§ 2.51 p.m.
§ Lord Phillips of Sudbury asked Her Majesty's Government:
§ What they propose to do to help the European Union to uphold the integrity of its treaties and institutions in the light of the breach by France and Germany of the stability and growth pact and the fact that the Court of Auditors has not approved the Commission's accounts for nine consecutive years.
§ The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)My Lords, we continue to support a prudent interpretation of the stability pact that takes into account the economic cycle, sustainability and the important role of public investment. With regard to the Commission's legal challenge of the November ECOFIN decisions, it would be inappropriate to comment on the possible, or likely, outcomes of the case. On the European Court of Auditors, the UK has been working closely with the Commission on radical reform of the EU's financial management, which the European Court of Auditors itself describes as ambitious and fundamental.
§ Lord Phillips of SudburyMy Lords, I am grateful to the Minister for his reply. Does he accept that when Mr Prodi became head of the Commission, he talked in his early days of zero tolerance of fraud? The language of the reply that he has given is comparable with language that has been given over the failure of the Commission to produce accurate accounts for nine years. Given the historically high levels of mistrust of the institutions of the EU, not just in this country but across Europe, would it not be more prudent of the Government to do more than utter sentiments? In particular with regard to the action commenced by the Commission as a result of the failure of France and Germany to comply with the stability and growth pact, would it not be the right thing for Her Majesty's Government to back the Commission? If I may—
§ Lord Phillips of SudburyMy Lords, I will leave it at that. I must leave it at that, but the fact is that the Government have not unequivocally backed the Commission in this action. Why not?
§ Lord McIntosh of HaringeyMy Lords, the noble Lord, Lord Phillips of Sudbury, got away—I do not 8 quite know how—with asking two different questions in his Question on the Order Paper. One is about the stability and growth pact, and the other is about the Court of Auditors. He has managed in his supplementary questions to mix the two up in a way that I did not think was possible.
I will answer as best I can about the Court of Auditors, because the noble Lord will know that the Chancellor has been ferocious in attacking both red tape and inefficiency in the European Commission. At the same time, without defending it, it should be recognised that the Court of Auditors has approved the income and expenditure accounts, and the administration and pre-accession aid accounts. The problem has been with the assets and liability statements.
§ Lord Stoddart of SwindonMy Lords—
§ Baroness NoakesMy Lords, the double-headed Question asked by the noble Lord, Lord Phillips of Sudbury, is really about the quality of compliance that exists in the EU. Does the Minister agree that non-compliance is a serious issue? France in particular does not comply, and does not introduce EU laws. What do the Government intend to do about that?
§ Lord McIntosh of HaringeyMy Lords, I congratulate the noble Baroness, Lady Noakes, on finding a link between the two heads of the original Question. Unfortunately, in doing so she has raised an issue of compliance with European legislation, which does not relate to either of the questions asked by the noble Lord, Lord Phillips of Sudbury.
§ Lord Stoddart of SwindonMy Lords—
§ Lord MarshMy Lords, my question is in relation to the accounts, which are part of the Question. The Government have good friends in the Commission and good relationships with them. Would the Minister like to comment on the role of Mr Kinnock over the past nine years?
§ Lord McIntosh of HaringeyMy Lords, no, I certainly would not—"over the past nine years", indeed. It is generally recognised that—did I say, "would not"? I meant that I would. I beg your pardon, that was a slip of the tongue, and I apologise. I would never resist an invitation from the noble Lord, Lord Marsh, to comment. Mr Kinnock is generally recognised to have done an excellent job in the reform of the procedures of the European Union.
§ Lord Howell of GuildfordMy Lords—
§ Lord Stoddart of SwindonMy Lords, I am not giving way again. I am most obliged to the noble Lord. I gave way twice—I did not think that I should do so for a third time.
Is it not absurd that the Commission should be able, through the stability and growth pact, to threaten this country with legal action, bearing in mind that our 9 economy is thriving while the economy of the euro-zone is stagnating? In Germany, the unemployment rate is 10 per cent. In France it is 9 per cent. In this country it is only 5.2 per cent. In Germany the growth rate is 0.9 per cent. Even in this country at its lowest rate it was 2 per cent last year.
§ Lord McIntosh of HaringeyMy Lords, I am not in a position to dispute the noble Lord's figures. I will have to read them carefully and see whether they can be confirmed. His basic question was on what basis would the European Commission be threatening the United Kingdom. It is not threatening the United Kingdom, and if there were any threat it has been resolved by the statement of Commissioner Solbes, which was reported in today's papers.
§ Lord Howell of GuildfordMy Lords, the Minister has been moving around the central question with his usual skill. What is our attitude to the law-breaking by the French and German Governments in relation to the stability and growth pact? Is it true, as all the newspapers report, that we have backed them? Have we backed France, by far the biggest lawbreaker in the Union? If so, we have done so to the fury of the smaller countries. Is this part of a unfortunate policy—which I hope that we change—of constantly being with the big boys against the smaller and newer members of the Community and thus damaging the Community, instead of taking the kind of lead that we should with the smaller countries?
§ Lord McIntosh of HaringeyMy Lords, I take it that the noble Lord, Lord Howell of Guildford, is referring to the ECOFIN decision of 25 November last. In answer to a Question last week, I said that we supported the general statement that ECOFIN made at the end of its communiqué. I point out that the decision about whether to proceed to the next step under Article 104 is taken only by those members of ECOFIN who are members of the euro-zone. Therefore, we did not take part in the vote on that decision.