Common Agricultural Policy (Hansard, 8 June 1995)

§ 10. Mr. McLoughlin
To ask the Minister of Agriculture, Fisheries and Food what steps are being taken to eradicate fraud in the common agricultural policy. [25821]

§ Mr. Waldegrave
At the Essen European Council last December, my right hon. Friend the Prime Minister made a number of proposals to help tackle fraud, as well as waste and mismanagement. These are now being taken forward. They include a requirement for the annual reporting on national action to combat fraud and waste. The Government are giving the Commission full support in its efforts to take more effective action against fraud.

§ Mr. McLoughlin
I am grateful for that answer. Can my right hon. Friend confirm that there is relatively little agricultural fraud in the United Kingdom? Is he aware of the annoyance caused to our farmers when they see other countries—Italy, for instance—getting away with what is seen as large-scale fraud, particularly to do with milk quotas?

§ Mr. Waldegrave
I am strongly aware of those feelings, which is why we have successfully pressed the Commission to take more formidable action. My hon. Friend will know that, as a result of a wholly British initiative, Italy, Spain and Greece were taken to the court over milk quotas, and in the end £2.5 billion was taken off them in the form of fines—the biggest single disallowance in the history of the Community, I believe.

§ Mr. Pike
Does the Minister accept that, despite the Government having had 16 years to try to eradicate fraud within the CAP, fraud is still a major problem? Why should we believe now that the Government, whose time is fast running out, will solve the problem in their dying months?

§ Mr. Waldegrave
The level of fraud in the United Kingdom, where the Government have a direct role, is very low, as my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) said. In the last year when the accounts were fully closed, which, surprisingly, was 313 1991, we had only £2 million of £1.2 billion-worth of fines. That shows that the British record is good. We have been making efforts—they have been increasingly successful—with other countries, such as the Scandinavian states that have recently joined the Community, to ensure that standards are raised elsewhere. That is beginning to happen.

§ Mr. Nicholls
Does my right hon. Friend agree that the worst vice in the common agricultural policy is that the British are inclined to obey rules while most continental farmers are inclined to disobey them? Surely the best reform would be for us to get out of the CAP now and become self-sufficient in agriculture.

§ Mr. Waldegrave
Much the best outcome is to maintain a single market with a proper, level playing field, which involves the avoidance of illegal state aids and of fraud, rather than asking British farmers to compete against farmers abroad who are subsidised by their Governments. That is what our farmers want, and that is the agriculture policy that we need in future.

§ Dr. Strang
Has the Minister seen the Commission's admission that there is now proof that criminal organisations have been successfully claiming butter export subsidies when they have not been exporting butter? Will he admit that, every year, hundreds of millions of pounds of agriculture export subsidies are claimed fraudulently?

§ Mr. Waldegrave
Not in this country. I am extremely pleased that the Commission is becoming far more realistic about the extent of fraud elsewhere. That is the first stage in stamping out fraud. We have been supporting the Commission's blacklist proposal—I believe that it was our proposal originally. When implemented, it will greatly toughen the handling of export subsidies. That realistic appreciation of the scale of the problem must come first if action is to be taken.