§ 2. Mrs. Gillan
To ask the Minister of Agriculture, Fisheries and Food what recent assessment he has made of fraud in the common agricultural policy; and if he will make a statement. 
§ 9. Mr. Whittingdale
To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the proportion of expenditure under the common agricultural policy in Europe which is lost in fraud. 
§ The Minister of Agriculture, Fisheries and Food (Mr. William Waldegrave)
The Government are vigorously pressing for action to combat fraud. There is no very reliable estimate of what is lost in fraud, for obvious reasons, but action to counter it is becoming much more effective.
§ Mrs. Gillan
Does my right hon. Friend agree that satellite technology is vital in combatting fraud, as has been evidenced recently by the use of imagery to detect potential overpayments on durum wheat to Italy? Is he aware that the national remote sensing centre this morning met representatives of the Department of Trade and the British national space centre to consider the further potential of using satellites for detecting fraud and in agricultural management? Will he undertake to meet representatives of the DTI and to study the NRSC report so that we can continue to exploit this potential, which is valuable British expertise?
§ Mr. Waldegrave
My hon. Friend is right, and gives an example of a real case—the attempted durum wheat fraud in Italy. The interesting thing is that the satellite information was able to prevent the fraud, which is better than pursuing it afterwards. All the member states, apart from Luxembourg, which perhaps is small enough not to need satellites to look at its territory, were either using remote sensing as a control tool by 1994 or, as in the United Kingdom, doing trials on it. My officials and the officials of the intervention board are indeed in close touch with the British national space centre, so progress is being made on the matter; it is a very good technique.
§ Mr. Whittingdale
Will my right hon. Friend make every effort to ensure that other member states in the European Community attach the same importance as we do to tackling fraud in the CAP? Will he further ensure that, when large-scale fraud is uncovered, member states are subjected to heavy fines, and that they are made to pay those fines in full?
§ Mr. Waldegrave
My hon. Friend is right. In the most recent year for which the accounts are completely closed, there was £1.2 billion of disallowance against member states, which is a large sum of money. I am proud to say that only £2 million of that related to the United Kingdom. There are beginning to be serious penalties and we welcome that, but there is more to do.
§ Mr. Tyler
May I put a little more pressure on the Minister regarding milk quota in other member states? He will have noticed, in the debate on Tuesday, that Members on both sides of the House expressed anxiety about both fraud and inadequate control mechanisms, especially in relation to milk quota. I know that that may involve long discussions, but I hope that he will be able to give us a 470 progress report and also say what initiatives he intends to take here to deal with the current milk quota crisis that is affecting us so badly.
§ Mr. Waldegrave
Several different issues are involved in what the hon. Gentleman says. First, there is the issue of the proper enforcement of milk quotas in other countries. Very large disallowances against Greece, Spain and Italy have been enforced, and the Commissioner has to report to the Council of Ministers by 31 March on the position in those countries before we approve any payments to them for the future.
In this country, we would like quotas to be tradeable across boundaries, which would help us. I am arguing for that in the Community.
§ Dr. Strang
Does the Minister agree with the chief agricultural official at the European Court of Auditors who said that fraud was inherent in the CAP? Is it not clear that, as long as we are taking surplus farm production into state intervention, and as long as the movement of agricultural commodities across the European frontier can attract large export rebate subsidies, we shall always have a major fraud problem?
Is fraud not another reason why we should end state intervention buying and export subsidies, and replace those arrangements with other means for supporting our agricultural industry?
§ Mr. Waldegrave
I agree with the hon. Gentleman that many of the range of quantitative controls introduced after MacShany are vulnerable to fraud. That is one reason among many for getting back to a much freer market. We had fraud in the old days under the deficiency payment system. Whenever one is involved in the business of paying people to produce goods, one is vulnerable to fraud, which is why it is ultimately better to leave the business to the market.