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20 Jun 2008 : Column 1203

Mr. Cash: Is my hon. Friend aware of the substantial disaffection in the farming communities—not only in this country but in others—and the fishing communities? Riots are taking place in other parts of Europe. Not much of that features in the media, but it is enormously indicative of the dismay felt by ordinary people. Under this failing system, the economies of Italy, Greece and Spain are imploding. The situation is incredibly dangerous. Ultimately, in some countries in particular, it is likely to lead to civil disorder because of the lack of a democratic safety valve.

Mr. Chope: My hon. Friend is absolutely right. We certainly do not want people to become so disillusioned with their leaders that we are confronted with the civil disorder that we have seen in parts of Europe in the past.

Mr. Syms: It is true that the world price of food is rather lower than the price in the EU, but it is also true that Norway and Switzerland subsidise their farmers at quite a high rate. There may be no savings to be made. I presume that if we left the EU, we would need some system of subsidy for our farmers unless we decided to take the New Zealand route, which I think is very brave. Perhaps some of our colleagues with more agricultural constituencies will comment on that later.

Mr. Chope: But if we did not have to pay for the common agricultural policy, we should be able to decide, in this sovereign Parliament, how we wished to distribute the money. If we wanted to help farmers in some way, that would be a decision for our Parliament rather than for the European Parliament.

Mr. Edward Leigh (Gainsborough) (Con): We could do what the New Zealanders do—their farming is hugely successful now—or we could introduce a working farmer tax credit. We could give money only to poor hill farmers. What we should not be doing is siphoning huge amounts of money into large agri-businesses, some of which, in my constituency, receive more than £1 million a year in subsidies alone. That is what is so scandalous about the situation.

Mr. Chope: My hon. Friend is absolutely right. We often have debates about the common agricultural policy in the Chamber, and what is common to all of them is the feeling of frustration and impotence among those who participate. We are completely at odds with almost all our partners in the European Union on the issue of the common agricultural policy and support for the farming community. The fact that the common agricultural policy is still consuming about half the European Union’s budget is surely the top issue for the membership audit commission to consider.

Mr. Cash: My hon. Friend made an extremely important point a couple of minutes ago regarding the question of the decisions that should be taken by this Parliament on behalf of the electorate of the United Kingdom. Does he not agree, in line with his other Bill that we will be considering later in this Session, on the supremacy of Parliament—I originally introduced such a Bill a few years ago, and I pursued the issue during the Lisbon treaty debates—that we have to assume that our Parliament will, in the vital national interests of the people of this
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country, make the decisions on behalf of the electorate? That is the way to achieve, for example, the economic competitiveness that my right hon. Friend the Member for Witney (Mr. Cameron) rightly insists upon, so that we achieve the kind of results that this Bill would produce, while at the same time ensuring that it is this Parliament that decides the fundamental questions on behalf of the British people.

Mr. Chope: My hon. Friend is right and I hope that there will come a time when the Bill to which he refers can be discussed in a similarly lengthy way to the one before us.

I want in conclusion to refer to the administrative burdens. I know that the issue of regulation has been raised a lot, and my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) made a fantastic contribution to it with his ten-minute Bill the other week, drawing attention to the extent to which we have lost control over the legislative process in this House and how we were faced last year alone with 177 directives, 2,033 directly enforceable regulations and 1,045 decisions. Linking in with what my hon. Friend the Member for Stone just said, part 4 of the Regulatory Enforcement and Sanctions Bill currently going through this House refers to making it incumbent on UK regulators to reduce unnecessary regulatory burdens. However, the gaping lacuna in that Bill is that it does not cover EU regulations, which as we know are responsible for a substantial burden on industry and small businesses.

The noble Lord Stoddart of Swindon, a former distinguished Labour Member of this House, was told by a Minister in the other place on 15 May last year that

in other words, over £100 per head. That, moreover, excludes the cost of EU administrative burdens in financial services, because, as that answer states, that information was

I do not know what format it is available in, but that is just the sort of information that we need to be brought before this House and the people, so that proper evaluation of the costs and benefits of our continuing membership can be carried out.

Mr. Cash: My hon. Friend may recall that he signed an amendment that I put down immediately after Second Reading in this House of the Bill to which he has just referred because of this huge hole. It applied the same formula as the Conservative party voted for en masse on the Legislative and Regulatory Reform Bill two years ago, and again in the House of Lords to reassert the supremacy of this House where it is in our vital national interest to ensure that we achieve the objective of reducing burdens on business. Does he also know that the Minister has informed me that the Government are going to oppose that amendment—clearly because they do not want in any shape or form to interfere with the European regulatory system in its application to this country? So in effect, that Bill will be a complete waste of time, because 80 per cent. of it and the 400 Acts
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of Parliament that are referred to in it will be derived from the European Union and nothing will be done about it.

Mr. Chope: What a depressing intervention that is, Mr. Deputy Speaker, but it confirms our worst fears.

I have not had a chance to go into other issues such as the costs of the common fisheries policy—perhaps the Minister will be able to tell us about its benefits—and the costs of the social chapter, which I am delighted we Conservatives are committed to getting rid of our involvement in, following the next general election. Nor have I been able to comment on the defence that the Government try to put forward regarding European Union membership and its benefits, but it is set out succinctly on the Department for Business, Enterprise and Regulatory Reform website and makes no mention whatsoever of the CAP, the social chapter, the common fisheries policy or anything else. Indeed, the European Union single market is regarded as being something separate and apart from the European economic area, when we know jolly well that the EEA includes countries such as Norway and Iceland, which benefit just as much from the single market as we would continue to do if were in that sort of relationship with the European Union.

I am very grateful to my hon. Friends, and I hope that we can hear from my hon. Friend the Member for Gainsborough (Mr. Leigh) in particular—I know that he has other commitments later on—as he and his Committee have a direct involvement under the terms of this proposed legislation. I hope that he can say whether he supports this proposal, and whether it has any legs.

10.36 am

Mr. Edward Leigh (Gainsborough) (Con): The whole House owes a debt of gratitude to my hon. Friend the Member for Christchurch (Mr. Chope)—

Mr. Cash: The nation.

Mr. Leigh: Well, he should be my right hon. and learned Friend, if there were any justice in the world, given the way in which he has moved this Bill and the care and interest that he takes in these matters. Clause 3 mentions the National Audit Office and having seen that reference, I thought it only right that I make a few comments.

Of course, I have my own views on our membership of the European Union but I am not going to labour them before the House; I will stick today very narrowly to the work of the Committee that I am privileged to chair, and to the audit of the European Union. I hope that anything that I say in those comments could be supported by everybody in the House—there is nothing party political about them. There is nothing behind my comments that is predicated on a Eurosceptic or a Euro-enthusiast attitude to the European Union.

I was talking only this week to a very senior European diplomat, who admitted to me that the problem of the Irish referendum was not just an Irish problem. Wherever the referendum might have been held, the people of that
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country would at this moment have said no. If it had been held in France or anywhere else, the people would have said no, so there is a real problem with accountability. It does not matter whether we are dubious or enthusiastic about our membership of the European Union—surely, we want to make this organisation work well. There are institutional problems that will doubtless receive a lot of discussion. Issues such as the weight of votes attributed to the populations of France, Germany and Italy compared with, say, Spain and Portugal, are certainly problems, but one of the main issues that worries people in Europe is the feeling that there is waste and inefficiency at the heart of Europe and a lack of a clear audit. I hope that we can achieve a consensus throughout Europe on the need to try to improve matters.

In what will not be a very long contribution, I want to deal with four issues, and I hope that what I say will get the support of the House. Before proceeding, may I apologise to the Minister and to the shadow spokesman? Unfortunately, for many months I have been committed to meeting the chief executive of a Government agency in my constituency later this afternoon. It is the vital matter of a driving test centre being closed down, so I hope that I will be forgiven, Mr. Deputy Speaker, if I cannot stay for the entire debate. However, as this debate is so central to the work of the Public Accounts Committee, I was very anxious to speak. I want to deal with the state of the financial management of the EU; fraud and irregularity; measuring what we get for the money spent by the EU, which is very much the purport of the Bill; and the vital role played by national Parliaments in the scrutiny of EU expenditure. Those are all very important matters.

We are all familiar with the chorus of concern and negative media attention that greets the release of the annual report by the European Court of Auditors. For each of the past 13 years, the Court has, in effect, qualified the accounts of the European Community. “Qualified” is a technical term, but it means that the Court of Auditors—the supreme audit body of the European Union—has not been prepared to accept the accounts as valid. That record of the accounts being qualified for every one of the past 13 years is an almost unique achievement; it is exceeded only by the Department for Work and Pensions. Many of the problems facing the DWP are precisely those facing the European Commission.

To be fair, the Court of Auditors has reported a slight, but steady improvement in the Commission’s performance in recent years, most significantly in its previous report. However, the Court continues to point to problems with the legality and regularity of transactions, particularly on structural measures and on parts of the common agricultural policy. That is not just anything, because a large proportion of the European Union’s expenditure is concerned with structural measures, regional policy and the CAP; it is fundamentally what the European Union is about. We all know that there is an imbalance in the European Union’s expenditure, so for the Court of Auditors to go straight to the heart of the matter and to say that it does not trust the figures that are given to it on the CAP or on regional policy is, in a sense, to drive a spear straight into the heart of the regular expenditure of most of the European Union. The situation is very worrying.

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Mr. Cash: Does my right hon. Friend—well he should be my right hon. Friend too, but that is another story—accept that when the spear carrier, the person who raised the question in the European Commission, Marta Andreasen, said that it had to sort out its accounts and get them right, she was shoved out of the job? That is how the European Commission works; it does not want any criticism and it does not want to hear whatever the Court of Auditors may say. The fact is that the European Commission is determined not to get the facts out. In addition, despite the fact that the European Scrutiny Committee, on which I have sat for many years, has sought to insist that debates on the Court of Auditors should be held on the Floor of the House, the Government have insisted that they go to Standing Committee, which, of course, has a much lower profile.

Mr. Leigh: I was not going to mention Marta Andreasen, because I wanted to frame my remarks in a way that all parts of the House could accept. She has been cited, so I should mention that she was quoted by the BBC as saying that 80 per cent. of the budget, including the entire agricultural budget, was suspect, even though EU auditors had, at the time, cleared 70 per cent. of the agricultural budget. If one takes her view, one should be extremely concerned. Even if one is not prepared to go down that route and even if one does not accept her concerns, one should still be very concerned by what the Court of Auditors—the EU’s own body—has said.

Indeed, the Budgetary Control Committee of the European Parliament has been active in pushing for improvement. That effort has been led by British MEPs. Manuel Barroso, the President of the European Commission, made striving for clear accounts one of the Commission’s objectives. People who are actively involved in trying to make the European Union work and who believe it in passionately are aware that there is a fundamental problem.

Mr. Edward Davey (Kingston and Surbiton) (LD): I agree with a lot of what the hon. Gentleman is saying and this is one issue on which the Bill might focus, because improvement is clearly needed. Given his experience as Chair of this House’s most important Committee, will he tell us the improvements he would like to see? In my view, one such improvement would relate to the way in which member states, which manage 76 per cent. of the EU’s budget, are brought to account for how they spend EU taxpayers’ money.

Mr. Leigh: I am grateful for that intervention. I am trying to frame my remarks in such a way that members of the Liberal party, including the hon. Gentleman, can agree with me, and I shall deal with precisely the point he raises. Although there is a lot of criticism of EU bureaucrats and the Commission, most of the money is spent in the European nations, and what we are talking about is trying to improve accountability within the European nations. My Committee made a great deal of progress with the Government on trying to get a consolidated account, so that we can follow the money all the way through the European nations. I pay tribute to those on the Treasury Bench, because we have been working with them to try to obtain that.

Mr. Davey: I am grateful to the hon. Gentleman for making that point, because part of the problem with the way we do business in this House—let us forget the
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European Union for the moment—is that we do not have those whole Government accounts for the UK Government. He will be aware that the National Audit Office told a Lords Select Committee examining the Court of Auditors that the NAO would not be able to give the UK Government a clean bill of health in the way that it is required to do so for the EU because the UK Government do not provide the information. So, this House has a huge problem with the UK Government’s accounts.

Mr. Leigh: As a result of a campaign by the Public Accounts Committee and the NAO, we are now getting this information and we are making progress; for the first time, we are leading the way in Europe, because we are going to follow this money with a consolidated account all the way through and we will see how the money is spent here. If the hon. Gentleman is patient, I shall deal with that point in a moment.

The aim of achieving a clear audit opinion is important, but it is highly ambitious. If offered the task of tidying-up the EU’s accounts, Sisyphus would have stuck to his day job of endlessly pushing his huge stone to the top of the mountain. Tidying-up those accounts is a monumentally difficult job. Each year, the Comptroller and Auditor General reports to the PAC on the results of the European Court of Auditors’ work and on progress towards improvement, and the PAC reported on progress in 2005. Since then, members of my Committee and me have regularly met our counterparts in member states—I was even invited to speak to the relevant Committee of the European Parliament on this matter—and we were all amazed about how much agreement there was on these issues. There was a slight problem with our French colleagues, but we shall leave that to one side.

Throughout Europe, there was a lot of agreement on this matter. A persistent theme in all the discussions that we have been having with our European colleagues is the sheer complexity of what we are talking about. One of the conclusions of our 2005 report stated:

I would say that it is almost entirely due to that complexity. That statement is as true now as it was in 2005, and a key factor in the failure to achieve a clear audit certificate is the sheer complexity of the rules and regulations governing European programmes. My hon. Friend the Member for Stone (Mr. Cash) is a leading expert on the complexity of the programmes.

The Court of Auditors agrees with all that, and it is not some obscure Eurosceptic British body. For the first time, its most recent report on the accounts observes that

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