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Lord Henley: I obviously cannot speak for another place, but I am sure that if the noble Lord wishes to find

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means of debating these matters in this Chamber, with his usual ingenuity he will do so. That is a matter for the noble Lord.

Lord Morris: I must thank my noble friend for that answer and for giving me a tour d'horizon of the procedures for the examination of these matters by the Council of Ministers and indeed by the European Parliament. I do not know whether it is coincidence but I was interested to hear that the Council of Ministers completed the examination of the budget on 8th December which happened to be the Feast of the Holy Innocents. That may be a total coincidence and nothing else. However, I do not wish to make myself even more unpopular by pressing this amendment. I think that in the circumstances I had better withdraw it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bruce of Donington moved Amendment No. 6:


After Clause 2, insert the following new clause:
(" . This Act shall come into force only when each House of Parliament has come to a resolution on a motion tabled by a Minister of the Crown as to whether the United Kingdom Government has taken sufficient steps to eliminate wasteful and fraudulent expenditure within the General budget of the European Community as identified by the Court of Auditors.").

The noble Lord said: If I may, I shall deal with this amendment very shortly indeed, partly because of the time limitations which I intimated to the usual channels and partly because, in a way, it would not be appropriate for me to introduce the new clause in the manner in which I should have preferred to have introduced it. The new clause states:


    "This Act shall come into force only when each House of Parliament has come to a resolution on a motion tabled by a Minister of the Crown as to whether the United Kingdom Government has taken sufficient steps to eliminate wasteful and fraudulent expenditure within the General budget of the European Community as identified by the Court of Auditors".

I have some rather important information to give to the Committee which does not enable me to comply with the terms of the new clause itself because my own amendment stipulates,


    "as identified by the Court of Auditors".

It has come to my attention that the audit of the Court of Auditors does not extend over the whole extent of European Community expenditure. That is a fact that I have been able to verify for the year 1993 by an examination in detail of the Court of Auditors' report. I am informed—I have given, the Government notice of the facts as I have discovered them—that the Court of Auditors does not audit the internal expenditure of any of the institutions. It only audits the operational expenditure. I must apologise to the Committee for not being aware of that before. I ought to have picked it up a long time ago on the basis of evidence already available to me.

However, the fact of the matter is that there is a cosy deal between the European Parliament, the European Commission and the European Council on the basis of, "I'll scratch your back if you'll scratch mine", and it has become an apparent convention that the Court of Auditors does not intrude into a detailed audit of the

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institutions' own expenditure. This I regard as something very important indeed to which I sincerely trust Her Majesty's Government will pay immediate attention and produce some immediate assurances, because the luxury expenditure of these institutions on new parliaments, on some of their so-called information campaigns, and some of their internal grants to the individual party organisations comprised within the European Parliament has to be seen to be believed. Provided that I get the normal customary, and perhaps on this occasion even short response from the Government, it would be my intention after the Government's reply, subject to any other Member wishing to speak, to withdraw the amendment in due course. I beg to move.

Lord Henley: In due course I hope to respond to that specific point raised by the noble Lord. I thank him for his usual courtesy in giving me some degree of notice, and I hope that to some extent I understood him when we discussed this earlier. I hope therefore that my response will be sufficient. Obviously, if it is not, it might be most useful to suggest that we come back to it on another occasion when we can consider the matter, having carefully read what the noble Lord had to say this afternoon, and when the noble Lord has had a look at what I am about to say. Then we could take the whole matter further.

As regards the amendment, I am grateful that the noble Lord has given an assurance that what I believe to be the last substantive amendment will not be pressed to a Division. In due course we can therefore move on after what I believe has been three or four hours of relatively useful debate, and return this Bill to another place.

Turning to the noble Lord's specific point as to whether the Court of Auditors is in breach of the treaty as it does not audit internal administrative spending, under Article 188C of the treaty, the Court of Auditors is required to examine the accounts of all revenue and expenditure of the Community. The Court does audit all Community expenditure and revenue, and that includes both the management of Community resources in member states where the work is carried out in liaison with national audit bodies such as the National Audit Office in the United Kingdom, and expenditure related to the Community institutions—the Commission, the Council, the European Parliament and the Court of Justice. The Court of Auditors itself is subject to external audit.

The Court of Auditors' report on the 1993 EC budget includes references to expenditure administered by the Commission. Chapter 16 deals with travel expenses paid by the institutions. Chapter 19 deals with the Commission's management of data protection resources. The Court of Auditors' report on the 1992 budget includes references to expenditure administered by the Commission. Chapter 15 deals with the European Parliament's budgetary and general accounts with particular reference to the use of consultancy services and an inventory of movable property. Chapter 16 dealt with the Council's administrative expenditure, with particular reference to inventory records and the checking and authorisation of commitments. Chapter 17

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dealt with the Commission's move from the Berlaymont building. Therefore, I do not consider the Court of Auditors to be in breach of its obligations to audit all Community expenditure and revenue.

Nevertheless, having said that, I shall look very carefully at what the noble Lord had to say and take further advice on these matters, I hope that he will also look carefully at what I have said this afternoon, and I suggest that we take the matter up on another occasion.

7.30 p.m.

Lord Bruce of Donington: I am most grateful to the noble Lord for his assurance. I can assure him that the matters that he has discussed in relation to the Court of Auditors' report for 1992 and 1991 are not unknown to me, but they cover specific operations of the various bodies concerned. I do not think that he made any reference to the internal accounts of either the European Parliament or the Council. Nevertheless, I agree that we ought to discuss the matter more fully on a later occasion. I thank Members of the Committee for their participation in this debate. I believe that the Committee stage of the Bill was abundantly justified on information grounds only. Such detail could not have been dealt with solely on a Second Reading. Expressing my thanks to all concerned, exactly on the dot that I promised, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 7 not moved.]

House resumed: Bill reported without amendment.

Then, Standing Order No. 44 having been dispensed with (pursuant to Resolution of 15th December): Report received.

Lord Henley: My Lords, I beg to move that the Bill be now read a third time.

This may be the appropriate moment for me to say a few words. We have had two interesting days of useful debate on the Bill. The points that have been raised are very relevant. Certainly her Majesty's Government will bear them in mind for the future.

Much has been said about fraud and financial mismanagement and irregularity in the Community. Yet again, I give the assurance that Her Majesty's Government will continue to take these matters very seriously and will continue to play a leading role in seeking improvements. In addition, the work of your Lordships' Select Committee in this respect has been extremely valuable. I have no doubt that it will continue to play an active role in investigating this important issue.

I understand that on Bills of this type feelings can occasionally run very high and people hold very strong opinions on the matters which are before us. I should like to offer my thanks to the House on this occasion for the generally good-natured manner in which we have conducted our debates and the very positive approach which all Members of the House who have taken part in the Committee stage have taken in regard to assisting Her Majesty's Government in passing this important piece of legislation to meet the commitments we made at Edinburgh—a successful deal negotiated by my right honourable friend. I should like to thank all Members of

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the House for assisting us in getting this vital piece of legislation through. Furthermore, I should like to thank the House for the manner in which the debate has been conducted. I beg to move.

Moved, That the Bill be now read a third time.—(Lord Henley.)

On Question, Bill read a third time.


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