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The Chairman of the Public Accounts Commission was asked—

National Audit Office

21. Mr. Philip Hollobone (Kettering) (Con): If he will make a statement on the recent performance of the National Audit Office. [38089]

Mr. Edward Leigh (Gainsborough) : In the past financial year, the National Audit Office published 61 major reports across public expenditure programmes to Parliament, audited more than 570 accounts and provided advice and support to the Committee of Public Accounts and other Select Committees. That work led   to savings for the taxpayer of £515 million—a return of more than £8 for every £1 it cost to run the National Audit Office. In the 2005–06 financial year, the   National Audit Office has so far published 30 major reports and audited more than 400 accounts.

Mr. Hollobone: Were it not for the good work of the National Audit Office and the Public Accounts Committee, would not this wasteful Government have wasted hundreds of millions of pounds more?

Mr. Leigh: My hon. Friend will appreciate that, in my present position, I do not want to get involved in party politics—[Hon. Members: "Oh, go on."]—but I will say that all Governments are masters of spending public money but often far less proficient at ensuring that that translates into better public services. Basic errors are repeated time and again, despite fine words and earnest assurances to the Committee of Public Accounts. Many public services are chronically marred by deadening complexity and bureaucracy, there is a continuing lack of leadership and drive, and Government Departments still disregard common and well-publicised pitfalls when they approach projects. My Committee will continue to ensure that we receive value for money for every pound spent.

Mr. David Heath (Somerton and Frome) (LD): The National Audit Office has frequently drawn attention to deficiencies in defence procurement. In that light, will the hon. Gentleman tell us whether the commission has   discussed with the apparently soon-to-be-abolished Advisory Committee on Business Appointments whether the 344 civil servants and Ministers who have left government and entered the defence-related industries have improved or diminished the value for money obtained in defence procurement?
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Mr. Leigh: It is certainly true that there is an increasing and complex interface between the public and private sectors. My Committee will carefully scrutinise all Departments and Ministries of State carefully to ensure that those who leave the public sector allow a reasonable period of time to elapse before they enter the private sector, so that there is no risk of corruption or of people using information that they have obtained in the public service to further their own careers.


The hon. Member for Gosport, representing the Speaker's Committee on the Electoral Commission, was asked—

Parliamentary Elections

22. Mr. Peter Bone (Wellingborough) (Con): Whether the Electoral Commission has recently been consulted on changing the method by which hon. Members are elected. [38090]

Peter Viggers (Gosport) : The commission understands that the Government are conducting research to examine the experience of new voting systems introduced to United Kingdom elections since 1997. The commission has not been asked to contribute to that process, nor is there an obligation on the Government to consult the commission in those circumstances.

Mr. Bone: I hope that there will be no change to the method of electing hon. Members to this House, but if proposals are to be made I ask that the equalisation of numbers in constituencies be considered.

Peter Viggers: Although there is statutory provision to transfer the responsibility for parliamentary constituencies to the Electoral Commission, that provision has not yet been implemented. However, my hon. Friend has made his point and I am sure that it will be heard.


The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—

Faith Communities Capacity Building Fund

23. Ben Chapman (Wirral, South) (Lab): What use the commissioners expect to make of the faith communities capacity building fund; and if he will make a statement. [38091]

The Second Church Estates Commissioner (Sir Stuart Bell): The commissioners welcome the existence of the fund administered by the Community Development Foundation, through which some £5 million will be distributed between January 2006 and March 2007.
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The   commissioners have not made use of the fund, but the Church's community and urban affairs unit has promoted it among regional groupings.

Ben Chapman: Will my hon. Friend join me in expressing the hope that the Church Commissioners will use that valuable fund as widely as possible and in ways that help to build interfaith linkages within communities and linkages between rural and urban communities, and in the development of faith trails for all to enjoy?

Sir Stuart Bell: As my hon. Friend is aware, interfaith activity involves programmes designed to bring people of different faiths together in rural and urban areas   to   promote mutual understanding, respect and co-operation. Capacity building involves strengthening groups' organisational capabilities, enabling them to sustain themselves and to play a full part in society, and this is a valuable contribution.


The hon. Member for Gosport, representing the Speaker's Committee on the Electoral Commission, was asked—

24. Greg Clark (Tunbridge Wells) (Con): How many publications have been funded through the polcy development grant to each qualifying political party;
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and what arrangements have been made to give members of the public up-to-date information on the availability of such publications.

Peter Viggers (Gosport) : The policy development grant scheme is intended to assist eligible parties in developing policies for inclusion in their manifesto. It is a matter for the parties to make the public aware of their policies through publication of their manifesto or other activities.

Greg Clark: Some of us are sceptical about the value of state funding of political parties, but if it is to be done, it is important that it should be done transparently. My hon. Friend the Member for Witney (Mr. Cameron), the Leader of the Opposition, has made a commitment to publish the working papers of the commission dealing with policy so that they are available for everyone to inspect. Should this be a requirement for all political parties?

Peter Viggers: The Electoral Commission takes the view that it is not necessary to have further explanation of the work undertaken. It has made recommendations in its review of expenditure in 2004. My hon. Friend, who has personal experience of the application of the policy development grant scheme, will be pleased that the commission has recommended that the scheme be expanded from £2 million a year to £3 million a year.

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European Council

3.31 pm

The Prime Minister (Mr. Tony Blair): With permission, Mr. Speaker, I should like to make a statement about the European Council in Brussels on 15–16 December.

The main issue at this European Council was the European Union budget for 2007–13, the first budget ever for the enlarged Europe of 25 member states, soon to become 27 with the accession of Bulgaria and Romania.

This country can be proud of the part that we played in the enlargement of the EU. The countries of central and eastern Europe that for so long suffered under communist dictatorship are now free democracies and   vibrant new members of the EU. To have   championed the cause of those new states, to have welcomed them into NATO and Europe and then to have refused to agree a budget that protects their future economic development would have been a betrayal of everything that Britain has rightly stood for in the past 15 years or more since the fall of the Berlin wall. They are our allies. It is our duty to stand by them. But it is also massively in our national interest. These new member states have fast-growing, open economies, new ideas, human capital and a political vision of Europe that is close to ours.

However, although they are catching up economically, they are still much poorer than most of the original European Union 15; their people half as   wealthy as in the rest of Europe. The purpose of the   budget is rightly to transfer resources from the wealthiest west of Europe to the poorer east of Europe. Over the coming years, within a broadly stable budget, funds for the new member states will increase from €24 billion to €174 billion, a seven-fold increase.

In time, of course, this makes them prosperous and us too. If we look at the example of Ireland and Spain, bilateral trade with those countries in goods alone is now more than €60 billion a year. Investment in the future prosperity and stability of eastern Europe brings big and lasting benefits to this country.

The reason that it was so important to reach agreement at the European Council is as follows: as all central and eastern European leaders made clear to me, it was essential to have a December deal to allow those countries to plan and prepare for using the EU funds when those funds start in 12 months' time. It was clear that the prospects for a deal next year were negligible, and, if there were to be no deal, then in 2007 the European Parliament would take over the budget process. That would mean the Parliament setting annual budgets, on the existing financial agreements, which would have meant that countries such as Poland would have lost around two thirds of their EU funds. That is why they wanted a deal now.

Of course, there is also a need for fundamental reform of the EU budget. As I said in June, what we need is to settle the budget on the basis of everyone paying their fair share of the costs of enlargement now; and then to open up the prospect of a radically reformed budget midway through the next budget period. The agreement reached on Saturday morning differed from that of the
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Luxembourg proposal in four key respects. The overall budget is smaller. The proposal in June was that the UK rebate should be reduced in commitment terms by about €22.5 billion; under this deal, the maximum we shall pay is €10.5 billion. In the review clause in June, the common agricultural policy agreement of 2002 was specifically endorsed. Now it is clear that all aspects of the budget can be examined in 2008–09. However, crucially for Britain, this agreement states expressly—unlike that of June—that the British rebate remains in full on all expenditure in the original 15 member states. It remains in full on all common agricultural policy market expenditure everywhere in the Union, including in the new member states. We have, however, agreed to disapply a proportion of the rebate on structural and cohesion spending in the new member states—in effect, on the spending directly designed for economic development. As I have said, the cost of this is up to a maximum of €10.5 billion or about £7 billion over the next seven years of the financing period. Moreover, because the rebate stays on all common agricultural policy and all spending in the original European 15, the rebate will rise, not fall, to an average of €5.8 billion in payments terms annually from 2007. Overall, the rebate will get us about €41 billion back in the next budget period—substantially more than in this period. That is then the crucial leverage for future reform.

As the strongest supporter of enlargement among all member states, I strongly believe that it was right—indeed, essential—that the UK should contribute properly to enlargement. The fact is that if we support and, indeed, drive through a policy of ending the post-war division of Europe, we have to be ready to accept our fair share of the costs of that policy. Enlargement was never, and could never be, a cost-free policy, and this Government are prepared to shoulder their responsibilities in this area, because it is the right   thing to do. In this context, I want to dispel one misunderstanding that has arisen—the impression that only the UK is contributing to the costs of enlargement. All wealthier countries are contributing. In terms of net contributions, our contribution will increase by 63 per cent. over the next financing period in comparison with 2000–06. France's contribution will increase by 124 per cent. Italy's contribution will increase by 126 per cent. Spain will lose in the region of €40 billion. Moreover, after some 20 years of our paying, under the original rebate, twice as much as France, UK and French contributions will, from 2007, for the first time, be in rough parity. Because the UK economy is now bigger than the French economy, we will, in fact, on the Commission's figures, be contributing a smaller share of our national wealth.

Alongside this agreement on support for the modernisation of eastern Europe, we also agreed on a fundamental review of all aspects of the EU budget, including the common agricultural policy, to be led by President Barroso, with the recommendation that it begin in 2008. As the language in the European Council conclusions makes absolutely clear, it is then possible for changes to be made to this budget structure in the course of this financing period. This will also allow us to take account of any changes agreed in the World Trade Organisation round, including the decision to phase out all export subsidies for agriculture by 2013. In addition, it was agreed that any CAP spending for Romania and
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Bulgaria—about €8 billion—should be fitted within existing CAP ceilings, which is a significant budgetary discipline.

So to summarise, when people ask what we got for agreeing to pay our fair share of enlargement, the answer is an agreement that sees us, for the first time since we joined the EU, paying no more than similar countries, such as France and Italy; the rebate staying put on all CAP spending and rising, not falling, in value; and a process that can, in the years to come, lead to the necessary fundamental reform of both rebate and CAP that we all want to see.

I should report briefly that the Council also agreed on a strategic partnership between the European Union and Africa, on a new and strengthened policy on illegal migration and on a counter-terrorism plan. We also agreed that Macedonia should be granted candidate status—the next step in its path towards membership of   the European Union. As a strong supporter of Macedonia's ambitions, I want to congratulate the Macedonian Government on the progress that they have made towards that goal.

The European Council also unreservedly condemned the Iranian President's recent remarks about Israel and warmly welcomed the 15 December elections in Iraq as a further step towards democracy and stability in that country.

Over the past six months, the UK presidency has delivered the historic launch of accession negotiations—[Interruption.] It has delivered the launch of accession negotiations with Turkey and Croatia—a long-standing British objective. We have delivered a number of important pieces of legislation, including the REACH—registration, evaluation, authorisation and restriction of chemicals—regulations and the data retention directive, which is an important measure against terrorism. We have delivered reform of the EU sugar regime and a strengthening of the EU position on climate change—[Interruption.]

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