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House of Lords

Tuesday, 21st October 2003.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Sheffield.

European Union Legislation

Lord Willoughby de Broke asked Her Majesty's Government:

    Whether the European Commission remains the appropriate body to initiate European Union legislation.

The Lord President of the Council (Baroness Amos): My Lords, in areas provided for under the existing treaties, the Commission initiates legislation which is then considered by member states through the Council of Ministers. Bodies other than the Commission, including the member states, the European Parliament and the European Court of Justice, may also initiate legislation in certain areas that are provided for in the treaties.

The Government believe that the Commission plays an essential role in implementing the EU's agenda and supports its right of initiative as provided for in the treaties.

Lord Willoughby de Broke: My Lords, while I am grateful for the reply given by the noble Baroness, does she recall that four years ago I asked a Question of the noble Baroness, Lady Symons of Vernham Dean, on this subject? Her Answer was:

    "We believe that the Commission should be guided by efficiency, transparency and accountability".—[Official Report, 20/4/1999; cols. 1017–1018.]

Is this not a triumph of optimism over reality, given that the Commission is mired, yet again, in fraud and corruption? Mr Kinnock, who was charged with cleaning out the Augean stables, seems to be part of the problem and not part of the solution. He is dealing with the responsibilities in a manner that is almost Hoon-like. Will the Government act to ensure that in future our interests will not be dealt with by a body that is so lacking in credibility?

Baroness Amos: My Lords, I first say to the noble Lord that I do not recall the debate of four years ago, but I entirely accept the quotation from my noble friend Lady Symons. On the issues of efficiency, transparency and accountability, we continue to believe that it is important that the Commission demonstrates both things. We fully support the comprehensive reports the Commission is now preparing, and we think that Neil Kinnock is doing an extremely good job. Reform is crucial to modernise the Commission and to improve the way it uses taxpayers' money.

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Your Lordships may wish to know that in January of this year Neil Kinnock's review of progress on a wide-ranging human resources package showed that 87 out of 98 reform actions have already been implemented and that the remaining 11 reforms are being fine-tuned before being put into play. Noble Lords will know that we have been leading that reform effort.

Lord Tomlinson: My Lords, does my noble friend agree with my suggestion that it is almost as ludicrous to condemn the European Union because of some illustrations of fraud as it would be to condemn free enterprise on the basis of Enron?

Baroness Amos: My Lords, my noble friend is quite right: there have been irregularities in the Commission. The recent case happened in the 1990s. The current Commission has been robust in tackling this issue. An NAO report pointed to the Commission's progress in tackling fraud and in putting into place the tools which make that effective. It is important to remember that.

Lord Tebbit: My Lords, perhaps I may remind the noble Lord, Lord Tomlinson, that the directors of Enron are being prosecuted. Is that not a very good idea? Might we move towards prosecuting some members of the Commission who are still mired in corruption and fraud, despite all the excuses that the noble Baroness offered for them?

Baroness Amos: My Lords, it is important that we recognise that serious allegations will be taken through a legal process. Currently, there is an ongoing investigation. There have been three interim reports. The President of the Commission has addressed the European Parliament on this issue. It is being tackled.

Lord Marsh: My Lords, can the noble Baroness assure the House that the accounts, which have been unsigned by the auditors for the past several years, are now being signed?

Baroness Amos: My Lords, I understand that the Commission is putting a new financial regulation in place. The NAO noted its timetable of 1st January 2005 for introducing that. Regarding the signing-off of the accounts, my understanding is not the same as that of the noble Lord. I shall check on the point and write to him.

Lord Wallace of Saltaire: My Lords, perhaps I may first say how remarkably well the Leader of the House is looking, considering that she went to bed at 5 o'clock this morning and presumably had a rather short night's sleep. Will she accept the advice that many of us would like to give her that politicians should not work too hard and should make sure they get a decent night's sleep?

I support the noble Baroness on the reform of the Commission. The European Parliament and OLAF are investigating the current status. We assure the Government that these Benches actively support their pursuance of the agenda of Commission reform. Some progress has been made but there is a good deal further

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to go. Can we ask Her Majesty's Government to make sure that, with the selection of the new Commission next year, the question of continuing this reform agenda is one priority which the Government wish to pursue?

Baroness Amos: My Lords, I first thank the noble Lord, Lord Wallace of Saltaire. A number of noble Lords were still here in this House at 5 a.m. this morning, and I find that we are all looking remarkably fit.

On the noble Lord's other point, the investigation is ongoing. I entirely agree with him that we need to give support to those investigations and to the reform process. We shall continue to do that.

Lord Howell of Guildford: My Lords, is not the difficulty that all this ongoing investigation has been ongoing for years? In order to create a stronger enlarged Union—not to undermine it; that is absurd—we must depend upon the Commission being corruption-free and honest. Is not the difficulty that the Court of Auditors has now said that the book-keeping of the Commission is eccentric; that it fails to meet accepted accountancy standards; and that the matter is not amenable to further ongoing negotiations, but to instant action now if we want a strong Commission and a successful European Union?

Baroness Amos: First, my Lords, the European Court of Auditors bases its statement of assurance on a small sample of transactions audited in each of the main budget sectors. Errors were found in the payments sampled in other budget sectors, but commitments and revenues received a positive statement of assurance and the ECA found the Commission's accounts to be reliable, as it has done every year.

I also remind the noble Lord, Lord Howell, that during the past 12 months a new director-general has been appointed; a new financial regulation will be in place as of 1st January 2004; annual activity reports have been introduced; and the Commission has set out detailed plans completely to recast the accounting framework. I agree that much needs to be done, but a great deal has already been done.

House of Lords: Appointment of Peers

2.44 p.m.

Lord Barnett asked Her Majesty's Government:

    Whether, in accordance with the Lord Chancellor's Statement on constitutional reform on 18th September, an invitation has now been made to the non-statutory Appointments Commission to make recommendations for new non-party Peers; and, if so, what number, if any, was suggested.

Baroness Amos: My Lords, the Prime Minister has invited the interim Appointments Commission to recommend a small number of non-party political Peers.

Lord Barnett: My Lords, it was a strange statement by the Lord Chancellor at the time to suggest that

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some more Cross-Bench, independent Peers should be appointed. Does my noble friend accept that at the recent count we already have 179 Cross-Bench and independent Peers, plus another seven "Others", as they are called? Some of them are excellent; some of them even sit here on my Bench.

However—as I always want to try to help the Government—would it not be more sensible and helpful to getting business through the House if the Government considered announcing now that those hereditary Peers who are proposed to be removed were—all who wished—offered life peerages in advance, so that we could proceed with our normal business?

Baroness Amos: My Lords, I thank my noble friend for his spirit of helpfulness. As he knows, there is a commitment in our published proposals to the retention of a strong independent element in this House. I can only echo the words of my noble and learned friend the Lord Chancellor, when he commented on the hereditary Peers:

    "I hope that we shall continue to benefit from the contribution of at least some of them, should they be nominated as life Peers in the future".—[Official Report, 18/09/03; col. 1058.]

That remains the position.

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