EU Financial Management

The hon. Gentleman clearly has a deep admiration for the people who work for the county of Staffordshire. I cannot even begin to understand how he knows about them, but the comparison is valid. The question of how good the workers are is separate. While we are making comparisons, let me make another. The total EU budget was less than the budget for the Department of Health in 2004–05, at £71.5 billion. I am not saying that the Department of Health spends its budget better than the European Union but merely making a comparison of size. That does not reduce the importance of the accusation levelled against European Union institutions that fail to secure auditing of their accounts. I am talking about the context, which is sometimes blown out of proportion. The House rarely engages in three-hour debates—even debates attended by the number of people who are present this evening—on the way in which the Department of Health spends its budget, or on the fact that, as I mentioned earlier in an intervention, the budget of the Department for Work and Pensions has been unapproved by the National Audit Office on more than one occasion. I am trying to establish the context rather than evaluating the effectiveness. It is important that a House of Lords Committee is to scrutinise the documents, and we shall pay close attention to its findings. I understand that it will consider a number of questions. For instance, what are the fundamental problems that have led to the accounts not being given a positive statement of assurance for the past 11 years? I am sure that the hearings on that question will be very interesting. Are the suggestions for improving management of the budget appropriate, will those improvements lead to a positive statement of assurance by the end of the tenure of the Barroso Commission, and can lessons be learned from accounting procedures in other countries? I look forward to all those deliberations, but the last point is particularly important. It is in no way an exoneration of the Commission, in terms of its responsibility, to say that although national Governments contribute to the totality of the budget, 85 per cent. of the funds are then administered by member states. It is extremely important for member states to take responsibility for the proper administration of those funds. As they are predominantly funds to deal with agricultural problems, and structural funds, it is frustrating for the Commission that it gets all the flak while national Governments get very little. It was suggested earlier that an independent investigation, the equivalent of a National Audit Office investigation, should be carried out to assess the performance of the Government of each member state. That is a good suggestion. The fact that it might amount to a supranational intervention does not deter me, although it might pose problems for some Members who have spoken today. However, it is very important that national Governments face up to their responsibilities, because in a sense, when they act on them badly they set a bad example not just to the Commission but to the new member countries. If Poland, which is a very considerable country itself, sees other countries not observing the rules, it might be tempted to go astray. So we must all set an example that will set the tone for how the budget and the Commission develop. Whether we can improve matters by activity based budgeting or by accruals is a complex and difficult question, but the Government need to put much more pressure on the Commission than they have done to date. They have been in power since 1997, so discussing what we did before then is irrelevant. Those of us who believe that the European Union brings benefits to this country are profoundly concerned that those benefits are being distorted by public criticism—it is justified—of the management of moneys transferred to Brussels. That is diminishing the value of programmes such as aid, when in fact, in many countries, the aid budget, which is administered by the EU, is valued and highly regarded. As one of those Opposition Members who has consistently believed that membership of the European Union is in Britain’s national interest, I urge the Minister to reinvigorate his efforts to ensure that this matter is dealt with by the Barroso Commission. Barroso himself I find an impressive figure. He has had big issues to deal with. He is a former Prime Minister of a good ally of ours within the EU, and a very sharp and intelligent man. But he clearly needs help not just from other commissioners, but from the member states themselves, if this problem is to be brought under control.