---

Column 286

tightening the scrutiny and accountability, not to eliminate from the treaty, as this group of amendments would do, the very proposals that have been agreed with our Community partners to try to improve matters.

As I was saying, the European Parliament has a part to play. It is an additional element of democratic accountability to the financial scrutiny and reporting provided in article 180b. Through the treaty, the responsibilities of the Court of Auditors, the member states and the Commission are strengthened in undertaking the task of monitoring expenditure and taking necessary corrective action.

Putting those provisions in the treaty and into law will not of itself guarantee that all irregularities, abuses and fraud in the EC budget are eliminated, but it provides the machinery through which they can be more readily tackled, and that is a significant step forward.

I have said that, on that and other matters, the treaty is far from perfect. It would have been good, for example, to see penalties set out for irregularities and fraud applied to member states, Community institutions and other responsible bodies. The need for those must be kept under review, depending on the experience of how much difference the provisions of the treaty make in practice. We urge the Government to impress on the Commission and other member states the importance we attach to the proper control and supervision of the budget. In a number of important respects, achieving more effective Community expenditure will also require changes in policies as well as improvements in financial control and accountability. I need not rehearse the powerful arguments in favour of the fundamental reform of the common agricultural policy in respect of specific and flawed regimes, to some of which the hon. Member for Stafford referred. We think of the olive oil scheme in Corfu, when aid was paid for three times the amount produced. Nobody can condone such abuse. It is important that the schemes are themselves reformed or, if they cannot be reformed, abandoned, in addition to financial scrutiny and accountability being improved.

Mr. William Ross : As Northern Ireland is the only part of the United Kingdom with a land frontier, we have a particular interest in the amendment. I hope that the discussion goes on for some time, so that I have an opportunity to tell the Committee of some of the problems that are experienced across that land frontier. I also hope that, before he concludes, the hon. Gentleman will dwell on some of the problems that arise because of that land frontier with another state.

Mr. Smith : The hon. Gentleman is far better qualified than I to comment on that issue. The general points I am making about the improvements provided for in the treaty and the ways in which they could be strengthened will be of assistance in that matter. As I was saying about the CAP, not only must we reform the schemes, or abandon them if they are incapable of reform, but we must change the general philosophy of the CAP, because it has resulted in consumers and Governments subsidising even very profitable operations, thereby producing much more food than the Community needs or can sell at cost on world markets.

Considerations of common sense, efficiency in resource allocation and the realities of international competition

---

Column 287

and co-operation will, sooner or later, force further reform of the CAP. We must do all we can to make sure that that happens sooner rather than later.

Mr. Lord : Is not one of the problems of the CAP and farming the fact that we, as a nation, are being penalised for our efficiency? When milk quotas were introduced into the Community, it was a matter of a modest amount of work for the Government to put them in place through the milk marketing boards, which quickly obeyed the rules and fell into line. The Italians do not know where their dairy farmers are, how many cows they have or which valley they are in. How on earth can such a system be monitored? Are we not trying to do the impossible?

Mr. Smith : I agree that we are to some extent paying the price of efficiency, but we are also paying the price for being late in signing up to the next stage in the development of closer Community co-operation. Another lesson that we should learn is that if we get in late and are forced to sign up to arrangements that have been shaped mainly by the influence of other member countries, they are likely to be arrangements which do not work especially to our advantage.

Mr. Lord : That point is frequently made but, in this instance, we are not late but are ahead of the rest of Europe. Our farming and farmers and the way in which we have organised our marketing are in many ways light years ahead of the rest of Europe. We and our farmers are being penalised for all the years of efficiency and hard work.

Mr. Smith : There is much in what the hon. Gentleman says, but what should concern us most in this debate is what can best be done about it. Should we turn our back on the Community as some people, such as the hon. Member for Southend, East (Sir T. Taylor), argue with great sincerity and vigour, or should we ensure that our voice is heard in all the deliberations on the Community's future and that our views and influence are taken seriously because we are seen and known to be wholehearted and sincere in our commitment to close European integration? Should we take the lead in setting the agenda so that issues such as the reform of the CAP will enable the rest of the European Community to catch up with the efficiency that our farmers have achieved?

Sir Teddy Taylor : Does the hon. Gentleman accept that, despite repeated attempts at reform, expenditure on the CAP is now far higher than it was last year or the year before and that the mountains of food are breaking all previous records? Would not it be far more realistic for the Labour party and the Government to accept the simple fact that there is no possibility of reforming the CAP under the present structure of the European Community? Would not it be much better to start with the assumption that it is a waste of time trying to reform it because it cannot and will not be reformed? If we started with that assumption, we might be able to get something done about it.

Mr. Smith : The problem with the hon. Gentleman's argument, on this as on other aspects of the treaty, is that he would abandon the mechanisms that we have, collectively and co-operatively, to bring about reform with our European partners. He would abandon them for a very uncertain future in which we are not even part of the Community and will clearly not be able to shape developments. He clearly prefers not to be a part of those

---

Column 288

developments. That is the sincere and strongly held view of a minority of hon. Members. I respect that view and am prepared to argue about it, but I favour working for closer co-operation between member states in order to deal with precisely those problems identified in the Court of Auditors' report and to bring about the fundamental reforms needed in, for example, the CAP. We shall be much better placed to do that if we are part of the process and framework established in the Maastricht treaty than if we abandon it.

Mr. William Ross : The hon. Gentleman says that we should seek closer co-operation, but is he not forgetting what happened with the introduction of milk quotas ? Milk farmers went to bed at night with a milk production that was worth absolutely nothing. Anyone could join in or leave without any financial consequences. They woke up in the morning owning something called a "milk quota" which, across the nation, must have had a value of countless millions of pounds. Was not that an obscenity, because overnight and out of thin air it created huge sums of money for farmers ? Surely to heavens, the hon. Gentleman could not support any system that produced such a crazy idea. Why should we embark again on a path that we have followed so foolishly for so long ?

Mr. Smith : The hon. Gentleman makes a persuasive case for reform, but I shall not be tempted into further debate of the details of the common agricultural policy. Suffice it to say that it will have to be changed sooner or later. Let us make it sooner. We shall secure change by building political support for further reform through the Community.

In these, as in other respects, the Maastricht treaty is, above all, a framework. What is made of the framework will depend upon political will and upon the determination of member states to ensure that, in the many respects in which action is needed for the purpose of securing effective budgetary and other policies, appropriate action is taken. I believe that the provisions of the treaty make that more, rather than less, likely.

For these reasons, Opposition Members are certainly unable to support the amendments tabled by the hon. Member for Stafford and his hon. Friends.

12.45 am

Mr. Robert G. Hughes rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put :--

The Committee divided : Ayes 269, Noes 56.

Division No. 220] [12.45 am

AYES

Adley, Robert

Ainsworth, Peter (East Surrey)

Aitken, Jonathan

Alexander, Richard

Alton, David

Amess, David

Ancram, Michael

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas (Hazel Grv)

Ashby, David

Aspinwall, Jack

Atkinson, Peter (Hexham)

Baker, Nicholas (Dorset North)

Baldry, Tony

Banks, Matthew (Southport)

Banks, Robert (Harrogate)

Bates, Michael

Batiste, Spencer

Bellingham, Henry

Beresford, Sir Paul

Blackburn, Dr John G.

Booth, Hartley

Boswell, Tim

Bottomley, Peter (Eltham)

Bottomley, Rt Hon Virginia

Bowden, Andrew

Bowis, John

Brandreth, Gyles

Brazier, Julian

Bright, Graham

Brooke, Rt Hon Peter

Brown, M. (Brigg & Cl'thorpes)

Browning, Mrs. Angela

---

Column 289

Bruce, Ian (S Dorset)

Burns, Simon

Burt, Alistair

Butler, Peter

Butterfill, John

Campbell, Menzies (Fife NE)

Carlile, Alexander (Montgomry)

Carlisle, Kenneth (Lincoln)

Carrington, Matthew

Channon, Rt Hon Paul

Churchill, Mr

Clarke, Rt Hon Kenneth (Ruclif)

Clifton-Brown, Geoffrey

Coe, Sebastian

Colvin, Michael

Congdon, David

Conway, Derek

Coombs, Anthony (Wyre For'st)

Cope, Rt Hon Sir John

Couchman, James

Currie, Mrs Edwina (S D'by'ire)

Curry, David (Skipton & Ripon)

Dafis, Cynog

Davies, Quentin (Stamford)

Davis, David (Boothferry)

Day, Stephen

Deva, Nirj Joseph

Devlin, Tim

Dickens, Geoffrey

Dorrell, Stephen

Douglas-Hamilton, Lord James

Dover, Den

Duncan, Alan

Dunn, Bob

Durant, Sir Anthony

Dykes, Hugh

Eggar, Tim

Elletson, Harold

Emery, Rt Hon Sir Peter

Evans, David (Welwyn Hatfield)

Evans, Jonathan (Brecon)

Evans, Nigel (Ribble Valley)

Evans, Roger (Monmouth)

Evennett, David

Faber, David

Fabricant, Michael

Fairbairn, Sir Nicholas

Fenner, Dame Peggy

Field, Barry (Isle of Wight)

Fishburn, Dudley

Forman, Nigel

Forsyth, Michael (Stirling)

Forth, Eric

Foster, Don (Bath)

Fox, Dr Liam (Woodspring)

Fox, Sir Marcus (Shipley)

Freeman, Roger

French, Douglas

Gale, Roger

Gallie, Phil

Garel-Jones, Rt Hon Tristan

Garnier, Edward

Gillan, Cheryl

Goodlad, Rt Hon Alastair

Goodson-Wickes, Dr Charles

Gorst, John

Grant, Sir Anthony (Cambs SW)

Greenway, Harry (Ealing N)

Greenway, John (Ryedale)

Grylls, Sir Michael

Gummer, Rt Hon John Selwyn

Hague, William

Hamilton, Rt Hon Archie (Epsom)

Hamilton, Neil (Tatton)

Hampson, Dr Keith

Hanley, Jeremy

Hannam, Sir John

Hargreaves, Andrew

Harris, David

Haselhurst, Alan

Hawkins, Nick

Hayes, Jerry

Heald, Oliver

Heathcoat-Amory, David

Hendry, Charles

Hicks, Robert

Higgins, Rt Hon Sir Terence L.

Hill, James (Southampton Test)

Hogg, Rt Hon Douglas (G'tham)

Horam, John

Hordern, Rt Hon Sir Peter

Howarth, Alan (Strat'rd-on-A)

Howell, Rt Hon David (G'dford)

Hughes Robert G. (Harrow W)

Hunt, Rt Hon David (Wirral W)

Hunt, Sir John (Ravensbourne)

Hurd, Rt Hon Douglas

Jack, Michael

Jackson, Robert (Wantage)

Johnson Smith, Sir Geoffrey

Johnston, Sir Russell

Jones, Gwilym (Cardiff N)

Jopling, Rt Hon Michael

Kellett-Bowman, Dame Elaine

Kennedy, Charles (Ross,C&S)

Key, Robert

Kilfedder, Sir James

King, Rt Hon Tom

Kirkhope, Timothy

Kirkwood, Archy

Knight, Mrs Angela (Erewash)

Knight, Greg (Derby N)

Knight, Dame Jill (Bir'm E'st'n)

Knox, David

Kynoch, George (Kincardine)

Lait, Mrs Jacqui

Lamont, Rt Hon Norman

Lang, Rt Hon Ian

Leigh, Edward

Lennox-Boyd, Mark

Lester, Jim (Broxtowe)

Lidington, David

Lightbown, David

Lilley, Rt Hon Peter

Llwyd, Elfyn

Luff, Peter

Lyell, Rt Hon Sir Nicholas

MacGregor, Rt Hon John

MacKay, Andrew

Maclean, David

McLoughlin, Patrick

Madel, David

Maitland, Lady Olga

Malone, Gerald

Mans, Keith

Marland, Paul

Marshall, John (Hendon S)

Marshall, Sir Michael (Arundel)

Martin, David (Portsmouth S)

Mawhinney, Dr Brian

Merchant, Piers

Milligan, Stephen

Mitchell, Sir David (Hants NW)

Monro, Sir Hector

Montgomery, Sir Fergus

Moss, Malcolm

Needham, Richard

Nelson, Anthony

Neubert, Sir Michael

Newton, Rt Hon Tony

Nicholls, Patrick

Nicholson, David (Taunton)

Nicholson, Emma (Devon West)

Norris, Steve

Onslow, Rt Hon Sir Cranley

Oppenheim, Phillip

Ottaway, Richard

Page, Richard

Paice, James

Patnick, Irvine

---