EC Budget: Waste of Funds (Hansard, 17 December 1993)

§ The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley)
My Lords, the Government have pressed and will continue to press the Commission to ensure that the Community budget is implemented with regard to the principles of sound financial management, as now required by the Maastricht Treaty.

§ Lord Boyd-Carpenter
My Lords, does my noble friend's Answer mean that the Government are satisfied that there will be no repetition of the large waste of funds which the Court of Auditors reported on?

§ Lord Henley
My Lords, we can never be complacent and we can never be totally satisfied that there will not be waste in the future. I want to make it clear that the Government are committed to sound financial management in terms of the Community's budget. We shall continue to identify problems and inform the Commission of deficiencies where we think fit. Certainly we have the commitment that my noble friend seeks.

Lord Bruce of Donington
My Lords, we realise that the Government can never be complacent in these matters, but many of us believe that it is high time that they got a bit angry about them. Will the Minister inform the House whether at the recent meeting of ECOFIN it was decided that the Council of Ministers would recommend to the European Parliament that it be granted discharge of the 1992 budget? But before embarking on that course, will the Minister assure the House that at least one member of the Cabinet will actually read the auditors' report for the financial year 1992 and report to the House on his reactions to it, which one hopes will be different to the vapid explanatory memorandum which the Government have just issued?

§ Lord Henley
My Lords, I can give an assurance that—well, I can say to the noble Lord—

Noble Lords
Hear, hear!

§ Lord Henley
My Lords, it is a matter for the Parliament as to its level of budget. The proposed increase is about 5.7 per cent. against a bid by the Secretariat of some 7 per cent. We believe that the European Parliament has at least heeded the need for budgetary restraint and has reduced its bid from a 7 per cent. increase to a 5.7 per cent. increase. I can also assure the noble Lord that all my right honourable friends will read all the appropriate documents as and when appropriate.

§ Lord Molloy
My Lords, does the Minister agree that the Court of Auditors is a very responsible body and that the Question tabled by the noble Lord, Lord Boyd-Carpenter, refers to funds and to this country's contribution to them, which comes from the British taxpayer? Ultimately, the Question is whether the British taxpayer will be defended from what is happening, which has been outlined by the court itself.

§ Lord Henley
My Lords, very much so. British taxpayers, and for that matter taxpayers in all the other European countries, are protected by the scrutiny which goes on in their own national parliaments. As the noble Lord knows, scrutiny in this Parliament is very effective. Certainly the Court of Auditors will continue to audit the accounts as appropriate.

§ Lord Peston
My Lords, we have been round this course several times before. I am always puzzled by the fact that we always utter the same words about how much we do not like waste and so forth and we are assured that the Government will look at the matter. Will the Minister answer a question which I have alluded to previously? What is the mechanism for doing so? Can he describe the step-by-step approach that leads to the waste being stopped? People can talk and complain, and today at least I can believe that Cabinet Ministers will read the documents—I can just about believe that. But what happens to prompt someone to say, "We must stop this waste and this is how we shall do it"?

§ Lord Henley
My Lords, it would take too long to describe the process in detail at Question Time and at the Dispatch Box. Put simply, under the Maastricht Treaty it will be for the Court of Auditors to identify waste and inappropriate expenditure. It will then be for the appropriate body that has made the inappropriate expenditure, if that expenditure was illegal, to recover it from those to whom it had been made.

§ Lord Peston
My Lords, I do not believe that the Minister understands the point. Thanks to my noble friend Lord Bruce of Donington, we are always identifying the problem. In terms of a business, if one sees waste one says to the people concerned, "You are responsible, you stop that waste. We don't want it to happen again". I cannot see the equivalent of that; I can hear the talk but I cannot see the action.

§ Lord Henley
My Lords, that is exactly how I answered the question and described what happened. Let us suppose that the Commission has spent money inappropriately and illegally. The Court of Auditors will tell it that it has done so, and it will then be for the Commission to recover those funds.

§ Lord Swinfen
My Lords, my noble friend said that it would take too long to answer the first question asked by the noble Lord, Lord Peston. But will he be kind enough to provide a Written Answer and place it in the Library of the House?

§ Lord Henley
My Lords, I should be absolutely delighted to answer a Written Question if my noble friend would care to table one.

§ Lord Bonham-Carter
My Lords, does the Minister agree that waste is not confined to the European Community? Only the other day Mr. Portillo admitted that the Treasury had mislaid no less than£1 billion.

§ Lord Henley
My Lords, it is possible that waste exists in all organisations. That is why Parliament scrutinises government expenditure to ensure that there is not waste.

§ Lord Aldington
My Lords, does not the key lie in the Council of Ministers? Is it not a fact that on two or three occasions reports to your Lordships' House have pointed to the importance of the Council of Ministers taking full notice of the reports of the auditors and not authorising the accounts of the Commission and the Community until action has been assured? That point has been made in countless reports from the Select Committee.

§ Lord Henley
My Lords, my noble friend is absolutely correct, but it is also important that we, as members of the Council of Ministers, play our own part. I was trying to give an assurance to the House that this Government will pursue fraud and waste as strongly as any other government.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that the views of the noble Lord, Lord Peston, are widely held? There is disquiet that when points are made about waste and, in this case when the official auditors, with all their authority, make those points, still nothing seems to be done about it. There is no evidence that it is taken into account or that moves are made to eradicate the weaknesses.

§ Lord Henley
My Lords, I do not accept what my noble friend says. He is accusing the Government of mere fine words. There are those fine words, but we also press the Community to turn those words into action.

§ Lord Stewartby
My Lords, does the Treaty of Rome prevent the Comptroller and Auditor General from investigating the waste of British taxpayers' money in Europe? If it does not, would it not be good for the National Audit Office, which has done such an excellent job in investigating waste by public bodies in this country, to have a look at what is happening in Europe?

§ Lord Henley
My Lords, my noble friend has gone rather wide of the Question on the Order Paper. I am not sure that I can answer his question; I should prefer to write to him.

Lord Morris
My Lords, it is the responsibility of the nation states to pursue any fraud affecting European Community funds within the jurisdiction of the nation states. How many prosecutions for fraud have been brought by member states?

§ Lord Henley
My Lords, I am unable to answer my noble friend.