HL Deb 20 January 1988 vol 492 cc206-7

2.47 p.m.

Lord Bruce of Donington

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what initiative they propose to take in the EC Council of Ministers to secure Council action in respect of the large-scale frauds set out in the latest annual report of the European Court of Auditors.

Lord Young of Graffham

My Lords, the Government welcome the fact that the Court of Auditors has devoted a chapter of its annual report to the question of fraud. The court's report will be discussed by the Economic and Finance Council later this year, on the basis of a procedure which the United Kingdom was instrumental in setting up. The Government will aim to ensure that the Council recognises the importance of the fight against fraud.

Lord Bruce of Donington

My Lords, I should like to thank the noble Lord for that partially reassuring reply. Is it not the case that the report referred to in the Question gives evidence of about £82 million-worth of fraud in the year 1986, and that a subsequent Commission investigation into the matter, which was published in October of last year, reveals that there is approximately £2,000 million-worth of fraud within the CAP? If that were not the case, that amount would go far towards reducing the deficit in the EC finances. Will Her Majesty's Government take the initiative at the Council to ensure that these matters are fully investigated within the member states, many of which have so far resisted investigations by the Commission?

Lord Young of Graffham

My Lords, the detected fraud—that is fraud which has been found out—runs at a far lower level than the noble Lord suggests. Over the past five years the average has been approximately £14 million although it was about £20 million in 1986, which is important and should be dealt with. Suspected levels of fraud which have not been detected have yet to be proved.

I wish to assure all noble Lords that we take the matter seriously. It is as a result of procedures suggested by the United Kingdom that we shall be discussing the item later on this year and every year. It is important that procedures are established and followed through by all countries within Europe to ensure that fraud is kept to the minimum possible.

Lord Bruce of Donington

My Lords, is the noble Lord aware that the figures I gave are set out in a report published by the EC Commission last year and referred to specifically in The Times of 15th October? Moreover, is he also aware that the Commission itself does not accept the noble Lord's view that the estimate is an under estimate? Will the noble Lord give the House the assurance that as and when the item goes on the next Council agenda, he will specifically notify the House and will undertake to report to the House on the progress thereafter?

Lord Young of Graffham

My Lords, I have little doubt that the report in The Times was correct. It reported that the European Court of Auditors suspected that fraud could amount to £2 billion a year; but suspicion of fraud is not the same as proving fraud. I have read many reports of the suspected size of the black economy in this country and reports vary enormously. However, until it can be proved, there can only be suspicion. We must not listen to reports about suspicion but take steps to ensure that whatever happens we keep the amount of fraud to the minimum. If the noble Lord cares to ask a Question later on this year, I shall be happy to answer in full detail what happens at the Economic and Finance Council.