Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Peston: Perhaps I may interrupt my noble friend. As he said, we are all trying to learn from this debate. Is he saying that the Chancellor of the Exchequer did not have a choice about levying VAT on domestic fuel? Is he also saying that when his right honourable friend, in the very near future, becomes Chancellor of the Exchequer, he will not have an opportunity to take such decisions? I find that very difficult to follow. Is he telling me that there is no choice?

Lord Bruce of Donington: His field of action was very limited. After all, the Chancellor of the Exchequer had to raise some £3 billion net out of the Consolidated Fund. Indeed, he had to impose a three-line Whip in order to secure the Government's agreement to that £3 billion and threaten resignation if it were not found. In searching around for money to enable him to honour the obligation to pay that £3 billion net to the Commission, he was circumscribed. In fact, he alighted, quite reasonably from his point of view, on the measure already taken by the previous Chancellor of the Exchequer, his right honourable friend the Member for Kingston-upon-Thames.

Lord Stoddart of Swindon: In answer to my noble friend on the Front Bench, I did not say in my speech that the Chancellor of the Exchequer had to levy 17½ per cent., or whatever, on fuel. I said that the threat was hanging over our heads. That threat is there all the time through the sixth directive, which was agreed by the British Government; and indeed, as I understand it, must be imposed or made effective by 1996. No doubt I shall

10 Jan 1995 : Column 132

be corrected if that is wrong. Nevertheless, that threat is there all the time. At one time or another the European Commission will say: "Come along, Britain, you are dragging your feet. There are all these things to which we have agreed to extend VAT. It is about time you implemented them".

The noble Lord, Lord Henley, referred again to unanimity being required before EC decisions are made. The problem is that British governments, British Ministers and Chancellors of the Exchequer, can go to Europe and make decisions without first obtaining the consent of Parliament. They can make decisions on expenditure and on taxation. As I said earlier, when it comes to the push and Parliament is asked to ratify what those Ministers have done, Parliament is told, "We made an international agreement and therefore you will let us down if you do not do what we say and ratify the agreement we have already made". That is the problem which we must address and which the Government will increasingly need to consider as the dissidents grow greater in influence and more in number.

With those words, I shall not press the amendment. I accede to the request of the noble Lord, Lord Henley, and beg leave to withdraw it.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

6.15 p.m.

Lord Beloff moved Amendment No. 4:

After Clause 1, insert the following new clause:
(" . Each year Her Majesty's Government shall make a report to Parliament which shall include—
(a) Her Majesty's Government's estimate of the amount of money from the Budget of the European Communities which is lost to fraud, irregularity and financial mismanagement in the previous year;
(b) details of Her Majesty's Government's efforts to combat fraud, irregularity and financial mismanagement both within the United Kingdom and in the institutions of the European Communities;
(c) details of the efforts of the European Commission and the European Parliament to combat fraud, irregularity and financial mismanagement;
(d) details of the efforts made by other Member States in combating fraud, irregularity and financial mismanagement.").

The noble Lord said: If this were a real Committee stage, I should be saying that the Government will accept the amendment because it merely puts into statutory form what they assure us is already their practice. Indeed, in the course of yesterday's debate, the Minister explained the very active role Her Majesty's Government are playing in the pursuit of fraud and mismanagement. However, as this is not a real Committee stage—as was pointed out, it is an occasion for discussion rather than legislation—I simply take the opportunity of asking the Chamber to turn for a little while to the subject of fraud and mismanagement, which was discussed at intervals yesterday.

I do not share the optimism of my noble friend Lord Boyd-Carpenter that by discussing these matters we contribute greatly to general enlightenment. I found no

10 Jan 1995 : Column 133

report of yesterday's proceedings in the press, in spite of the fact that they were graced by the contributions of no fewer than five former commissioners.

Lord Cockfield: In fact, there was a report in the Financial Times.

Lord Beloff: I do not have time to read the specialist press; I read only general newspapers and books. However much we think that we may have enlightened the elite readership of the Financial Times, that is unlikely to make a huge impact on the electorate. But it was informative for your Lordships, largely because of the contributions of the former commissioners, of whom no fewer than three are now in their places.

Lord Graham of Edmonton: Four!

Lord Beloff: I apologise, four. There was also the presence of the noble Lord, Lord Jenkins of Hillhead, who did not intervene in the debate. Perhaps he repents his earlier life in Brussels. At any rate, we received no guidance one way or the other from that brooding presence.

When we came to discuss fraud and the commissioners, what struck me was their eagerness to disclaim responsibility for what the Community actually does. In their sensitivity they felt that when anything was said about the Community then it must to some extent be a criticism of the Commission. It reminded me of other kinds of prima donnas and I was thinking that a possible collective word for former commissioners would be a "sensitivity" of commissioners.

In some respects, the former commissioners remind me also of a class of persons much in the public eye at the moment; namely, the Prison Service. When there is an escape, a riot or something of that kind, what do we hear from the Director of the Prison Service and his acolytes? They all say, "Oh, no, it was not me; it was those Ministers". That is what the commissioners tell us about fraud. Anything that is lacking is due to the failure of the Ministers. That may or may not be true. But it is an interesting fact upon which these commissioners, who come from different political parties, appear to agree.

The other main point, made particularly by my noble friend Lord Cockfield and generally accepted in the Chamber, was that the bulk of fraud takes place not in Brussels itself, but in the various member countries. He said that we must find a way of dealing with fraud and mismanagement in those member states, or many of them. My noble friend produced a possible solution which did great credit to his imagination, perhaps fertilised by constant reading of the Financial Times. Roughly, as I understood it—I believe I understood it—it was that if the expenditures undertaken under the Community umbrella were in part financed out of those countries' own taxation—that is to say, if it were not just our money being spent in Spain but Spanish money, also—then they would perhaps be keener on making sure that the money was properly spent.

That sounds plausible. It sounded so plausible that even my noble friend Lord Tebbit—who I regret cannot be with us today—was attracted by the proposition. But

10 Jan 1995 : Column 134

when one comes to think of it, it does not really work for one perfectly obvious reason. It was frequently said yesterday, and rightly, that the expenditure that countries make on their contributions to the European Community is relatively small compared with total public expenditure. By the same token, it is true also, though not quite to the same extent, that receipts from the Community are, in most countries, even those who are net recipients, a relatively small part of the general money available to their governments.

When we consider what is happening in the way of financial mismanagement and fraud, we obtain some guidance from the fact that other governments do not themselves already deal satisfactorily with what is going on in their own countries. The degree of fraud perpetrated in Spain by Ministers or persons close to Ministers was recently referred to by His Majesty the King of Spain as calling into question the ability of Spain to retain the democracy it recovered after the death of Franco. In France the number of Ministers under arrest or threatened with arrest is reaching the point where it may be cheaper to hold Cabinet meetings in gaol. When one comes to Italy it looks as though the impact made on the public mind by the revelations of fraud and corruption is such that, to put it in a nutshell, we are seeing the reversal of the Risorgimento. We are seeing the break up of the Italian Republic.

I do not go into minor delinquencies. If the Greeks wish to spend their own money on furnishing Mr. Papandreou with a new palace and three swimming pools, that is their decision. But if we are asked to be in partnership with a number of countries which, quite irrespective of what they do with the money we raise from our taxpayers, are not at the moment capable of dealing with the money they raise from their own taxpayers, does that not cast a very considerable doubt on this whole idea of progressing towards economic and monetary union, on which the twin ornaments of the economic profession and the Labour Front Bench seem so keen? There is only one way in which this could be approached even moderately reasonably, which would be to say, "Okay, we throw in the sponge. We will accept a single currency, which will be the deutschmark; we will accept the Bundesbank as Europe's rulers; and, by and large, we hope that we can accommodate ourselves to that kind of thing". But that is not desired by any country and perhaps least of all, as I think the noble Lord, Lord Dahrendorf, would agree, by Germany itself.

The noble Lord, Lord Dahrendorf, pointed out yesterday how the misgivings, the discontents, the dissents, or whatever one likes to call them, in this country with regard to the financial aspect of the way in which the Community is being run are increasingly paralleled in continental Europe. One has to face the fact that this is only one example—the example of an attitude towards fraud and financial mismanagement—of what divides countries and makes some societies very different from others. To try to unite them in some

10 Jan 1995 : Column 135

federal system, with a single currency and a single bank which go with it, would involve a federal system or even something rather more centralised than a federal system.

Next Section Back to Table of Contents Lords Hansard Home Page