HL Deb 02 July 1992 vol 538 cc871-2

3.7 p.m.

Lord Benson asked Her Majesty's Government:

In the light of the request by the Council of Ministers to the Court of Auditors dated 16th March 1992 concerning expenditure by the Community since 1988, how it is proposed to correct the unsatisfactory financial management and administration in the Community disclosed in opinion number 2/92 of the Court of Auditors dated 15th May 1992.

The Earl of Caithness

My Lords, the Court of Auditors' opinion is a valuable input to the ongoing discussion about the Community's finances. Following discussion at the June meeting of ECOFIN, the United Kingdom will now take the report, and the issues which it raises, forward in the discussions about the Community's finances which will continue under our Presidency.

Lord Benson

My Lords, I am grateful to the Minister for answering that oft-repeated Question. Does he agree that the way to deal with the matter would be to identify the individuals responsible for proposing the inadequate procedures and failing to follow them up with the member states, to get rid of them and appoint competent people in their place?

The Earl of Caithness

My Lords, the noble Lord raises an important point. I can assure him that we are ready to co-operate with the Commission in looking at ways to continue to improve the formulation of regulations, the proper implementation of them, which is so important, by the member states, and effective monitoring of that by the Commission.

Lord Bruce of Donington

My Lords, is it not the case that the Government cannot take any action to correct the situation, which was the term used in the Question asked by the noble Lord, Lord Benson? Is the Minister aware that the Council cannot act in that matter, save on a proposal from the Commission, and that the Commission itself is most unlikely to produce a proposal which would result in the people incapable of carrying out their functions of financial control being dismissed?

The Earl of Caithness

My Lords, the origin of the report of the Court of Auditors was as a result of a letter by my right honourable friend the Chancellor of the Exchequer which was then discussed at ECOFIN. Such was the feeling of member states that the instruction was given to this effect. That proves that we can influence the situation.

Lord Boardman

My Lords, does my noble friend agree that until the unsatisfactory financial management has been corrected, it would be quite unreasonable for the Commission to be provided with extra funds?

The Earl of Caithness

My Lords, this is one of the aspects at which we are looking in discussing the future financing of the Community. There are many other points, but I can assure my noble friend that this one will be taken into account.

Lord Peston

My Lords, the noble Lord, Lord Benson, knows infinitely more about the subject than I. I find the expression "unsatisfactory financial management" quite horrifying. If it were used about any other organisation, one would assume that serious action, often of a legal kind, would be taken. I speak as an ordinary person with no expertise. Can the noble Earl tell me whether, if it is correct to use the expression "unsatisfactory financial management"—and I also agree with the noble Lord, Lord Boardman —ought we not to be acting more vigorously? If any of the rest of us were accused of unsatisfactory financial management, I assume that we would be in serious trouble.

The Earl of Caithness

My Lords, we are taking the subject very seriously, as I have said on a number of occasions when asked about it. As the noble Lord will know, in 1989 this House produced a report and the Commission continues to examine the 45-point plan with a view to updating it.

Lord Boyd-Carpenter

My Lords, can my noble friend tell the House what sum of money has been lost as a result of this unsatisfactory management?

The Earl of Caithness

My Lords, I am unable to give my noble friend an answer. There was another report by the Court of Auditors which highlighted two firms and it is the subject of another Question by the noble Lord, Lord Benson, in the near future. As a result of the report, certain remedies have been taken.

Lord Elton

My Lords, as my noble friend also conveniently answered the first Question, can he tell us whether Her Majesty's Government regard themselves as the "customer" of the Commission in this context? Can he exert more effective restraint upon it than the customers of the Inland Revenue are able to exert upon it?

The Earl of Caithness

My Lords, as one of the three major net contributors to the Community, I can assure my noble friend that we are taking the matter extremely seriously. As we have to be prudent about our own expenditure at home we should be equally prudent in the Community.