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Mr. Cash: He was wrong.

Mr. Milburn: There were one or two exceptions, as always--but the party that now condemns Mr. Santer was responsible for putting him there in the first place.

This Government are getting on with the process of reform and modernisation. We have proposed root- and-branch changes to improve the Commission's financial management, accountability and transparency. We now look to Mr. Prodi to drive the reform process forward.

Our reform proposals build on the success that we have achieved to date in tackling fraud. The shadow Chancellor alleged that we have not achieved much. I have a long list which I will run through for his benefit and that of the House. During our presidency, we strengthened anti-fraud operations in Europe. For the first time, European Finance Ministers dealt with fraud in a concerted way. For the very first time, member states reported to ECOFIN on their responses to the Court of Auditors report as it affected their countries. That is a welcome development which we want to continue.

We have used the Agenda 2000 negotiations to push for more effective, better-managed expenditure, with tighter EU spending limits than ever before. On structural funds, the Government have supported the simplification to reduce irregularities and to improve project management. On the common agricultural policy, we have strongly supported moves away from market intervention in favour of direct support for farmers where that is necessary for social or environmental reasons. Each and every one of these reforms will help encourage sounder financial management. That is what the Conservative party appears, at least, to be so concerned about.

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This Government have been delivering in the war on fraud in Europe. Nobody pretends it is easy--it is not. It will be a long and hard battle, but we are determined to protect the interests of UK taxpayers.

Mr. Andrew Tyrie (Chichester): The Minister made it clear a moment ago that he felt that it was quite right that the Commission, which had performed appallingly, should go. Do the Government support the fact that, several months later, the members of the Commission are still in their offices?

Mr. Milburn: The work of the Commission continues, and it is important that we have somebody who can take decisions. I hope that the hon. Gentleman will agree that it would be sensible this time round if we actually got the right people to do the job. It will take some time to secure the best candidates, as I am sure we will. Since the hon. Gentleman is so keen on transparency and accountability, I hope that he will recognise that it is important that the European Parliament has its say about the appointment of the new Commissioners. It is also important that Mr. Prodi, as the new President of the Commission, has a hand in shaping a team that will help drive forward the modernisation and reform programme that we all want in Europe.

Mr. St. Aubyn: Will the Minister give way?

Mr. Milburn: No, I will not give way for a moment. I have given way on umpteen occasions and I really must make progress.

The contrast with the record of the Conservative party when it was in Government could not be clearer. The Conservatives stood out against the introduction of qualified majority voting in the area of fraud prevention. To pretend, as the shadow Chancellor has, that fraud in Europe has somehow only just been invented flies in the face of the facts.

The annual statement of assurance by the European Court of Auditors shows that the level of substantive errors, including fraud, on EU payment transactions rose from 4 per cent. in 1994 to 5.4 per cent. in 1996. According to press briefings, it fell to 5.1 per cent. in 1997. Nobody pretends that such a level is in any way acceptable, but the figures give the lie to the claim sometimes made by the Conservative party, that the problem is not being tackled.

The shadow Chancellor alleged that spending on specific anti-fraud measures in the 1999 EC budget is falling. In fact, spending on those measures is about 4 million euros higher than in the 1997 budget, which was agreed when the Conservatives were in power. The Labour Government are putting our money where our mouth is on tackling fraud in Europe.

The Tories failed to tackle the problem of fraud when they were in government and their party is still failing to take a clear and concerted stand on the issue in Europe. Here I come to the question asked by the hon. Member for Vale of York (Miss McIntosh), and to the shadow Chancellor's allegations about the events leading to the resignation of the Commission and the President.

It is worth reminding the House of the real sequence of events. In early January, it was the leader of the European parliamentary Labour party, Alan Donnelly, who first

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proposed setting up an independent group of expertsto make comprehensive improvements in financial management and accountability. It was Edward McMillan- Scott, the Leader of the Conservative MEPs, who refused Mr. Donnelly's invitation to take a cross-party approachto investigating fraud allegations in the European Commission.

When the European Parliament voted later in January to set up a committee of experts--the so-called committee of wise men--to investigate fraud and mismanagement, of the 17 Conservative MEPs, three abstained on the issue and 12 voted against.

Miss McIntosh: Will the Minister give way?

Mr. Milburn: No. The hon. Lady had her chance and she blew it.

What is more, after many months of detailed work by the Council of Ministers and the European Parliament, Conservative MEPs voted against a Members' statute with detailed rules on MEPs' pay and conditions. Only this month, they voted against a cut in MEPs' salaries and against MEPs having to provide receipts for expenses. The record of the Tory party on fraud in Europe, either in government or in opposition, does not stand up to scrutiny. The party is isolated in Europe, talking tough but failing to act in Britain's national interest. On fraud, as in so many other areas, the party says one thing to the people of Britain and does another thing in Europe.

Miss McIntosh: On a point of order, Mr. Deputy Speaker. I have a serious matter to raise. I put a question to the Minister, to which he was kind enough to listen. It was a very specific question, and I am worried that the House is being misled on the point. Pauline Green tabled a motion for resolution, calling for the resignation of all the Commissioners and--

Mr. Deputy Speaker (Mr. Michael Lord): Order. That is not a point of order for the Chair. It is a matter for debate.

Mr. Milburn: The Leader of the Opposition, perhaps in recognition of the chaos in the Conservative party on these issues, has called for what he describes asa mix-and-match approach to European policy. Mix-and-match it certainly is. Here in the Westminster Parliament the British Conservative party rails against fraud, yet in the European Parliament the Conservative party votes against taking action on fraud.

Mr. Love: I thank my right hon. Friend for giving way to me, and I hope that the House will not engage in the low politics that the Opposition spokesman adopted earlier, especially his refusal to allow others to respond to his comments. I want to draw my right hon. Friend's attention to the manifesto of the European People's party, which says:

Does that contradict the policy of the British Conservative party?

Mr. Milburn: I am sure that the Opposition will be interested to hear what their colleagues in the European

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Parliament have signed up to. Perhaps it is worth reminding them that five Tory MEPs sit on the executive committee of the European People's party that drew up the manifesto. Two Tory MEPs are vice-presidents of that grouping, and one is its chief whip, so they can hardly disclaim the manifesto on which it will fight the European elections.

Today's debate is revealing. Nobody pretends that fraud in Europe is not an important issue. It is. But there are a host of other important issues in Europe that the Conservative party would prefer to avoid. It cannot debate the single European currency, it cannot debate social reform in Europe and it cannot debate economic policy in Europe--because the Tory party is split from top to bottom on Europe. It says one thing in Europe and another in Britain. It cannot agree on fighting fraud, it cannot agree on the single currency, and it cannot even agree on taxation policy.

The Conservative party in Britain is so extreme that it cannot even agree with its own European MEPs. It is no longer a party that engages with Europe but a party that opposes Europe. Such a party cannot deliver the goods for Britain in Europe, and all the tough talk from the Opposition Benches--

Mr. St. Aubyn rose--

Mr. Milburn: I am winding up now.

All the tough talk cannot disguise the fact that the Conservative party is weak and isolated, whereas the Government are strong and engaged. The Conservatives have no credibility on fraud or any other European issue. All their double-talk about cleaning up Europe fools nobody. The Tories cannot agree about waging the war on fraud because they are too busy waging war on each other. It is this party and this Government who are heading the fight against fraud in Europe. It is this Government who are now playing a leading role in Europe, and it is the Labour party that is shaping a new Europe that will benefit Britain and its people. I urge my hon. Friends to reject the Opposition motion and back the amendment.

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