HL Deb 29 January 1992 vol 534 cc1303-6

2.38 p.m.

Lord Benson asked Her Majesty's Government:

In the light of the deficiencies in the administration of the finances of the European Community, which were exposed in the report of the Court of Auditors for the financial year 1990 and in a long series of reports of prior years, when they expect the administration of the finances of the European Community to be conducted in a satisfactory manner and how this is going to be achieved.

The Minister of State, Department of Transport (Lord Brabazon of Tara)

My Lords, the Court of Auditors, in its annual and ad hoc reports, rightly highlights deficiencies in the administration of the Community's finances, The court's observations concentrate on areas that need review, playing a vital role in strengthening Community procedures. In some cases the court's observations require the preparation of long-term improvements, but more often the Commission undertakes immediate steps to modify its procedures or strengthen regulations.

Lord Benson

My Lords, I am grateful for that Answer, although it does not really answer the Question. Is the noble Lord aware that by chance the answer was given in the correspondence columns of The Times this morning? It indicates that what is needed is wholesale reorganisation of the administration of the Commission and a staff of greater competence and quality.

Lord Brabazon of Tara

My Lords, I have of course noted the correspondence to which the noble Lord refers. However, the Question which he asked concentrates on the actions of the Court of Auditors. I believe that the Court of Auditors plays a most useful role in the affairs of the Community and has a considerable influence on what goes on. And so it should.

Lord Cockfield

My Lords, does my noble friend agree that most of the trouble has nothing whatever to do with the Commission? It is malfeasance on the part of the member states themselves.

Lord Brabazon of Tara

My Lords, I can only answer today on the action taken on the various reports of the Court of Auditors. For example, the Community now has a 45-point action programme on fraud against the budget which covers areas, particularly in agriculture, identified in various reports of the court. I can assure the House—I hope that I can assure the House properly—that full note is taken of the reports of the court and that action is taken where necessary.

Lord Bruce of Donington

My Lords, in supporting the observations of the noble Lords, Lord Benson and Lord Cockfield, may I ask the Government when they will take the initiative in seeking a complete and thorough review of the Community's financial regulations with a view to giving the Court of Auditors far greater powers in relation to the conduct of recalcitrant member states? Will the Government consult the Comptroller and Auditor General and obtain his views on the staff available to the Court of Auditors since at the moment that staff is grossly inadequate for the tasks entrusted to it?

Lord Brabazon of Tara

My Lords, I have on fairly recent occasions set out for the noble Lord, Lord Bruce of Donington, the various improvements made through the Maastricht agreement to the financial management and accountability of the Community. For example, the European Court of Auditors is to be given enhanced status as an official Community institution. It is to be required to provide the Council and the European Parliament with a statement of assurance on the reliability of the Community's accounts and on the legality and regularity of underlying transactions. Those steps and the others taken at Maastricht are steps very much in the right direction.

The noble Lord suggests that the Court of Auditors has inadequate resources to fulfil its role. I do not believe that there is evidence to support that assertion. The Community draft budget for 1992 provides 36 million ecu for the ECA, but I agree that it will be important to keep the effectiveness of the court under review.

Lord Harmar-Nicholls

My Lords, does my noble friend accept that this Question, and the first Question on the Order Paper, and the supplementary questions and answers to both, confirm quite clearly the lack of affinity between the member states? Would it not be stupid to make any more commitments so long as that situation is the truth of the matter?

Lord Brabazon of Tara

My Lords, I think that my noble friend goes somewhat wide of the Question on the Order Paper.

Lord Peston

My Lords, without disagreeing with the view that we should perhaps raise the status of the Court of Auditors and give it more resources, is it not the case that, even if its status was as high as it conceivably could be and it was given an infinite amount of resources, its task in dealing with fraud remains an impossible one so long as the common agricultural policy continues? As I have said before, is not the CAP simply a mechanism for fraud and a problem that no one will ever be able to solve? Surely, what is required is a change of policy.

Lord Brabazon of Tara

My Lords, I believe that the status of the Court of Auditors is very clear: its role is essential in the management of the European Community budget. It is an essential part of the process. I do not disagree entirely with the remarks made by the noble Lord about the common agricultural policy; but I would not go so far as him and say that it is a fraudster's charter. It is not quite as bad as that.

Baroness Robson of Kiddington

My Lords, can the Minister say whether it is true that when the Court of Auditors makes recommendations the Council of Ministers has adopted the principle of explaining why, with reasons, it does not conform with the recommendations? That was one of the recommendations in the report of your Lordships' Select Committee.

Lord Brabazon of Tara

My Lords, both the Council and the European Parliament consider the court's findings and the Commission's responses very carefully. In granting its discharge to the budget, the European Parliament, acting on a recommendation from the Council, indicates what further action it believes to be necessary.

Lord Stoddart of Swindon

My Lords, is the noble Lord aware that not everyone will agree with him when he says that the common agricultural policy is not a fraudster's charter? Indeed, most people believe that it is a fraudster's charter. Therefore, would not the best way of dealing with the matter be to repatriate agriculture to the individual nation states, rather than the Commission embarking upon an enormous Domesday exercise using planes and helicopters, at a cost of about £70 million, to spy on every farmer, sheep and cow in the EC?

Lord Brabazon of Tara

My Lords, although that question is a little wide of the one on the Order Paper, I should point out that the Government have already made clear their view on that proposal.