's a surprise. Would it not be better to concentrate on increasing the prosecution rate and the penalties for those in breach of health and safety legislation for the whole United Kingdom than to pick political fights?

As an Aberdeen Member, my hon. Friend has taken a big interest in the matter, and as she knows, a private Member's Bill concerned with those very issues has been before the House during the past year.

With the expansion of the oil industry over the past 30 years, we have taken health and safety issues very seriously. I believe that whenever incidents have raised questions we have acted immediately—and that is true of all Governments. I understand that proposals are on the table for an extension of the health and safety legislation in this area and for more intensive and higher standards, and I believe that the proper place in which to consider such matters is this United Kingdom Parliament.

It would appear that Baroness Jay was aware of the illegal nature of Mr. Abrahams's donations to the Labour party long before the Prime Minister himself. Can the Prime Minister tell us which of his Cabinet colleagues shared her knowledge at the relevant time, or is it sub judice?

That is not, I believe, what Baroness Jay said, but the hon. Gentleman's question will be a matter for the inquiry, which will examine all issues relating to this matter. Surely the right thing to do when a problem arises is to investigate it in detail, deal with it, change the procedures if necessary and, if necessary, reform political party funding—which we are prepared to do.

The whole country, apart from the Opposition, will be pleased with what the Prime Minister has told us today about the inquiries that he intends to bring about. [Interruption.]

Order. Hon. Members must let the hon. Gentleman speak.

Equally, the whole country would wish the terms of that inquiry to be widened, and perhaps to fill four or five "Panorama" programmes with the audit trail of the Ashcroft money. Will the Prime Minister do that?

We agreed the Political Parties, Elections and Referendums Act 2000 as a matter of consensus. There was a consensus in 2000 about the things that needed to be done. I hope that we can proceed to make reforms—including reforms relating to donations from third-party agencies and the timing of donations involving local political finance—by agreement, and I hope that Mr. Cameron will change his mind about running away from the party talks that were involved in solving this problem.

Precisely when did the Prime Minister's Leader of the House first learn of the illegal donations to the Labour party?

The Leader of the House has made it absolutely clear that the criteria on which she judged donations—[Hon. Members: "When?"] I am explaining this. The criteria were whether the people giving donations were known to her campaign team or were registered with the Labour party. There is not an iota of evidence to suggest that at any time until Saturday the Leader of the House knew that the donation was being given by a third party.

Does my right hon. Friend agree that although the Government have done a great deal for pupils with special educational needs up to the age of 16, there is still a real challenge post-16, and particularly post-18, for young people with severe special educational needs, mental health problems and disability? When will we do more for that group, their carers and their families?

We have set up a review into exactly that matter—the special needs of young people and particularly children at school. I believe, again, that there should be all-party consensus about what needs to be done. Let me repeat: our policy is educational opportunity for everyone until 18, not just for some.

Order. A deferred Division is under way in the No Lobby. The pink voting papers were not circulated in the usual way with the Order Paper, but they have been made available to Members in the Vote Office. They are also available in the Lobby.