HC Deb 15 June 1994 vol 244 cc611-3
2. Mr. Evennett

To ask the Secretary of State for Foreign and Commonwealth Affairs what progress is being made to prevent fraud within the European Union budget; and if he will make a statement.

The Minister of State, Foreign and Commonwealth Office (Mr. David Heathcoat-Amory)

My right hon. and learned Friend the Home Secretary has announced a joint action proposal, under title VI of the treaty on European Union, to combat serious fraud against the Community budget. The European Commission has also recently tabled an anti-fraud strategy, which is under consideration by the Council.

Mr. Evennett

I thank my hon. Friend for his reply. Does he agree that the level of fraud and waste of taxpayers' money in the European Union is unacceptably high? Does the Maastricht treaty allow any additional powers to help combat such abuse and misuse of public funds?

Mr. Heathcoat-Amory

I agree with my hon. Friend. Fraud is still far too prevalent in the European Community and we are determined to do something further about it. The answer to my hon. Friend's question is yes: the Maastricht treaty gives additional and important powers to the European Court of Auditors and an assurance that its observations and recommendations will be acted on. In addition, the European Parliament can interest itself further in this issue, and I very much hope that it does.

Mr. Campbell-Savours

Can there be any justification at all for the Commission's failing to publish the report which it has on fraud in member states?

Mr. Heathcoat-Amory

We believe that such documents should be published if their publication would enhance the action that we and the Commission together are taking against fraud.

Sir Peter Hordern

I welcome the additional powers given to the European Parliament to question the Commissioners about fraud, but, in view of the extensive fraud that has proceeded for so many years, is not it necessary to make it a condition that grants from the European Commission are not given to member countries until all cases of fraud have been cleared up?

Mr. Heathcoat-Amory

My right hon. Friend makes an important suggestion and he will be pleased to know that, at our insistence, the new regulations governing the structural and cohesion funds now insist on proper prior appraisal of projects, a value-for-money test and subsequent scrutiny to ensure that the money has been properly applied.

Ms Quin

Is not it the case that, in the Council of Ministers last year, the Government tried to argue against increased expenditure in respect of fraud, and that, in doing so, were at odds with their own MEPs, who voted in the European Parliament for the package of further measures against fraud? Does not that show once again that the Government are frequently at odds with their own MEPs in Strasbourg? The Government are presumably absolutely delighted at Labour's sweeping victory last week because they now have fewer of their own MEPs to disagree with.

Mr. Heathcoat-Amory

An increased number of Labour MEPs is extremely bad news for the cause of budgetary discipline in the European Union. However, I can assure the hon. Lady that the Government give the very highest priority to cracking down on fraud in the Community. We are satisfied that the anti-fraud unit, both in the Commission and in this country, is properly and adequately staffed. But such problems are not dealt with simply by throwing more money at them. Budgetary discipline must apply to the strategy against fraud as it does to every other area of expenditure.

Dame Elaine Kellett-Bowman

Does my hon. Friend agree that it is a very good thing that, in future, recalcitrant Governments—and it is in such Governments and not within the Community itself that most of the fraud takes place—will be fined in addition to having to return the money? Does he agree that that will have a salutary effect, particularly on the Italians who have already had to cough up quite a lot of money? In response to my hon. Friend's European Parliament observation, as he well knows, the European Parliament keeps a very close watch on such matters through the Committee on Budgetary Control which saves the Community hundreds of millions of ecu.

Mr. Heathcoat-Amory

My hon. Friend makes the important point that the Maastricht treaty brings in fines against member states that fail to live up to legislative obligations.

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