HL Deb 18 March 1999 vol 598 cc828-30

3.26 p. m.

The Earl of Clanwilliam asked Her Majesty's Government:

What is their current assessment of the level of fraud and corruption in the European Commission.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean)

My Lords, the European Court of Auditors annual report presented to Parliament on 17th November 1998, which covered the financial year 1997, estimated that the amount of erroneous expenditure in the EU budget was around £2.8 billion. A small percentage of this sum was suspected fraud, the remainder down to irregularities concerning the payments made against the Community budget. The Committee of the Wise report catalogued a culture of complacency, lack of accountability and in some cases nepotism, which is unacceptable. The consequent resignation of the entire Commission presents an opportunity to make changes to the structure of the Commission and to ensure that the standards of management and public administration in the European institutions are as high as we expect them to be in the national governments of Europe.

The Earl of Clanwilliam

My Lords, I thank the noble Baroness for her excellent intimation that there is a need for a structural review of the operation of the Commission. How many of the 20 commissioners who presided over departments were adversely reported upon by the committee? Can the Minister assure the House that none of those commissioners will be supported for re-appointment by Her Majesty's Government? In addition, do the Government agree that the common agricultural policy is itself a major cause of fraud and corruption and that only a lasting solution and proper reform will lead to a considerable reduction in the budget of the CAP?

Baroness Symons of Vernham Dean

My Lords, the noble Earl raises a number of enormously important points. The report was critical of a number of Commissioners for different reasons. Commissioners Santer, Cresson and Marin were criticised for lax management of expenditure programmes or departments under their control. It was also critical of Commissioners Cresson, Pinheiro and Wulf-Mathies for favouritism or irregularity in the making of appointments. It will be up to individual countries to decide what to do about re-nomination. The noble Earl is aware that my right honourable friend has made clear what the Government intend to do about the nomination of our own commissioners upon whom there is no taint. The noble Earl also referred to issues related to the common agricultural policy. These matters, together with other important issues related to the structural funds and financial matters of great interest to all of us, will be discussed at the meeting in Berlin on 24th and 25th March.

Lord Thomson of Monifieth

My Lords, I declare a somewhat ancient interest as one of Britain's first commissioners 25 years ago. Is the Minister aware that I find particularly painful the findings against the present members of the Commission of nepotism and administrative failure to manage their affairs? Is the noble Baroness aware that none of the commissioners was personally found guilty of either fraud or corruption? Is she also aware that I welcome the fact that she spread the net more widely about looking at the institutions of the Community? In declaring a more recent interest as a member of the Nolan committee, perhaps I may ask whether the Minister believes that there may be a strong case for a truly independent Nolan committee of the European Union to consider not only the European Commission but also the European Parliament and the Council of Ministers.

Baroness Symons of Vernham Dean

My Lords, the findings are very painful indeed. My right honourable friend described the report as damning. The noble Lord is quite right that none of the commissioners was found to be personally culpable of fraud or of having gained himself financially from those irregularities.

However, what the noble Lord says is absolutely right. It is no good simply identifying some individuals. We need to consider not only the systemic difficulties but also the ways in which those might be put right. I draw the noble Lord's attention to the fact that the committee of les Sages is due to report again in a few weeks' time to make some recommendations about reform. In the Statement repeated in your Lordships' House by my noble friend the Leader of the House earlier this week, my right honourable friend put forward a number of suggestions about the reforms on a wider basis which should be contemplated for the European institutions.

Lord Mishcon

My Lords, will the Minister be good enough to indicate to the House Her Majesty's Government's policy in regard to the payment of compensation for loss of office where Ministers or members of the Commission are involved who will not be reappointed but who are ultimately responsible therefore for the disgraceful level that has been announced?

Baroness Symons of Vernham Dean

My Lords, commissioners' terms and conditions are set down in the statutes which govern their employment. The statutes contain generous provision for the end of service remunerations. I have details of those provisions. I do not think it is worth repeating them now. I can send them to the noble Lord if he finds that helpful. However, as the Prime Minister made clear in another place on 17th March, we believe that any commissioner who is found guilty of fraud or misconduct should not receive those remunerations. Indeed, the statute states that in the event of resignation as a result of gross misconduct— what it terms as a faute grave—the commissioner would not qualify.