Andrew Smith's answers to your questions

Q: The social security committee for work and pensions recommended in their recent report on the integrated child credit that the government organises a working party involving policy makers, academics and other interested parties to assist it to devise publicly acceptable measures of income to avoid poverty, a recommendation also previously made in relation to the social fund. The government response was that it takes an active interest in such questions but that there are a variety of views as to how this question should be approached.

Do you agree that there is a need for such research to establish what would constitute a minimum income standard, in order to measure how successful the new tax credits are in alleviating poverty among children?

How will the Treasury make decisions as to the adequacy of the new tax credits, given the absence of this type of detail in the consultation document regards the new tax credits? What sort of monitoring and evaluation of the effectiveness in tackling child poverty will there be following the introduction of the new tax credits?

AS: This government is determined to build on the progress we have made in tackling child poverty by supporting all families with children in recognition of the costs and responsibilities that come with parenthood. Already there are now 1.2m fewer children in poverty since 1997 than there would otherwise have been, due to the policies we have already put in place.

The new child tax credit, which comes into effect in 2003, paid direct to the main carer, will bring together all income related child payments into a single payable tax credit administered by the Inland Revenue. We have been consulting recently on our proposals and in fact have received more than 170 representations. I can assure you that these and the specific points you raise will be considered carefully as we set the rates and thresholds for this new credit in next year's Budget.

Q: What happened to the tax credits for small breweries to help British real ale producers that the Treasury was "letting it be known" would be in the pre-Budget report ?

AS: We are committed to supporting the hundreds of small breweries throughout Britain, and we are currently considering the scope for reduced rates of duty on their beer. We have been discussing this with the industry itself and decisions will be taken in the Budget.

Q: If you do increase tax, will it be via upping the thresholds for national insurance contributions - surely a prima facie case of regressive taxation?

AS: The government's current spending plans are fully costed and fully affordable. Derek Wanless has not yet provided detailed figures for the resources required for the NHS, but any implications for the financing of the NHS are a matter for next year's Budget and spending review.

Q: Didn't Michael Howard have a point when he said of the report "ask a Labour question, get a Labour answer"? Why were the terms of the report so constrained?

AS: There does not seem to have been much in the statement about the role of the private sector in the delivery of public services, indeed the whole basis of the Wanless report seems to be that the NHS will remain predominately under state control. What do you say to those who say that the only way to fundamentally reform the health service is to bring in new capital and outsource because that is the only way to ensure that services are delivered in the interests of the patients rather than the trade unions who hold so much power across the public sector?

The report into the long-term trends of the health service by Derek Wanless is the first time in the history of the NHS that such a long-term assessment of the resources required to fund the health service has been conducted. The terms of reference were wide ranging in terms of the facts affecting the NHS over the next 20 years.

Mr Wanless concluded that the NHS is sustainable; that the principle of an NHS publicly funded through taxation, available on the basis of clinical need and not ability to pay, remains both the fairest and most efficient system for this country; and that the NHS has suffered from a history of underinvestment. Comparing Britain to other European countries, such as France and Germany, his figures show that these countries have, over decades, committed significantly more resources as a share of national income to healthcare.

The government has already increased spending on the health service by a third in real terms over five years. In addition the NHS plan sets out a blueprint for modernisation and reform over the next 10 years. But we recognised that the country in 20 years' time will be a very different place than now. The Wanless review is looking at an assessment of the resources required to deliver a high-quality service in 20 years' time, taking into account the technological, demographic and medical trends that could affect costs over this period.

He makes it clear in his interim report published that he has not tried to estimate at this stage the levels of resources required - but he does conclude, after extensive consultation both domestically and internationally, that there is no evidence that any alternative financing methods to the UK's current system, would deliver a given quality of health care at a lower cost to the economy - indeed other systems seem likely to prove more costly.

The chancellor, Gordon Brown, has made clear that the choice is now clear - whether we deliver a properly funded health system through the tax system, free at the point of delivery; or as others are advocating, a health system where people have to pay directly for their treatment - with all the unfairness that that can bring.

Q: How much pressure has the parliamentary Labour party put on the Treasury to encourage a more open and honest approach to tax policy. Have these issues been raised with you and the chancellor in the regular briefings which you have with backbenchers?

AS: The government has always been honest in its approach to taxation. We kept every promise we made on tax in the last parliament, and will do so again in this parliament. Labour's general election manifesto stated that "tax policy will be governed by the health of the public finances, the requirement for public investment, and the needs of families, business and the environment". The chancellor said there should now be a debate about the future funding of the NHS.

Q: Do you think the damage caused by the 75p a week increase in pensions has now finally been laid to rest after the announcement of at least 2.5% annual increases?

AS: It is certainly the case that the government, as it always has, is committed to helping pensioners to share in the country's rising prosperity.

Alongside above inflation increases in this year's Budget, the pre-Budget report announced the details of a new pension credit to reward pensioners for saving during their working lives; a new guaranteed minimum increase to the basic state pension - guaranteeing ?100 a year for single pensioners and ?160 a year for couples in 2003-04 and in future years by 2.5% or the level of the September inflation rate, whichever is higher; and a guaranteed ?200 winter fuel payment for the rest of this parliament. By April 2002, after our measures, on average pensioner households will be ?840 a year better off.

Q: Call me old fashioned, but I find tax credits impossible to understand. When are you going to introduce a public information campaign which will tell us once and for all what they are all about?

AS: We ran very successful information campaigns for the existing working families tax credit and the children's tax credit and I am sure that would look to do the same for our new tax credits.

Q: Did you enjoy seeing Michael Howard back at the despatch box, he often got under the skin of Tony Blair when they both did home affairs, do you think he's come close to laying any blows on the chancellor yet. And what about your opposite number, John Bercow, he's crackers isn't he? Have you exchanged any friendly words with him since he got the job?

AS: I think the interesting thing about Michael Howard and John Bercow is how little they seem to have learnt from the past.

At the last election, the people of Britain voted for investment in schools and hospitals first, rather than the massive spending cuts offered by the Tories. Yet we saw again Mr Howard on behalf of the Tories failing to welcome the additional ?1bn for the NHS, and refusing to work with the government to build a consensus on the long-term funding needs of the NHS. Both Mr Howard and Mr Bercow remain committed to cutting public spending to 35% of GDP, which would mean massive cuts to Britain's schools and hospitals.