EU Financial Management

I was fascinated to hear the Economic Secretary say that he believes in the EU. I know that it is in vogue to take direction from an overarching authority, but the EU is something in which I believe, in so far as it exists, but I do not believe that it has a coherent system of financial accountability. I must declare an interest—as someone who farms modestly in Yorkshire, I am eligible for my share of the €43 billion out of a total of €100 billion. Little has been paid incorrectly to farmers this year, because little has been paid at all. The Department for Environment, Food and Rural Affairs system is so complex that it rules out the possibility of fraud, but DEFRA has so many officials that it probably wastes an equivalent sum on administration—there are now more DEFRA officials than there are dairy farmers in England. Until 2004, I was a Member of the European Parliament, where, as a member of the Environment Committee, I was budget rapporteur between 2002 and 2004. A particular bugbear of that Committee was the way in which the LIFE—the financial instrument for the environment—third countries programme is administered. The programme is for environmental projects outside the EU and the Committee was especially concerned about financial probity in relation to money deployed in the west bank and Gaza strip. I did not look to see whether it was referred to in the documents because I know that the Commission had difficulty finding an inspector who was prepared to go and look at those projects, but it is a concern. Last November, once again the European Parliament enacted what has become an annual ritual by refusing to sign off the EU’s accounts for the 11th year running. It is almost as predictable as the arrival of Alsatian asparagus or Beaujolais nouveau that the European Court of Auditors will deliver a ““negative statement of assurance””—a phrase reminiscent of ““deferred success””. We have been deferring success in this area for 11 years. As the Minister rightly said, 80 per cent. of the budget is deployed by member state Governments, and the blame for many of the more blatant frauds—for example, those involving olive trees in Italy or flax in Spain—should be laid fairly and squarely at the door of the Governments involved, but not all of the money unaccounted for has been misappropriated. Attention was drawn to the UK’s sheep annual premium scheme, for example. There was no suggestion that farmers misappropriated every single penny in the scheme, but the system in place before sheep were individually tagged meant that sheep could be counted twice by inspectors on different days. Such infringements were few and far between, but the system was not sufficiently robust to rule out the possibility of fraud. My hon. Friend the Member for Esher and Walton (Mr. Taylor) drew a parallel with the housing benefit system in the UK, but I do not think that the comparison is fair. We are talking about money given to 25 member states and a small number of NGOs, which is not the same as distributing large sums among large numbers of individuals. Some EU funds are spent in a way that I believe is diametrically opposed to the wishes of the British people—for example, we spend €1 billion a year on subsidising the growing of tobacco, much of which is low quality and has to be sold on to third-world markets—and some of the money is wasted. Hon. Members who have perused the documents will have found on page 245 a reference to the Committee of the Regions. It is noted that the Committee has not been able to fill the auditor’s post on a permanent basis. There is a story behind that. The Committee has 317 members from across Europe, each of whom costs £147,000—that figure does not include salaries. I discovered that fact by accident. When I was discussing another report in the European Parliament, it emerged that the Committee of the Regions also discussed reports, but no one listened to what it said. Is that Committee good value for money? Do right hon. and hon. Members receive feedback from their Committee of the Regions representatives? Do they even know who their representatives are? When the financial auditor of the Committee of the Regions drew the Court of Auditors’ attention to problems associated with members’ travelling expenses during a meeting of CoCoBu—the Committee on Budgetary Control—the matter was played down by the auditors. Not until Members of the European Parliament—in particular Michiel van Hulten, a Socialist MEP from the Netherlands, and Chris Heaton-Harris, a Conservative—drew attention to it did those events emerge.