European Union (Amendment) Bill

If the noble Lord had controlled himself, he would have had the answer by now, because I was just coming on to that issue. We have to consider what the Court of Auditors does. It produces a statement of assurance based on a particular statistical base that produces—I say this to my noble friend Lord Kinnock—far too small a sample to necessarily predict the underlying transactions correctly. I said that frequently as a member of the Budgetary Control Committee. Of the two parts of the statement of assurance, the balance sheet has always been approved and there is always a questioning of the regularity and the reliability of the underlying transactions. It is all very well to smirk about the underlying transactions, as the noble Lord is doing, but they are 85 per cent expended in the member states. Most of the criticisms of underlying transactions are criticisms of what happens in departments such as Defra. Of the underlying transactions that take place in this country, as my noble friend Lord Kinnock explained, most of the money is transferred money and does not even leave the United Kingdom. There is a serious problem with fraud and irregularity. However, if we look at fraud and irregularity in the European Union budget carefully, we find that the majority of it is not on the expenditure side of the budget but on the revenue side—the collection of own resources. One of the things that we have to do on the budget—the people who have been taking the lead in this are the members of the European Parliament Committee on Budgets—is to get away from the traditional own resources, which are both a diminishing part of the budget and the most fraud-prone part of the budget, and get a more sensible system of financing the European budget. The noble Lord, Lord Hunt, paints a picture of the European budget inevitably leading to a bigger budget, but there is nothing inevitable about that because the final control of traditional own resources is a power retained by Parliament. National parliaments retain the power for the ultimate approval or disapproval of the level of own resources in the budget. I believe that the abolition of the distinction between compulsory and non-compulsory expenditure is a proper, right and necessary course. We have been slow to adopt it. It has been on the agenda for a long time; a large number of parliamentarians, including me, supported it during the Convention on the Future of Europe. Tonight we should be inviting the Opposition to withdraw their amendment, although we need not in any sense beg them to, because, if we test the opinion of the Committee, the amendment will be defeated.