Agenda 2000: The New Financial Framework
|
Mrs. Liddell: My hon. Friend makes a good point. The no change perspective is a starting point. My hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food, is currently sitting in a sister European Committee dealing with these matters. We are agreed that negotiations on enlargement must run in parallel with reform of the CAP and structural funds. Without significant reform of agricultural policy and an attempt to control agricultural spending, we will reduce the margins. It is a question of priorities. The Government believe that expenditure of the European Union should be tuned to the needs of the people, which will require changes in overall patterns of spending. We want a financial perspective that will begin to wean Europe's farmers off their expensive subsidy habit--then we can have a realistic agricultural policy and secure the leeway to which I referred earlier. Mr. Boswell: I come to a more detailed point about volume two of Agenda 2000. As the Economic Secretary noted, there is concern about the ability of applicant states to absorb resources. The annual report of the European Court of Auditors for 1996 and its special report 3/97 on PHARE and TACIS point out that the Commission's concentration on full commitment of annual resources to fill up the budget, combined with low absorption rates and an excessively wide range of programmes, has resulted in a disturbing statistic--38 per cent. of the advance payments are paid up but uncommitted to work even within the current, modest framework. Mrs. Liddell: The hon. Gentleman makes a valid point. The acquis for the transition period is aimed at ensuring not only adequate resources to prepare countries for accession, but structured advice and guidance to help applicant nations to prepare themselves. Those countries have a long way to go before they match not only the economic performance of the existing 15 member states, but their administrative structures and their ability to use Community resources properly and effectively. I am mindful of the hon. Gentleman's point. The transition period is critical. Part of the process to determine acceptable applicant states relates to countries' ability to make progress during the period that the acquis covers. Mr. Stevenson: Does my hon. Friend share my anxiety that agricultural expenditure constitutes the only growth in the financial framework? Does she agree that the Commission documents display a complacent attitude? They claim:
In fact, it meant additional expenditure of 6 billion ecu. Can my hon. Friend assure the Committee that a position in which CAP expenditure increases while structural and cohesion fund expenditure remains, at best at a standstill, is not acceptable to the Government? Mrs. Liddell: I said at the beginning of my remarks that members of the Committee should not expect me to defend everything in the Commission documents. I share my hon. Friend's anxieties, which he has expressed on several occasions. It is not strictly true that agriculture constitutes the only growth. Growth has occurred elsewhere, but, in real terms, spending is spread between more states. I cannot stress too often the importance that we attach to reform of the CAP. It is vital for ensuring that enlargement works. If the CAP is not properly reformed, we jeopardise prospects for enlargement and exciting opportunities for British companies to gain access to greater markets. We have supporters in other member states. There are signs of an understanding of the difficulty, even in states that were hitherto implacably opposed to any changes in the CAP. The Committee is unanimous in wishing to secure reform of agricultural spending. Mr. Boswell: I have just one more question at this stage; it relates to the preamble to the first volume of documents. I was disturbed by a reference on page 13 to modernisation of the pension and health-care system. The document provides an analysis of aging in the Community, and the disproportion between retired people and those who are economically active. Can the Minister explain the reference on page 13 to ``coordination of policies'', and especially the phrase,
Some of us are rather concerned about that. Mrs. Liddell: The issue of pension funds has arisen on several occasions and we must bear in mind some significant points. Given that it is a complex matter which requires more detailed consideration than can be given in a brief exchange in a European Standing Committee, I undertake to write to the hon. Gentleman giving a full explanation. Dr. Palmer: Further to the questions asked by my hon. Friends the Members for Stoke-on-Trent, South (Mr. Stevenson) and for Luton, North (Mr. Hopkins), I want to mention the political angle. It seems likely that after the Community expands, the lobby in favour of agricultural spending will grow significantly because of the nature of the economies of many of the new states. That, perhaps, is a reason to press enthusiastically for the reform of the CAP before the expansion takes place. Mrs. Liddell: I accept my hon. Friend's advice. There is a need now to press vigorously for that reform because, given the agricultural interests of an enlarged Community, we could create difficulties not just for ourselves but for all European member states. It is important, too, to recognise the case for reform of the CAP, which was designed for a regime in the 1950s. We are now trying to apply to it a regime in the closing days of this century and the early days of the next. The Committee's concentration on agricultural reform is very helpful. It will guide the Prime Minister, the Foreign Secretary and the Chancellor, when they go to the European Council in Luxembourg, on the strength of feeling that exists on the subject--not just to be negative about agricultural expenditure, but to ensure that there is an agricultural policy that takes into account the real needs of member states and applicant states, rather than the establishment of a bureaucratic system which many member states have found counter-productive and which has caused grave concern to consumers and politicians alike. Mr. Hammond: In its justification for maintaining a margin below the own resource ceiling on page 80 of the first volume of the document, the Commission states:
When I read that, an alarm bell rang in my mind and I wondered whether, during the course of the negotiations about the transitional arrangements, the Commission is signalling that open-ended arrangements might be allowed to overrun the budgets that have been set. Can the Minister assure us that the United Kingdom will insist that the scope of the transitional arrangements negotiated is strictly within the cash budgets agreed? Mrs. Liddell: I can certainly give the hon. Gentleman that assurance, because the sums involved are considerable--they go up to three billion ecu by the end of the transitional period. It is therefore important that we ensure that proper and finite operations are put in place. There are a number of other states which, in the Commission's view, are not ready yet to pursue the route of enlargement. We must also ensure that the current over-concentration on the applicant states does not inhibit the prospects of future applicant states. If we were to give the sort of open-ended commitment--which I am not prepared to give--we might be storing up problems for the future. Mr. Coaker: Will my hon. Friend ensure that during debates about the new parliamentary framework, sound financial management is absolutely a part of discussions on tackling fraud? Will she also ensure that the challenge of enlargement will bring with it the challenge of ensuring that additional moneys are properly spent? The huge amounts of money under different budget headings in the documentation, and the monitoring of how it is spent, will be absolutely crucial if we are to maintain the confidence of the British people in what is happening in Europe. Mrs. Liddell: That is a very good point. It is a matter not just of fraud, but of waste and mismanagement--there is probably more waste and mismanagement than specific instances of fraud. I visited the European Court of Auditors last week, which is beginning to feel slightly more positive about the attitude of the Commission and of member states to issues such as financial management. The same time scale that is being used for Agenda 2000 applies to the SEM 2000 arrangements to improve financial management in the Community. A point that I made in the budget negotiations concerned the Union's tendency sometimes to set expected expenditure levels that are way out of kilter with what could be spent in the relevant period. It is important, for sound financial management, that budgets should not be overestimates. Such problems can occur with the structural funds and that does not lead to sound planning or to focusing of programmes. My right hon. Friend the Prime Minister has made several key points about employment expenditure, because of the Government's initiative in Europe on the matter of employment, and has pointed out that several programmes related to that issue require greater focusing. We also need to take advice about the experience of other member states concerning best practice and programmes that have and have not worked. That approach is preferable to simply deciding that more money is required, as distinct from focusing the money on the aims for which it was intended. Mr. Ross: A very large part of the objective of the common agricultural policy was to raise the income of people who worked on the land to a level comparable with that of people working in industry. How successful has that policy proved to be for the present member states? How has it helped to diminish the number of very small farms that formerly existed in continental Europe? What is likely to happen with regard to the very small, one-man, subsistence type of farming that goes on in much of eastern Europe?
|
![]() ![]() ![]() | |
©Parliamentary copyright 1997 | Prepared 10 December 1997 |