Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Tebbit: My Lords, I am grateful to the noble Lord for giving way. He is wrong. We have a rather good record for uncovering fraud. There are no statistics as to how much fraud is committed in any country, only how much governments uncover.

Lord Eatwell: My Lords, that is why I stuck to facts rather than fantasies.

I have mentioned already that the Treasury was first taken unawares and now seems totally unable to explain why our contribution to the budget has increased so sharply this year. But the problem goes wider than that. Just before Christmas I met in the Corridors of your Lordships' House my noble friend Lord Bruce of Donington. I wished him a happy holiday and he commented to me that he would be spending his time examining new European directives because if he did not, nobody else would. That statement rings true. There is certainly no evidence that the Government perform the detailed examination that is performed by my noble friend.

Unless and until the Government bring forward proposals to improve scrutiny, either at the level of the European Council as proposed by the noble Lord, Lord Dahrendorf, or scrutiny by the European Parliament and by the British Parliament, it is impossible to take any of their statements about prudent financial management seriously.

There is, of course, a close link between fraud and the common agricultural policy. The entire philosophy of the price support and quota system is perfectly designed to encourage fraud, as the noble Lord, Lord Kingsland, pointed out in his excellent maiden speech. Nothing could be more inherently corrupting than bribing people to produce nothing, as the set-aside provisions do.

Spending on the CAP has been the main focus of the second theme in today's debate. The theme was taken up by the noble Lord, Lord Boyd-Carpenter, and by the noble Lord, Lord Moran. My colleagues and I have argued consistently that the common agricultural policy is fundamentally misconceived. It is a policy which imposes a burden, as has been said, of more than £20 a week on the average family in this country.

As well as lowering real incomes, the high price of agricultural produce—which is the inevitable and, indeed, the necessary outcome of the common agricultural policy—raises industrial costs and lowers industrial profits, reducing the competitiveness of our

9 Jan 1995 : Column 68

industry throughout the world. As if that were not enough, the common agricultural policy severely damages the economies of many developing countries.

Moreover, the CAP now threatens the future security of Europe. As your Lordships' Select Committee so graphically demonstrated last October, and as the noble Lord, Lord Tebbit, argued this evening, not only is the current operation of the CAP doing enormous damage to the agricultural economies of the eastern European states, contributing to the impoverishment of the rural population and hence threatening the stability of those fragile new democracies, but also the CAP is a direct impediment to the eastern European states joining the European Union.

What is the Government's position on reform of the common agricultural policy? The Government tell us repeatedly, the Prime Minister having had yet another triumph at a European Council meeting, that they are reducing the burden of the CAP. Can the noble Lord, Lord Henley, explain why the cost of the CAP to the British taxpayer has risen from £20 billion in 1992 to £27 billion during the last year, an increase of 30 per cent?

It is obvious to anyone who has followed the history of the CAP that it is a policy which cannot be sensibly reformed by piecemeal measures. But where are the Government's proposals? Can we really expect Mr. Waldegrave, one of the architects of the poll tax, to bring forward a reform which will actually save money for a change? Surely there could not be a more opportune moment to produce a truly constructive policy which would serve the interests of British industry and the British taxpayer when so many member states, especially Germany, long an opponent of reform, are now desperate to incorporate the Eastern economies into the Union. A constructive and radical proposal might now find favour.

There has been a third theme in the debate. It appeared in the speeches of my noble friends Lord Bruce of Donington and Lord Stoddart of Swindon and those of the noble Lords, Lord Moran, Lord Beloff and Lord Buxton, although perhaps not featuring quite so much in the latter's. Essentially the argument has been that we should not be contributing anything at all to the European Union. That position was most clearly stated by the former Chancellor of the Exchequer, Mr. Norman Lamont, who argued in another place that there is an,

    "incompatibility between what is acceptable to Britain and what is acceptable to our partners".

Mr. Lamont proceeded, perfectly logically, to suggest that,

    "this country must consider all options ... including even withdrawal".

He declared that the Conservative Party,

    "should have the confidence to set out the issues and to debate them before our future is thrown into the melting pot in 1996".—[Official Report, Commons, 28/11/94; col. 962.]

The noble Lord, Lord Cockfield, echoed that call. Is the noble Lord, Lord Henley, prepared to respond to Mr. Lamont's advice? Will the noble Lord tell us exactly what is the Government's European policy? Or, indeed, what the criteria might be on which their European policy is based? As far as we can discern from the

9 Jan 1995 : Column 69

comments made by government Ministers and by the noble Baroness, the Government's position is essentially informed by the need to maintain the sovereignty of the British Government. But exactly what that amounts to is steeped in confusion.

The Chancellor of the Exchequer said in another place that the Government's policy of maintaining the sovereignty of the UK Government was expressed in the Prime Minister's regular triumphs at the European summits, in particular his triumphs over monetary policy and the opt-out he had negotiated. So far as I can see, the triumph of the Government's monetary policy, in so far as it has had any concrete result whatever, has been to ensure that any central European bank will not be located in the City of London where it should be. That is the triumph so far.

The Government do not seem to understand that the increasing globalisation and integration of the world economy severely reduce our sovereignty and the influence the British Government can have over the economic lives of our citizens. When 60 per cent. of our manufactured exports go to other European Union countries, when one-fifth of all the jobs in Britain depend directly upon the growth of demand in other member states of the European Union, and when our financial stability is dependent substantially on the financial stability of Europe, it is obvious that we can acquire greater sovereignty by working together with our partners in the management of our economic affairs.

Of course, what form collaboration and working together takes requires a key decision. Any collaborative decision-making means giving up some powers to acquire other powers. The key issue is whether the loss of powers is greater or less than the powers acquired. For example, in any future monetary union, would Britain acquire greater economic influence by securing a role in European monetary decision making, including European monetary decision making in Germany—an influence which it certainly does not have at the moment—or would it lose influence?

Those are the sort of questions which should be faced and which the Government should be debating and presenting to the country. However, decisions in the Cabinet clearly prevent the Government dealing with those matters in a rational manner. The Chancellor of the Exchequer and the Foreign Secretary are clearly in favour of moving towards monetary union; the Employment Secretary and the Social Security Secretary are clearly against.

The sort of debate Mr. Lamont and the noble Lord, Lord Cockfield, have called for is not happening and does not seem possible. British policy is therefore paralysed by division and indecision and the task of creating a new post-cold war Europe goes by default. Once again, the British people are being seriously let down by Mr. Major's crew—one cannot call them a team—and the sooner they go, the better for Britain it will be.

7.27 p.m.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, some hours ago, the noble Lord, Lord Richard, stated that

9 Jan 1995 : Column 70

there was an element of unreality about the debate. I thought that it was rather an odd thing to say at the beginning of the debate as we had not heard many of the speeches. I can only suppose that the noble Lord had had a glimpse of the speech of his noble friend Lord Eatwell and that he deduced from that speech that there was to be an element of unreality in it. It is a bit rich for the noble Lord, Lord Richard, to attack the party to which I and my noble friends sitting behind me belong on the basis that not all of them were in full support of the views of Her Majesty's Government when I believe—if I can quote statistics—that something in the order of 100 per cent. of those who spoke behind the noble Lord were not exactly in support of his own policy.

However, I believe that I can agree with the noble Lord and other speakers in one respect. We have indeed had a very valuable debate. In the main, I can also say that it has been extraordinarily well-tempered and well-informed. We have heard from a number of former Commissioners; for example, the noble Lord, Lord Richard. The noble Lord, Lord Jenkins, did not speak, but he was present in the Chamber. By that process, he gave us the benefit of his advice. We also heard from the noble Lord, Lord Thomson, and the noble Lord, Lord Cockfield.

Further, we heard speeches from a number of former Members of the European Parliament. I have in mind my noble friend Lord Kingsland. I should like to join others in congratulating him on his maiden speech. The noble Lord, Lord Bruce of Donington, also spoke in the debate. He is another former distinguished Member of the European Parliament. We also heard from my noble friends Lady Elles and Lord Shaw. Their experience and expertise has been of benefit to those of us sitting on these Benches and indeed to all noble Lords.

However, it may be worth reminding your Lordships that the Bill we are debating this evening—and this point was made by my noble friend Lord Boyd-Carpenter—has been certified by Madam Speaker as a Money Bill. This means after Thursday of this week the Bill may be presented for Royal Assent under the terms of the Parliament Acts with or without the agreement of your Lordships and there is no need for the Bill to be considered further in another place whether or not this House should happen to amend it.

That being so, and in view of what the noble Lord, Lord Richard, said about the element of unreality about the debate, it just may be asked why we are debating the Bill at all. The answer is that the "usual channels" recognised the very strong interest in the Bill which has been expressed in various quarters of your Lordships' House and the importance of the matters at issue. I think we are all agreed they are matters of fundamental importance. The number of speakers and the quality of the speakers who have taken part in the debate this afternoon indicates the wish of this House to consider these matters.

Most unusually for a Money Bill it has further been agreed that there should be a separate Committee stage which will take place tomorrow and for which amendments have been tabled. That might give me the opportunity to deal with some of the more detailed

9 Jan 1995 : Column 71

points that I am unable to deal with in the time available this evening. That debate, as I said, will take place tomorrow; but I would strongly urge your Lordships that there is no practical purpose to be served by further prolonging the proceedings or by, for that matter, any amendment of the Bill. I trust therefore that the House will not in fact seek to obstruct the passage of the Bill.

I do believe that many of us are in agreement—if I can start with the noble Lord, Lord Thomson—and I believe the noble Lord, Lord Eatwell, and I are occasionally in agreement that the price we pay for membership of the European Community is a price worth paying. Not surprisingly, I think, the noble Lord, Lord Bruce of Donington, and my noble friend Lord Beloff and others would not agree with me; but I do not think it is for me now to elucidate all the benefits of European Union membership which I believe are overwhelming. But enough noble Lords in the course of the debate this afternoon have referred to the jobs, prosperity, the inward investment and to the degree of trade that we now have with our European partners, and to the degree of influence that it allows us to express throughout the world, through being members of a greater body, and the real individual benefits for individual citizens.

May I also say that I simply do not accept the jibes—I put it like that—of some Members of the Opposition Front Bench, and even from my own side, that we are entirely without influence in terms of our position within Europe. I think it is fatuous to say that the United Kingdom always loses the arguments. We have a long list of negotiating successes including the EFTAn enlargement, the GATT Uruguay round which might have gone very differently if we had not expressed our views in the manner we did, the Edinburgh future financing agreement preserving the abatement which is what we are debating this afternoon, subsidiarity, the social protocol on which I am afraid the noble Lord, Lord Eatwell, and I will have to differ, and almost more important than most, the actual abatement negotiated by my noble friend Lady Thatcher back in 1984. I simply cannot accept the arguments of the noble Lord, Lord Bruce of Donington, that we would be unable to get that because we always adopted a suppliant posture. I would ask my noble friend Lord Beloff, how on earth, if our success in negotiating is no greater than that of the late lamented Sir Austen Chamberlain to whom he referred, did we manage to pull that one off on that occasion. Quite simply, back in 1984, we did negotiate that abatement which no previous government had debated and since then that has been worth something of the order of £16 billion to us.

I must now, of course, turn to the subject of fraud. By fraud—just to save the noble Lord, Lord Stoddart, from intervening—I am talking not only about fraud but also about value for money, about financial mismanagement or appropriate procedures. I feel that it is important to touch on this, albeit briefly, for exactly the same reasons as the noble Lord, Lord Dahrendorf, touched on it; that it is absolutely vital in terms of the credibility of the Community and for all its citizens that we are all seen, both in this country and in other member

9 Jan 1995 : Column 72

states and, dare I say it, in the Commission itself, to be taking the issue of fraud against Community funds, against government funds, and against the individual taxpayer's taxes that he has paid, as seriously as we could.

I would like also to stress, as I think my noble friend Lady Chalker did in opening, the effect that the growing number of net contributing countries—again something that results directly from Edinburgh—will have on member states' attitudes to fraud. Again that was, I think, a point stressed by my noble friend Lord Kingsland in his very excellent maiden speech.

The party opposite said in another place—this was repeated by the noble Lord, Lord Richard—that they would not approve the Bill in another place unless Her Majesty's Government did more about fraud and about reducing the cost of the CAP. I do believe that that is exactly what we have done on fraud. I would reject the allegations that have been made by the noble Lord, Lord Eatwell, that we are not at the forefront of the fight against fraud. Let me just repeat the points that my noble friend Lady Chalker made. We have been at the forefront of the fight to detect and to suppress fraud in the Community. Fraud, as I said earlier, includes not only criminal acts but also waste, mismanagement and incompetence.

We were in the lead in securing European Council conclusions at Essen which called for concerted action by all institutions; the adoption of a legal instrument on anti-fraud criminal law measures; the adoption of a Council regulation setting out the basis of anti-fraud measures to be adopted in future sectoral legislation; for 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.

We recognise that fraud in the Community remains a very serious problem. We are always ready to consider how to strengthen our own anti-fraud activities in the United Kingdom. I think I ought to deal with the point made by both the noble Lord, Lord Richard, and the noble Lord, Lord Eatwell, that we do not take up all the anti-fraud funds. The noble Lord, Lord Eatwell, rather misquoted me on an earlier occasion when I had allegedly accused him of being a socialist, which seems to me a perfectly fair thing to say. The point I made on that occasion was that it seemed rather a simplistic judgment put forward by the noble Lord that merely by spending more money on a particular issue one would get nearer to the solution. Perhaps I can just tell the noble Lord how we take advantage of Community anti-fraud financing. For example £7.8 million was taken up in 1993 and 1994 to meet part of the cost of introducing a computer database following introduction of the integrated control and administration system (IACS). We have also taken advantage of the provision for computer systems in the CAP export refund area where customers received £185,759 and £114,679 in 1992 and 1993. The customs have applied for yet more money—about £250,000—for 1994.

But the money is not in fact for hunting fraudsters in the field. The United Kingdom is not simply in the business of up-grading information technology

9 Jan 1995 : Column 73

equipment, replacing staff and initiating training schemes just simply for the sake of obtaining Community funding. This may mean that the United Kingdom will not take up its full allocation under particular programmes. The Community budget contains provision for anti-fraud work, some of which is spent directly by the Commission. Funding for certain sectors—I give the example of olive oil—is simply not available to this country. As the noble Lord will be aware, we do not produce any olive oil.

Next Section Back to Table of Contents Lords Hansard Home Page