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Baroness Harris of Richmond: My Lords, perhaps at this stage I may--

Baroness Farrington of Ribbleton: My Lords, I thank my noble friend whose great experience in the field of local government will be of benefit to the House in discussing local government matters.

Lord Simon of Glaisdale: My Lords, did not the Layfield Committee review the manifest advantages and attractions of a phased-in local income tax as part of a source of local authority finance, and did it not finally reject it on the ground of administrative difficulties? Have not those difficulties been virtually met by modern technology; and, if so, should not the matter be reviewed in the light of those advances? I would have apologised more abjectly for not giving the noble Baroness notice were it not for her famous knowledge of all aspects of local government.

Baroness Farrington of Ribbleton: My Lords, the noble and learned Lord puts me on a pedestal from which I can be knocked with swiftness and ease by

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many Members of your Lordships' House. He is correct in his recollection of the recommendations of the Layfield Committee. However, my recollection, which may not be as accurate or detailed as his, is that local income tax faced problems arising from the fact that many of our communities, unlike those in countries such as the United States, live in areas that are bordered by a number of different local authorities. Therefore, it is perfectly possible for people to live in one area, to send their children to schools in two other areas and to work in and use the services of a fourth. There are many arguments. I believe that I am on very firm ground in saying that the Government have no plans to introduce local income tax.

Baroness Harris of Richmond: My Lords, first, I apologise to the House for not observing the conventions. I hope that my intervention will be overlooked due to my "newness". I offer my apologies.

The announcement will be perplexing for police authorities. We have already indicated that we need £100 million more to run the Police Service than we received last year. That is just to stand still. We have inescapable increases in police pension contributions to which I alluded briefly yesterday. Indeed, in my force in North Yorkshire we know that next year we shall have a shortfall of £5 million. That is partly because of our pension payments. It will be £7 million the following year.

The settlement today gives me no confidence that it will improve matters one jot either locally or nationally. Even the offer of 5,000 more police officers over three years--it equates in North Yorkshire to 51 officers--does not help us when the normal budget for policing continues to go down.

How will the police authorities pay for those parts of essential policing expense which are directly outside our control but which we are still obliged to fund? I speak of the public safety radio communications service (PSRCS) and the national service authority's budget, as well as the awful spectre of the pensions problem. Inflationary pay and pension-related costs alone will eat up all the new money provided by the Government next year.

Baroness Farrington of Ribbleton: My Lords, I am sure that the noble Baroness will be forgiven by the House, not least because she brings to the House very relevant knowledge of the issues facing police authorities at present.

The noble Baroness is right. Over the three-year period there will be an increase of 3 per cent. And there is an increase in real terms in the police authority budgets. I am sure that the increase of 3 per cent over 1999-2000 will be welcomed by those police authorities.

The noble Baroness referred to the importance of new technology. In addition to that money, £400 million is being made available, including £150 million for CCTV schemes and £50 million to protect homes most at risk of burglary.

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The noble Baroness graciously recognised the additional money for police recruitment. There will be £35 million additional funding in the challenge fund for 2000-2001; and all forces can put in a bid for that.

The noble Baroness raised the issue of the new national radio communications system. I am pleased to inform her that the £50 million extra investment in that system is genuinely new money.

Fraud: ECC Report

6.22 p.m.

Lord Hope of Craighead rose to move , That this House takes note of the Report of the European Communities Committee on Prosecuting Fraud on the Communities' Finances--the Corpus Juris (9th Report, Session 1998-99, HL Paper 62).

The noble and learned Lord said: My Lords, at the heart of this evening's debate there lie two problems--and it may be difficult to decide which is the more troublesome.

It is beyond question that far too much of the Community's budget is being lost to it through fraud. That is the first problem. As we say in the opening sentence of our report, no one doubts the need to take action to protect the assets of the European Union against fraud, corruption and waste. But corruption and waste within the institutions of the Community is one thing. It can, for the most part, be dealt with by means of internal financial controls and other similar self-regulating measures. Fraud on the Community's budget is quite another. It crosses national boundaries. It extends far and wide throughout the member states, and beyond. It attacks and undermines the budget from both sides. It affects both income and expenditure. Crimes are being committed on a large scale. Not to put too fine a point on it, the Community's resources are leaking out in favour of the criminal. The budget is being depleted to the prejudice of all right thinking people throughout the EU.

The second problem is, in part, a product of the first. Everyone agrees that these crimes must be investigated, and that when the evidence has been gathered the offender must be prosecuted. But views differ as to the strategy which we should employ. As I have said, the fraud which needs to be combated crosses national boundaries. Indeed, it tends to exploit them. The involvement of several member states increases the prospect of delay and confusion, and it frustrates the criminal justice process. Some see the best way forward as being to improve measures of co-operation between member states. They believe that at the end of the day it must be for the prosecuting authorities of the member state with jurisdiction over the offender to bring him to justice. The Minister will correct me if I am wrong, but I believe that that is the position which the United Kingdom wishes to adopt. But there are others who wish to bring about a fundamental change in the way in which law and justice are administered throughout the Community.

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For them co-operation is not the answer. They see harmonisation of laws and procedures--the creation of a single judicial area--as the most effective means of breaking down the obstacles created by national boundaries. It is worth noting that in this context the word "judicial" includes the functions of the investigating and prosecuting authorities as well as those of what we in this country mean when we refer to the "judiciary".

The movement which favours harmonisation appears from time to time in different forms. For the purposes of this debate it is to be found in the publication in April 1997 by a group of eight academic lawyers of a research paper entitled Corpus Juris. This paper, which was prepared at the request of the European Parliament, has been designed specifically to deal with the problem of fraud. Although this is a research report, not a formal proposal by the Commission, it seemed to the committee to raise issues of sufficient importance to merit the carrying out of a detailed examination by my sub-committee, Sub-Committee E. It is the report which was prepared following that examination and placed before the House last May which is before your Lordships for debate this evening.

I think that I can best assist your Lordships in three ways. First, I propose to say a little more about the nature and scale of the first problem--the problem of fraud. Next, I shall draw attention, in outline, to the main proposals in the Corpus Juris. Then I must mention a number of developments since the report left the committee's hands which are relevant to this debate.

First, how big is the problem of fraud, and what are its forms? As we explain in the report, fraud on the Community's finances may take many forms, such is the nature of man's ingenuity. But it can be divided up conveniently into income or receipts fraud and expenditure fraud. On the income or receipts side it consists typically of the making of deliberate mis-statements aimed at minimising customs duty or maximising refunds; the smuggling of cigarettes and alcohol; failure to register for VAT; bogus registration; fraudulent inflation of deductible input tax; or suppression of sales to reduce the true tax liability. On the expenditure side it may consist of claiming agricultural aid on the basis of a series of fictitious transactions or simply of embezzlement. The important point to notice is that much of this activity is the product of organised crime. A large proportion of it is trans-national and much of it is on a very large scale. According to official figures, about 1.4 per cent of the budget is lost to fraud. But the real figure may well be much higher than that. The figure of around 10 per cent was mentioned in evidence as having being placed on this by criminologists; and that is about 85 billion euros when measured against the 1999 budget.

Action has, of course, been taken by the Community. As background to our study of the Corpus Juris project, we took steps to inform ourselves about the various measures which are in place. The product of that part of our study is set out in

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paragraphs 10 to 19 of the report. We thought it right to draw attention to the way in which the problem is already being tackled by Community institutions whose function is to detect and combat fraud within the Commission and in the member states, and by instruments which seek to promote co-ordination and co-operation between the investigating and prosecuting authorities. We believe that the Corpus Juris project should be examined in the overall context.

I turn now to the Corpus Juris--a rather grand name, to those familiar with the Corpus Juris Civilis, the Emperor Justinian's great codification of Roman law in the 6th century. What we are dealing with in the report is by comparison quite a modest document. You will find it printed at pages 36 to 44 of the report. It consists of two parts. The first part, which is headed "Criminal Law", sets out a uniform code of offences, to which are attached provisions dealing with a variety of related issues such as mens rea, penalties, concurrent offences and aggravating circumstances.

The second part, which is headed "Criminal Procedure", sets out a scheme which would confer powers of investigation and prosecution within each member state upon a new European public prosecutor. It would create a uniform set of rules of evidence and procedure which each member state would be required to adopt for prosecutions brought in his name.

It must be stressed that the authors of this document would demur to the suggestion that it is designed to create a uniform code of European procedure. They would point out that it is limited in its application to a particular group of offences, and decisions as to guilt or innocence and a wide variety of other matters are left in the hands of the national courts. But one does not have to dip very far into this document in order to discover difficulties. Almost all the evidence which we received was critical of it, and the two members of the committee which drafted it, and who gave evidence before us, acknowledged that much more work needed to be done, following an assessment of reactions, before it could be taken further to the stage of a proposal. There is no time for me to go into detail. But I should like to mention one or two points.

The fundamental objection to the scheme is that it is in conflict with the legal traditions of each of the three jurisdictions within the United Kingdom and, we believe, of other member states. The offence of fraud as we know it in this country is based on conscious dishonesty. Under the proposal, it would be enlarged, for the purposes of Community fraud, to encompass acts of negligence and recklessness. Where a single act creates concurrent offences, against both national law and the Corpus Juris, it would not be open to our prosecuting authorities to prosecute the offence against national law however desirable that might be.

Much of the detail of the procedure is difficult to reconcile with our own procedure. The conduct of the entire process of investigation and prosecution would be in the hands of the European public prosecutor, who would not be answerable to any of the national parliaments. The rights of the defence would be

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weakened in comparison with those which we insist upon in our own courts. Those charged with offences could be remanded in custody for long periods, up to six months renewable for three months, on reasonable suspicion but without charge. Trial would be before a judge, specialising in economic and financial affairs, without a jury. The range of penalties bears little relationship to those which would be available to the sentencing judge in our own courts. And the legal basis in the treaty for such a scheme is, at best, doubtful.

Despite all these shortcomings, it is clear that the Corpus Juris project is not going to go away. It is a well-intentioned response to a real and pressing problem. The European Parliament has welcomed it. Indeed, it has said that it sees it as an example for future developments. The question of its compatibility with national laws has been under consideration by a group of experts for the Commission; the Comite de suivi. I understand that its report is now with the Commission, and that a revised version of the Corpus Juris has been prepared. It may be that the noble Lord the Minister will be able to confirm my understanding and perhaps say when these documents are likely to be published. As we state in the report, it is important that these documents should be in the public domain.

Furthermore, the underlying problem of fraud on the budget is still with us and everyone is agreed that further action to combat it is necessary. The "Committee of Wise Men", appointed by the European Parliament earlier this year, made a number of proposals which included the appointment of a European public prosecutor. So much will depend on the success or otherwise of the measures of co-operation on which the alternative approach to the problem relies.

At the end of our report we sound a note of warning. It is simply this. If the steps taken to improve assistance and co-operation do not produce effective results in the near future, serious consideration will have to be given to the setting up of a special regime for dealing with fraud on the Community's finances and possibly other forms of fraud within the EU. What that regime might be was not for us to explore. But we hope that something useful has been achieved by drawing attention to the many concerns and objections to the Corpus Juris scheme which were expressed by our witnesses.

Lastly, I must mention two points to bring the report up to date. First, as many of your Lordships know, a newly-established European Anti-Fraud Office (OLAF) has been established to replace UCLAF. Doubts have been expressed about its independence from the Commission--about which I say nothing--but there are other difficulties. Its director has not yet been appointed. Until that appointment has been made, steps cannot be taken to draw up a work programme. Nor can plans be made for the recruitment and training of new staff. So this new body has some way to go before its utility can be demonstrated.

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Secondly, I must mention the Special European Council meeting held last October at Tampere. The Corpus Juris was not discussed, but I believe that useful progress was made with a view to better co-operation and convergence between the legal systems of the member states. It was concluded that the principle of mutual recognition, which was put forward by the United Kingdom, should be the corner-stone of co-operation in both civil and criminal matters in the EU. This is a process to which we in the UK, with our legal traditions, are particularly well-placed to contribute, against the background of the co-operation which exists at all levels between three legal systems in our own country.

The signs are that the strategy which favours mutual recognition and co-operation is, for the time being, winning the argument. The committee in its report indicates that this is the more realistic approach. Harmonisation, even on Corpus Juris lines, is likely to be a highly contentious and very time-consuming process. The fact is that the problem of fraud is already too great and too pressing for it to be sensible to proceed along these lines. Time is not on our side. I hope that the report will have performed a useful service by drawing attention to the substantial difficulties which harmonisation along those lines would cause and in supporting the case for mutual co-operation which is being made by Her Majesty's Government. The Motion is that your Lordships should take note of the report. I commend it to the House.

Moved, That this House takes note of the Report of the European Communities Committee on Prosecuting Fraud on the Communities' Finances--the Corpus Juris (9th Report, Session 1998-99, HL Paper 62)--(Lord Hope of Craighead.)

6.39 p.m.

Baroness Goudie: My Lords, as a member of the sub-committee, which was skilfully chaired by the noble and learned Lord, Lord Hope of Craighead, I should like to make one or two comments on the report. No one doubts the need to take action to combat fraud in the European Union's finances. The national laws and procedures of member states are not proving sufficiently effective. More and better practical co-operation is required. There is a real and serious problem which Corpus Juris seeks to address constructively, but it does not in itself represent a feasible way ahead. Its shortcomings are more significant than its potential benefits. Above all, the proposals in relation to criminal procedures are fundamentally flawed. The two which are of the gravest concern are the denial of jury trial in such cases and the creation of a European public prosecutor, the EPP, with enormous coercive powers.

It is a major defect that the EPP would not be accountable to any parliament, minister or judge and, indeed, would barely be accountable to anyone. When I probed that aspect during the taking of evidence before the sub-committee, we were told that what is envisaged is not political responsibility but merely disciplinary rules. That is simply not good enough.

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The case for the creation of a supra-national system at that juncture has not been made out. Huge practical problems surround the relationship between the EPP and the national prosecutor specifically, and the co-existence of the legal regimes generally.

Those are not problems which will be overcome by limiting the scope of Corpus Juris. We must continue to press other options for reform. Those include further simplification of extradition procedures, fast-track mutual assistance, and jurisdictional and evidential changes. The best way forward is increased and improved co-operation at a practical level, which has worked well on the whole in relation to England and Wales, Scotland and Northern Ireland, and I believe, increasingly, in the Republic of Ireland.

The European Convention on Human Rights is already in force in much of the United Kingdom. It will within less than a year be in force throughout the United Kingdom. It is doubtful whether Corpus Juris in certain respects meets the minimum requirements of the convention. Corpus Juris fails in terms of both principle and practicality. The Government are right to regard the creation of a single uniform jurisdiction as not being a realistic way forward, and in pressing instead for streamlined co-operation between jurisdictions in fighting against cross-border fraud and corruption, not only in relation to EU funds, but also more generally.

6.43 p.m.

Lord Wigoder: My Lords, as a member of the sub-committee I too pay my tribute to the noble and learned Lord, Lord Hope of Craighead, for the fascinating combination of charm and efficiency with which he conducted our proceedings so helpfully to us all.

Noble Lords will have read the report and have certainly listened today to a clear exposition of its principal features. It is quite unnecessary for me to repeat what the noble and learned Lord has said about this rather tentative and incomplete study called the Corpus Juris by a group of a number of distinguished academics. Out of that proposal there have emerged three serious misconceptions which I believe were in danger of fouling up the whole discussion on the future of the issue. It might perhaps be of assistance to your Lordships if I made a brief comment about each of the three.

The first misconception is that the Corpus Juris is a study that has some official status and that it has in some way or another been adopted by the Commission. That is simply not true. Paragraph 20 of our report states:


    "It is not a formal proposal of the Commission. It has the status of a research report or study".

Paragraph 23 states:


    "The Commission has taken no view on the proposal and given no commitment to pursue and adopt it".

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The noble and learned Lord mentioned the Tampere European Council meeting which took place recently. Your Lordships may be aware of the comments made by Mr Charles Clarke on behalf of the Home Office in the other place a few weeks ago:


    "'Corpus Juris' was not a topic for discussion at the Tampere European Council, nor did the European Council endorse any of the specific proposals in 'Corpus Juris'...There was a brief discussion on whether to examine one Corpus Juris proposal, the idea of creating a European Public Prosecutor, concerned only with protecting the financial interests of the Community, but this was not pursued".--[Official Report, Commons, 5/11/99; col. 370.]

Those statements in our report and by the Home Office make it clear that the proposal, when it first emerged, was greeted with a somewhat hysterical reaction by observers in this country. I refer, for example, to the Daily Telegraph on 30th November 1998, which in large black type carried the headline:


    "Alarm over Euro-wide justice plan".

A small paragraph on the front page referred to articles inside:


    "Rewriting Magna Carter: Page 4

Editorial: Page 21

Boris Johnson: Page 34".

The main article referred to the,


    "Proposals for a common judicial area",

which were in their early stages, but,


    "could shortly be adopted for European Union fraud cases and might form the basis for a unified criminal justice system in the future ... The plan, drawn up under the aegis of the European Commission, has alarmed the Government",

and so forth. Indeed, some months later the same newspaper stated on 1st June 1999--although I am unable to find any support for the assertion--that,


    "Last month, the European Parliament voted in favour of the idea being pursued".

If we could get the status of this fascinating study right, it might help in the rational discussion of it.

The second gross misconception is that the activities which the Corpus Juris has been devised to defeat can be in some way used as a stick with which to beat the Commission. The fraud being investigated by the sub-committee and by the body which produced the Corpus Juris has no sort of relationship with the misuse of Community funds, which has quite rightly had so much publicity recently from the reports of the Court of Auditors and the Committee of Independent Experts. The report and the Corpus Juris deal with matters which had nothing at all to do with those issues.

We and they were both concerned with the activities of common criminals, whether individuals or corporate bodies, who were pursuing financial fraud against the Community on a cross-frontier basis where the differences in jurisdiction between the countries concerned was liable to cause confusion, delay and incompetence in bringing those common criminals to justice. As your Lordships have heard, the result is that some billions of pounds appear to have been lost through offences such as smuggling. They have been lost at the expense of both the member states and the

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Commission. The Corpus Juris which the academics produced was a brave attempt to deal with an extremely difficult problem.

The third misconception is perhaps the most serious. It is that the Corpus Juris proposals by the academics, if adopted, would lead to a change throughout the national legal systems of the countries in the European Union. For example, in August 1997, the Daily Mail referred to it as a plot by Brussels to dictate crime policy to the British Parliament; that it would be the end of habeas corpus. That is a suggestion which our committee, when it investigated it, concluded was quite unfounded.

In the issue of 30th November, to which I have referred, the Daily Telegraph referred also to the habeas corpus allegation and added that it would replace our procedure by a Napoleonic code and that it would lead to the rewriting of Magna Carta.

Professor Spencer, who was one of the most distinguished of the academicians concerned, offered to write an article for the Daily Telegraph setting out clearly what was involved in the Corpus Juris but it became apparent, I suppose, that such an article would not interest the readers of that paper and, sadly, his offer was not accepted.

It is important to realise that what this report and the study were concerned with and, therefore, what your Lordships' sub-committee was concerned with, was limited entirely to the issue of financial frauds committed across frontiers against the Community finances. It was that and nothing else. The suggestion is totally misconceived that if your Lordships were to go at some time in the near future to sit in Court 1 at the Central Criminal Court, you would find the spectacle of the judge conducting the whole proceedings on an inquisitorial basis, with the lawyers occupying very much of a back seat and the jury box having been dismantled completely by enthusiastic carpenters. That is certainly no part of any proposals by the European Commission. Of course, I cannot be responsible for whatever our Home Secretary proposes in those directions.

In those circumstances, your Lordships' sub-committee reached the conclusion, with which I hope that your Lordships will agree, that this study was a serious contribution to consideration of possible ways of dealing with a very serious problem. The committee reached the conclusion also that certainly at this time, in the present atmosphere, it was not possible for us to take the matter further by recommending it or approving it in any way and that there were alternative ways of dealing with those grave problems.

6.52 p.m.

Lord Norton of Louth: My Lords, I too very much welcome the report. Like the noble Baroness, Lady Goudie, and the noble Lord, Lord Wigoder, I too am a member of Sub-Committee E. I too pay tribute to the work of the chairman, the noble and learned Lord, Lord Hope of Craighead, and our excellent staff.

I note also that the noble Lord, Lord Goodhart, who is yet to speak, is also a member of the sub-committee and that the noble Lord who is to reply

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from the Government Front Bench, the noble Lord, Lord Bach, was a member of the sub-committee at the time that the report was drawn up, which bodes rather well for the response from the Front Benches. I hope that my noble friend Lord Cope will not feel too isolated in this debate.

I begin by making a general point. This report, along with other reports from the European Communities Committee, which your Lordships have had the opportunity to debate, demonstrates the value of the committee work of this House. There is a marked contrast between our approach to domestic legislation and our approach to European legislation. Yesterday, I spoke in the debate on the gracious Speech. I drew attention to the fact that we do not usually employ investigative committees for the consideration of government Bills. As a revising body, this House is extremely good, indeed extraordinarily good. It adds value to the legislative process. It could be even better through making greater use of Select Committees.

In the sphere of European legislation, your Lordships' House works principally through a Select Committee. The work of that committee shows what can be achieved through inquiry by committee. It enables a particular subject to be considered in depth; for evidence to be taken from interested parties; and for a considered report to be produced informing debate not only in your Lordships' House but also in other political arenas.

It may be a cause for regret, but it is none the less true, that a report from a committee of your Lordships' House, widely disseminated, will reach a much wider audience and may have a greater impact than a debate in your Lordships' House.

The value of such committee work could not be better demonstrated than by the report which we are considering today. When the proposals for a common criminal code, the Corpus Juris, were published, as we have already heard, they attracted coverage in the media which contributed only partially to one's understanding of what the proposals were. I make no particular complaint about that. Complex proposals are difficult to summarise in a few words, especially by those who do not have a background in the subject, although I note, as the noble Lord, Lord Wigoder, has already mentioned, some of the coverage generated more heat than light.

But before we criticise the media too much, let us consider what type of debate we should have had in this House had we debated the Corpus Juris proposals without the benefit of this report. I know that we should have had some informed contributions but we should be lacking the advice and information of many with expertise in the field. The material drawn together in the report is substantial, as much in quality as in quantity, and any debate would be the poorer without it.

Much can be learnt from how we proceed in dealing with European legislation. We can and should make greater use of committees, not to compete with but to complement our existing procedures.

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I turn now to the substance of the report. As has already been mentioned, there can be little doubt that the Corpus Juris proposals address a major problem. Fraud on the Community's finances takes place on an extensive scale. The noble and learned Lord, Lord Hope of Craighead, has indicated already the evidence that we received. Official figures suggest it is about 1.4 per cent of the Community's budget, but one estimate that we received is that it is about 10 per cent; in other words, well in excess of £5 billion per year. If that figure is correct, it is staggering.

There is thus a problem which is massive in scope which requires action, and immediate action. The proposals for Corpus Juris, drawn up, as we have heard, by a team of legal experts, represent a genuine attempt to address a real problem. One can appreciate the motivation for the proposals; in many respects, one can appreciate the case made for them. As the noble and learned Lord has already mentioned, we took evidence from two of those responsible for the proposals and they made good witnesses.

However, the proposals as they stand are flawed. The limitations are adumbrated in the report. One of the strengths of the report is the way in which they are clearly and concisely laid out. Given that, I do not want to dwell on them too much. As is made clear in the report, the proposals lack a clear legal basis. The European public prosecutor would be largely unaccountable to an elected body; there are problems as to the feasibility and the acceptability of the proposals at national level; and the problem of dealing with fraud committed outside the European Union is not adequately addressed.

Indeed, the problems are very well summarised by looking at the headings in Part 3 of the report: the Corpus Juris is not popular; it lacks a proper treaty base; it is not practical; and it is defective and incomplete. Clearly, the Corpus Juris is not, at the moment, the way forward.

What is the way forward? The report considers alternatives and I want to draw out what I consider to be two very positive features deriving from the report. The first is a need for a twin-track approach. Not only must rigorous mechanisms be in place to ensure that those who commit fraud are detected and prosecuted but also rigorous mechanisms need to be in place to prevent fraud occurring. Several witnesses drew attention to procedures which could be employed to cut down on fraud on the Community budget. Several major initiatives are now under way although I was struck by evidence which suggested that some fairly modest reforms could have a considerable impact on preventing fraud.

In terms of transit fraud, for example, we were told that the introduction of a computerised system costing a fraction of the cost of the lost revenue could eradicate most of this loss. In view of recent events, the need for stronger discipline within the Commission to prevent fraud is now recognised.

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The second requirement is for a "bottom up" approach. Witnesses were sceptical of the "top down" approach represented by the Corpus Juris proposals. They recognised that co-operation between national authorities represented a more feasible and acceptable way forward. One of the problems that clearly came across was that there has been a lack of co-operation. However, what came over in evidence was the extent to which that is now changing. The report draws attention to three developments in particular: a judicial network, peer review and joint action.

What also came over in evidence were other practical proposals that could and indeed should be pursued. The report mentions, for example, extending the use of fiscal liaison officers. It goes on to state that that might require a moderate increase in resources. Given the sheer scale of the problem, I believe that a moderate increase in resources is more than justified. In the context of national co-operation, the role of the Commission should perhaps be one of encouragement, not imposition.

In conclusion, the problem addressed by the report is clearly a major one. That is indisputable. The question is, how does one address that problem. The Corpus Juris proposals are not the answer, for the reasons given in the report. A "twin track" and "bottom up" approach is a more feasible response. However, as is abundantly clear from the report, there is still a great deal to be done, including that to be done by the British Government in order to implement these approaches. It is vital that the Government not only commend the report but also act upon it. I hope that the committee will return to the subject at some future date. From the evidence we took, two things are abundantly clear. The need for action is urgent and there are absolutely no grounds for complacency.

7.4 p.m.

Lord Pearson of Rannoch: My Lords, I join others in congratulating the noble and learned Lord, Lord Hope of Craighead, and his committee on this succinct and well-balanced report. However, I intervene because I do not quite share the confidence of the noble Lord, Lord Wigoder, on the low status of the Corpus Juris project in Brussels.

I say that because last week I was speaking to an MEP who sits on the European Parliament's committee which is considering this project; no names, no pack drill. However, he tells me that there is a serious enthusiasm in Brussels for Corpus Juris and a determination to promote it. That would fit with the views of those of us who believe that the European Union really does want to end up as a superstate one day and has determinedly set its face against the Europe of nations collaborating together which so many of us would prefer. That, for instance, is why the EU aspires to have the common foreign and defence policy, because a state needs that.

It is not, therefore, unreasonable to believe that, at the end of the day, there is similar enthusiasm for a common legal system, down the road to which this seems to many of us to be just the first step. Over the

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years we have often been told first that an EU initiative does not really exist. Then we are told that it does not really matter; it is only being discussed. Before we know where we are it has happened, and then it is too late because we should have been alive to it earlier.


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