European Union (Amendment) Bill

I am extremely grateful to all who have spoken. I am aware that we had quite a lengthy debate earlier in Committee and I will therefore not repeat all the things that I said before. I will take those as read for the purpose of this debate, but will try to deal with the questions that have been raised. I love the idea that I might be able to satisfy the noble Lord, Lord Stoddart, on an issue to do with Europe. I fear that that will never ever happen—if it does, the drinks are on me. As the noble Lord, Lord Hunt of Wirral, very eloquently said in his support of the noble Lord, Lord Willoughby de Broke, and his amendment, this is an important issue and one that concerns the UK Government. I know that noble Lords will also not mind if I make clear that we have to make a very important distinction between fraudulent activity and activity of errors. In his references to the UK and Spain, the noble Lord, Lord Hunt of Wirral, described errors. That does not mean that errors should not be put right, but I would not want noble Lords to think that the position held by the European Union in the main is to do with fraud. That is not to diminish the issue of fraud in people’s minds, but to be absolutely clear. It is clear that most of the irregularities and errors are resolved after the reports come out. In other words, these issues are not about finances going astray but are rather issues of not complying strictly with the rules and regulations that apply, and therefore are dealt with. None the less, I do not think the figure is 31 per cent as the noble Lord, Lord Willoughby de Broke, said—only 40 per cent is able to be signed off at present. I am not trying to suggest that these are not important issues, but a lot of the ways in which they can be dealt with are by making sure that member states and the Commission take responsibility for ensuring that they fulfil their obligations properly, rather than making assumptions about fraud, although that plays its part. I will not go through all the different concerns that we addressed before but will rather focus on what noble Lords want to hear in answer to their questions. The noble Lord, Lord Willoughby de Broke, asked about the production of a list. He asked me three questions and I will try to answer him as fully as possible. First, there is not yet a list, as such. I will let him know if I can find out any more information about whether there are any plans for such a list. I will copy that letter to any of your Lordships who participated in the debate and to the Library as well, but as far as I am concerned there is not a list. We want to make sure that we continue to press for these issues to be dealt with properly and appropriately. The UK has played an important role—for example, in setting up the EU anti-fraud office, OLAF. It is a very active anti-fraud office and has had successes. It has looked at complaints where, for example, more than €20 million has been wrongly claimed and has been able to reclaim that money, at flax producers in 2001 where there had been a false declaration that straw was unsuitable for processing, and at all aspects of fisheries and so on. It has been able to deal with examples of fraud very effectively. We were instrumental in making sure that we had an EU anti-fraud office. I have already said that we are concerned to make sure that we play our part. We will be publishing a consolidated statement on the use of EU funds in the UK. That will be audited by the National Audit Office and will give Parliament a greater role in scrutinising it. The noble Lord, Lord Willoughby de Broke, asked whether that had yet been published. It will be published soon, but we are waiting for the National Audit Office to finalise its work; once that is ready the statement will be published—but it rests with the NAO, not the Government at present. The noble Lord, Lord Hunt, asked what had happened to the Commission’s action plan—the report that it produced on progress. A progress report has been produced and most of its points have now been dealt with. The Commission was going to produce a further report on the implementation later this year. As the noble Lord indicated, Mr Balls said in another place that it is the Commission’s objective to try to strive for a positive statement of assurance by 2009 as well. There is clearly an impetus. In our negotiations on the reform treaty and the constitution which preceded them, the UK has been keen to make as much progress as possible and we have put forward positive suggestions. I do not accept the proposal made by the noble Lord, Lord Pearson of Rannoch, that we should simply withhold the money. That is not the right approach. I can understand why he would feel that even the most dire consequences of so doing would not matter, but that is not the way that we should try to ensure that we get a better outcome and more satisfactory progress. The noble Lord, Lord Brooke of Sutton Mandeville, who is probably the most experienced person here as he has visited the European Court of Auditors, asked about good practice. It is a very important question and I mouthed as much to him, because if we can get more progress in spreading good practice that would be a better proposition. The UK, the Netherlands and Denmark have already published, or will publish, their own initiatives on the use of EU funds. Sweden has also announced that it too will be doing so, or something similar in any event. We hope that other areas will follow suit and that being able to see what is being done across member states will be a good way of demonstrating good practice. We also have various working groups. There is a working group on Article 280 which is trying to look at co-operation and the prevention of fraud where good practice and best practice across member states plays its part. Good practice is beginning to be seen as a way of combating at least the irregularities of the issues before the European Court of Auditors and the European Union. The scrutiny committees of both Houses have commented on the report of the Court of Auditors. The Commission recently issued a report of member states’ responses made to it in the 2006 ECA report, which was considered in the House of Commons European Scrutiny Committee in March 2008. The committee recommended a general debate. I agree with noble Lords that it is very important to make sure that Parliament is able to debate, not just through this treaty but in more general terms, what is happening on these important issues. I hope that the work of the National Audit Office, when we get it, will provide another opportunity for the committees to consider the matter and perhaps recommend to the House through the usual channels whether we need to debate those matters further. The UK has been very keen to push forward proposals and think about how we might reform the European Court of Auditors. Perhaps, as noble Lords have said, a committee that was set up originally for nine member states now doing the same thing for 27 has a large task. Perhaps there is a better way in which to do that, with an executive board of auditors-general and a more strategic approach. We will continue to press on that. It is clear from the discussions that I have had and from looking through the detail, not least in response to thinking about these amendments, that a lot of work is under way. While it is difficult to see how we can get 100 per cent certainty from the European Court of Auditors, with 27 member states and a Commission—not because of fraud but because of irregularities—the more that we can spread good practice, the more we can push to ensure that the auditing position is the best that it can be. The more that member states and the Commission take responsibility for ensuring the best possible practice and the best way in which to root out any fraudulent activity, then so much the better. I am grateful to the noble Lord for tabling these probing amendments in what I think has been a useful debate.