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Lord Wyatt of Weeford: My Lords, as the Greeks have the greatest longevity in Europe, ought we not to encourage them in the agreeable habit of smoking instead of trying to discourage it?

Lord Inglewood: My Lords, I am not sure whether it is in the interests of this country that Greeks should live longer than Britons. However, if it is desirable to promote the consumption of tobacco one can rest assured that Her Majesty's Government will do so. Conversely, if it is not we shall endeavour to do our best to discourage it.

Pedestrian Casualties

2.48 p.m.

The Viscount of Falkland asked Her Majesty's Government:

The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, within our overall target of reducing all road casualties by one third by the end of the century, we aim to reduce pedestrian fatalities by 35 per cent. and serious injuries by 40 per cent. from the 1981-85 average. The reduction will be promoted through a wide range of measures, including traffic calming, pedestrian education, penalties for dangerous and careless driving, research, improved pedestrian facilities and substantial advertising campaigns.

The Viscount of Falkland: My Lords, I thank the Minister for that Answer. But is it not clear that, sadly, the number of pedestrian casualties is out of gear with the fall in accident rates involving motorised vehicles? Is that not to some extent due to the inability of people properly to use crossings? Is it not also due to the fact that the technology—the lighting and alarms for disabled people—is out of date? Has the department any plans for updating that technology?

Viscount Goschen: My Lords, it is important to put the trend of pedestrian fatalities into context: they are now at their lowest since records began in 1926. But the noble Viscount is right to draw attention to the problems associated with pedestrian crossings. A statistic has emerged from research that over 90 per cent. of pedestrian crossing movements at light-controlled crossings are against a red light. That is why we have carried out a great deal of research and have come up with a so-called intelligent crossing which will hold the red signal to drivers until pedestrians are clear of the crossing.

Lord Strabolgi: My Lords, can something be done about the increasing habit of cyclists jumping the traffic

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lights and speeding ahead when the crossing is in favour of the pedestrians? Are the Government aware that many accidents have taken place? The noble Viscount did not mention that in the list that he gave in his original Answer to the noble Viscount.

Viscount Goschen: My Lords, as I believe we discussed on an earlier Question, that is an offence. Cyclists are subject to the rules of the road as are motorists. Therefore, it is the responsibility of the police to prosecute those who break the law.

Lord Finsberg: My Lords, is my noble friend aware that I was about to raise in part the matter to which the noble Lord has just referred? I was going to ask my noble friend whether there are any statistics to show how many pedestrian casualties are caused by those cyclists who ignore all the rules of the road. My noble friend has said that it is for the police to enforce the law. I ask him specifically to request his right honourable friend the Home Secretary to ask the Commissioner of Police for the Metropolis to pay some attention to that instead of allowing many of his officers to stand and watch those things happen without taking action.

Viscount Goschen: My Lords, I believe that I previously answered that exact question from my noble friend. I said that I would take his remarks back to my right honourable friend the Home Secretary. Nevertheless, it is the responsibility of the police to enforce the law and the police must make their own priorities.

The Countess of Mar: My Lords, will the noble Viscount consider resurrecting the "See and Be Seen" campaign which we had some years ago? Recently I have noticed that pedestrians seem to be walking on the wrong side of the road along country lanes at night in dark clothing. In fact, my daughter and I had a very narrow escape the other day and received abuse when my daughter complained to the three youngsters concerned.

Viscount Goschen: My Lords, we are continuing to carry on with the very campaign to which the noble Countess referred. Indeed, we issued recently half a million copies of the leaflet used in the "See and Be Seen" campaign. We believe that that is the right approach to promoting conspicuity for pedestrians.

Lord Brougham and Vaux: My Lords, can my noble friend tell the House whether the number of pedestrian fatalities is higher in the evening when people are coming out of pubs?

Viscount Goschen: My Lords, my noble friend has put his finger on a very important point. Some 80 per cent. of pedestrians injured between the hours of 10 p.m. and 4 a.m. were under the influence of drink.

Lord Carmichael of Kelvingrove: My Lords, the Minister will be aware that during the recent holiday period in most areas of the country the number of those who were breathalysed and did not pass the test was unfortunately higher than it was last year. That was even allowing for the fact that the police were not able to stop and test quite as many motorists as they did last year.

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One good feature of the statistics is that last year there was a very slight reduction in the number of pedestrian casualties, but that is not enough to give us any great encouragement.

I am delighted with the programme which the Minister laid out for the future to reduce the accident rate by 35 per cent. However, will he give us an idea of what authority local authorities have, for example, to institute on a wider scale the 20 miles an hour speed limit in densely populated residential urban areas?

Viscount Goschen: My Lords, the noble Lord is quite right to draw attention to the success and the potential of the new 20-mile-an-hour zones. We believe that such traffic calming is extremely effective in reducing pedestrian accidents. A recent study of the first 100 20-mile-an-hour zones showed that they have reduced child, pedestrian and cyclist accidents by 75 per cent. That is an extraordinary statistic and we shall continue to work very hard on such measures.

Baroness Gardner of Parkes: My Lords, in view of the large number of accidents actually on pedestrian crossings, may not pedestrians be placing too much faith in the crossings and simply be stepping out? Is there not a case for educating pedestrians so that they understand that a motorist needs a certain distance within which to stop?

Viscount Goschen: My Lords, that is an important point. It is obviously part of the problem. The 90 per cent. figure for pedestrians crossing at light-controlled crossings against a red light indicates that much of the blame lies with those very same pedestrians. Nevertheless, it is the responsibility of both motorists and pedestrians to ensure that the crossings are safe.

European Communities (Finance) Bill

2.55 p.m.

Baroness Chalker of Wallasey: My Lords, I beg to move that the Bill now be read a second time.

This Bill is short. At first sight, it appears very technical, with its references to "treaties" and "Community treaties" and "own resources". But it represents the final stages of a review of the European Union's finances which started almost three years ago. Its passage will honour an international commitment which the Government made on behalf of the United Kingdom at the Edinburgh European Council of December 1992—over two years ago.

At Edinburgh, the Prime Minister, as President of the Council of Ministers, led the European Council to agreement on an interlocking set of complex issues: on agreement to begin enlargement negotiations with Sweden, Finland and Austria, who formally joined the Union last week; on establishing formal relationships with the new democracies of central and eastern Europe, with the eventual goal of Community membership; on a plan for improving growth and tackling unemployment on free market lines and on a commitment to reach agreement on the GATT; on improving openness and obtaining a clear statement of subsidiarity; on a way

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forward for Denmark, following its rejection of the Maastricht Treaty; and on the agreement to the shape of the Union's finances until the end of the century.

The result of the Edinburgh Council was reported to this House by my noble friend Lord Wakeham on 14th December 1992. Your Lordships' House rightly welcomed the solution of so many difficult yet important issues. As I have explained, the issues were an interlocking set. Without agreement to all, there would have been agreement to none.

I should pause at this point to explain that the Government had their own package of aims for the Edinburgh European Council. European Councils deal in packages. It is a common mistake to think that any one issue can be isolated from the rest of the agenda; it cannot. One of our aims, back in December 1992, was to help the Danes to obtain Maastricht opt-outs similar to our own in order to keep them in the Union as our de-centralising and anti-federalist allies. Other aims were to secure the completion of the single market; further, to turn subsidiarity into a more concrete form; to secure agreement to enlargement so that Austria, Sweden and Finland might join; and to obtain a satisfactory solution to the Community's financing negotiations, limiting the increase in the resources available to the Community budget and preserving the valuable UK abatement which my noble friend Lady Thatcher negotiated at Fontainebleau in 1984. We achieved all those aims at Edinburgh.

This Bill gives legal effect to the main elements of the financial settlement reached at Edinburgh. The Edinburgh Council agreed to freeze the Community's "own resources ceiling"—the limit on the amount of revenue the Community can raise from the Member States—at 1.20 per cent. of Community GNP in 1993 and 1994, and then to raise it in stages to 1.27 per cent by 1999. That would increase the resources available to the Community budget by about 6 per cent. in real terms—equivalent to some £4 billion—in 1999, compared with retaining the 1.20 per cent. ceiling.

The Edinburgh Council also agreed to change the formulas which determine how much each member state contributes towards the financing of the Community budget by placing more emphasis on their relative GNP shares and less on the relative size of their VAT bases. GNP is widely acknowledged to be a fairer way of acknowledging wealth and ability to pay than VAT.

Finally, the Edinburgh Council agreed to maintain unchanged the UK abatement formula, which was negotiated by my noble friend Lady Thatcher in 1984 and which has saved us £16 billion since; to a package of extra spending measures which were necessary to help the less developed regions of the Union with the infrastructure and other investment that they needed to compete in the single market and to accept enlargement; and also to assist the former communist countries of central and eastern Europe to build free-market economies that would bring prosperity and sustain democracy.

The first three of those elements have now been put into legal form in a new Own Resources Decision. The fourth element is encapsulated in an "inter-institutional agreement" between the Council of Ministers and the

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European Parliament and will be given effect through the annual Community budget negotiations. Under the Treaty of Rome, a new Own Resources Decision not only has to be agreed unanimously by the Council of Ministers, but also has to be approved by member states,


    "in accordance with their respective constitutional requirements".

Therefore, the Bill seeks Parliament's approval for that new decision, which we published as a Command Paper (Cm 2702).

The financial package agreed at Edinburgh was much tougher than the Commission and many other member states wanted, and represents a good outcome for the United Kingdom.

The Commission of the day originally wanted to increase the own resources ceiling—the limit on the amount of revenue that the community can call up from member states—from 1.20 per cent. of Community GNP to 1.37 per cent. by 1997. That would have increased total Community spending by about £8.5 billion more in 1997 than under the present arrangements. The proposal would have cost the UK taxpayer an extra £750 million in 1997.

The Commission of the day also suggested that the UK abatement could be amended so that it did not apply to expenditure under the new Cohesion Fund. Mr. Trojan, a Commission official, confirmed that point when giving evidence to the Select Committee on the European Communities (as it then was) on 20th October 1992. Many member states wanted to go further and eliminate the UK abatement altogether. The Commission's suggestion would have cost us a further £250 million a year by 1997, making the total net cost of the package £1 billion a year over and above the present arrangements.

However, the agreement reached at Edinburgh in 1992, and approved by the other place last December, preserves our abatement unchanged until at least the end of the century. Even then, safeguards remain in place which ensure that it can be changed only by unanimity and with the subsequent approval of Parliament. It also increases the overall ceiling on Community revenue, but by just 7/100ths of 1 per cent. of GNP. That is a small increase over seven years when one considers what people were trying to persuade us to do. It also means that the Community budget is expected to grow on average by about 3.3 per cent. a year in real terms between 1992 and 1999—significantly less than the 5.3 per cent. a year which was agreed in the last review in 1988.

The result of that package of measures is that our net contribution will be £75 million higher next year and £250 million higher in 1999-2000 than would have been the case under the present arrangements. That will be a much smaller increase than under the Commission's proposal.

Due to the UK abatement, we will pay a much lower share of the cost of Edinburgh than many other member states. By the end of the century not only Germany but also the Netherlands, France, Austria and Sweden are expected to pay more per head to the Community budget than us. Moreover, for the first time, Italy will be a significant net contributor on a regular basis.

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The Edinburgh European Council was, therefore, a considerable success for the United Kingdom because it achieved our objectives on a range of Community policies, and obtained a tough financing agreement.

Now let us tackle the vital issue of fraud and financial management within the framework of the Community budget. In the debate in another place, in our debate in this House on 31st October, and even during a Question earlier this afternoon, Members of both Houses have shown themselves to be deeply concerned about fraud and financial mismanagement. Noble Lords are well known for their hard work and for the excellent reports produced on that crucial issue.

In the debate in the other place, there was concern that the Community budget should be increased when there was evidence of fraud and mismanagement as reported, for example, in the recently published report of the Court of Auditors on the 1993 budget. As I said, your Lordships' House has always taken the issue of fraud in the European Community very seriously. That is why the four extremely valuable reports that your Lordships have produced since 1989 have been valuable not only to this country but also to other countries in the Community. Moreover, as more countries become net contributors they will become even more interested in the reports that your Lordships have produced.

The work on this very difficult and important issue has attracted admiration from within the Community. As a government, we have made the fight against fraud a real priority. We obtained important improvements to the Maastricht Treaty. They included improving the status and strengthening the powers of the Court of Auditors and the legal duties of the Commission and of member states, so that the Community is at last in a position to start to get to grips with fraud. We made a proposal for increased co-operation between member states and the co-ordination of national criminal laws.

Fraud rightly attracts headlines, but it is as important to ensure that Community spending is well directed to achieve the best value for money as it is to find the fraud. Prevention is as important as detection and putting it right. The Government have also taken action in that area. The Edinburgh European Council took an important decision to require prior appraisal of programmes and projects before resources are committed, and to require subsequent evaluation. Since Edinburgh, those requirements have been incorporated in the cohesion fund regulation, the new structural fund regulations and the regulations governing the fourth research framework programme.

We intend to build on to that work by insisting that the Court of Auditors' recent excellent report is vigorously followed through when the Council discusses it in the near future. We shall ensure that the Community institutions have the powers and the resources that they need to carry out their responsibilities in that area, such as the legal instrument on anti-fraud criminal law measures to be agreed before the June European Council of this year.

When we last debated the issue of fraud in your Lordships' House many noble Lords emphasised the need for commitment to action at the highest level in the Community. I am pleased to say that the fight

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against fraud was an important item on the agenda at the European Council in Essen on 9th and 10th December, where my right honourable friend the Prime Minister made a number of proposals for action in that area. These were all endorsed by the European Council. The European Council rightly recognised that what the Government have been emphasising—namely, that taxpayers expect fraud, waste and mismanagement to be combated with the greatest rigour—has to apply throughout the Community.

The European Council called for: concerted action by all institutions; the adoption of a legal instrument on anti-fraud criminal law measures to be agreed, as I mentioned just now; the adoption of a Council regulation setting out the basis of anti-fraud measures to be adopted in future sectoral legislation; member states to submit reports on measures they are taking nationally to combat fraud and waste; and for all institutions to follow up special reports by the Court of Auditors.

These areas for action form a useful basis for action on fraud over the forthcoming year. They include action in a number of areas identified as important both by the Government and by your Lordships' House. The fight against fraud is vital, but it is not a fight that is won easily or by grand political gestures. It is only won by relentless and grinding vigilance and by close attention to details over a number of years. It has been a top priority for this Government and will continue to be at the head of our agenda; and we shall continue to value the expert work carried out by your Lordships in the specialist committees.

For the Government, it is a matter of highest importance to deliver our commitment given at Edinburgh on the resources for the European Community. The United Kingdom's international reputation would be severely damaged if we broke our word, and our effectiveness in future negotiations would then be substantially undermined. The Edinburgh financing agreement was a good deal for Britain. It helped to deliver a successful outcome on other key objectives too. I commend the Bill to the House and trust that your Lordships will give it a Second Reading. I beg to move.

Moved, That the Bill be now read a second time.—(Baroness Chalker of Wallasey.)

3.12 p.m.

Lord Richard: My Lords, this is the Second Reading of this Bill. If I may say so to the noble Baroness, I did not realise it was going to be a congratulatory inquest upon the genius of the Prime Minister and his negotiations at Edinburgh, but there it is. With the benefit of hindsight, no doubt all things appear more rosy today than they did at the time.

I must say that on the face of it this Bill really should have been a simple one giving rise to little controversy. It is, after all, meant to be a measure giving effect to the new "own resources" position which was agreed at the Edinburgh Summit. It has now been certified by the Speaker of another place as a money Bill and therefore the powers of this House are necessarily limited. As I understand the position, it has to have completed its

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passage through this House by Thursday. There is therefore, it seems to me, a certain unreality about our proceedings today and tomorrow on this measure. No amendment that is carried in Committee will have any effect, and for all practical purposes our powers in respect of this piece of legislation are insubstantial.

That we are considering a money Bill of this sort in this kind of detail at all is due not to anything intrinsic to the measure itself but rather to the extraordinary political tangle in which the Government seem to have enmeshed themselves. First, they made this an issue of confidence in another place, thereby transforming what should have been a relatively uncontroversial measure into one going, if I can coin a phrase, to the heart of the continuation of the Government themselves.

Secondly, by depriving eight Conservatives of the Whip, thereby destroying his parliamentary majority, the Prime Minister has created a group of dissidents within the Conservative Party who have to be placated if the Government are now to survive.

Hence, too, the extraordinary statement on a referendum which the Prime Minister made yesterday. If Mr. Major is to go to the intergovernmental conference next year with his mind set on vetoing anything which might give rise to renewed Euro-sceptic calls for a referendum, he really is handing control of the British negotiating position at that conference to the very group of people he has so recently deprived of the Whip. Either that or he goes quite determined to make the intergovernmental conference a failure. Why on earth should the others now pay any attention to what Britain says at that conference? They know in advance that his negotiating position is at all costs to avoid trouble at home. Is this at the heart of Europe? It is one more step in the increasing marginalisation of Britain in its relations with the European Community—a process that many of us find totally unacceptable and nationally extremely damaging.

Thirdly, the Government got themselves into this mess because their sums were wrong. For the Chancellor of the Exchequer to discover on the eve of the debate in another place that he was £700 million out in his figures was, to put it mildly, somewhat careless. One would have thought that on an issue as sensitive as this, the Government would have made sure that the arithmetic was correct before they brought the measure to the House of Commons; so the House may have gathered that I have little sympathy for the predicament in which the Government now find themselves.

To turn to the provisions of the Bill itself, what are its objectives? The Treasury Bench may mutter, but I am bound to say with great respect that most of the speech of the noble Baroness who introduced this Bill had nothing whatsoever to do with this measure. It was a paean of congratulation to the Prime Minister for his enormous success in his European policy which, if I may say so to the Government, is not perhaps the most noticeable of all the successes that the Government could claim.

What are the objectives of the Bill? First, it enshrines in United Kingdom law the decisions made by the Council of Ministers on 31st October 1994 on the system of financing the European Communities. The

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principal decisions, as I understand them—I am bound to say that I have followed the figures with some difficulty and I am always grateful for any guidance that I can get from the Benches opposite, or indeed on occasions even from the Bench immediately behind me—were, first, to raise the ceiling for the EC's "own resources". At present this is 1.2 per cent. of EU members' GNP. The proposal is that gradually it should be raised to 1.27 per cent. by 1999. For the noble Baroness to describe that as a freeze seems to me to be somewhat straining the English language, but there we are. As I have said, the figure will rise to 1.27 per cent. by 1999.

Secondly, it was decided to adjust the formulae for calculating how much each EU member pays over. The changes broadly increase the weighting given to GNP and reduce the weighting given to VAT. The Government argue that this will benefit the UK. So far, so good. Even a bear of little brain such as I can follow that part. But what will all this cost? I am bound to say that this is where the matter becomes a little more complicated. A Written Answer of another place of 23rd November set out the Government's latest figures.

The Government argue that the net cost to the UK of decisions made at the Edinburgh Summit is £75 million in 1995 rising to £250 million by 1999. I am not quite sure how the Government arrive at those figures, but that seems to be the firm basis upon which they have chosen to stand. But public sector net contributions were already set to rise. The figures fluctuate from year to year; but, as I understand it, the underlying trend is for our net contribution to rise by £850 million between 1995 and 1999. That is the kind of figure that we are talking about.

It is clear that the Treasury badly miscalculated its forecast of our net contribution to the Community this financial year. It is now expected to be over £700 million higher than predicted in the Treasury's departmental report last March. The £700 million, as I understand it, is made up of a miscalculation. There is to be a £900 million rise in our contributions plus a £200 million shortfall in our receipts offset by a £400 million rise in our budget abatement, and that produces the £700 million. I think that is right, is it not?


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