HC Deb 07 March 1996 vol 273 cc442-3
6. Mr. Hayes

To ask the Chancellor of the Exchequer what steps the Government are taking to counter fraud and mismanagement in the EC budget. [17622]

The Paymaster General (Mr. David Heathcoat-Amory)

The Government are at the forefront of the fight against fraud, waste and poor financial management within the European Community. For example, the Madrid European Council in December 1995 adopted the proposal of my right hon. Friend the Prime Minister to examine measures to extend the system of financial penalties, which already applies to agricultural spending, to other sectors such as the structural funds.

Mr. Hayes

I apologise to my hon. Friend and to my right hon. and learned Friend the Chancellor of the Exchequer for not calling them complacent—which is obviously the soundbite of the day—because clearly they are not. Will my hon. Friend tell the people of this country—the majority of whom are not Europhiles or Eurosceptics but Euro-couldn't-care-lesses—that without the Maastricht treaty the European Court of Auditors would not have been strengthened to combat fraud?

Mr. Heathcoat-Amory

My hon. Friend is right. The European Court of Auditors report used to be forgotten shortly after it was produced. At Maastricht we insisted that it be made a full institution of the Community, and its reports are now noted and acted upon. That is a big advance in our attempts to control the European budget.

Mr. Sheldon

Is the Minister aware that the European Court of Auditors now has to produce an annual statement of assurance which provides an opportunity to question it rigorously, as the Public Accounts Committee is doing in meeting the individuals concerned? Will he assure the House that the Government will take that process very seriously? It is a new opportunity to press the Court of Auditors about the assurance it provides.

Mr. Heathcoat-Amory

The right hon. Gentleman is correct. The statement of assurance is a new weapon. The British Government proposed at Maastricht that the European Court of Auditors should produce a new, comprehensive audit. We have debated that already in Committee, and I assure the House that it will be treated extremely seriously and acted upon.

Mr. Congdon

Does my hon. Friend agree that one of the best ways of countering fraud is by reducing opportunities for it to occur? Cannot the Government assist in that endeavour by fighting for massive reductions in the European Community budget, thereby giving more money back to taxpayers to spend in the way that they, rather the bureaucrats in Brussels, think fit?

Mr. Heathcoat-Amory

We do insist on checks, not just on the quantity of money spent but on the quality of that expenditure. We receive no help whatsoever from the Labour party or from its allies in the socialist group in Europe, which always presses for a higher budget and more expenditure, and takes too little interest in ensuring quality of spending and standing up for the taxpayers in each member state.

Mr. Darling

Given the importance of the European Court of Auditors, does the Minister share the dismay felt by many people about the findings of the Coopers and Lybrand report regarding the court's inability to control its own spending and to keep tight control over the behaviour of its officials? If the Government want to be at the heart of Europe, what have they done to date to ensure that the Court of Auditors is controlled properly and effectively?

Mr. Heathcoat-Amory

We entirely agree that the Court of Auditors must obey the diktats of financial discipline, whereas the Opposition always want more money spent on all the organs and institutions of the European Community, as well as on the Court of Auditors. Just because money is available, it should not necessarily be spent until we can get value for money. That applies to the Court of Auditors as much as to anything else.