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Mr. MacShane: Can the right hon. Gentleman, with his great experience, tell us what percentage of the EU budget is returned to national Governments for direct payment by national Ministries and Exchequers?
Mr. Hague: Of course a very large percentage is returned to national Governments. In some countries that is part of the problem, but it is clear that there is an immense problem within the Commission. We have, for instance, the statement of Mrs. Andreasen that
That was in her speech when she came to London not so long ago. In her experience, anyone could access the payment system of the European Commission
"and change amounts, change the beneficiaries, and change the dates without leaving an audit trail",
so let us not blame the countries of the European Union. The problem is at the heart of the Commission itself. I shall give way to the Minister again, so that he can explain.
Mr. MacShane: Can the right hon. Gentleman say what percentage of the payments made directly by the Commission and signed in Brussels have not been signed off by the auditors?
Mr. Hague: I can give the hon. Gentleman plenty of percentages, including the fact that 93 per cent. of the payments are considered unsafe or riddled with errors. It is all very well the hon. Gentleman taking the side of the Commission and trying to persuade us that there is not a problem. I warn him that it is the sort of thing that deeply undermines public confidence in the European institutions.
Mr. Hague: I shall give way for the last time, as others want to speak.
Mr. Bercow: I am grateful to my right hon. Friend for giving way, and I apologise for being absent for a great deal of his speech. As the Minister for Europe seeks intelligence and clarification, does my right hon. Friend think it a matter of the utmost seriousness that the report of the European Court of Auditors found that no less than 89 per cent. of the humanitarian aid to Zimbabwe was lost through fraud?
Mr. Hague: My hon. Friend gives another stark example. The aid budget has been a particular problem, with possible fraud and possible corruption. A report by accountants showed that there were 10,000 possible instances of fraud and corruption in the European Commission budget. That is not to be dismissed, and it is only an example of the many different ways in which the European Union's institutions are losing the confidence of the people they were meant to represent.
That makes the case for a more flexible Europe, as advocated by my colleagues on the Front Bench, a compelling one. It makes the case for liberalisation of the economies of Europe advocated by almost everyone in the House a vital one. If the trends of which I have spoken continue to gather pace, the issue in our lifetime will be not whether the European Union is to become a superpower, but whether it will survive at all.
2.50 pm
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): It is a privilege, but also a huge challenge, to follow the right hon. Member for Richmond, Yorks (Mr. Hague), not least because he tends to be so much more eloquent than many of us. I was struck by his analogy when he said that this was like a dining club. It seems also to be a terribly all-male one. That has certainly been my experience on the European Convention.
I am sad that the right hon. and learned Member for North-East Fife (Sir Menzies Campbell) is no longer present, because when he was explaining his commitment to the European Union I suddenly thought, "Yes, this is the problem; it is old men
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dreaming." I do not mean to be unkind. For those of us in the post-war generation, our dream of the European Union was fulfilled in 1989, when the Berlin wall came down, and in 2004, when eight former communist countries came into the European Union.
The real problem is that we have not come up with a new dream that engages young people, who take it all for granted. When I tell my children that Germany and France will never go to war again, they say, "That's very interesting, mum, but I never thought that they would go to war anyway." That is a part of the problem. We think that the European Union is a fragile creature and that it will collapse if we question anything that happened in the past. Far from it: we need to look at it in a new way.
I want to look at parts of the European constitution as it stands, assuming that it will be accepted, and to put them in the context of the negotiations about the accession of new countries and the question whether that would work. My assumption is that none of the political parties across Europe will spend the amount of political capital that they will need to spend to get the constitution ratified in the interests of a document that they do not think will see us out for at least the next 10, 15 or 20 years, given that once they have committed themselves to referendums on these treaty changes, it will become very difficult not to have referendums on future such changes.
I therefore thought that I would go back to the text and try a modelling exercise. There are now 25 member states, we know that Romania and Bulgaria will come in soon and we have started negotiations with Croatia. Turkey is knocking on the door, and I want to make it clear that I am absolutely in favour of its accession. We have to find a way of bringing Turkey in, and not through some different sort of agreement status. We have to make it possible for it to be incorporated.
When we look at the map of Europe, however, we see a big gap in the western Balkans. We will have to get to a point, probably more speedily than we think, at which quite a number of other countries can accede. There will be a lot of very small countries. We can even talk about Serbia and Montenegro, although I am not entirely sure whether that union is sustainable, as well as about Macedonia, Albania and Kosovo. We are potentially talking about a European Union of 34 or 35 members.
The European Union is built on a structure that has always given disproportionate rights to small countries. That was fine when we started with a European Union of three big countries and three small ones, but it continued. In a European Union of 25 members, we have roughly six bigs and 19 smalls. In respect of the constitution as it stands, the institutional agreement limits the size of the European Parliament to 750 Members, but it also gives a minimum of six seats to every country. Expansion towards 35 member states therefore squeezes the countries in the middle.
We are also saying that every country should have one commissioner, but the proposal on the constitution acknowledges something that I think is very important—the need to try to reduce the size of the Commission. It proposes that, by 2014, only two thirds of countries will have a commissioner. That will not get us anywhere, however. By the time we get to 2014 and look at a European Union of perhaps 35-plus members,
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the Commission will have 20-plus commissioners—a size that we have already said is too big. Is that structure sustainable, and will it be accepted by the key members as we expand, as I think we need to do?
One of the countries that may enter the European Union has a very high population, and the definition of qualified majority voting as it stands in the European constitution has a population-based element. On that basis, I wonder whether Germany and France will be prepared to accept a European Union in which Turkey has higher voting rates than they have. I do not know the answer. If we really want to look ahead over the next 15 or 20 years and to have a European Union that can expand and develop, is the constitutional treaty as it stands a vehicle that allows us to do so? That decision has to be made at some stage.
I also wonder—this is a technical point—whether, between now and any ratification, there is still a mechanism to clarify some points in the constitution and to make them legally clearer. The issue arises out of something that I came across in close reading about the presidents of the Council and the Commission. I remember the debate on this issue in the Convention. The original draft made it clear that the President of the Commission and the President of the Council could not be the same person. There was a specific line to exclude that possibility, but it was removed, and we now have a statement that the office holder may not also hold a national mandate. There is also an argument that, in the treaty as it stands, as a commissioner may not hold any other office, that means by implication that they should not hold any other European office.
What I am disturbed about is that, in evidence to the Dutch Parliament, Dutch Ministers made it clear that it was their aspiration that the offices should eventually be held by one person. Furthermore, Dutch legal services clearly stated in evidence to the Dutch Parliament that they thought that the correct legal interpretation was that it would be possible for the offices of President of the Commission and President of the Council to be held by one person. Of course, as the treaty stands, both those people will be appointed by qualified majority voting. As I understand it, the British Government are clear that they want those positions to be held by separate people, and I wonder whether it is possible clearly to state some basic understandings of the facts.
I congratulate the Government on the publication of their short guide to the European Union, which goes some way towards giving an understanding. They were right to explain past developments and what the European Union means and does. Even among colleagues, real understanding of how the operations work and what the Council of Ministers does is sadly lacking. As hon. Members have already said, it is a shame that we tend to have a narrow focus in debates such as this, and that the domestic Departments are not more involved, so as to give us some indication of domestic policy.
While Ministers are going to the Council meeting, debates about the budget are also going on. Politically, the budget debate is in many ways far more significant than debates about the European constitution. I wonder whether it is wise to make the British rebate—it is called a rebate—such a political totem. I happen to have great
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sympathy with the point made by the right hon. and learned Member for North-East Fife, who said that it is the outcome that really matters. If I had been a poker player, I would have put the British rebate on the table and said, "It comes at a price—the common agricultural policy."
When I travel across Europe, as I still do now and then, I find that colleagues talk not about whether the British rebate will be challenged, but about when it will be challenged. I recall extensive discussions with a former commissioner, Henning Christophersen, who was also a member of the praesidium of the Convention. If we examine the rebate in closer detail, it is not worth as much as it seems, because we do not get certain other payments because of it. The removal of the rebate and the CAP would result in long-term gain for both the UK and for the long-term sustainability of the European Union. Between now and the referendum, I hope that both sides occasionally generate a debate informed by facts rather than misunderstandings. One of the great virtues of the referendum is that people will make up their minds on what they want to see in the future. People do not have an appetite to leave the European Union, and they want the EU to work.
When negotiations over the constitution broke down at Christmas last year, it was because Spain and Poland refused to sign up. No one, but no one, suggested that Spain and Poland could always leave the EU—bizarrely, Poland had not even joined at that point. Why does the analysis that if a country says, "No," it must leave apply only to the United Kingdom? I cannot understand that.
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