European Union (Amendment) Bill

I am grateful to all noble Lords who have spoken in this debate, particularly for the expertise and experience that has been evident in all the contributions. I begin where the noble Lord, Lord Maclennan, began, in saying how much the UK has always been in favour of increasing democratic accountability and transparency of EU procedures and policy-making. As many noble Lords have pointed out, scrutiny of the budget by Parliament and Council is key to ensuring democratic accountability and transparency. Giving the European Parliament joint authority with the Council over the annual budget will increase democratic accountability, as the European Parliament will share with the Council the important task of agreeing the annual budget. However, the key budgetary decisions on the multi-annual financial framework expenditure ceilings and own resources, which I will explain further in a moment, will continue to be taken in Council—by unanimity. Noble Lords are correct in their assumptions that in the context of the annual budget procedure, the Lisbon treaty will expand member states’ influence. As the noble Lord, Lord Hunt of Wirral, said, the treaty will remove the distinction between ““compulsory expenditure”” and ““non-compulsory”” spending. As the noble Lord indicated, compulsory expenditure is mostly common agricultural policy spending, over which the Council currently has the final say and which is approximately 35 per cent of the budget. As noble Lords have pointed out, the non-compulsory element is the 65 per cent over which the European Parliament currently has the final say. Under the treaty, all spending will be subject to the same classification, and therefore no one part of the budget authority will have the final say over particular areas of the budget. We believe that that increases the Council’s leverage across the budget as a whole. The noble Lord, Lord Grenfell, kindly indicated the comments made by the Committee in its report and I am extremely grateful to him. The conclusion of the paragraph that the noble Lord referred to says: "““The abolition of the distinction between compulsory (agricultural) and non-compulsory expenditure is a significant step alongside the application of the ordinary legislative procedure to agriculture policy. The change will make the agricultural budget-setting process more transparent, open and balanced””." I want to deal with some of the specific points that have been raised before I outline what the procedure will be and, I hope, address the central point made by the noble Lord, Lord Hunt of Wirral. I was grateful to the noble Lord, Lord Pearson of Rannoch, for his contribution and for his suggestion about the Court of Auditors. I will explain what the Court of Auditors currently is, because I am not entirely convinced about the noble Lord’s suggestion; I believe that the court does what the noble Lord was suggesting it should. First, there is one member per member state. Secondly, the individuals must have belonged, at national level, to an external audit body, or be especially qualified. Thirdly, their independence must be beyond doubt. I think that that brings together a group of people of extraordinary experience, as expert as any independent group of auditors from any nation state.