CAP Reforms: ECA Opinion (Hansard, 13 January 1999)

§ The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue)
My Lords, the Government generally welcome the ECA Opinion on the Agenda 2000 proposals which lends support to the United Kingdom view that the Commission's reform proposals, although representing a move in the right direction, do not go far enough in reducing support prices. The Government are continuing to press for comprehensive CAP reform.

§ Lord Thomson of Monifieth
My Lords, I warmly welcome the first part of the Answer given by the Minister. However, is it not a stark fact that unless there are more radical reforms to the common agricultural policy, including a more effective tackling of the problem of agricultural fraud within member states, it will be simply impossible to carry forward the policies of enlargement and that that would have serious political consequences?

§ Lord Donoughue
My Lords, I and the Government agree absolutely with every word said by the noble Lord. Wider-ranging reforms than have been proposed are desirable in their own right because the present system has many faults. They are particularly necessary as we embark upon enlargement. Were the European Union to enlarge without reform, especially reform of the CAP, we believe that the costs would be intolerable to the European taxpayers and especially to the British taxpayers and the British Government.
The question of fraud is quite complex. Two quite different kinds of fraud are currently under discussion; first, the humanitarian aid central fraud and, secondly, CAP and other frauds which were reported on by the European Court of Auditors. On that point the Government totally support the noble Lord. We are totally in favour of stricter measures to control fraud. However, I should point out that the CAP fraud comprises a relatively small percentage, around 0.4 per cent. of expenditure, compared to the overall alleged 5 per cent. fraud of the budget as a whole.

Lord Bruce of Donington
My Lords, can the Minister make clear to the House that the Government will at all 176 levels and in all circumstances, whether at meetings of heads of state, the European Council, the Council of Ministers or at any unofficial conference that from time to time takes place, support the complete independence of the Court of Auditors? In the light of the other observations made by the noble Lord relating to fraud, can the Minister assure the House that the Government, once again at all levels, will protect the Court of Auditors from the rule established by the Commission for its own purposes; namely, that when it wants the Court of Auditors' report altered, all it needs to do is to make representations to it? In that connection I draw your Lordships' attention to the observation I made on that point five years ago.

Noble Lords
Hear, hear!

§ Lord Donoughue
Yes, my Lords; I am sympathetic to what my noble friend said. I should point out to him that on the question of the monitoring and control of fraud, proposals have been made by the Commission and Parliament for greater independence. Those proposals were the subject of discussion at the Vienna Council. It was decided then that they should be pursued urgently and we are expecting a decision at the Cologne Council. The Government are certainly sympathetic—they are not always so—towards the remarks of my noble friend.

§ Lord Marsh
My Lords—

§ Lord Clark of Kempston
My Lords—

§ Lord Mackie of Benshie
My Lords,

§ The Lord Privy Seal (Baroness Jay of Paddington)
My Lords, as always, I shall abide by the decision of the House on who should speak next. However, as there is plenty of time, and I believe that the feeling of the House is that the Cross-Benchers should ask a question, I ask the noble Lord, Lord Marsh, to speak.

§ Lord Marsh
My Lords, given the length of time that we have been discussing the problems of enlargement, with the need to discuss the various factors, can the Government give some indication as to when they first became aware of the scale of fraud in that area?

§ Lord Donoughue
My Lords, I believe that the Government have always been aware of the fact that there is a problem with fraud. As regards the scale of the problem, particularly in other countries, we are dependent on official reports on the matter. In relation to the common agricultural policy, which is the only area for which we are responsible, we believe that the monitoring of fraud in some cases reveals genuine errors. Noble Lords opposite who are farmers will know that the system is immensely complex and bureaucratic. The number of errors or frauds discovered has risen but the value of them has declined. As I have said, for the CAP the figure was 0.4 per cent., about £122 million 177 for the whole community. Though we believe that is not acceptable and is possibly not the whole story, we feel that sometimes it is represented out of perspective.

§ Lord Mackie of Benshie
My Lords, can the Minister tell the House how he proposes to solve the problem of applicant countries coming into the European Union? For example, do Her Majesty's Government propose to drop the price level in this country to world level and ensure that the applicant countries are at that level, which would save a lot of money? Alternatively, do the Government propose to keep the assistance at a level which will raise the level in applicant countries?

§ Lord Donoughue
My Lords, the proposals for scrutiny of applicant countries are set out by the European Union and by the Commission in this area and are to be found within the structure of Agenda 2000. The British Government's hope is to move towards world prices to diminish and ultimately—it would be nice—eliminate price support, to eliminate control of supply and to increase environmental support. However, within Agenda 2000 is a more modest proposal and the applications are being conducted within that framework.

§ Lord Clinton-Davis
My Lords, is my noble friend the Minister aware that, in the Commission on which the noble Lord, Lord Cockfield, and I had the privilege to serve, the noble Lord introduced proposals, with the agreement of the whole Commission, to deal much more effectively with questions of fraud which were then opposed by at least some of the member states? Will my noble friend also comment on whether or not the southern European member states are becoming more sensitive to the arguments that he has adduced before the House this afternoon regarding the need for much more radical reform of the CAP?

§ Lord Donoughue
My Lords, as regards my noble friend's first question, I can confirm that I was aware of that fact. However, I believe that the climate in Europe has changed. The activities in the European Parliament of late regarding all member states, which will conclude with a vote on this issue tomorrow morning, reflect the fact that there is now a much tougher attitude to, and a greater awareness of, the problem.
On the attitudes of the Mediterranean states, I believe that a little more education may need to be provided in that respect. However, we must always appreciate that they are recipients of a positive balance in all of these areas. Member states are often reluctant to give up the financial subsidies that they receive, but that will be a matter for the whole debate which lies ahead. Britain, Germany and others are very determined to try to achieve a reform in the interests of the British taxpayer, the British consumer and, indeed, the British farmer.