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6.41 p.m.

Baroness Elles: I, too, should like to add my congratulations to my noble friends Lord Blaker and Lady Rawlings on their maiden speeches. They have brought an area of expertise to our debate today which might otherwise have been lacking. We are most grateful for their contributions today and hope to hear from them often in the future.

The outstanding evidence from the gracious Speech is that the United Kingdom is in a unique position in relation to international affairs. The noble Lord, Lord Wright of Richmond, touched on the fact that we are one of the five permanent members of the UN Security Council. We are members of the European Union, NATO, the Western European Union and, importantly, the CSCE. There is reference in the gracious Speech to the visit of the Queen and the Duke of Edinburgh to New Zealand for the Heads of Government Commonwealth meeting. We are members of the Commonwealth. We should welcome most warmly the visit of Her Majesty the Queen to South Africa which has once again re-entered the Commonwealth, a matter that those of us on all sides of the House warmly welcome. We send our warmest wishes to the two leaders, in particular President Mandela, and Mr. de Klerk for his courageous actions in bringing about the current situation in South Africa.

No other country has such responsibility as the United Kingdom in playing a pivotal role in the policy making and development of international relations and in working for the maintenance of peace and political stability. But we must remember that it must be the prime duty of any elected government to look after the interests of their own citizens. They must ensure that the interests of their citizens are protected.

I wish to touch on two or three of the wide range of issues set out in the gracious Speech. I do so not because they are more important but many matters have already been touched upon and I wish to raise these specific issues before your Lordships tonight. First, it has been correctly emphasised that the European Community finance Bill rests on the legal obligation already undertaken in December 1992 at the Edinburgh Summit. There can be no question of reneging on that obligation. It would be devastating to the record of the United Kingdom if that were even to be threatened.

The increases involved are proportionately slight compared with the expenditure programme of the European Union and the tasks before it. That factor is largely due to the successful efforts of my noble friend Lady Thatcher at the Fontainebleau Summit some years ago when she succeeded in fixing the abatement for the contribution of the United Kingdom. That policy has been continued by my right honourable friend the Prime Minister. But there has been a certain amount of political scenery (if one may call it that) because of the timing of the publication from the Court of Auditors; and there is a debate in the European Parliament. The

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report from the Court of Auditors, regrettably, has been repetitious every year in setting out examples of massive fraud. No one can deny that there is fraud in the European Community and it must be stamped out. I do not intend to go into that in detail now. We have already had a major debate on the excellent report from the sub-committee chaired by the noble Lord, Lord Hunt of Tanworth, on financial control and fraud in the Community. Many recommendations were made and debated in your Lordships' House.

However, as I read the press, I sometimes wonder whether we are not being rather holier than thou. Let us look, for example, at the magnificent record of the Inland Revenue. It has recouped £4.7 billion sterling from underpayments and cheating in income tax returns in this country alone. Already the Department of Social Security--I congratulate the department on its work--has recouped £654 million from fraudulent demands for benefits. There is no doubt from conversations with those responsible that the sums estimated to be fraudulently paid out in this country run to something like 10 per cent. of the total budget on social security and health. That includes fraud, crime and waste. As the total sum for that budgetary element is £83 billion, one can safely estimate that something like £8 billion is being paid out fraudulently or through waste. I do not wish to minimise the estimated £6 billion which is missing from the Community budget, but let us start at home. Those members who claim that they are serving the British taxpayer and their constituents well by tackling so forcefully the European Community could well start by serving their country and taxpayers better by ensuring that those frauds and wastes are properly controlled through parliamentary activity--the Public Accounts Committee, the National Audit Committee and the various other means by which representatives of the people of Britain can look after the interests of their people.

Although fraud exists in the European Community, it exists everywhere. Probably one of the best actions that Britain can take is to indicate what we are doing in this regard--identifying fraud in our own country both from EC funds and within the UK's administration--and in that way encourage other member states to do the same: to ensure that they are controlling and monitoring payments into the various funds of the Community, whether the agricultural, structural or regional funds or payments as regards training. We have many examples of frauds. It is up to the member states to ensure that that fraudulent behaviour and the imposition on all European taxpayers is stopped as speedily as possible.

On a point of international law, the acceptance of the United Kingdom to fulfil its legal obligation is important when we reflect on the recent decision of President Clinton to flout a Security Council resolution, to which the US was party, to waive the naval embargo on trade of arms to Bosnia. As Alain Juppe pointed out recently, it was the unanimous decision of NATO that that embargo should remain. It bodes ill for our relationship if deflection from a legal obligation, taken through major bodies of which the United Kingdom is a member, should start in that way. We should perhaps also remember that, to my knowledge, the US has no

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ground troops in Bosnia, but we, the British and the French, have the largest contribution there in the form of ground staff and UNPROFOR. They will be the recipients of an undoubted escalation of armed conflict in the area. That decision was ill thought out and could have disastrous consequences for the United Kingdom, both for our troops and the French troops serving on behalf of the United Nations. They are not there as members of national military personnel; they are there on behalf of the United Nations. That is an even more harmful aspect of the decision, which is regrettable.

The signal that has come from the president and consequently the US serves as a warning to us to get our own act together in Europe. First, we should strengthen our co-operation through the Western European Union. I believe that the treaty expires in 1998, so we now have an opportunity to study its provisions to see how we should go forward and develop closer relations in the military field.

Secondly, we should make greater use of common interests and concerns through the common foreign and security policy, the CFSP structure available to European Union members. We have seen the success of Her Majesty's Government's foreign policy in pressing for the enlargement of the European Community. The Government should be congratulated that it is one of the planks of their policy within Europe that we should go forward as quickly as possible to unite with other applicants to the Union. I am sure we all welcome them as warmly as both my noble friend Lady Chalker and the noble Baroness, Lady Blackstone, did when they congratulated Austria, Sweden and Finland on joining on 1st January. We very much hope that Norway will also do so.

I consider that it should be an urgent matter to assist the four central and eastern European Visegrad countries to enter at the earliest possible time and not to disappoint the aspirations of those who lived under oppressive regimes and who have sought to turn to democracy and liberal economies. That is a very difficult stage in the transition of any country, as we know only too well and have seen throughout Europe. Those countries seek membership of the European Union to consolidate and stabilise their internal situations.

No foreign policy can be achieved without close alliances not only between the European Union and bordering countries but also within the European Union. Efforts to co-operate closely, for example, with Italy have been made on specific issues and it must surely be in the United Kingdom's interest to co-operate more closely with France. Despite our traditional differences, we share with it the same strategic interests.

As France will take over the presidency in January, we have the opportunity of working more closely together. We now have both the symbolic and the practical example of a close link between our countries through the Channel Tunnel which was referred to by the noble Lord, Lord Wright. With it, we have a practical example of how the citizens of France and other countries on the Continent can come through to our islands as we, the citizens of the United Kingdom, can go through to the Continent, recognising that we do

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not have to cross what has always been considered the division between us and the rest of the world--the Channel. Thus I hope very much that the Channel Tunnel will be a symbol of the joint efforts in a great masterpiece of engineering which will unite us with the Continent and remove what my noble friend Lord Cockfield so aptly called the "hang up" of the isolationists and turn us into true Europeans.

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