The
Committee consisted of the following
Members:
Chairman:
Mrs.
Janet
Dean
Cable,
Dr. Vincent
(Twickenham)
(LD)
Clarke,
Mr. Kenneth
(Rushcliffe)
(Con)
Clarke,
Mr. Tom
(Coatbridge, Chryston and Bellshill)
(Lab)
Cunningham,
Tony
(Workington)
(Lab)
Ellman,
Mrs. Louise
(Liverpool, Riverside)
(Lab/Co-op)
Goldsworthy,
Julia
(Falmouth and Camborne)
(LD)
Heathcoat-Amory,
Mr. David
(Wells)
(Con)
Hoban,
Mr. Mark
(Fareham)
(Con)
Newmark,
Mr. Brooks
(Braintree)
(Con)
Sheridan,
Jim
(Paisley and Renfrewshire, North)
(Lab)
Smith,
Geraldine
(Morecambe and Lunesdale)
(Lab)
Ussher,
Kitty
(Economic Secretary to the
Treasury)
Wright,
David
(Telford)
(Lab)
Chris
Shaw, Committee
Clerk
attended the Committee
European
Standing
Committee
Monday 9 July
2007
[Mrs.
Janet Dean
in the
Chair]
Preliminary Draft Budget 2008
4.30
pm
The
Economic Secretary to the Treasury (Kitty Ussher):
It is
my great pleasure to appear before the Committee so early in my
ministerial career at the Treasury, and under your chairmanship,
Mrs. Dean. Todays discussion will help to inform the
position that I take when I represent the United Kingdom at the budget
ECOFIN meeting in Brussels on Friday, when the Council will conclude
its first reading and adopt a draft budget. I should like to widen the
context in which I present the Commissions proposals for the
2008 European Commission budget to include our preparations for the
mid-term review of the EC budget and the way in which it will be
financed, and our efforts to improve the way in which the EC budget is
managed.
The
Governments objective is to ensure that EU expenditure provides
value for money and is affordable and well managed, and that the budget
is fairly financed by member states. As the Committee is aware, the
annual negotiations on the EC budget are conducted in the context of an
agreement on the financial perspective for 2007-13, which we reached at
the end of the UKs presidency in December 2005. The financial
perspective provides global ceilings for expenditure under six
headings, as well as setting out in broad terms how member states
finance the budget. The annual budget negotiations are essentially
about how to divide up among the various expenditure programmes the
resources agreed under the financial perspective ceilings. The
negotiations are not the occasion for discussing major reform of the EU
budget and their outcome, unlike that of the financial perspective
negotiations, is influenced at least as much by the European Parliament
as by the Council.
The
basis for the annual negotiations is the Commissions
preliminary draft Budgetthe PDB. The Governments
priorities for this years annual budget negotiations are
threefold. First, we will insist, as usual, on budget discipline. In
other words, the budget must fully respect the agreed financial
perspective ceilings. There must be adequate margin for new initiatives
and unexpected contingencies, and the level of payment appropriations
must be based on sensible forecasts of absorption and implementation so
that our contributions do not simply build up and sit idle in the
Commissions bank account.
Secondly, we want to achieve
value for money by bearing down on the areas of expenditure that we
regard as particularly questionable. The common agricultural policy and
the administrative budget spring instantly to mind, although there are
others. Finally, we want, where possible, to protect certain areas of
spending that we regard as justified and fulfilling an important role.
They include: the Lisbon
agenda; dealing with immigration and terrorism;
external matters, such as reconstruction in Afghanistan, Iraq and
Palestine; and common foreign and security policy stabilisation and
peacekeeping missions.
Since the PDB was published,
the UK has been working closely with like-minded member states, and I
am cautiously optimistic that, so far as our priorities are concerned,
the draft Budget to be adopted by the Council on Friday will represent
an improvement on the Commissions PDB. It remains to be seen
whether the European Parliament will be as amenable to our arguments in
the autumn, but we look to the Parliament, as one part of the budgetary
authority, to play a responsible role and to contribute to building
taxpayer confidence in the EC budget.
Turning briefly to the wider
context, when the European Council reached agreement on the current
financial perspective, it invited the Commission to
undertake a comprehensive review of the EC
budgeton expenditure, including the CAP, and resources,
including the UK abatementand to report in 2008-09. The
Commission has indicated that it will begin the review later this year
by launching a consultation process with all interested stakeholders.
Given that 40 per cent. of the EC budget is still being spent on the
CAP, and more than 60 per cent. of structural and cohesion fund
expenditure is still directed to rich member states, the Government
will argue that the budget is hardly designed to meet the challenges
that the EU faces in the 21st century. That is why the review must be
genuinely fundamental and strategic. The Government have set out the
three principles that will guide our approach to the budget review, and
the Committee might like to touch on that aspect of budgetary
reform.
The third
principle concerns sound financial management and the administration of
the EC budget. The UK has been a consistent champion of improved
management of the budget, but we must do a lot more to achieve the
efficient, effective and scrupulous EC budget process
that taxpayers deserve. It is unacceptable that the European Court of
Auditors cannot give a positive statement of assurance on the EC budget
year after year. There is no room for complacency in this
regard.
A particular
priority is to improve the management of the 80 per cent. of the EC
budget for which the Commission and member states share responsibility,
notably agriculture and structural funds. That is why the Government
announced last November that the UK would take a lead in showing how
member states could improve their management of EC spending at a
national level. The Governments initiative has been widely
welcomed and I understand that similar initiatives are now being
developed in a number of other member states. I will continue to make
the case for such reform when I meet my budget ECOFIN colleagues on
Friday. I am grateful for the opportunity to put our discussions into a
wider context and I look forward to discussing all these issues with
the Committee
today.
The
Chairman:
We now have until half past five for questions
to the Minister. May I remind Members that these should be brief and
asked one at a time? There is likely to be ample opportunity for all
Members to ask several questions.
Mr.
Mark Hoban (Fareham) (Con): It is a pleasure, Mrs Dean, to
serve under your chairmanship for the first time this afternoon. It is
also the first time that I have had an opportunity to congratulate the
Economic Secretary formally. In her opening remarks, she referred to
ensuring that there was sufficient margin for events that took place
during the course of the year and for the agreed amount of spending to
be below the ceilings. In heading 1, that margin this year is
€87.6 million, compared with a total budget of €57
billion. Does she think that €87.6 million is enough of a
margin?
Kitty
Ussher:
I am not sure that I can give an exact figure, but
I know that there are a number of pressures, especially relating to
heading 1. Our intention is to make sure that the margin is adequate.
We would like a larger
margin.
Dr.
Vincent Cable (Twickenham) (LD): May I ask the Minister to
go back to the big picture of the budget? Last year, the big argument
was about whether the Community would exceed the target of 1 per cent.
of gross domestic product. The tables at the back of the document
suggest that the figure is within that, but will the Minister confirm
that the Union will definitely remain within that aggregate
figure?
Kitty
Ussher:
I can give the hon. Gentleman that reassurance. My
understanding is that the figure is well within the 1 per cent. limit
that was agreed at the time of the December 2005 budget negotiations.
That is certainly the UKs position. I hope that it will not
come to this, but we need unanimity to change any of the financial
perspective ceilings and we will not allow any of them to be
raised.
Mr.
David Heathcoat-Amory (Wells) (Con): The Minister, whom I
welcome to her new position, referred to the continuing need for
reform. Indeed, that has been said in every debate on this matter that
I have attended. If we do not get reform, what can we do? What voting
system is attached to these
decisions?
Kitty
Ussher:
I am not clear whether the right hon. Gentleman is
referring to the wider EU budget review that is due to start later this
year or the budget for 2008, which is the formal subject of our debate.
On the wider issue, there is a bottom-up, blue-skies approach. We will
negotiate as hard as possible. We believe that certain pressures will
come to bear in the next five to 10 years, such as on the common
agricultural policy, which may work to our advantage as the EU
expands.
The point of
the fundamental review that is taking place in 2008-09 is to inform the
financial perspective beyond 2013. We are using quite a long time scale
as some of the pressures on other member states could be quite
different from what they were when the policies were initially agreed.
We shall focus on some quite fundamental changes around reform of the
CAP. Moreover, in an enlarged Europe, we believe that it is wrong for
such a high proportion of structural and cohesion funding to remain
with richer member states. We hope that as time goes on our argument
will gather force.
In terms of the specific
negotiations on next years budget, which is the subject of the
ECOFIN meeting that I will attend on Friday, past experience shows that
it is worth adopting the type of stance that we are taking at the
moment. In previous years, the UK stance has informed the outcome after
the first review of the annual budget and, as I said in my opening
remarks, we are cautiously optimistic that the negotiations that have
taken place at an official level will yield results at the end of the
week. However, anything can change and we must be ever
vigilant.
The
financial perspective, the abatement and the resources are, of course,
subject to the unanimous voting procedure, so we ultimately have power,
at the last moment, should anything untoward happen. We have qualified
majority voting on the annual budget, and, as I explained, the European
Parliament has significant powers with regard to that budget. We have a
lot of influence through precisely that process, and through
negotiation.
Mr.
Hoban:
Will the Minister elaborate a little on her
statement to the House of Lords European Union
Committee? She said that cohesion funding is
incorrectly allocated. Which countries does she believe should no
longer receive such
funding?
Kitty
Ussher:
It has been the UK position for a number of years
that structural and cohesion funding should go only to the less
well-off member states. The Government published a consultation paper
and a position paper on that subject in 2003 to inform our negotiations
on the European stage. It was no secret that that would have resulted
in parts of the United Kingdom, as well as other richer countries, not
receiving EU money, and the Treasury proposed alternative mechanisms,
through our regional policy, to ensure that our economic objectives
were maintained. That remains our position. We were not successful in
our negotiations, but we will continue to
try.
Mr.
Kenneth Clarke (Rushcliffe) (Con): May I congratulate the
Minister on her new appointment? I also offer her my sympathy for
having been plunged into these negotiations almost immediately on
taking her job.
The
Minister said in her opening statement that she hoped that the
forthcoming budget meeting of ECOFIN would result in some improvements
to the draft budget. Will that involve moving between
headingsor within headings, from one subject to another? Does
she have it in mind to negotiate particular improvements? Could she
indicate in what areas she will try to get more, and where she will try
to get less?
Kitty
Ussher:
I am grateful to the right hon. and learned
Gentleman, both for his congratulations and his commiserations. It was
with great pleasure that I became involved in the negotiations, but it
meant a rather steep learning curve. I thank him for
acknowledging that fact.
We are negotiating on a number
of levels. I am not sure that it would be appropriate to say publicly
exactly where we are, although that will be made public in a
couple of days. It is no secret that we were particularly
concerned about the high level of financial
commitment in the Commissions draft proposals for the
administration budget, and particularly for the structural and cohesion
fund budgets, not necessarily because we do not agree with the aims of
those budgets lines, but because history shows that they are unlikely
to be implemented to the extent proposed by the Commission. We would be
concerned if the original budget levels were agreed because we think
that the actual amount will come in at a lower level. That would leave
a sort of slush fund, which we believe is an inefficient way of working
a budget.
Dr.
Cable:
May I belatedly congratulate the Minister on her
promotion, which I should have done earlier? Having heard the speech
that she gave to the City at lunchtime, and hearing her speak now, I
realise that her job covers a big range.
Will the Minister explain one
or two specific items? The first is about heading 1a on
competitiveness. The Government clearly have some reservations about
the ability of the Commission to absorb this money. Can she explain the
54 per cent. increase for research? What conclusions has the Treasury
reached about deploying the money through European research programmes
rather than through the Governmentor, indeed, entirely through
the private
sector?
Kitty
Ussher:
We think that there are occasions when it makes
sense to co-operate on research, although we obviously think that there
is a huge domestic role for the Government. Indeed, we have a
number of domestic policies, such as the research and
development tax credit and funding for basic science. In general, we
support the line on R and D in the EU budget, because we think it can
play a positive role in helping us achieve the Lisbon agenda. It is
also in line with the financial perspective agreement, so alarm bells
would not lead us immediately to adopting a crisis stance. However, we
have some questions over whether the budget allocation for 2008 can be
spent wisely. Those are the sorts of questions that we are currently
probing.
Mr.
Kenneth Clarke:
May I ask about the cohesion fund? I agree
very much with the Ministers remarks about structural and
cohesion funds going to wealthier countries. I agree with her
particularly on cohesion funds, which were originally
introduced as a transitional arrangement to help new entrants to adjust
to the Common Market and to enable them to join the euro. Portugal,
Greece and Spain went through that process long ago. Is there any
prospect, in this negotiation, of restraining the cohesion funds for
those particular countries and diverting spare money to more attractive
budgets?
Is there any
possibility of reopening the arguments that the British Government were
making last year? I realise that they cannot be reopened in full, but
is there a possibility of restraining the amount that goes, by way of
cohesion funds, to countries that long ago achieved cohesion and are
now prospering under the market and the currency that they
joined?
Kitty
Ussher:
I am extremely grateful for that question. The
Government share the right hon. and learned Gentlemans concern
and will pursue it aggressively in the broader review of the whole
operation of the EC budget. Given the agreement that was reached in
December 2005, however, I fear that there will not be much scope for
negotiation on his substantive point in relation to the 2008 annual
budget. We will continue to bear down on the overall spend on the
budget lines because we are concerned that it is not matched by the
implementation capacity across the board. Reallocation among different
countries in the longer term is a matter for the next
negotiations.
Mr.
Clarke:
Will the Minister tell us what was last
years underspend in that area? More is always allocated to the
countries that demand it and they are incapable of spending on anything
sensible.
Kitty
Ussher:
There are two separate issues worth mentioning.
Not only was there an underspend of €3.3 billion below the
forecast, but we had some success during the course of the discussions
in negotiating a budget line that was lower than at the equivalent
point last year. The initial Commission estimate was unrealistic in
more ways than
one.
Mr.
Heathcoat-Amory:
I notice that commitment appropriations
for macro-economic assistance are due to go up by 58.1 per cent. next
year. There is no treaty base for macro-economic assistance, so it goes
through under article 308, by unanimity. Will the Minister therefore
tell us whether that macro-economic assistance has been valuable and
who audits it and reports back to us? That is particularly important
because a large increase is inked in for next
year.
Kitty
Ussher:
I need to seek clarification from the right hon.
Gentleman. Is he referring to assistance under heading
1a?
Mr.
Heathcoat-Amory:
I referred to article 308 of the treaty,
which is a flexibility clause. It allows the Council to go outside the
provisions in the treaty by unanimity, if it is in the cause of the
Common Market. We therefore agree, exceptionally, to macro-economic
assistance. Given that that is to go up by 58 per cent. next year, we
need a report on how the existing assistance has been spent and whether
it has worked. Does that come under European Court of Auditors, for
instance? We are talking about large sums that were not envisaged when
the treaties were drawn up. There is no treaty base for such
expenditure.
Kitty
Ussher:
I am grateful for that clarification. If I am
unable to answer the right hon. Gentleman in full, I will answer him in
writing. I understand that the purpose of this budget line is
completely different from that of the rest of the EU budget. It is to
help to support, through loan or grant, countries that have an
International Monetary Fund funding gap in the event of a
macro-economic crisis. It is generally used only when there is
consensus that it is worth doing. The reason why the IMF exists is
obviously that there is a benefit to all countries from working
together in these
periods, and the same principle applies. I agree with the right hon.
Gentleman that going back to the EC treaty is not an optimal way of
making such decisions. The view of my Department is that the assistance
is money well spent, however. If I can add to that response, I shall do
so in
writing.
Mrs.
Louise Ellman (Liverpool, Riverside) (Lab/Co-op): I add my
congratulations to my hon. Friend on her worthy promotion. Will she
assure me that negotiations on the EU budget will enable the current
objective 1 area of Merseyside to continue to benefit from European
structural funds so that the growth in Merseysidea lot of it in
the private sectorthat has arisen very much as a result of
European funding will continue? There has been an agreement about
continued European funding for the Merseyside objective 1 area, but I
should like to be assured that that will continue and will be directed
in a way that will directly benefit
Merseyside.
Kitty
Ussher:
I can give my hon. Friend that assurance. However,
I must remind her of what she already knows, which is that the British
Governments position on longer-term policy towards regional
funding through the EU is that taxpayers across the EU should not
subsidise or support richer member states, but that the moneys
collected through the EU should support poorer member states. That is
not to say that British taxpayers money should not be used to
support activities in Merseyside, but that is a rather wider question
about the effectiveness of how each British pound is spent. However, in
terms of the immediate budget negotiations, I can give her that
reassurance.
Dr.
Cable:
May I ask the Minister about heading 5, which is on
administration and the proposed increase of 5.7 per cent. spending,
which is about 4 per cent. in real terms? The Government have indicated
that they are dissatisfied with that growth, but can she say, first,
how the Commission justifies that, and secondly, what the British
Government regard as an acceptable level of growth or decline in
administrative
spending?
Kitty
Ussher:
That is an extremely important point. We believe
that the administration budget is too high and is growing at a worrying
rate. We argue for efficiency gains to be identified, and for
reductions to be made to administrative and staffing costs. We will
pursue that line of argument both in the course of the annual budget
negotiations and in the wider budget review. To put that into context,
all hon. Members will be aware that the Government have tried extremely
hard, and with some success, to introduce productivity gains in the
work of our own public sector officials. We have had the Gershon review
and year-on-year cuts to cash administrative payments. We believe that
we get a better deal for the taxpayer by focusing on
productivity, just as the private sector does all the time. We are not
convinced that the European Commission has the same rigorous approach,
or that for every additional staff in post that it proposes, there is a
corresponding increase in productivity and output. That is why we are
pursuing the negotiations that we are.
On the specifics, the Commission
is proposing €7.3 billion expenditure on administration, which
is a 5.7 per cent. increase on last year. We think that that is
unacceptably high. The preliminary draft budget also asks for an extra
860 posts for the Commission and the offices in line with staffing
plans. The net increase will be 785 posts after some redeployments that
are already included. There is also a significant increase for the
decentralised bodies or external agencies.
To answer the question
directly, the Commissions justification is that it needs
greater central staffing because of enlargement, but we are not
convinced that that argument is valid to the extent that it proposes,
although it is valid to a certain degree. We want annual efficiency
gains along the lines of, and in the same magnitude as, what happens in
the private sector in the western worldfor example, the 2.5 per
cent. increase that we asked for in the UK.
Mr.
Hoban:
May I pursue the matter of the increase in
administration costs? Last year, the explanation given by the
Ministers predecessor was, yet again, enlargement. This year,
the European Commission is trying the same approach to justify the
increase. What is she going to discuss on Friday? How is she going to
lay down to her colleagues on the budget ECOFIN how that figure should
be brought down in this years budget, rather than waiting for
the draft budget of 2009 to see any more progress on this
matter?
Kitty
Ussher:
We have been making that point extremely strongly
already, and I will continue to do so on Friday. We think that that is
the right thing to do, and in previous years it has led to a reduction
in the budget proposed. I will continue to do that and will make the
same arguments because it is part of the process. I shall also have
absolutely no qualms in mentioning the views of this Committee, as that
is a very important part of the review process. In a sense, the reason
why this sitting is taking place now is that I seek, through this
Committee and also through their lordships in the other place who
subjected me to a grilling last week, to go through those avenues
to the British people and obtain a mandate for the
Governments negotiating position. It will be with great
pleasure that I shall express the concerns of this Committee when I
begin negotiating.
We
are facing some forces against us, from the European Parliament and
some new member states. However, as I said, I am cautiously optimistic
that we will make at least some progress.
Mr.
Kenneth Clarke:
I am sorry to keep dotting about, but
Afghanistan was the next topic that I wanted to raise. Does the
Minister agree that economic assistance to Afghanistan has been given
somewhat lower priority than the military activity there over recent
years, and that economic assistance needs to be stepped up if
we are to make any progress in Afghanistan? Does she feel that the
proposed budget is adequate for that purpose, and does she think that
there is, at the moment, adequate agreement within the European Union
about how best to provide economic assistance? Finally, how do our
Government judge the effectiveness of the deployment of European
economic assistance to Afghanistan?
Kitty
Ussher:
We were glad to see a budget line for
Afghanistan and think a fair amount is being proposed. During our
negotiationsnegotiations that will continuewe have
supported that economic assistance and argued for it to be maintained.
There are obvious benefits from EU member states working together in
that regard. We have been a strong advocate for economic assistance to
Afghanistan through the EU, as well as engaging in the separate
military role that Britain is
performing.
Mr.
Clarke:
Can I gather from that that this is a new budget
line for Afghanistan and that there is no previous programme to comment
on? I thought that there was an existing budget
line.
Kitty
Ussher:
I am sorry if I was misleading. There was an
existing budget line and we were very pleased to see it maintained in
the 2008 draft budget.
Mr.
Clarke:
I understand the difficulties,
obviously. I asked the Minister what the judgment of the
Government was of the effectiveness of the deployment
of the previous funds for Afghanistan and whether that deployment could
be improved. I wonder if it is possible for a new Minister to comment
on that issue; I realise the obvious
difficulties.
Kitty
Ussher:
I am not aware of any major concerns; I will
clarify that position later should I become aware of any. Obviously, we
will always look carefully at implementation capacity in this area, as
in every area. However, our general view is that we support the
priorities under this heading and we have lobbied hard to ensure that
those are
maintained.
Dr.
Cable:
May I ask the Minister about heading 2? There are a
couple of very odd items under that heading, particularly as they are
in juxtaposition. The first is the proposed increase of 516 per cent.
on spending on animal and plant health. I realise that a 500 per cent.
increase of nothing is nothing and that this figure may just be a
statistical quirk, but it seems an extraordinarily large increase. What
is it for? Is it to deal with bird flu, or is it for something
else?
Secondly, a big
reduction is proposed in spending on the European fisheries fund. Given
all the worries that we have about fish stocks and conservation, that
seems a very odd area to reduce spending on. Presumably, there is a
rational explanation for that reduction. Will the Minister let us know
what it is?
Kitty
Ussher:
I am sure that there is a rational explanation and
I hope that it will shortly become clear to the Committee, as well as
to myself. However, I suspect that I will have to come back to the
Committee in a few moments time with it; I
apologise.
Mr.
Hoban:
May I ask the Minister about Galileo, a topic that
I am sure she is familiar with from last weeks scrutiny by the
Lords Committee? In this budget, I think that we have seen a 51 per
cent. increase in the allocation of funds for Galileo. The German
Transport Minister, who presumably was president of the Transport
Council until the end of June, described
Galileo as being in a profound and serious crisis. Is it
wise to continue to increase the payments for Galileo given its current
position?
Kitty
Ussher:
There are potential huge advantages to be gained
from the Galileo project. The question is whether the proposals
represent value for money and whether the project can be managed
effectively. Crucially, we must also ask if the project is the best use
of every euro of taxpayers money compared with the
other options that are available. The British Government supported and,
hypothetically, continues to support the public-private partnership
financing arrangements that were initially proposed, but we understand
that, in the real world, those arrangements no longer appear to be an
option. The purpose of the current negotiations, which I will be
pursuing on Friday, is to ensure that the project is not used as an
excuse to raise the previously agreed ceilings in the financial
perspective. We will not tolerate that situation, although there may be
some difficult choices to make on the relative priorities of different
budget lines under heading 1.
Mr.
Hoban:
I hope that the Minister does not take this the
wrong way, but I am not sure from her answer whether she is in favour
of scrapping Galileo or not. She seemed to move between the
hypothetical and the real quite
easily.
Kitty
Ussher:
I am not able to say that at the moment, because
in theory we think there could be potential advantages. However, we
will not support something that looks as if it does not use
taxpayers money effectively, and we will not support something
that would raise the overall budget levels beyond those that have
already been agreed. The situation is in flux and very current, so
perhaps the Committee will be updated when there is further
information. I have clearly set out the UKs principles in that
regard.
Mr.
Heathcoat-Amory:
May I ask the Minister about heading
5administrationespecially the 10 per cent. pension
increase and the extra 860 posts next year? Given that enlargement
happened on 1 January this year, that seems a fairly flimsy excuse for
further increases. I am particularly interested in the pension increase
and who sets it. All bureaucracies tend to expand without limit unless
they are put under very severe financial discipline. It is not clear
what body does that. Is it a self-awarding system, whereby bodies make
a case themselves and award themselves the money? Is there an external
actuary who puts pressure on them? If so, who is it, and has the matter
been discussed?
Kitty
Ussher:
My understanding is that it is the
Commissions proposals both on staffing and on the associated
pensions costs. We agree that that is unacceptable, which is why we are
pursuing our negotiating stance. Now is probably not the right moment
to attempt realistically to achieve a long-term reform of the European
Commission pension scheme, but it is something that this Government
will be happy to consider later.
Mr.
Kenneth Clarke:
May I ask about the heading on a common
foreign and security policy, which shows an increase in payment
appropriations of 29.5 per cent.? It is possible that I would approve
of it if I were capable of working out the policy implications behind
it and what it is being expended on. Is there some significance in the
apparently large increase in the appropriations under that
heading?
Kitty
Ussher:
It refers to our missions in Kosovo, Bosnia and
Africa
generally.
Dr.
Cable:
My question is similar in that it is on something
that may be perfectly healthy but I do not know what it means. Under
the heading on freedom, security and justice, there is a proposed
increase of 24 per cent. for
Solidarity and Management of
Migration Flows.
Since
the Union does not yet have any competence in migration and asylum, why
is it spending money on
it?
Kitty
Ussher:
I understand that some programmes have been
established under that heading. In particular, there are benefits in
acting together and from the co-ordination of member states
policies, and that attracts a cost, presumably through information
flows and the
like.
Mr.
Hoban:
In our debate last year, the Ministers
predecessor described one of the three broad objectives as
being
to ensure that
budget discipline is achieved by controlling the growth of the
budget.[Official Report, European Standing
Committee, 11 July 2006; c.
4.]
Does not the
Minister think that in the context of headings 1a, 1b, 3a and 5, the
Government have not met that
objective?
Kitty
Ussher:
The objective of the UK Government referred
to our negotiating stance, not to the objectives of the European
Commission; we obviously do not speak for the Commission. We continue
to maintain that objective, and historical precedent shows that it is
worth pursuing our line because when we have done so over the
past few years, it has led to the overall budgets coming down. My
predecessor referred to the Commissions proposals and our
negotiating stance in relation to how we lobby on those
proposals.
Mr.
Hoban:
Will the Minister therefore explain by how much the
budget came down last
year?
Kitty
Ussher:
It was by €1 billion; a substantial
figurewe had negotiated very hard. At the
corresponding stage of the first budget ECOFIN last year, we had
achieved substantial reductions in the headings that the Commission was
then proposing. The proposal then went to Parliament, was amended and
came back to us. At the equivalent stage this year we managed, working
with allies, to secure a €1 billion
reduction.
Mr.
Hoban:
Given last years Budget payment
appropriations of €78.6 billion, does the Minister think that
€1 billion is adequate?
Kitty
Ussher:
We will continue to do everything that we can, but
I think that that is a significant
sum.
Mr.
Hoban:
I have one last question, which is on another line
in the Budget that was referred to in last years debate. It is
on a topic close to the Ministers heart. How much will be spent
in this years budget on tax harmonisation, and which areas will
be covered by that
work?
Kitty
Ussher:
I am not sure what the hon. Gentleman means by an
issue close to my heart. I do not think that there is a specific budget
line on tax harmonisation, but that is certainly something on which we
would use our veto. I am not aware of any specifics on the
harmonisation of direct taxation. Perhaps he would like to enlighten
us.
Mr.
Hoban:
All I would say is that there was a line item on
tax harmonisation and the expenditure on it last year. I am pleased
that the Minister is ready to veto spending on tax harmonisation. I am
sure that that will be welcomed by those who object to it.
Motion made, and Question
proposed,
That
the Committee takes note of the unnumbered Explanatory Memorandum from
HM Treasury dated 6th June 2007 relating to the Preliminary Draft
Budget of the European Communities for the year 2008; and supports the
Governments efforts to maintain budget discipline in the
Communities.[Kitty Ussher.]
5.7
pm
Mr.
Hoban:
May I properly congratulate the Minister on her
promotion? She has recognised the wide variety of topics that she will
have to cover as Economic Secretary to the Treasury. I am sure that
this is not the least onerous of them. I also congratulate her on the
addition to her own team. I read on her website that she is to have a
baby in the new year. I also noticeshe might want to look at
thisthat the website describes her as serving as a chief
adviser to the Treasury. I am sure that she will be able to explain
that.
I start by
trying to establish some common ground. I was heartened to read in the
transcript of last weeks European Union Committee in the House
of Lords that she had said
that
it goes without
saying that we believe some fundamental aspects of the EU Budget do not
represent value for money.
She is right to say that. It is a view
that might be shared by all hon. Members, regardless of their stance on
the EU.
We have
teased out some things on which we share concerns. I touched on the
cost of Galileo. Some of the original reasons behind the proposal for
that have been overtaken by enhancements to the global positioning
system. That project could cost £10 billion, so it is an
expensive commitment, and the Minister hinted at her negotiating
position on it. Given the criticisms about the slow progress being made
on Galileo, it would benefit UK taxpayers if the Minister were to
question that figure very hard and to consider whether it is in our
interests to pursue it.
On administration costs, the
Minister also said last
week:
What we
are seeing is staffing levels rising without a corresponding rise in
output, which we think leads to lower productivity and is therefore
less efficient and less value for
money.
Again, she is
right. It is another year when we have seen significant increases in
administrative costs. I am a little perplexed as to how much movement
the Government
will get on this, given that on her own admission they managed to shave
just €1 billion off the overall budget last year. It sounds to
me that while the Government may be saying the right thing, other
member states in the Parliament are not taking as seriously as they
should the need to get administration costs under control. There needs
to be much firmer action from the Government to persuade other EU
Governments and the EU Parliament of the need to control those costs
further.
We should
consider whether it is still appropriate for the European
Parliament to sit in both Brussels and Strasbourg as that
incurs additional costs. The Government should consider that. They
should try to persuade the European Parliament to act sensibly and have
one location rather than incur additional costs in moving between the
two. In one of the EU publications aimed at improving the vision of
Europe, one character is quoted as
saying:
I seem
to spend my whole life on the train between Brussels and Strasbourg,
but Id hate to have to choose between mussels and chips and
Strasbourg onion tart.
I
am sure that that was said tongue in cheek, but it is an indication of
some of the problems that arise when it is perceived that the
Parliament itself is unable to make
decisions.
One of the
things that we have not touched on is the information and
communications budget of the EU. A publication that came out either
earlier this year or late last year looked at spending across a
number of different areas. It suggested that the total cost for
information and communication came to £3.8 billion. That
included the cartoon character Captain Euro and a Europa diary to go to
schools. The Dutch version apparently described the European Parliament
as
the most important
multi-national organ in the
world.
Would it not be
appropriate to trim back some of these costs and to see whether we can
achieve some of the savings that we are all keen to have in the
European budget?
I
notice that there is a little channel on YouTube called EU Tube, which
is surely destined to kill YouTube as a cool place to go. There are
videos on such matters as anti-fraud measures in the EU, the control of
the sugar operation and a short film containing scenes from what might
be described in more polite conversation as European art movies. That
seems to generate a great deal of comment on YouTube, much to my
surprise.
Is it not
time to look at the citizenship element of the budget and to see
whether more work can be done to bring that expenditure under control?
In response to the hon. Member for Liverpool, Riverside, the Minister
highlighted the Governments continued opposition to cohesion
funds. She said that she felt that those should not be available to the
UK. I asked her which other member states she felt were benefiting that
should not. I should be grateful if she could come back to
that.
Kitty
Ussher:
It might be easier if I clarified that point now.
Our view is that the funds should not go to the richer member states.
The hon. Gentleman can draw his own inference as to which those
are.
Mr.
Hoban:
But I am not the one negotiating on the ECOFIN
budget on Friday. I should like to know where the line is drawn between
richer and poorer member states. It might be quite useful for the
Committee to know. The Minister could go back to ECOFIN on Friday and
say that there is concern in the Committee about how this money is
allocated.
Does the
Minister believe that the deal that was struck last December on the
size of the UKs budget rebate has had an impact on these
negotiations? Clearly our rebate as a percentage of the European budget
will fall. We have given away £7 billion as a consequence of the
deal that was struck last December. When we had this debate last year,
the then Economic Secretary referred to some technical discussions that
were going on to finalise the wording of the deal. In setting the
context for this debate, the Minister did not mention the outcome of
those technical deliberations. It would be useful if she could share
that with the Committee.
The Minister did not touch in
any great length on the need to improve financial reporting and
financial controls in the European Union. That issue is raised time and
time again in debates such as this. What fresh insights does she have
that might enable greater financial control to be exerted over the
spending of UK taxpayers money? When does she think that
sufficient progress will be made to ensure that the EU accounts will
not be qualified by the European Court of Auditors? Such qualifications
have been made for 12 successive years. Does she feel that there will
be any progress this year? For last years accounts, the opinion
from the auditors was 228 pages long. If a report of that length was
produced for a normal public company, serious concerns would be
expressed about the quality of management and of the financial
records.
It is clear
that we need a new budget settlement for the EU. Three key issues cause
concern. Until EU resources are under proper financial control, we
cannot be certain that the budget has been spent properly. The failure
to defend the rebate has given EU institutions the green light to
continue to spend unwisely. There are significant increases in
expenditure to which the Government object. The Minister made a
persuasive case in the House of Lords Committee and again today for
voting against the budget. She said in Committee last week
that
it is no secret
that our view is that there are some quite serious questions remaining
about the extent to which the EC budget represents value for money both
in terms of the programme spend but also in terms of simply the way
that the budget is managed and the adequacy of mechanisms to ensure
spending achieves the desired
results.
By making
statements such as that, she will gather consensus behind her if she
chooses to vote against the
budget.
5.17
pm
Dr.
Cable:
May I congratulate the Minister on her first major
outing in the House and on trying to explain the inexplicableor
certainly the very obscure, since a lot of these concepts are difficult
to get ones head around in administrative terms?
As someone who has always been
a supporter of the European project, particularly its
achievements through the single market and enlargement to the
south and now to the east, the one time that I almost feel a sense of
embarrassment and sometimes despair is when we consider the
European budget and, in particular, its administrative aspects. I was
reassured by the Ministers robust attitude
towards the administrative budget. There is absolutely no justification
for the endless empire-building in the Commission and I am glad that
the British Government are taking a tough-minded attitude towards it.
If I might qualify that slightly, she mentioned a concern about
unaudited accounts. That is absolutely right. There is no justification
for unaudited accounts, but we should remember that a lot of the money
is not properly audited at a Commission level because of national
failures. If I remember correctly, several British Ministriesof
which the Department for Work and Pensions is the most
prominentcannot get their accounts audited either. It is not
entirely a failing in the
Commission.
On the
bigger question of the budget, I share the view of the hon. Member for
Fareham, although I think that our views on Europe are probably rather
divergent. The Government gave in far too easily. They achieved nothing
in the wider reforms on agriculture and got no conclusions in the world
trade negotiations, yet they accepted a substantial scaling down of the
British rebate. That was a major failing and we are left with a
profoundly unsatisfactorily budget structure. All we are doing now is
talking around the details at the edges of that structure.
On some of the content, there
is a tendency in European budget discussions for the British
Governmentperhaps out of a sense of frustration that they
cannot get the agricultural budget downin particular to say,
Well, lets do other, more positive things such as
research. Everybody is in favour of research, so lets spend
more money on it. The problem is that there is a quite a lot of
research into research that suggests that publicly promoted research is
not very productive. Some good research has been done at the university
of Buckingham by the vice-chancellor which suggests that for everything
except blue-skies research there is not a market failure, and that
Government-promoted research is not productive. When research is
channelled through the European Commission, it is even less efficient
because there are artificial collaborationsfor example, people
have to find somewhere in Finland or Portugal to team up with. It is
all very artificial, and is not the natural research collaboration that
people would look out, which would probably be with an American
university or institute. That is probably not good use of public money,
and the fact that research is a good thing, of which we are all in
favour, rather masks that. I hope that the Government will not go too
far down the road of trying to correct the existing imbalances in
favour of agriculture by promoting money on other things that sound
superficially attractive but are not in fact productive at
all.
5.20
pm
Mr.
Heathcoat-Amory:
I congratulate the Minister on her outing
on this rather complex subject. With a bit of in-flight refuelling, she
managed to answer a good many of our questions. There is indeed a lot
of history here and a lot of it is very technical, so it is certainly
not my intention to try to trip her up or ask a question that she
cannot answer.
The Minister kindly said that
she will write to me about something that I have already asked her. I
rather commiserate with her, because she is trying to control a system
and a budget that is formally beyond her control. That is a kind of
annual tragedy that we rehearse here. We are putting more and more
money into a system that is not accountable or under any real
control.
The annual
bible is the White Paper published in May, which sets out the European
Communitys finances and gives a statement on the current
years budget. It also sets out the rather dismal story of the
European Court of Auditors attempts to grapple with where all this
money is spent. I am quoting practically at random from those pages,
but it records that on structural
measures,
the Court
found that expenditure was not free of material
irregularities,
and on
internal policies, which is an area that gets a great deal more
attention than money, it talks about
weaknesses in the supervisory and
control systems, which led to material incidents of errors in payments
to beneficiaries.
On
external actions, on which we have touched already, it
says:
A
material level of error still exists. This can be attributed to a lack
of comprehensive approach to supervision, control and audit of these
organisations.
On EU
agencies, which is a particular concern of mine, because they are one
removed again from the taxpayer, it
reports:
The
Court of Auditors audited 18 agencies with greatly increased budgets,
but several of them had not assessed their operational risks. As a
general rule, activity-based management had not been introduced within
the
agencies.
It
is hardly surprising that the Court of Auditors rejected the accounts
for the 12th year running. This is not an annual comedy; it is a
tragedy, because it concerns taxpayers money
and leads to very widespread disillusionment with what is going on.
People have long ceased to believe all the assurances that it is all
getting better. No other organisation would survive this. If a
commercial company were to have its accounts rejected in this way, the
directors would have been disbarred by now. No domestic or national
spending Department would survive 12 years of such treatment from the
auditors.
I last
discussed the matter in detail with the ex-chief accountant of the
European Union, Marta Andreasen, and she reported a startling lack of
double-entry bookkeeping. I declare an interest, because I am an
accountant, but I did not invent double-entry
bookkeeping. It was invented in Venice in the 15th century, but
it is disappointing that it has not yet reached
Brussels. She exposed a catalogue of accounting errors and
mismanagement, but it was she who got sackedshe lost her
jobnot the people responsible for this mess and muddle. Again,
it is almost an endless refrain that it is the whistleblowers who lose
their jobs rather than the people responsible for all this
money.
We are talking
about a budget that is now about £115 billion a year, so this is
a colossal supra-national budget, which is outside any real control.
However, instead of pausing and trying to get this budget right, it is
receiving very large annual increases. Most of the expenditure is now
non-compulsory, to use the
technical term; that is, it is not required under the
common agricultural policy. It is essentially
discretionary expenditure and it will go up next year by 9.2 per cent.
We are pouring into this leaky bucket very large sums of extra
money.
If one looks
at the headings, research will increase by 54.5 per cent. I agree with
the hon. Member for Twickenhamjust because research is a good
thing, that does not mean that it is best carried on at European Union
level, particularly with increases of this size. We need to be sure
that the money that is currently being spent is delivering results
before we put the expenditure up by more than 50 per cent.
I suppose that trans-European
networks are a good thing too, but perhaps not to the extent of
deserving an 89 per cent. increase next year. Expenditure on lifelong
learning is going up by 20 per cent. That is an interesting one,
because we all thought that education was basically a member state
responsibility. The European Union has a supporting role, to exchange
best practice and so on, but again this increase is a very
large one. I know of no Department here that is receiving
increases on anything like this scale. Expenditure under the heading of
competitiveness also receives an increase, of more than 25 per
cent.
Galileo has
been mentioned. I know something about Galileo, because, as an amateur
astronomer, I use global positioning in the instruments that I use.
However, they all work perfectly well with the American satellites,
which are all free. Galileo has been described as a vanity project, and
yet it is to receive an increase in funding of more than 50 per cent.
next year. Of course it is well over budget already and some years
behind schedule.
I
have mentioned the agencies and my concern about them. Again, they will
receive 25 per cent. more money next year. I also mentioned
macro-economic assistance and the Minister will kindly write to me
about that. Then there is the common foreign and security policy, which
has also been mentioned. Again, expenditure on that will go up very
substantially.
The
overriding point is this: can the European Union absorb this extra
money and spend it wisely given the strictures of the European Court of
Auditors on the existing expenditure? I asked what the Treasury is
doing about that problem, but perhaps I can answer my own question,
because they can do very little. I asked the Minister what her powers
were and what the voting system is. I can tell her that it is majority
voting on the annual budget, and, in fact, she conceded that that was
the case. She is quite right that the inter-institutional agreement and
the overall amount that is extracted from member states is negotiated
periodically, but we must wait until 2013 before we have any real
influence over that.
We are practically without
powers, beyond the power of persuasion. Again, if one reads the White
Paper published by the Treasury, there is a terrible familiarity about
the phrases that are used. For example, we
are
to continue working
towards the achievement of an effective integrated internal control
framework
whatever
that is. We are also to
urge all stakeholders in the
budgetary implementation process to continue their work to improve
financial
management.
Yes, we
urge them, we persuade them, we continue working, but
we have been doing that for 12 years. I remember doing so when I had a
junior position in the Treasury doing the Ministers
jobperhaps that was the start of the problem. We took it as
seriously as we could, but I was struck then that we lacked the
instruments to enforce the same budgetary discipline that our taxpayers
rely on in domestic expenditure.
Another point is conceded in
the explanatory memorandum, which states that the final decision on
much of the expenditure is taken by the European Parliament, which we
all know is basically an expenditure agency. It does not have the pain
of taxation; it has the enjoyment of expenditure. Most other member
states, being net recipients of the budget, have no particular interest
in budgetary restraint. We do, because we are a very large and growing
net contributor. The helpful table at the back of the Treasury document
records that our net contribution this year is £4.699 billion,
which is easily a record, and going up very sharply because we lost a
chunk of our rebate during the negotiations two years ago. Most of it
is back-end loaded, so it will not kick in until the year before 2013,
so our net contribution will rise to at least £6 billion a year.
I ask the Minister to look more fundamentally at what we can do to
enforce her good intentions. Parliament came into existence to control
not just taxation but expenditure.
My final request to the
Minister is about the reform treaty. It is self-styled as a fundamental
look at how the European Union operates institutionally. Why, then, is
it entirely silent on the questions we have been debating? I re-read
the presidency conclusion of the Brussels European Council and it says
absolutely nothing about budgetary restraint or financial reform. Why
is that? It certainly concerns the public, who know perfectly well that
the budget is mismanaged, and they want something to be done about it.
There was such an opportunity, and it still exists because member
states will have an inter-governmental conference in the autumn to draw
up a legal document to reform the European Union. What will the British
Government do to bring forward specific and legally binding
mechanisms to enforce the budgetary discipline that she talks
about?
5.33
pm
Mr.
Kenneth Clarke:
There are different views on the European
project among the Opposition, but I will speak briefly to show that
even those in favour of it, such as the hon. Member for Twickenham and
I, feel just as strongly as anyone else about the need for financial
discipline and control in the European Union. I get the impression from
the Ministers first presentation of her case that the
Government share that view, so we wish her well in her
negotiations.
We have
made some progress over the years in the direction that British
Governments would wish, the greatest of which has been to keep the
budget below 1 per cent. of GDP, which at one time would have seemed
almost impossible. However, we have not made enough progress in any
other direction to shift the balance of the budget towards more modern
and relevant priorities. Although we cannot reopen the
recent deal, I agree with the hon. Member for Twickenham that the
Government made very little progress, largely because of the former
Prime Ministers foolish commitments to President
Chirac on agricultural policy, which he entered into, for
inadequate reasons, some years before negotiation on the financial
framework started.
We
are therefore left with annual budgets within a framework that still is
not right. We have failed to shift enough from agricultural and
fisheries policies into other areas. Agricultural policy has been
reformed so that there is more emphasis on environmental
expenditure, which the documents refer to. However, I hope that the
Minister will continue to press for value for money from the
environmental projects because it seems to me that there is a lack of
clarity about exactly what environmental benefits are being delivered
by the various forms of environmental support that are now being
introduced.
Under the
Lisbon agenda, there are some headings that are undoubtedly to be
welcomed. I share a view that hon. Members have expressed: things that
sound attractive as headings do not always represent good value for
money, as one will see if one looks at what the money has already been
spent on. Like my right hon. Friend the Member for Wells, I have some
experience of the research budget from my time at the Department of
Trade and Industry and the then Department of Education and Employment,
as well as my time at the Treasury. If the research that has been
referred to is up to date, it is depressingly familiar. It shows that
little has changed in 20 years.
The research budget sounds
worth while to make a more modern, competitive economy, but it tends to
be dominated by horse-trading. It is shared out country by country, and
it often produces artificial tie-ups with people in other countries in
order to qualify for grants. There isthere certainly used to
bea terrible reluctance to bring to an end projects that are
going nowhere. It is assumed that there is a commitment to the jobs and
institutions that have grown dependent on the money that has been
granted. I hope that that will be borne in mind.
I have always had grave doubts
about the value of structural and regional funds. I understand that
Liverpool Members seek to defend the right of Liverpool and other less
prosperous parts of the country to those support funds, whose value in
promoting economic progress I have always doubted. In this country, as
well as in Germany, France, Spain and other wealthier countries of the
Union, there is scope for a national, rather than European, regional
policy to deal with the matter. The cohesion funds, to which I have
already referred, were introduced for a temporary purpose that has long
since been served. As we are doomed to have expenditure remaining in
that area, I hope that it will be kept to a minimum.
I asked about economic
assistance for Afghanistan. I discovered that foreign security policy
referred to Kosovo and Bosnia and the various European Union activities
in trouble spots in Africa. I think that hon. Members on both sides of
the House would strongly support properly judged European efforts of
that kind and would wish to see them better financed, once satisfactory
ways of spending the money effectively have been outlined.
I wish the Minister well. I do
not think that she will find herself alone at the Council. With
respect, I do not share the vision of my right hon. Friend the Member
for Wells that it is only the British who are advocating restraint and
value for money while being surrounded by Governments from 26
profligate continental countries who see the budget merely as a
bean feast through which they distribute money among
themselves. I should be surprised if the taxpayers of Germany and the
Netherlands did not feel as strongly as those of the United Kingdom
about such matters. I suspect that their Ministers feel equally
strongly; in my day, we were lucky to have a blocking majority, as long
as the Germans, the British and the Dutch stayed together. Now that
France is a net contributor, I suspect that its taxpayers are looking
for better value for money.
I realise that we are talking
about a negotiation. It would be quite wrong for us to try to tie the
Minister to precise heads, and to what she will achieve here and what
she will achieve there. She will have to engage in a great deal of give
and take. She will have to concede on things on which she would like to
do better, but, in return, she will try to make some progress in the
right direction. This is not about only the British interest because it
is in the sensible interest of every European taxpayer that the overall
budget is restrained to a size that is useful and necessary, and only
that, for European purposes.
Even more importantly, better
value must be achieved from the money that is provided by each of the
member states. I wish the Minister well in her efforts. I suspect that
there is a British view common to all politicians, parties and others
who follow European affairs about the kind of progress that we would
like to make to improve the cost-effectiveness of the
Commission and the European
Union.
5.39
pm
Kitty
Ussher:
The debate has been extremely useful. It
demonstrates that Parliament can perform its scrutiny effectively. I
covered most of the points raised in my earlier remarks, but I shall
respond to a couple that we did not discuss in
detail.
The hon.
Member for Fareham and the right hon. and learned Member for Rushcliffe
mentioned that they thought that the Government had somehow conceded on
the abatement during European Council conclusions in 2005. I do not
believe that that is in any way the case. In absolute terms, our rebate
has gone up. As the then Prime Minister said in 2005, the
rebate
is there for a
reason: it is there because of the distortion of expenditure across the
European Union.
We think
that that reason remains. We also think that it would be wrong for
Britain not to play its part in paying the fair costs of enlargement,
but the rebate remains firmly in
place.
The hon. Member
for Fareham suggested that my comments should be interpreted as
implying that we should vote against the EU budget. That would not
achieve much, as has been acknowledged, given that the annual budget
negotiations are conducted by QMV, but I believe strongly that we gain
more by engaging constructively, as history has demonstrated.
To respond to the point made by
the right hon. and learned Member for Rushcliffe, part of the reason
for going on Fridaynot every Minister goes to the initial
budget ECOFINis to ensure that alliances are built so that we
can negotiate effectively as a group in the later, tenser stages. We
can achieve much by working
together.
A number of
hon. Members, particularly the hon. Member for Twickenham, mentioned
research and development expenditure. It is worth saying that the
Government believe that there is a clear case for the
Communitys research and development framework programme.
Improved investment in R and D is one of the bedrocks of future EU
prosperity, but as individual member states can lack the volume of
resources to make suitable investment, economies of scale can make
funding at the EU level attractive and help to avoid a duplication of
effort. That is our rationale, although of course we must ensure that
each individual project represents value for money,
as the hon. Gentleman
said.
The right hon.
Member for Wells made a well-reasoned argument and expressed well-known
concerns about accounting issues and implications of fraud. Although it
is deeply regrettable that the European Court of Auditors has been
unable to sign off the accounts, the British press sometimes implies
that all the money is being siphoned off into someones back
pocket. That is not the casenot always, anyway. Their
lordships recent report on the subject makes that clear.
I have seen the
figures for actual fraud, as opposed to inability to meet the required
accounting standards. They are close to 0.05 per cent. of the overall
budget. That is not to be tolerated, but it is not as much as one might
presume given the heightened attention paid to the issue. Britain is
playing its full part in supporting the Commission in its stated
objective to strive for a positive statement of assurance by 2009, and
we shall continue to do so. That ambitious aim is dependent on action
by all concerned, including member states, and I am proud that the UK
has taken the lead in providing a quality standard to which others can
aspire through administering our own spending.
The right hon.
Gentleman mentioned whistleblowers, who play a vital role. The latest
EU staff regulation introduced better protection for themI
understand that a whistleblowers charter is now in operation.
On a slightly more light-hearted note, the hon. Member for Fareham
suggested that it is inefficient for the European Parliament to travel
to Strasbourg. I could not possibly comment, but I note that it would
requiresadly, my officials writea
treaty change to stop it doing so, and there are other treaty changes
that should perhaps be higher up the negotiation list.
I believe that Britain gains
from EU membership. It is therefore in our interests to negotiate
positively, strongly and effectively at the EU level. I have enjoyed
taking part in the
debate.
Question
put:
The
Committee divided: Ayes 7, Noes
5.
Division
No.
1
]
Heathcoat-Amory,
rh Mr.
David
Question
accordingly agreed to.
Resolved,
That
the Committee takes note of the unnumbered Explanatory Memorandum from
HM Treasury dated 6th June 2007 relating to the Preliminary Draft
Budget of the European Communities for the year 2008; and supports the
Governments efforts to maintain budget discipline in the
Communities.
Committee rose
at fourteen minutes to Six
oclock.