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I turn to the 30th report of the Public Accounts Committee for 1987-88, where reference is made to Customs and Excise. If the system is to operate properly, there must be proper inspection at ports. However, paragraph 2(iv) states :
"We consider that the absence of inspection facilities at some ports is unacceptable."
How can one run such a system without any certification at ports? Paragraph 2(vi) of the Committee's report adds :
"We are surprised that, in the absence of satisfactory C&E records for CAP examination, IBAP"--
the Intervention Board for Agricultural Produce--
"can be satisfied with the evidence about the level of examination."
In other words, the Committee spotlights a weakness in Customs and Excise.
I have some surprising statistics for the House. The United Kingdom comes fourth of the Community countries that benefit from export refunds. At the top of the list is France, with refunds totalling 3, 074 mecu. The Netherlands come next, with 1,777 mecu, and Germany third with 1,445 mecu. The United Kingdom ranks fourth,
Column 479with refunds of 880 mecu. When one considers that the French market is worth £2,000 million per year, those amounts fall into perspective.
It is also significant that the three countries that top the list have a total of 25 votes in the Council. As right hon. and hon. Members well acquainted with the EEC will know but others outside the House may not, 23 votes can produce a blocking third. Any amendments to the rules of the kind that we want to see will have to achieve a two-thirds majority, which could be blocked by the top three countries if they so wish : I am not claiming that they do, but they have that capability.
I have three questions for the Minister. First, does he think that physical checks take place at stores, and that there is a sufficient number of them and that there are physical checks at ports? The evidence of both the Court of Auditors' annual report and the special report suggests that the Paymaster General cannot answer yes to those questions. Secondly, while I understand the right hon. Gentleman's reticence in respect of an earlier request for information, if the Community's audit authority wants information from a national authority, is there not, by contract as it were, an obligation to assure the court that there is an adequate domestic audit procedure or, in the absence of such a procedure, an obligation to provide any necessary facts? It is clear that, alas, we do not have a satisfactory domestic audit procedure.
Thirdly, does the Paymaster General accept the amendment that is on the Order Paper? He cannot say that it is a criticism of the Commission. It is not. It could be interpreted as backing it up. Whatever may be the failures of the Commission--and some of its replies are pretty pathetic--at least it has set up a working party to consult national Governments. Would it not be wise to await the results of that working party, and to discuss those findings--I am not saying that we should accept them--before recommending a discharge of the accounts to the European Parliament, as the treaty provides? That would not only be sensible and wise but would be an action of probity and honesty, and would at least satisfy the people of this country, who are growing increasingly worried at the situation.
The power of this House was founded on, and can only be sustained by, the power to vote money and to scrutinise expenditure. The Paymaster General and the Government should do nothing less at the next meeting of the Council of Ministers on this subject.
Sir Richard Body (Holland with Boston) : I hope that the hon. Member for Newham, South (Mr. Spearing) realises that the House is much in his debt for all he is doing as Chairman of the Select Committee on European Legislation and for his diligence on this and other EC matters.
Having struggled through most of the 300 pages of the auditors' report, I was left with the desire that Sir John Hoskyns, a fair-minded man, might be persuaded to give enough time to read this report and especially to read that horror story, as my hon. Friend the Member for Nottingham, East (Mr. Knowles) described it, in which 18 per cent. of the Commission's expenditure in 1987, the year with which we are concerned, was unaccounted for. I should like to think that, if Sir John read the report, the
Column 480next time he had any comments about the Commission, they would be less charitable and generous than they were when he spoke at the Albert hall the other day.
My right hon. Friend the Paymaster General has invited the House to give its opinion on whether there should be a supranational authority to police the expenditure under the common agricultural policy. It seems that logic is driving us in that direction. I have never been a friend of the common agricultural policy. To me, it seems that it was devised by the devil when he was inebriated, but I am in favour--as I hope all of us are--of international co-operation on a number of agricultural issues.
I wish that my right hon. Friend would realise the tremendous potential we have towards that end in Europe through the Economic Commission for Europe. I find it sad that the Foreign Office had turned its back on that institution, which, after all, has the support of almost every country in Europe and certainly every country that is a member of the United Nations. It is uniquely qualified to do some of the tasks that all hon. Members would wish to see done in international co-operation on certain agricultural issues. The common agricultural policy is, of course, supranational. That is why it is inherently wrong and why it has a number of built-in mechanisms that are unmanageable. I cannot see how we shall ever manage it. If we wish to have a common agricultural policy and if the House is willing to surrender its powers over agricultural policy, we must recognise the inevitable consequence that there will be endless fraud because billions of pounds are sloshing around in the funds. As all the mechanisms are so complex, it is extremely difficult for anyone to understand.
For some time I have, for a particular reason, been studying some of the agricultural reports. I have been a farmer, and have had the advantage of practising at the criminal Bar for 20 years and taking on many fraud cases. But even with those qualifications, I found it difficult to comprehend the frauds. We cannot expect our own police force, overworked as it is, especially the fraud squad, to embark on that work and it would not have the will to do it. Our own Government, recognising that we are one of the main beneficiaries of the refund system, would have to be willing to give the police the necessary resources.
Given the great complexity of the frauds, I am driven to the view that if we want to do something--which will only scratch the surface--it will be necessary to have a team of supranational officials based in Brussels. I hope that it would work under the auspices of the Court of Auditors, the one institution over there in which one can have faith. The force would have to be drawn from all the countries and would have to have the right to come here and look at the books, to pursue matters and to act as a supranational police force.
Mr. Cash : Does my hon. Friend agree that what he is describing is similar to the operations of Interpol? However, the co-ordination required in following fraud, especially in an area such as the Community, presents certain complications. Under the present system, the ultimate prosecution is left to the national authorities.
Sir Richard Body : I agree. I am wholly in favour of Interpol. As an international framework, it is wholly desirable, but it is made up of individual police forces co-operating with each other when their interests
Column 481converge. That is admirable, but it is not the same as the issue here, when we are dealing with a supranational policy, where supranational funds are involved, where far too much money is available for the purposes and where, inevitably, sticky fingers are trying to get hold of it.
That is why I said that if we want to deal with the problem--and we shall never truly deal with it, because it is too vast--and if we want to try to do something, I am driven to the view that we must have a team based on Brussels under the control, I would hope, of the Court of Auditors, recruiting detectives and accountants internationally and with the power to go throughout the Community. It would need to have powers to match those of our own police force and it might be necessary to go further and to have supranational courts. That seems to be the logic if we decide to go along the supranational road.
Mr. Alan Meale (Mansfield) : Is the hon. Gentleman aware that there are also plans to lessen the customs procedures across the boundaries of member states? Does he not think that it is madness to proceed with such a stupid measure at a time when such vast amounts of fraud are being perpetrated on the Governments of member states?
Sir Richard Body : Indeed, I am at one with the hon. Gentleman on that. The House and our Government must make up their minds about which way they want to go. They have the power, as I have said on numerous occasions, to disengage from the common agricultural policy.
Were they to take that step, they would undoubtedly succeed in causing reforms for other countries, which would be to the advantage of the whole Community. This country, more than any, has it in its power to do something about the common agricultural policy. It is uniquely able to do that. Sad to say, the Government do not have that will at present. I wish that they had the resolution to disentangle this country from the common agricultural policy. As long as we go along with the common agricultural policy, which is essentially supranational, and if we want to work supranationally, we must have a supranational police force to check the frauds to some extent. However, given the complexities, I do not believe that we shall ever see the end of the great frauds that have been committed over the past few years. They will continue despite the assurances that my right hon. Friend sought to give us.
Sir Russell Johnston (Inverness, Nairn and Lochaber) : In one respect, this debate represents an improvement on our last debate on the Court of Auditors' report, which also took place on 2 March. The Minister may recall rising to his feet at 1 o'clock in the morning on that occasion, and the degree of liveliness that hon. Members exhibited was perhaps slightly affected by the lateness of the hour. This time, we are conducting our debate at a more civilised time. Nineteen eighty-seven was an exceptional year in terms of the Community's finances. I hope that it will have been the last year in which the Council was late in agreeing the budget, with the result that the previous year's budget had to be extended temporarily, a month at a time. We very
Column 482much hope that that measure will not need to be used again. The second half of 1987 also saw the implementation of the Single European Act which, among other things, greatly improved the decision-making procedures.
As hon. Members have already said, it is right that we should congratulate the Court of Auditors on an extremely detailed, thorough and forthright report. Some hon. Members remain highly suspicious of all things European, but it is clear that the Court of Auditors is a very effective institution. The Community does not consist of a closed conspiracy of empire-building Eurocrats. It has open institutions that are capable of self-criticism which, on occasions, they conduct extremely well.
I, too, propose to criticise the Commission during my short speech, but I hope that my criticism will be constructive. With respect to the hon. Member for Holland with Boston (Sir R. Body), I thought that Sir John Hoskyns made an extraordinarily loose speech, designed simply to bring the Community into some disrepute--for what reason, I am not very clear. He also took a long time to make such a statement--but I shall not be diverted into talking about him. It is unsatisfactory that we should be debating the report so long after the year with which it deals, but the debate will at least concentrate our minds on the need to respond--and to respond more effectively than the Government have so far seemed to be responding. In our debate on the European Community last Thursday, I said that I felt that only the European Parliament could undertake such activities, and I continue to hold that view. The concentration on fraud in the Community is largely due to the constructive, diligent, patient and repetitive work of the European Parliament.
The myth persists that the British taxpayer single-handedly supports the European Community. Page 219 of the auditors' report carries a colourful table from which one can establish that, in fact, we were the second biggest recipient of funds from the structural fund in 1987--receiving 1.2 billion ecu. The United Kingdom's total receipts from the Community were 3,121 mecu. Our contribution--even before taking into account the abatement --was 5,305 mecu--only 55 per cent. of the contribution made by the Federal Republic of Germany. I do not think that we shall hear the Germans complaining in quite the same way about what they pay into the Community, because they feel more than compensated for their contribution by the huge benefits to their industry.
Mr. Cash : The hon. Gentleman may or may not have taken part in the debate on the structural fund directive the other day. It is clear that of the 14 billion ecu to be made available by 1992, 9.2 billion will go to Greece, Portugal, Italy, Nothern Ireland and Ireland, as well as the French overseas departments. The proportion that will go elsewhere--to countries other than the United Kingdom--is therefore somewhat different from the proportion in the picture that he painted.
Sir Russell Johnston : I can only say that I have been citing figures in the report, which referred to 1987. Perhaps we are talking about two different periods, although the hon. Gentleman is right to say that in the most recent round the majority of money went to the Mediterranean countries, particularly Greece and Portugal.
Column 483While on the subject of the structural fund, let me point out that the Minister did not respond when I referred to the Chancellor's Chatham house speech. I do not have the cutting on me, but I remember accurately a report of that speech and the questions that the Chancellor answered after it in The Guardian. He was asked about regional policy and the diverting of resources to less favoured areas and replied that he thought it was "positively damaging". It is evident that the Chancellor does not believe in regional policy, although that is not a new thing for him. In 1962 or 1963, before I was elected to the House, I read an article in The Financial Times by the right hon. Gentleman--then a journalist--in which he referred to the "liberal illusion of regionalism". I remember that clearly. At least the Chancellor has been consistent, although he has not been consistent with the Brussels agreement, which increased structural funds and which the Government supported.
Before dealing with fraud itself, I must express my view that for us not to apply the additionality rule to the regional structural funds is a form of fraud. The whole idea of having regional funds at all is to give extra money to deprived areas, but all we have done is to use them as a method of substituting expenditure rather than adding to it.
As we work out the cost of Europe--and I am not talking about fraud here-- we should remember that there is also a cost of non-Europe, to be found, for example, in the waste that has resulted from not having a single European market. That cost is difficult to estimate, but some have suggested that it might be nearly five times the Community's present budget --perhaps £126 billion.
The question of fraud has rightly dominated the debate. Many hon. Members already said that the report contains some terrifying passages. Paragraph 4.15 on page 67 of the report, which deals with member states' declarations of expenditure, says that they "bear only a tenuous relationship to the actual level of the underlying expenditure. Its analyses, showed, for example, that the average error rate of quantities declared as having left public storage, which determine the losses on sales from intervention to be made good by the Community, was as high as 45 per cent."
Paragraph 4.17 concluded :
"In the absence, taken overall, of adequate independent physical stocktaking and quality control arrangements in the Member States, in the Court's opinion no reliance can be placed on published figures for the quantities and values of products held in intervention storage at the end of the financial year nor on the related expenditure in the year."
It could not be much more devastating than that. Inevitably much of our discussion has related to whether we can do anything about it, and if we can do anything about it, what is the best mechanism. The hon. Member for Holland with Boston reluctantly said that we may well have to have a supranational body to deal with the matter as effectively as possible. I agree with what the hon. Gentleman said, and although I know that it is not his natural position, it seems inevitable.
Despite what the Minister said, I am puzzled about what Lord Cockfield said in another place. The Minister made a short statement on the matter, but I was not much clearer about it when he had finished his statement than before he started it. As I understand it, he said that Britain did not veto the anti-fraud proposals from the Commission, but everyone voted against it, suary Lord
Column 484Cockfield was wrong. On 14 February, Lord Cockfield said exactly that : that not only Britain but all the member countries have voted against it.
I am not clear why that was done. Lord Cockfield obviously considered that it was a good proposition that would enable the Commission to conduct investigations in a way that is not available to it at present. I should like to know why it was opposed. The Minister said that it was an inappropriate measure--a dreadful Civil Service expression that one hears from time to time. When they do not want to tell you why something was done, they tell you that it was inappropriate and that does not mean anything.
Since that was done in 1986, about two and a half years ago, why has there been no follow-up? Why did the Commission just give up? I do not understand that, nor do I understand what the Commission wants in addition to the existing fraud squad established in 1987, the strength of which was doubled as recently as January this year. What did the Commission want to do which the member states unanimously prevented? That is extremely relevant, particularly since fraud on such a scale has been uncovered and, as has been said, the Court of Auditors has pointed out evidence of fraud for many years but no action was taken.
The popular press has given the impression that the United Kingdom is on the march. The Times said :
"The Prime Minister is spearheading a drive against fraud". It seems to me that the Prime Minister has not been spearheading any drive against fraud and that the United Kingdom, along with the other member countries has not been doing anything about it. To return to the European Parliament, one of the British members of the Court of Auditors explained the action of the Commission as follows :
"The Commission was feeling harassed by the European Parliament on the subject of fraud, and were looking for a buffer to protect themselves from the sniping."
That reading of the situation was supported by Robert Cotterill in The Independent on 9 February, when he wrote :
"The emergence of fraud as a significant issue at ministerial level of the European Community brings to a climax a year of patient groundwork by the budget control committee of the European Parliament."
In other words, the drive seems to come from the European Parliament rather than from within the Council.
It may be, as the hon. Member for Newham, South (Mr. Spearing) pointed out, that the top three recipients of intervention were not liable to take the lead in controlling this matter. We were fourth in the league, so perhaps we were under similar pressures.
Sir Russell Johnston : At the moment, I am standing still. In one of the many sections of the report, paragraph 10.102, there is criticism by the Court of Auditors of the Commission's involvement in subsidising a television channel. It was an extraordinary exercise on the part of the Commission. In October 1986, it agreed to grant a subsidy of £1 million ecu to a television channel. It failed, and the Commission is still trying to get back the money. The
Column 485auditors say that the Commission did not verify as it should that the recipient's financial basis was sound. In many respects it appeared to behave like a babe in the wood. I question the basis on which the Commission subsidised a television channel. There are many points that one could make. It appears that the Commission took the wrong course. It would be interesting to know what the position is now and whether it has been successful in recovering our money. The report is chastening. There has been widespread fraud and incompetence. The Court of Auditors deserves to be congratulated on the way that it has focused our attention on the problem. The Government are beholden to work vigorously with other member states to do their best to prevent further serious abuses.
Mr. Tim Boswell (Daventry) : I am grateful for the opportunity to make a brief contribution from a long-standing pro-European viewpoint. As hon. Members have said, the European Community of 12 is an imperfect vessel. Any body with such a large membership must have some diffusion of decision-making and accountability, but, at the hon. Member for Inverness, Nairn and Lochaber (Sir R Johnston) said, there are compensating benefits. I often regard myself as being in the position of Galileo who, after sore torment, reflected on his views on the earth rotating around the sun, is reputed to have muttered, "But yet it does so." It still works in that sense. In much the same vein, even though it does not do a perfect job, the Court of Auditors' report adequately delves into some of the murkier parts of the Community budget, and the common agricultural policy in particular. We must still get total European expenditure into some context. It represents only a tiny fraction of the total public spending of member states. Even if the whole lot were to be defrauded or wasted, it would still represent only about one year's increment in national Government expenditure. At the same time, all hon. Members must admit that we still do not know how big is the incidence of fraud, yet we can say the same about domestic crime. We would be able also to say that, just as an increase in reported crime may reflect an increase in reporting, an increase in fraud may reflect improvements in auditing systems. It is difficult to tell which is which.
I counsel the House against one possible blind alley. From my experience of the workings of the CAP, I know that there must be a strong temptation for auditors to opt for soft targets. Paradoxically, by that I mean those member states which tend to have the best developed administrative systems and the highest traditional levels of compliance. The House will realise that I am hinting at the countries of the northern tier in the Community, including ourselves. Of course, things can and do go wrong with public money in Britain, Germany and France, but but there is some hope for putting them right.
The position is no longer hopeless south of the Alps. It is possible, for example, to use satellite imaging to count the number of olive trees which evidently grow in such remarkable and heavily subsidised profusion in countries such as Greece and Italy. Hon. Members will appreciate
Column 486from the experience of milk quotas in the latter--which, after five years, are still not in full operation--that some Community members are more equal than others.
To put it bluntly, if the European auditors were to nose about in the accounts of cereal intervention stores in the United Kingdom, the worst that they might encounter--and I do not think they would encounter obstruction--would be MAFF, but if they did it in Italy they would be running up against the Mafia.
There are three levels at which our common objective of achieving a cut in fraud under the common agricultural policy could be achieved. The first is simply to cut off some of the excess public funds going into the agricultural sector and the CAP. That would be a matter of policy changes, and some hon. Members who have spoken have not given sufficient weight to what has happened so far.
There is a considerable way further to go yet, and I readily admit that in the current year the savings, of about 2 billion ecu, have had a great deal more to do with the American drought than with the measures that have been taken. Those measures have been worth while, but they have not solved the problem.
It is remarkable this year that, because of the drought, we have got back to the budget as well as to the guidelines. It would be wrong not to acknowledge the efforts that have been made to empty the intervention stores, even if we had to knock out the excess stocks to do it. They are now empty, or much more empty than they were, and it is in the interests of everyone to keep them that way. Intervention must revert to the original concept of a case of last resort and not the regular way of doing business.
That is the first line of defence : the auditors' and the Select Committee's strictures. Next, fraud can be diminished if the distinctions between the agricultural regimes applying between member states can be reduced. The point of much that was said about the beef regime in the auditors' report is that people profited from the wide disparities between the internal price of beef and the export price, and therefore the refunds.
In the same way, traders profit from the large distinctions that exist between the effective prices in member states. Naturally, this is largely connected with the issue of monetary compensatory amounts and border taxes arising from the different rates of the green currencies.
To some extent the same has applied to special arrangements such as the beef variable premium in the United Kingdom, with the consequential clawback on exports. It has also applied to certain animal health matters. Although there will have to be exceptions in, for example, animal health, I welcome 1992 as a move towards removing further internal occasions for fraud, because it will reduce the differences between member states and the prices farmers in them receive.
At the same time, a quid pro quo is to have an effective Community action squad in place, and the debate has been interesting in taking that concept further than simply the Commission's internal procedures. It may have to be a police force. I was interested in the exchanges about customs forces because, if 1992 is to mean a withdrawal of
Column 487Community frontier controls, the logic must be Community spot checks at any point within the area of its responsibilities. I commend the efforts of Her Majesty's Government to put some of those controls in place, although I acknowledge the view held by many people--I have some sympathy with it--that they do not go far enough. I am always concerned, when we are considering regulations, that there should be adequate resources for policing. I would add to that adequate resources within the Intervention Board for Agricultural Produce, to account and monitor and to check its own activities. There have been some signs that it has been inadequately staffed. The fraud that has been clearly set out in the reports is an extra tax paid by legitimate Community taxpayers such as ourselves to persons unknown. None of us should want to rest in our efforts to remove the occasion for fraud and to provide adequate resources that would make it no longer worth while.
Mr. Dennis Skinner (Bolsover) : I listened carefully to the hon. Member for Daventry (Mr. Boswell) who I believe could be described as a pro -marketeer, even after all these disastrous years since we had that fateful vote in this place on 28 October 1971. Then we heard the cries of the people like Roy Jenkins, now in the other place, who talked about what would happen when we got into this wonderful market, how we would get economies of scale, how unemployment would fall and everything in the garden would be rosy. He was followed by people like Shirley Poppins and Dr. Death. They were all in the same bed then. They marched into the Lobbies behind the last Tory Prime Minister, taking us into the great nirvana. Everything would be all right for everybody.
Every so often we have a debate in the House which tells us the bald unvarnished truth. There are a few hon. Members on both sides of the House who refuse to give in on the Common Market. When we read the Court of Auditors report, we see the Common Market with all the veneer stripped off. What do we see? We see fraud on a scale that would not be countenanced in this country. If anything of the kind perpetrated in the Common Market was done here, people would be in gaol.
From what I have heard today from hon. Members who reckon to be in the know, including the hon. Member for Daventry who is a fanatical pro- marketeer, this thing started when Roy Jenkins was the head of the show. He came back with a big fat pension. What did he do about fraud? All we can gather is that it has grown almost every year, imperceptibly, until, according to the Prime Minister the other day, about £2 billion is being paid by the British taxpayer, to fill the claret glasses of those in the Common Market.
It is not to feed the Third world, as they said it would be when we went in to the Common Market. It was a grand great strategy to fill the bellies of the spindle-legged kids in Ethiopia, who we saw on our television screens. They do not have two halfpennies to rub together. These great strategists who are now members of the SDP and the SLD and the Liberals and all those in the party that dare not speak its name, told us that the Common Market would solve all those problems. That is why it is in my guts.
The Common Market has been one of the biggest confidence tricks ever perpetrated in this country in my
Column 488lifetime. I hear about the £6 billion of fraud. In one newspaper it says £17 billion. They cannot even calculate it. It is like having a train robbery every week. But nobody is getting 30 years inside. Nobody is told, "Hey, just a minute. You cannot run away with money on a scale like that." Just imagine.
Then we pick up the paper and read about some old-age pensioner in Britain who does not know which way to turn and is caught in Marks and Spencer pinching a tin of pilchards and put inside. A disabled woman in my constituency was chucked in gaol because she could not pay her television licence. Then we hear hon. Members saying that the Common Market is grand and lovely, but turning a blind eye to the fraud on a massive scale.
Then a Tory has the gall to say, "Oh yes, I have discovered it as well." Sir Henry Plumb rips up his director's card, and God knows what else, because somebody in the higher echelons of the Tory ranks is prepared to open his gills about it. Some of us have been prepared to do that for a long time. The television companies should do something about it. Let us have one television documentary a week on fraud in the Common Market. Why are the television companies not delving into things to find out who the guilty people are? I have been told by someone who has been on the continent about £2.5 million-worth of goods being on a ship and, when a crate of beef was opened, chicken offal was found underneath. That is one of the tricks. Some people are making money hand over fist. The Mafia are moving in on a big scale. I am told that there are olive trees that exist only on paper. The authorities have been searching for 3,000 olive trees in Italy for the past three years. We are paying money out on those olive trees day after day. What a scandal. Then the Government have the cheek to talk about surcharging Labour councils, not for fraud but because they are providing goods and services for the elderly and disabled. In their efforts to provide services, councils are going to great lengths, but not fraud, so that the people can have a decent existence.
The whole thing is ready made for Del Boy and George Cole. All the ingredients for fraud are there. It seems that people who go across to the Common Market cannot fail to make money on the side. So we have not got the jobs or the money for the regions. The other day my hon. Friends told the Prime Minister about the massive pit closures in Nottinghamshire, Derbyshire, Yorkshire and Wales. The Common Market was supposed to resolve all that, but we cannot even get money for the regional policy. Why? If there is £17,000 million of fraud, we are not likely to get money for Wales, for shipbuilding in the north-east or to keep pits open. It is a sad commentary on what has taken place in the 18 years since the vote in 1971.
Other hon. Members want to speak. We shall come back to this. In the meantime some of us have a job to do--to make it clear to the nation that there will be a body of people here, representing large sections of the population, who believe that it is our duty to expose the fraud, always in the knowledge that the Common Market has been an unmitigated disaster for Britain. Some of us will work night and day until we get out of the mess. We will never surrender the belief that the Common Market has been a complete and utter waste of time and money. On we go, with councils here being attacked because they are providing services. Lambeth, Liverpool and other local
Column 489authorities are being surcharged, yet the posh bureaucrats can get away with fraud in countries throughout the Common Market. I do not know what the chairman of the Tory party will say in reply to the debate. Will he answer one question? Can he give me a guarantee that some of that £17,000 million of fraud has not gone into the Tory party coffers?
Mr. Christopher Gill (Ludlow) : While I shall speak less volubly than the hon. Member for Bolsover (Mr. Skinner) I do not want the Paymaster General to think that I speak any less passionately about the matters that we are considering.
My right hon. Friend was nothing if not realistic. He said that the scale of fraud was impossible to quantify. I understood him to mean that not just in respect of beef export refunds or intervention storage costs, but equally in respect of the structural funds. The House should not be surprised because, when that amount of money is sloshing around, there will be sharks in its wake who will find some way of getting their teeth into it. The fault must be with the system--and perhaps with us in that we allow it to continue. While I do not have any blind trust in auditors generally, equally I do not share the confidence of Opposition Members who place so much trust in the ability of inspectors to prevent some of the fraud and abuse so apparent in matters such as the food mountains.
Mr Meale : If, as the hon. Gentleman says, he does not have much trust in inspectors, will he explain how the many cases that have been discovered--such as the tens of thousands of lorries that have crossed boundaries and never even been weighed and the tens of thousands of boxes of so-called beef that when opened were found to contain chicken offal-- could have been discovered other than by inspectors' examinations?
Mr. Gill : I am glad that the hon. Gentleman asked that question. Before I answer it, I should like to say how heartened I was to hear the Paymaster General say that we must put greater emphasis on practical matters. The hon. Member for Mansfield (Mr. Meale) has raised a practical point, and I hope that when he listens to my reply he will realise that it comes from a practical person.
I have spent a lifetime in a very practical industry--the meat industry-- which is at the heart of the problems on which the hon. Gentleman questions me. As a result of my experience after a lifetime in the meat industry, I believe that no number of inspectors will ever obviate the fraud and abuse that we are criticising. I wish it were so, but to believe that that would ever be the case would be a triumph of hope over experience.
Mr. Meale : Will the hon. Gentleman accept that the lesson to be learned from the auditors' report is not to concentrate on the quantity of fraud--which is hard to determine--but to reduce the incidence of it in the future?
Mr. Gill : I listened carefully to what the hon. Member for Newham, South (Mr. Spearing) said about this matter. At one point he invited the House to comment on whether it thought he was exaggerating. In reply to the intervention
Column 490of the hon. Member for Mansfield I can say that I did not consider that the hon. Member for Newham, South was exaggerating.
I was convinced that if the hon. Gentleman had his way and we were able to employ more and better auditors, we would discover more fraud. What we are considering is purely and simply the tip of the iceberg, which is why, inevitably, I have come to the conclusion that it is the system that is at fault--and we are at fault for allowing it to continue.
I hope that my right hon. Friend is listening and will tell other Ministers that they must concentrate harder to reform or abandon this system which appears to be beyond all reasonable control. Why do we have structural funds? I believe that we can create a Europe that will achieve the objectives that we Conservatives believe to be important without the structural funds. I was interested to hear the comments of the hon. Member for Holland with Boston (Sir R. Body), who suggested that we could perhaps do better by repatriating agricultural support to the individual nation. Certainly if we did that, agricultural support would be more intelligible, which would benefit those employed in the industry. As hon. Members will have heard me say in the House before, one of the faults of the present system is that it is completely unintelligible to those who earn their living in the industries that are affected. I also believe that, if it were repatriated, agricultural support would be more closely targeted towards the people whom it is intended to help and who, indeed, need that help. Last but not least--I hope that this is of interest to the hon. Member for Newham, South--it would be easier to account for the funds.
I fear greatly that the common agricultural policy could be the rock on which the European Community founders. I do not want to see that : I have a vision of a Europe in which we have removed the fiscal, technical and political barriers and have created a bigger, freer market from which we will all derive greater prosperity. I see the structural funds as an entirely unnecessary extravagance, and I urge my right hon. Friend to serve notice that the House cannot and will not tolerate the position described in the report.