HC Deb 10 May 1989 vol 152 cc855-6
11. Mr. Greg Knight

To ask the Secretary of State for Foreign and Commonwealth Affairs what progress is being made by the European Commission to detect and deter fraud in the European Community.

Mrs. Chalker

At the meeting of Economic and Finance Ministers on 13 March the Commission undertook to propose fresh measures to combat fraud and mismanagement, notably in agricultural export refunds and intervention storage.

Ministers will take this further at the June meeting of the Economic and Finance Council.

Mr. Knight

Can my right hon. Friend tell the House what steps have been taken by the European Commission to follow up the call of the Court of Auditors to bring about better financial control in respect of existing abuses of the common agricultural policy? Do not some estimates indicate that fraud in the European Community is costing up to £6 billion a year? That being the case, is it not right that the Government should continue to take the lead and press for further action on this outrageous scandal?

Mrs. Chalker

I, too, have seen the figure of £6 billion as being the cost of fraud to the Community. I understand that it was published in The Independent and is a speculative figure based on surmise, not on fact. But that does not alter the fact that this is a serious problem and that large sums are involved, even if we cannot give precise figures at the moment. That is why the British Government welcomed the Court of Auditors' report and ensured that its reports were discussed regularly in Council. At the 13 March meeting that I mentioned, the Commission promised a number of new and revised proposals, including concrete measures to improve controls over export refunds and intervention storage. The head of the anti-fraud unit is discussing the means of operation this month ready for the June meeting of Ecofin where we shall decide on the actual measures.

Mr. Cryer

If the Common Market is so keen and zealous in tracking down fraud and fraudsters, would it not be likely to have an idea of how much fraud is involved? Has the Minister any information to combat the figure of £6,000 million? As over the past four years membership has cost us £5,000 million and we have a deficit in manufactured goods of £11,000 million, does it not behove any Government to keep open the back door of withdrawal from the Common Market as a useful negotiating posture?

Mrs. Chalker

I am not surprised to note that some Opposition Members still favour an out-of-date attitude towards our future. With regard to our deficit on manufactured goods, 75 per cent. of equipment imported is for the re-equipping of factories for their modernisation. Companies are now investing in new plant and equipment in order to become more efficient. If we cannot provide the equipment ourselves, we must import it, and it is better that we import if from the Community which will serve us well. Wherever there is fraud, it must be sought out. However small or large, it must be deterred and detected. We shall put all our energies into doing just that.

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