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31 Jan 2005 : Column 594W—continued
European Communities Pensions
Mr. Hayes: To ask the Chancellor of the Exchequer what the cost of European Communities pensions was in the last year for which figures are available; and what the forecast cost is for (a) 2014, (b) 2024, (c) 2034 and (d) 2044. [211360]
Mr. Timms: The total amount allocated for pensions in the 2004 budget was €817.6 million. No specific Commission forecasts are available for the years requested, but for historical and demographic reasons, pension costs will take an increasing share of the €6billion administration budget. Forecasts from 2002 suggested that costs would reach around €1.5 billion by 2015 but then stabilise in real terms. The Commission reforms of 2003 helped to reduce this future burden by increasing the retirement age to 63, abolishing correction co-efficients and increasing contributions from EU officials.
Mr. Hayes: To ask Mr Chancellor of the Exchequer if he will make a statement on the ongoing pensions liabilities of the European Coal and Steel Community; and to where pension funds were transferred from closed budget lines and accounts. [211386]
Mr. Timms: We understand that the pension budget of the European Coal and Steel Community (ECSC) was transferred to the European Community's budget when the ECSC was wound up in 2002.
EU Court of Auditors
Mr. Hayes: To ask the Chancellor of the Exchequer what liabilities arise for the European Commission where budget discharge has not been granted by the Court of Auditors under Article 276 of the EC Treaty and Article 143 of the Financial Regulation. [211377]
Mr. Timms: The European Court of Auditors publishes an annual report on the Commission's management of the Community budget. When the report is published it includes the responses and comments of the European Commission on the Auditors' findings, as required by Article 143 of the Financial Regulation. The Council considers the report and makes a recommendation on discharge to the European Parliament. The European Parliament considers the Council's recommendation, as required under Article 276 of the EGA Treaty, and votes on a resolution on discharge. The Commission is required, also under Article 276, to take all appropriate steps to act on the observations made by the Court of Auditors, the Council and the European Parliament—including observations relevant to those sectors of the budget to which the Court of Auditors did not give a positive Statement of Assurance—and it produces an annual report on the actions it has taken.
Mr. Hayes: To ask the Chancellor of the Exchequer if he will make a statement on the assessed sum level of fraud within those areas of the European Communities budgets that have not been signed off by the European Court of Auditors. [211376]
Mr. Timms:
The Government takes the issue of fraud or financial malpractice in the European Community's budgets very seriously and has pressed and continues to press for effective action to be taken, including the setting
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up of an independent and powerful European Anti-Fraud Office and an effective reform of the financial rules which ensures greater accountability and effectiveness of spending.
The European Commission's annual Fight Against Fraud" report publishes the amounts of irregularities reported each year by member states. The most recent report covered 2003. The figures published were:
Own Resources total irregularities declined from €342 million in 2002 to €270 million in 2003—down 21 per cent.;
When added together, the total irregularities reported in 2003 were €921 million—a reduction of 20 per cent. from the €1,154 million reported in 2002.
The Commission's report deliberately does not provide a breakdown between cases of irregularity and fraud; fraud is defined and treated differently in each member state. Past estimates made by OLAF (the EU Anti-Fraud office) have suggested that around 20 per cent. of reported irregularities may turn out to be fraud. Applying this to the 2003 figure would suggest that the amount of fraud could be around €185 million. This would represent around 0.2 per cent. of total EC Budget expenditure in 2003.
Mr. Hayes: To ask the Chancellor of the Exchequer which organisations received funding contrary to finding 6.25 of the European Court of Auditors' report for 2003; and if he will make a statement. [211410]
Mr. Timms: The Government takes the issue of fraud or financial malpractice in the European Community's budgets very seriously and has pressed and continues to press for effective action to be taken, including the setting up of an independent and powerful European Anti-Fraud Office and an effective reform of the financial rules which ensures greater accountability and effectiveness of spending.
In order to protect the professional relationship between auditor and auditee, the European Court of Auditors (ECA) cannot provide a greater level of specific information to the outside world than is provided in its adopted reports. In this particular case it is encouraging that the Commission has already taken action to remind member states of the appropriate provisions.
Mr. Hayes: To ask the Chancellor of the Exchequer if he will identify the ineligible expenditure referred to in paragraph 7.39 of the European Court of Auditors annual report for 2003. [211412]
Mr. Timms:
In order to protect the professional relationship between auditor and auditee, the European Court of Auditors (ECA) cannot provide a greater level of specific information to the outside world than is provided in its adopted reports. In this particular case it is encouraging that the Commission has already taken action to improve controls and to rectify the specific irregularities indicated by the ECA.
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Mr. Hayes: To ask the Chancellor of the Exchequer if he will identify the cases referred to in paragraph 9.45 ofthe European Court of Auditors annual report for 2003. [211413]
Mr. Timms: In order to protect the professional relationship between auditor and auditee, the European Court of Auditors (ECA) cannot provide a greater level of specific information to the outside world than is provided in its adopted reports. However in this particular case it is encouraging that the Economic and Social Committee has taken corrective action to prevent similar errors recurring in future.
Mr. Hayes: To ask the Chancellor of the Exchequer if he will make a statement on the cases of fraud identified in paragraph 31 of page 332 of the European Court of Auditors annual report for 2003. [211414]
Mr. Timms: In order to protect the professional relationship between auditor and auditee, the European Court of Auditors (ECA) cannot provide a greater level of specific information to the outside world than is provided in its adopted reports. In addition, since these cases have now been referred to OLAF it would not be appropriate to comment until OLAF's investigation has been completed.
Mr. Hayes: To ask the Chancellor of the Exchequer if he will make a statement on each of the cases of irregularity identified in (a) paragraph 43 of page 335 and (b) paragraph 65 of page 345 of the European Court of Auditors annual report for 2003. [211415]
Mr. Timms: In order to protect the professional relationship between auditor and auditee, the European Court of Auditors (ECA) cannot provide a greater level of specific information to the outside world than is provided in its adopted reports. However it is encouraging to note that the Commission has taken action in response to the ECA's findings, by issuing new guidelines, initiating its own audit, and launching a comprehensive inventory in order to carry out a complete survey of these funds.
Mr. Hayes: To ask the Chancellor of the Exchequer if he will place in the Library the latest Commission Report on the Beneficiaries of Grants Made Under Chapter A-30; and which (a) internal audit and (b) Court of Auditors report related to these grants. [211417]
Mr. Timms: The European Commission produced its latest report on Chapter A-30 on 31 May 2004 in respect of EC Budget year 2003. I am arranging for a copy of this Report to be placed in the Libraries of both Houses. The Government has no information about specific internal audit reports.
The European Court of Auditors has not produced a specific report on A-30 funded projects. Its audit of the 2003 EC Budget may have included sample checks on A-30 projects covered by the European Commission's Report.
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