ECOFIN: Fraud against Community Funds (Hansard, 19 June 1995)

§ Lord Inglewood
My Lords, as my right honourable friend the Chancellor of the Exchequer made clear in another place, on 22nd May the Council agreed to further discussion at the Committee of Permanent Representatives (COREPER) of the proposed regulation on the protection of the Community's financial interests, on which an explanatory memorandum was originally submitted to Parliament on 5th October of last year.

Lord Bruce of Donington
My Lords, I thank the Minister for his reply. I am happy to congratulate the Government on having provided your Lordships' House with the document requested in my Question, which arrived at the Select Committee some 10 days after I tabled the matter. In view of the fact that ECOFIN is meeting tomorrow and the next day to consider the memorandum, will the Minister bear in mind that the draft convention contains an extended definition of fraud which I entirely applaud, but what it omits is the relationship between the member states and the Commission? It should also be borne in mind that 8 prima-facie evidence already exists that the European Parliament and the Commission have in fact been guilty of fraud within the definition in Article 1 of the proposed convention. Therefore, will the Minister ensure that the institutions concerned give full and immediate access to the police of the countries in which they are situated so that some of those allegations can be investigated?

§ Lord Inglewood
My Lords, it is a matter of satisfaction that the Government have given such pleasure to the noble Lord. Once the law is in place the noble Lord can rest assured that the processes of law will take their course in an impartial and proper manner.

§ Lord Hunt of Tanworth
My Lords, I have much sympathy with the point made by the noble Lord, Lord Bruce of Donington. However, is the Minister aware that we are discussing a complicated issue which relates to immunities granted to international bodies generally? There is a big question as to whether one can make an exception for the Commission and its role and distinguish it from other international bodies. It is an issue which the European Communities Committee has taken up in a recent letter to the Home Secretary. Can the Minister assure us that the letter will be considered in that context?

§ Lord Inglewood
My Lords, I am most grateful to the noble Lord for pointing out how technically complicated the matter is. It lies on the cusp between administrative law and criminal law and between the responsibilities that are vested in the Community under Pillar l and those dealt with under the third pillar of the Maastricht Treaty. I assure the noble Lord that the matters he raised will be given the most serious consideration.

§ Lord Eatwell
My Lords, does the Minister agree that an effective attack on fraud in the Community requires that greater powers to investigate national dispersion of Community moneys be given to the central authorities of the Community?

§ Lord Inglewood
My Lords, the important point is that proper investigation is carried out and that those responsible are brought to book. Inevitably that will involve a partnership among all parties. It is not possible to say that there is a paramount party involved in the transactions. It involves member states, national governments and Community institutions.

§ Lord Pearson of Rannoch
My Lords, can my noble friend tell the House what has happened to the task force of outside experts which was so firmly recommended by your Lordships' Select Committee after six years of studying the problem? Further, does my noble friend agree that the only way to win the battle against this fraudulent Euro-monster is to remove the money from the grasp of the fraudsters, possibly by repatriating the common agricultural policy which costs £30,000 million a year and abolishing the structural funds which cost a further £10,500 million a year?

§ Lord Inglewood
My Lords, I am grateful to my noble friend for his opening remarks. However, I am not in a position to give him the detailed response that he seeks. Nevertheless, I am willing to write to him to inform him of the up-to-date position. My noble friend proposes the 9 most drastic solution to achieve the ends that he seeks. We believe that it is possible to achieve the same results without such drastic measures.

Lord Bruce of Donington
My Lords, will the Minister give the House an undertaking that the matters that I ventured to lay before your Lordships today will receive the careful consideration of the Ministers participating in ECOFIN both tomorrow and the next day?

§ Lord Inglewood
My Lords, as the noble Lord knows, the attack on fraud, waste and mismanagement has been a major theme of British-European policy for many years. As the noble Lord pointed out, ECOFIN is meeting to deal with the matter, as also is the Justice and Home Affairs Council. By the end of the month I am hopeful that we shall have a much stronger regime in place than we have at present.