EC Budget (Hansard, 23 November 1994)

§ The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley)
My Lords, according to the European Court of Auditors, the outturn for the 1993 European Community budget totalled 69,021 million ecu in commitments and 64,498 million ecu in payments. The outturn figures for 1988 were 43,342 million ecu in commitments and 41,279 million ecu in payments.

§ Lord Boyd-Carpenter
My Lords, I thank my noble friend for giving that interesting information. In the light of the heavy increase during the past five years, are Her Majesty's Government exerting all the pressure that they can to restrain further growth in this expenditure?

§ Lord Henley
My Lords, my noble friend is right to draw attention to the growth in expenditure by the European Community during the five years that I cited. On paper, the growth appears to be of the order of 50 per cent. About 10 per cent. is taken into account by growth in GNP and between 15 and 20 per cent. by growth in inflation.
Nevertheless, I assure my noble friend that Her Majesty's Government are concerned about growth in expenditure by the European Community, and that is why we secured the deal at the Edinburgh Summit in 278 1992. It limited further growth to 1.27 per cent. of GNP rather than the 1.37 per cent. that the Commission was seeking.

Lord Bruce of Donington
My Lords, is the Minister aware that the figure that he has given for the limit set at the 1992 Edinburgh Summit means an increase of £8 billion during the next five years? In view of the fact that the European Community budget is decided by qualified majority vote, thereby enabling the Commission to extend the budget up to the limits, will the Minister assure the House that in future expenditure will be approved where it ought to be approved—that is, by Parliament—instead of by Cabinet without consultation with or the agreement of Parliament?

§ Lord Henley
My Lords, such matters will be secured by Parliament when the own resources legislation comes before Parliament in due course. I must tell the noble Lord that I believe my right honourable friend the Prime Minister secured a very good deal on behalf of the United Kingdom at the Edinburgh Summit. He preserved the budget rebate in full, something negotiated by a Conservative Government and never negotiated by any Labour Government in the past. Indeed, no rebate was negotiated by a Labour Government. As I said, my right honourable friend preserved that rebate in full, and limited the growth to 1.27 per cent. rather than the 1.37 per cent. that the Commission was seeking.
Perhaps I may assist the noble Lord as regards the figures. The net cost of the Bill to the UK will be £75 million in 1995–96 rising to £250 million in 1999—that is, after growth and inflation are taken into account—compared with the net contribution that was payable in those years that are presently under consideration.

§ Lord Wyatt of Weeford
My Lords, can the Minister inquire into why the recent report of the Court of Auditors is apparently not able to be afforded by the budget, because it has never arrived here; indeed, we have still not seen it in this country, although it has been published in Brussels?

§ Lord Henley
My Lords, I am afraid that I cannot answer the noble Lord's question as to why the report has not yet arrived in this country. However, I believe that the noble Lord is right to draw the attention of the House to the report of the Court of Auditors into the 1993 budget and the concerns expressed therein. I can give the noble Lord the assurance that my right honourable friend the Prime Minister is well aware of those concerns and recently, following the Anglo-French Summit at Chartres, he set out a number of ideas to deal with fraud, which include the Commission stepping up its spot checks for fraud and fraudsters, the European Parliament as a whole—and not just its budgetary control committees—acting on fraud, and the Council of Ministers acting on the Court's special reports on particular areas of the Community budget.

§ Lord Stoddart of Swindon
My Lords, when the Government produce such figures, I wish that they would do so in pounds sterling rather than in ecus so 279 that we can understand what we are discussing. Can the Minister confirm that the increase in expenditure in the EC or the EU—or whatever we have to call it these days—is 55 per cent. in percentage terms? Can the Minister also confirm that the taxpayers of this country pay no less than £10 billion to the EC and that only selected areas and persons receive any return? Therefore, the taxpayer is bearing a much larger burden than would seem to be the case if we merely take into account the net contribution of £3.5 billion, as it will be next year.

§ Lord Henley
My Lords, as regards the noble Lord's first point, whenever I next answer such questions I shall seek, if it is possible, to put the answer in pounds sterling rather than ecus. I can confirm that, on paper, in the years that I quoted, there has been a growth of somewhere around 50 per cent. I am prepared to accept the noble Lord's figures in that respect. However, as I made clear when responding to my noble friend Lord Boyd-Carpenter, much of that is made up by the growth in inflation and the growth in GNP which pushes up the size of the budget.
As regards the noble Lord's latter remarks, where he seemed to imply that the deal we are getting out of our membership of the EU is not a fair one, I must simply say that I do not agree with him. We have considerably reduced the potential rise in the size of our net contribution. I see considerable benefit—as, indeed, do most people—in our membership of the EU.

Noble Lords
Order!

§ Lord Boyd-Carpenter
My Lords, can my noble friend make it clear whether or not the report of the Court of Auditors is being obtained and will be made available to your Lordships and to the people of this country? If it is not, why not?

§ Lord Henley
My Lords, I shall have to look into the matter. However, I hope that I can assure my noble friend that a copy of the report will be made available to the Library of the House.

§ Lord Eatwell
My Lords, in his replies to other noble Lords, the Minister made several references to the Edinburgh Summit and to the European Community (Finance) Bill which is the outcome and which will shortly be before Parliament. However, can the Minister confirm that the demand made by the Prime Minister in another place last Wednesday that that Bill should be passed, "in all its essentials", was meant to imply that a vote on any amendment whatever would be a matter of confidence?

§ Lord Henley
My Lords, I believe that the words of my right honourable friend the Prime Minister meant exactly what he meant them to mean; namely, that the 280 Bill has to be passed in all its essentials. I look forward to debating that Bill with the noble Lord when it comes before the House.

§ Lord Hailsham of Saint Marylebone
My Lords, as regards any publication which is made available to this House or to the British public, can we be sure that it will be written in English?

§ Lord Henley
My Lords, I hope that I can give an assurance that such a publication will be written not only in English but also in clear and good English such as my noble and learned friend would like to have, so as to enable him to understand it.

§ Lord Richard
My Lords, can the Minister tell the House what the Prime Minister meant his words to mean?

§ Lord Henley
My Lords, my right honourable friend meant exactly what he meant by those words.

§ Lord Boardman
My Lords, is not one of the problems with the European budget that an ever-rising figure is set from the top and the Commission then decides how to spend it; in other words, it is a top-down budget? The result is that moneys are spent to try to use up the amount available instead of setting the budget in the traditional way by first finding out what is needed and then having a cut-off point to the debt.

§ Lord Henley
My Lords, I recognise the point that my noble friend makes. However, that is how the EU works and that is why we were very keen to limit the amount of growth that was obtainable within the EC budget. I can assure my noble friend that Her Majesty's Government are certainly not complacent with regard to EU expenditure. We shall continue to strive to achieve good management and to strive against waste in the EU budget.