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Mr. Spring: Does the Minister recognise that this proposal is only the thin end of the wedge? Last year, the Commission stated:

    ``the Union would greatly benefit from having a number of members of the European Parliament elected on European lists, presented to all European voters throughout the Union. The voters would then have to vote twice: once on a national list and once for the group of members on these European lists.''

It also stated that that would:

    ``encourage the development of Europe-wide political parties and produce members who could claim to represent a European constituency rather than a purely national one.''

Mr. Vaz: I recognise that proposal, although, given the hon. Gentleman's intonation, I am unsure whether he supports it. It is important that we have a statute that serves our proposed work. We have tried to reform those matters for some time. There is a perception that Members of the European Parliament are involved in a great bandwagon—the gravy train. That is not so. However, to show that things are being done properly, we need a statute that will ensure accountability and transparency.

I do not believe that the citizens of this country want to vote other than for someone they know from the constituency, who will represent them in the European Parliament. They want to know that they can seek help from their MEP. Accordingly, we are trying to bring that about within the context that I have explained.

Mr. Hopkins: First, I thank my hon. Friend the Minister for his answer to my previous question, with which I am happy. He anticipated my second question, about the British system and whether the Government will advocate that Europe moves toward a system like ours. Will we propose and pursue something similar to our office costs allowance, giving individual MEPs a budget with which to employ staff directly, instead of a scheme in which staff are employed by the Parliament or Commission?

Mr. Vaz: We need to examine the detail. The first comment that most hon. Members would make about their office costs allowance is that it is not enough and that it is difficult to manage staff on that sum. As hon. Members will know, that matter is now before the Senior Salaries Review Body, and we hope for a report on it.

The public want to know—perception is always important—that everything is being handled properly, and that people who work for MPs or MEPs have a contract and are dealt with appropriately. There are too many loose ends. The problem with the system in this country is that it takes a long time to be reimbursed: hon. Members have told me about getting into difficulties, such as their telephone being on the verge of being cut off because claims take so long. Such anecdotal points can be dealt with in the detail, but we want to show the public a more transparent approach. I think that our system is pretty good, and I pay tribute to the Fees Office, which does a good job. The issue that needs to be dealt with is one of amounts, not how money is spent—our aim is to ensure sufficient resources to enable MPs and MEPs to carry out their business appropriately.

Mr. Spring: Is the Minister aware of the statement made by the Leader of the House during business questions on 18 January in response to a question from my hon. Friend the Member for Buckingham (Mr. Bercow)? The right hon. Lady said that Conservative Members had misread the rules on the proposed funding of national parties. She said:

    ``Having heard the statement by the Commission spokesman, and having read a clear statement by the Commission, I believe that Conservative Members have misread the rules to which the hon. Gentleman is referring, and that no such provision exists. There is no suggestion that any party will be or could be debarred from receiving funding.''—[Official Report, 18 January 2001; Vol. 361, c. 521.]

If it turns out that we have not misread the rules and that we would not benefit from the funding because we are not part of a transnational party, would the Government, on reflection and after considering the matter, undertake to oppose the plans?

Mr. Vaz: No. The hon. Gentleman misunderstood what my right hon. Friend the Leader of the House said. There is no question of discrimination. As I made it clear, we are not discriminating against the Conservative party. No United Kingdom national party will receive funds as a result of the measure. On the contrary, it will be made explicit—as we have long sought—that European Commission funding cannot be used to finance United Kingdom or other national political parties. I should expect the hon. Member for Ruislip-Northwood to agree with that. Why should EC funds be used to fund national political parties? We have not heard from the hon. Gentleman yet; although I am goading him to speak, he sits looking very calm. I expect that he agrees that that is not a European Union function and that money should not be used in that way. I think that the public would expect the same.

Mrs. Eileen Gordon (Romford): My hon. Friend mentioned Community taxation and I agree that MEPs should pay the same taxes as their constituents. However, the report by the Group of Eminent Persons seemed fairly definite about wanting to proceed along the route of Community taxation. The group argues that it makes no sense to agree a common salary if that is then altered dramatically by different rates of national taxation. How will my hon. Friend resist that course of action? Will doing so hold up the progress of other reforms?

Mr. Vaz: I assure my hon. Friend that we will hold things up until we get our way. We have pressed that point forcibly in discussions. It is a principle that is accepted on both sides of the House. Members of the European Parliament will want to pay the same tax as their constituents. That is fundamental not only to the principles that we adopt in connection with the European Union, but those of a representative democracy. We are not trying to hold things up; we are trying to improve them, and we have made it clear that we shall not give in. As the Committee knows, we achieved a declaration at Nice on such matters and it is important that people understand our position.

Mr. John Wilkinson (Ruislip-Northwood): Why did the Minister give such a misleading impression to the Committee about two Members of the European Parliament, Messrs. Nigel Farage, and Jeffrey Titford of the United Kingdom Independence party? For example, they were not funding a campaign for imperial measures with their expenses; they were using the excess between the amount that they spend on travel between the United Kingdom and the European Parliament and the fare that MEPs are allowed to claim. Is it not true that other MEPs who pocket the difference are not being held to account, whereas those two MEPs, who tried to use the excess for a worthwhile purpose that is relevant to their parliamentary activities, are?

Mr. Vaz: I am sorry if the hon. Gentleman considers that I have misled the Committee. However, people say that about quotes from the The Times, and I was merely quoting that example to illustrate the need for us to ensure that the public are satisfied about what happens to MEPs' expenses. People would be worried if individual causes were funded by such expenses. I am not saying that I approve of any Member of the European Parliament who pockets the difference between what they are entitled to and what they spend. That would not be right.

The hon. Gentleman's argument is that if MEPs spend such money on a good case, that is okay. I understand that argument, but I cannot accept it. He probably supports such causes, but, given that Northolt is in his constituency, he would be concerned if the money were given Campaign for Nuclear Disarmament, for example. Martin Fletcher's article in The Times was misleading, but people are concerned about what MEPs do with their money. Such action hits them in the face. We are not at fault in the way in which we administer our allowances, but people would be concerned if there were the slightest sign that they were not being used for the proper purposes. If you were claiming money for travel allowances, you should use it for travelling, not for funding a court case even though that case has merit in the hon. Gentleman's eyes.

The Chairman: Order. First, the hon. Member for Ruislip-Northwood did not accuse the Minister of misleading the Committee. Secondly, the Minister used the word ``you'', and I assure him that I use warrants and do not claim any allowances.

Mr. Vaz: I apologise, Mr. McWilliam.

Mr. Hopkins: I strongly support the British position on the state funding of political parties. I hope that the matter under discussion will not be regarded as a step towards that at national level. Will my hon. Friend the Minister tell the Committee whether other member states on the continent of Europe might hold different views, which might lead to conflict in the debates on the future funding of European elections?

Mr. Vaz: I am sure that others have different views; as far as we are concerned, however, ours is the right one. Clearly, some other countries do not support our view, but we must make it clear that we regard it as a matter of principle, as we do the taxation points. We should continue to debate such matters. The European Parliament has a different view, but all the British Labour MEPs are united in a belief that something needs to be done. I cannot, of course, speak for the Conservative group, but that is the view of the Labour group.

Nobody comes up to me in the street in Leicester, grabs me and says, ``What about the MEPs' statute?'' It is not a burning issue. I do not know whether that happens to my hon. Friend the for Luton, North (Mr. Hopkins) or to the hon. Member for Bury St. Edmunds. However, it is an issue that suddenly appears in the headlines. An MEP on the ``Today'' programme, talking to John Humphreys, will say, ``Oh, well I went from Manchester airport, I did X, Y, Z, and I kept the rest'' and that is enough to taint everybody. It is important that the public are reassured, which is why we are fighting hard on the statute.

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Prepared 29 January 2001