Select Committee on European Communities Report


29.  PRELIMINARY DRAFT BUDGET OF THE EUROPEAN COMMUNITIES FOR THE FINANCIAL YEAR 1999

Letter from Lord Tordoff, Chairman of the Committee, to Helen Liddell MP, Economic Secretary to the Treasury

  Sub-Committee A (Economic and Financial Affairs, Trade and External Relations) deliberated on the Commission's overview document and the Treasury's explanatory memorandum at its meeting on 2 June. The Sub-Committee agreed that I should write to raise a number of points with you, as follows.

  First, the Sub-Committee warmly welcomed both the fact that the EM was submitted on the basis of the Commission's overview document in order to allow more time for scrutiny, and the "new-look" way in which the EM has been presented, which makes it much easier to read. The Sub-Committee believes that these two changes are a significant improvement to parliamentary scrutiny arrangements, and would like to express their compliments to officials who have worked on the exceptionally helpful EM.

  The Sub-Committee also wish to raise two major concerns about substantive matters. The first is that in paragraph 22, on the subject of the TACIS programme (under detailed examination by another of our Sub-Committees) the memorandum states that "in the light of poor execution rates, however, the Commission propose to reduce the level of total commitments for this programme to around 1,800 million euros". The Sub-Committee would like to know (i) whether HMG considers that the delays in receipts of TACIS funding by eligible countries have contributed to the execution rates and (ii) what is HMG's response to the proposed cuts in the programme.

  Second, in paragraphs 34 and 35 the Government expresses its belief that there is room to reduce the overall size of the budget, but neither here nor indeed elsewhere in the document is there reference to the role of the Court of Auditors or the fight against fraud generally, which the Sub-Committee found disappointing. Sub-Committee A has in the past produced a number of reports on the fight against fraud and, bearing in mind the Commission's latest initiatives on this subject, which it also considered at its meeting on 2 June, the Sub-Committee is keen to see anti-fraud measures retaining a high priority.

  I look forward to your reply to the two substantive points in this letter. In the light of the fact that a further EM is to be submitted on the Budget proposals, this letter lifts the scrutiny reserve on the present document.

3 June 1998

Letter from Helen Liddell MP, Economic Secretary to the Treasury, to Lord Tordoff, Chairman of the Committee

  Thank you for your letter of 3 June, and in particular for passing on the kind sentiments expressed by Sub-Committee A on the "new-look" form that the Government used to explain the Commission's budget proposals. I am glad the Committee found this helpful.

  You raised two points of substance. On TACIS, you questioned (i) whether the Government considers that delays in receipts of TACIS funding by eligible countries had contributed to poor execution rates, and (ii) what the Government's response would be to the proposed cuts in the programme.

  Since responsibility for the implement of TACIS within Whitehall lies with DfID, and since I understand DfID Ministers plan to reply to another Lords Sub-Committee in connection with an enquiry into TACIS, I have asked them to respond on this point.

  Second, you mentioned that the Sub-Committee were disappointed that the EM did not refer to the role of the Court of Auditors or the fight against fraud generally. I hope that the Sub-Committee will be pleased to note the section on anti-fraud expenditure in the Government's supplementary EM on the EC budget, a copy of which is attached. This information could not be included in the EM on the overview because EC expenditure on fraud is split over a number of different budget chapters and can only be found by looking at individual lines in the full budget documents. I should, of course, like to reassure the Sub-Committee that the Government takes the fight against fraud very seriously, and, indeed, has made this only one of its priorities for the UK Presidency.

25 June 1998


 
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