EU Financial Management

It is a pleasure to be called to speak on behalf of the Opposition in this debate, which encompasses several European institutions, their related spending programmes, and the process by which those are examined by the European Court of Auditors. I am pleased to debate these issues with the Economic Secretary, who was temporarily under the weather after Christmas. I am genuinely pleased to see him back in his place on the Treasury Bench this evening, in his usual humorous good form. He will recall that he and I have debated these topics on several occasions in recent months, including in European Standing Committee A on 1 November, when we focused on the Government’s then draft proposals for the EU budget and combating fraud, and subsequently in a Statutory Instruments Committee on 14 December when we looked in some detail at the UK’s economic performance relative to our European neighbours in the aftermath of the pre-Budget report. I give the Minister notice that a few questions remain outstanding from those sessions, which fortunately also touch on our business this evening. I hope that he can provide me with answers this evening, as he was not always able to do so then. We are here partly at the behest of the European Scrutiny Committee, which recommended this topic for debate on the Floor of the House—and quite rightly, too. The package that the Committee provided us with includes some 30 documents, which we have collectively before us tonight—all 1,158 pages of them—for which we must thank the Committee profusely. Those papers centre on the European Court of Auditors’ scrutiny of the EU budget process and include its detailed annual report on the implementation of the EU budget for 2004, to which the Economic Secretary has referred on several occasions as a result. The issue of fraud and the reliability of the EU’s accounts, which lies at the centre of the debate, has continued to rear its head repeatedly ever since the entire Santer Commission resigned over EU fraud in 1999. We were subsequently told that a reform process would be put in place under Commissioner Neil—now Lord—Kinnock and that those issues would be seriously addressed at last and put to rest once and for all. However, despite that so-called reform programme, the European Court of Auditors has refused to sign off the EU’s accounts for 11 years running, because of continuing irregularities. That process was well summarised by the European Scrutiny Committee in its 19th report of the 2005–06 Session, which appears at page 1,089 of our bundle tonight and states:"““For eleven years, the European Court of Auditors has been unable to give a positive statement of assurance (frequently referred to as a DAS, from the French declaration d’assurance) on the Community Budget. The present arrangements for financial control and audit of Community spending are not working.””"