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Lord Bruce of Donington: My Lords, I am very grateful to the noble Lord for giving way. He referred to the efforts that were made in establishing the Court of Auditors in which he and I both co-operated. Will he confirm that one of the forces with which we had to contend was the resistance of the Commission to any further powers being given to the Court of Auditors as distinct from the old Audit Board?

Lord Shaw of Northstead: Yes, my Lords, and it was important that that move took place. We had to have the flexibility of promising to alter it yet again if the Court of Auditors, which had only just been set up, came forward at a later date with criticism. I am sure that the noble Lord will remember just that.

Perhaps I may continue with this point. The time has more than come when the role of the Court of Auditors should change. At long last, thanks largely to the insistence of Her Majesty's Government at Maastricht, the power and authority of the Court of Auditors has been changed. The realisation of those increased powers has been the very encouragement that was needed for the Court of Auditors to produce the 1993 report. And what a devastating report it has turned out to be! Having got that, we now have to insist that the court pursues its new powers and makes sure that the shortcomings that it has clearly declared within that devastating report are acted upon, not only by the Commission but by the Council and, of course, by individual member states.

Having said that, I should like to add—and when one reads the 1993 report one will see the reason for my remarks—that I hope attention will be given to the financial regularity of the institutions themselves, which could very much do with a review in that respect.

The time is getting late. I support this Bill wholeheartedly. I respect the strong feelings that have surrounded it during its passage, yet the objectives that we all seek are so much the same that I believe that the Government's approach and record deserve the full support of us all. Let us not dig ourselves into different trenches. We are all determined to improve the financial regularity and value-for-money procedures of the European Union, but we shall only continue to give a lead in these matters if, from now on, we work together.

6.4 p.m.

Lord Tebbit: My Lords, much as I have enjoyed many of the speeches today that have gone slightly wide of this short Bill, I shall try to restrain myself as much as I can to addressing the Bill itself and the immediate matters around it rather than a number of wider issues. It is a great temptation to go much wider, but I shall do my best to resist.

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However, first, perhaps I might digress for just a moment—not directly about matters European but about a matter that is related to this Bill. I find sometimes that there is some difficulty in reconciling our experiences in different parts of our lives even within the same day. This morning I had the privilege, as the chairman of a charitable appeal, of cutting the ground at the Nuffield Orthopaedic Centre in Oxford for a new building. Thanks to the generosity of very many people and enormous hard work by fellow trustees, we raised £1 million for the new building, a new orthotic centre for the hospital which is much needed. It will cost something over £1 million. It will actually cost rather more than that because VAT will be charged when the charity hands over that building to the hospital: £175,000 or so will be paid in VAT. That is £175,000 which might be better spent on patient care. That £175,000, or at least part of it, will be re-routed as a consequence of this Bill to the tobacco farmers. I find it difficult to reconcile these two parts of my life. That is why, had I been in the Commons, I would have found it very difficult indeed to support the Bill.

My task has not been made too much easier today, I must sadly confess, by the arguments that were put forward by my noble friend Lady Chalker. I found it distressing that the argument should be made that this was some part of a package deal at Edinburgh in which we had preserved the budget abatement that had been won by, as she then was, Mrs. Thatcher. That is preserved for ever unless a British government choose to give it up. To talk of it now, as my noble friend did, as being safe until 1999 is only to encourage those among our partners who quite clearly, and from their own point of view reasonably, would like to get rid of that abatement.

Again, let us be absolutely clear: there is no possibility that that abatement could be ended except by an Act of this Kingdom. Nobody else can do it. It was not preserved at Edinburgh: it had always been preserved—and in my judgment always should be.

Even worse, I regret to say, I heard no argument for the increased spending which will be the result of this Bill. Normally, when a finance Bill is introduced in the Commons, a Chancellor makes the case that the revenues will be put to good effect and that the taxation which is imposed will be fair and equitable. It would be difficult to make the case that the taxation imposed upon the citizens of this kingdom is fair and equitable compared with the taxation which is imposed on others in respect of European expenditure and benefits. I did not hear any argument or any case made that the spending of moneys siphoned out of taxpayers' in this country, taken through Brussels and brought back to be spent here will provide any better value for money than if the spending had been conducted on a straightforward basis by the Government taxing here and spending here. What advantage comes from routeing the money in that manner, leaving aside the amount which on the way gets diverted to other, in my opinion, less worthy causes than for the benefit of the citizens of the United Kingdom?

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My noble friend Lord Shaw was slightly puzzled as to why this Bill had caused such ructions in the other place. One reason was that almost simultaneously, on 14th November, one read in the EP News, no less—the organ of the European Parliament—the headline "Budget controls inadequate". That was a bit of a red rag to a bull, if I may say so. I have found from experience that there is a golden rule for training children, dogs and institutions: good behaviour should be rewarded and bad behaviour punished. If budget controls are inadequate—give out some more money. If £6 billion are going in corruption, fraud, waste and mismanagement—make it up; give out another £6 billion. That conflicts with the golden rule.

My noble friend Lord Cockfield made a powerful case for it not being the Commission's fault. He made the Commission sound like Macavity—Old Possum's cat—who was never there when the crime was discovered. The Commission is a little like that. Surely we could not argue that it has responsibility only for spending and does not have any responsibility for making sure that spending is properly controlled, even if, as we know, the fraud mainly is committed by member states. That seems to be taking a bit far the case put by the Labour Party, not least the case against my right honourable friend Mr. William Waldegrave, and inverting it. Mr. Waldegrave has been accused of cruelty to animals by proxy because the calves which he sold into the market were subsequently badly treated on the Continent of Europe. To excuse the Commission from any blame when the money that it passes to member states goes in corruption and fraud seems to be taking matters rather too far.

Baroness Elles: My Lords, perhaps I may interrupt my noble friend. I wonder whether he is aware of the latest action of the European Parliament, on which I know he has certain views. It has put £400 million into reserve until the Commission implements certain policies: measures to combat fraud in the agricultural fund; measures to combat fraud in the ESF; measures to combat fraud in the regional policy. That is a decision taken by the European Parliament until the Commission shows that it will implement measures to combat fraud in certain areas.

Lord Tebbit: My Lords, my noble friend explains that the Parliament is trying to act as a longstop and holding on to the money, which should not go to the Commission until action has been taken. How much better if this Parliament, which is responsible to the British people for taxation, had simply sent the message, "No, you will not have that money until your practices have been improved".

But there is a more important reason why certainly some Conservative Members in the other place were in a truculent mood over this Bill. It is an argument that has been reiterated here today: the unusual constitutional dictum that if a Prime Minister undertakes an agreement with foreigners, it is absolutely binding upon Parliament; that is to say, it is a different kind of undertaking from an undertaking which may have been given by a Prime Minister to the voters of the country during the course of an election campaign. Apparently,

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by common consent among all administrations, that is not a binding promise; but a promise given to foreign statesmen at a conference is absolutely binding. The other place has no option but to go along with it, whatever the arguments against it.

My noble friend Lord Beloff, as ever more erudite than I, produced a fascinating extract from the proceedings of the House in 1366. In my uncultured way I had thought to put it rather differently. It is my understanding that the Prime Minister cannot conceivably be a principal in negotiations with other powers. He can only be an agent. The power to make agreements and the power to tax must surely reside in Parliament and not with the Government. Surely that was the whole point of the battles between the monarchy, the Executive and Parliament for hundreds of years. It seems that those battles may some day have to be fought again as we face the overweening arrogance of a new monarchy or a new Executive in Brussels.

I enjoyed most particularly today the excellent maiden speech of my noble friend Lord Kingsland. I had the feeling that it had not taken my noble friend too long since living back here in England to go native. I could not say that about either of the former commissioners on the Benches opposite who seem unable to go native again. Ever since they left Brussels and came back to live in this country they have remained staunchly commissioners. It is rare to hear from them any criticism of the Commission.

It is a pity, if I may say so to the noble Lord, Lord Thomson of Monifieth, that he reiterated part of a speech which he had made late one night during the proceedings on the Maastricht Bill. I understand that he may have forgotten that he made the speech because he made it very late at night. He certainly forgot my response to it. It was another of those occasions when he declared that all those who had harsh criticisms to make of the policies and the direction of the European Community today were dedicated to Britain leaving the Community. I corrected him then. I correct him again today. I hope that he will not make that speech again in some future debate because it is simply not accurate.

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