HL Deb 29 November 1994 vol 559 cc538-41

3 p.m.

Lord Benson asked Her Majesty's Government:

Having regard to the statement in the Queen's Speech on 16th November 1994 that they will promote budgetary discipline in the European Union and combat fraud, what proposals they will initiate to achieve that purpose.

Lord Henley

My Lords, the United Kingdom has been in the lead in pressing for improvements to the Community's financial arrangements. We secured important improvements in the Treaty on European Union. At the recent Anglo-French summit at Chartres the Prime Minister suggested a number of areas where the Community needs to improve its performance in dealing with fraud. I expect him to pursue these at the European Council in Essen next month.

Lord Benson

My Lords, does the noble Lord believe that this difficult subject could be approached by a three-pronged attack? First, it should be recognised openly that the Commission is not in a position to prevent those financial misdemeanours which take place throughout the Community, and particularly in the member states. Secondly, for that reason, does he agree that what is needed is a comprehensive reform of the whole of the financial administration of the Community which embraces not only the Commission but also the member states, as a single exercise? Thirdly, so far as I know the only institution in the Community which could set that in hand is the European Council of Ministers, which will have to undertake a great deal of painstaking inquiry and will need a great deal of independent professional advice. Has the noble Lord any other workable solution in mind?

Lord Henley

My Lords, I suspect that Question Time is not the time for me to answer in great detail the various points that the noble Lord makes, because I would use up not only the remaining 12 minutes available to the House for Question Time but a great deal more time thereafter. The noble Lord makes some very interesting suggestions. Perhaps I may take the first one, in which I suspect that he was suggesting an increase in the Commission's own extra powers. Obviously that is a matter which could be considered as part of the attack on fraud, but member states themselves would have to recognise that in so doing they would have to expect much greater intrusion into their own affairs. I am not sure whether that would be acceptable to all member states.

All that I can say to the noble Lord is, I repeat that the United Kingdom Government are absolutely committed to the fight against fraud and to good financial management within the Community. We shall continue to fight through the Council of Ministers and through other means for such improvements. We are beginning to see some improvements. But as the House's own Select Committee made quite clear, any such improvements are very much a long-term policy and would take quite a long time to bear fruit.

Lord Bruce of Donington

My Lords, the noble Lord has spoken of the efforts made by Her Majesty's Government in this respect at the level of the Council of Ministers. Is he aware that at approximately 25 minutes past 5 o'clock yesterday Mr. Norman Lamont, the former Chancellor of the Exchequer, gave his account of what happens when matters are raised? I quote from what he said.

Noble Lords

Order! Paraphrase!

Lord Bruce of Donington

My Lords, he is an ex-Minister. However, in effect, he said that he opened the discussion. A large number of Ministers did not turn up. Some of those who did turn up read newspapers. For some reason or other, Mr. Delors intervened in Council to reprove Mr. Lamont for having raised a political matter at the Council of Ministers. Thereafter the discussion terminated.

In those circumstances, is it wise for Her Majesty's Government to agree, and to insist through another place, that an extra £18 billion be paid over the next six years into Community funds when the Community is quite incapable of controlling its expenditure properly?

Lord Henley

My Lords, again I do not think that now is the time to discuss the own resources decision and last night's debate in another place. We shall certainly have our opportunity to discuss the matter in due course. Nor do I intend to follow the noble Lord in discussing what my right honourable friend may or may not have said in another place yesterday. I am afraid to say that I have not actually read what my right honourable friend had to say.

Perhaps I may make one brief point about the fight against fraud; namely, what was agreed in Copenhagen. It is very valid. It was agreed by all member states that it was in their own interests to pursue fraud because if they did not do so—and they were in the best position to pursue the fight against fraud—the very reputation of the entire Union would be called into question by all those individual citizens in the Community. Therefore, I hope that in due course every single member state will pursue this policy with the same vigour as Her Majesty's Government.

Lord Clark of Kempston

My Lords, does my noble friend agree that the more effective control of public expenditure in Europe would be greatly increased if a committee were set up similar to the Public Accounts Committee that we have in this Parliament? Further, does he also agree that the Court of Auditors in Europe should model itself on our National Audit Office which places emphasis on value for money?

Lord Henley

My Lords, my noble friend makes very interesting suggestions. But as I said to the noble Lord, Lord Benson, I do not think that Question Time is the time for Her Majesty's Government to respond in considerable detail to what are perfectly valid suggestions that may or may not have advantages.

Lord Eatwell

My Lords, will the noble Lord confirm what Sir John Cope, the then Paymaster General, wrote to my honourable friend Mr. Andrew Smith last year? He wrote: It is correct that the UK does not take up the money that the Commission allocates to us for anti-fraud work". In the light of Sir John's admissions, is not the Minister's statement that the Government are committed to fighting fraud totally worthless?

Lord Henley

My Lords, I start by saying to the noble Lord what I heard in an aside from one of my noble friends: absolute nonsense. The noble Lord takes the simplistic socialist view that merely by spending money on a problem one can resolve it. I do not believe that money is the only answer. The best answer is for all member governments to have the appropriate attitude. Her Majesty's Government will continue to set a lead in this matter and encourage other member governments so to do.

Lord Richard

My Lords, will the Minister confirm that the Government are not taking up moneys which are available from the Commission in order to combat fraud? That was said in the other place yesterday by a Government Minister. Will the Minister be pleased to confirm it?

Lord Henley

My Lords, I was not denying the veracity of that letter from my right honourable friend the former Paymaster General. I was saying that the party opposite has a very simplistic view about how to go about things.

Noble Lords

Order, order!

The Lord Privy Seal (Viscount Cranborne)

My Lords, I am, as always, in the hands of the House. I observe that we have one more Question. I wonder whether your Lordships might feel that the time has come to move on.