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Lord Thomson of Monifieth: My Lords, I am much obliged. If I used the word "exploit" in a way that caused offence to the noble Lord, Lord Stoddart, I wish that I had used another word. The main thrust of my argument—and the noble Lord will realise this when he reads the Hansard report—was to say that, in dealing with fraud and waste generally, we are on the same side, although we started with different motives.

Lord Stoddart of Swindon: My Lords, I am very pleased to have that apology from the noble Lord because I certainly do not want to use the terms "waste" and "fraud" to make my arguments. But, in any event, how reliable are the figures that the Chancellor gives, bearing in mind the source from which they emanate? After all, it is the same Chancellor who commended the Maastricht Treaty to us all without having first read it and who had to revise—as we have already heard—this year's net contribution to the EC upwards by £740 million, from £1,700 million to £2,440 million, all in the space of eight months. I am afraid the attempts of the noble Baroness to explain that awful mistake did not go down very well with the House and certainly did not satisfy me.

The House of Commons has been informed that as a result of this Bill there will be an additional contribution of £250 million four years hence. Can we really place any reliability on these figures? Can we have the assurance this afternoon that that figure will not exceed £250 million by 1999? But whatever the figures turn out

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to be, there is great resentment on the part of the British people that they are taxed up to the hilt in order to subsidise people who are better off than they are in terms of GDP per head. The United Kingdom is the second highest net contributor to the EC budget, yet in terms of GDP per head—within the 12 that is, not the 16—we are eighth in the Euro-league table. No wonder British people are resentful when they see a British Government shovelling money into Spain where people danced in the streets at Britain's defeat over access to British fishing grounds, or when they see Eire being lavishly subsidised to the tune of no less than £519 per annum for every man, woman and child. They resent it even more when the French, who lecture Britain over not being sufficiently communautaire pay less to the European budget than Britain although their income per head is £2,250 a year more.

I sincerely hope that this is the last Bill of its kind that is presented to Parliament. The Government might yet go some way to redeeming themselves in the eyes of the country if they declared unequivocally that they will not agree to further increases in EC financing and indeed will make every effort—they can do so, as we have heard from the noble Lord, Lord Boyd-Carpenter, this afternoon, by reducing the £800 million on tobacco subsidies—to reduce the Euro-budget by reducing fraud, refusing to extend the scope of EC powers and activities, and repatriating (this should also apply to agriculture), many of the powers which have wilfully and wrongly been filched from the British people.

5.24 p.m.

Baroness Elles: My Lords, I should first like to congratulate my noble friend Lord Kingsland on his maiden speech. It is particularly appropriate that I should do so as we were colleagues for some years in the European Parliament. I can only say that it is a great loss to the European Parliament to have lost such a distinguished speaker on behalf of British interests. But at least the House of Lords will have gained a distinguished speaker. We are certainly very pleased to have him here and to hear his speech today.

The noble Lord, Lord Richard, rather implied that the Government side are merely paying a kind of tribute to the Prime Minister as regards how well he did at Edinburgh. I believe he deserves a tribute in that regard. It is high time that the British people realised what he did for Britain at that summit which perhaps did not receive the publicity that it should have done. I hope that the debates in both Houses will at least put on record what he achieved for Britain. Some people mock him for saying he is at the heart of Europe. However, he could not have achieved what he did achieve if he did not have the support of the other member states because the kind of agreement we are discussing depends on a unanimous vote. The Prime Minister received support for reducing the Commission's proposed figure of 1.37 per cent. of GNP by 1999 to 1.27 per cent. That is a considerable sum in terms of millions of pounds.

The noble Lord, Lord Stoddart, referred to GNP. We are eighth in the table of member states as regards GNP. The noble Lord should be pleased that the Prime

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Minister was able to negotiate a greater balance of "own resources" coming out of GNP than of VAT. As noble Lords will know, it is now proposed that the percentage of "own resources" coming out of VAT will go down to 1 per cent. over the next two or three years and the GNP percentage will rise. That is in Britain's interest. While I am referring to the speech of the noble Lord, Lord Stoddart, I should refer to the 1994 figures. Germany paid the most. France paid 13,442 billion ecu. We paid 8087 billion ecu. We paid less than France in 1994. I have the figures and I shall be happy to pass them to the noble Lord, Lord Stoddart, afterwards. If he disagrees with the figures, I am willing to discuss them with him. However, those are the figures that I have.

Lord Stoddart of Swindon: My Lords, of course I would like to see those figures. However, I was talking about net contributions, not gross contributions. I believe the noble Baroness may be talking about gross contributions. In net terms I think she will find that in 1994 we will pay some £1,400 million more than France.

Baroness Elles: My Lords, I agree with that particular figure but, as far as payments are concerned, the UK was third and not second after Germany. As regards the achievements of the Prime Minister, there has been some discussion as to whether they were really constitutional. No one can surpass my noble friend Lord Beloff as regards his stature as one of our great historians in this House. My noble friend went back to 1366 in his speech. I wish merely to go back to 1992 when the Prime Minister gave his word that we would honour our obligation in agreement with the 11 other member states. We did not need to write anything in Norman French. I believe it was probably written in perfectly good English, and translated into the other eight or nine Community languages. That agreement was made and the Prime Minister expected his party, and indeed his Government, to keep that word which was given on behalf of the United Kingdom Government. The Chancellor of the Exchequer gave a Written Answer in Hansard of another place on 14th December 1994. He stated:

    "The agreement reached at Edinburgh was a political commitment in which the United Kingdom Government gave our word to our EU partners. We expect our partners to keep their word; and they expect us to keep ours. If we were to break our word, the international reputation of the United Kingdom would be severely damaged. The own resources decision will constitute a treaty obligation when the Government notify adoption of it".—[Official Report, Commons, 14/12/94; col. WA 648.]

I believe that that to some extent answers the point that was made by my noble friend Lord Beloff. It is up to Parliament to decide whether or not we pass this Bill. I know that this House is in a special position because this Bill has been certified as a money Bill. However, in theory if not in fact, the House of Commons had a perfect right to throw the Bill out and not accept the agreement which the Prime Minister undertook on behalf of the United Kingdom at Edinburgh.

I do not believe my next point about spending has been mentioned. Many people are saying that there is a lot of extra money involved in this matter and they ask what it is being spent on. I think we sometimes forget

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what is going on in central and eastern Europe and the amount of expenditure that the Community is spending in those areas, with our own Government's agreement, and I believe with the agreement of the vast majority of United Kingdom citizens. We want to see political stability in central and eastern Europe and that cannot be achieved with no expenditure whatever. I believe that we must support that expenditure in order to achieve not only political stability but also to ensure that democracy survives in those areas where people have lived for so many years under oppression.

I believe that the debate has gone somewhat astray on the question of fraud. My noble friend Lord Cockfield rightly pointed out how the system works. No one knows better than he how it works, having also been a distinguished member of the Treasury in an earlier incarnation. I agree very much with the noble Lord, Lord Thomson of Monifieth, that it is difficult to find total honesty anywhere, whether it is in the Community, a member state or anywhere else. It depends on the opportunities for fraud which are available.

Perhaps I may quote a rather ancient example. I used to be interested in juvenile delinquency at one stage in my political life and I attended an international meeting at which distinguished members spoke of juvenile delinquency in their countries. In the west we were very concerned because delinquency was increasing considerably. That must have been in the 1960s. I remember the Russian delegate being very smug and saying that Russia had very little juvenile delinquency. Then we discovered that the only thing that children in Russia could steal were bicycles, and they had much less temptation than people living in western society and did not have the opportunities. There is no doubt that where there is opportunity people will take that opportunity, whatever their nationality.

I am sorry to say that in our own country we have only to remember that last year £654 million of fraud was detected in relation to social security benefits. That was confirmed in answer to a Written Question in Hansard for the other place recently. The latest Inland Revenue report for 1994 shows that £4.75 billion was restored through the compliance efforts of the Inland Revenue. That is a sizeable sum when compared with fraud elsewhere.

I should like to raise the question of control of Commission spending. As my noble friend Lord Cockfield pointed out, it is not the Commission itself which controls the money. There should be parliamentary scrutiny of how the money is spent. It is our own Parliament's fault if we do not analyse how expenditure is carried out.

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