Lord Triesman: My Lords, I am not certain that the governments will be held to account for the misdeeds of particular farmers in relation to agricultural subsidy. What I do know is that in areas where there is defrauding of the European Commission by any part of the community it carries penalties right across Europe—and we probably would be horrified if it did not.

Lord Bradshaw: My Lords, can the Minister confirm that the new rules cover road haulage as one of the polluters? Is he aware that in north Wales recently, the same Irish haulier has been stopped 10 times for disobeying the drivers' hours' regulations, and nothing has been done about it in the Irish Republic? Is it not time that these rules were made fair for everybody?

Lord Triesman: My Lords, I suspect that changes in the way hauliers operate may not be a matter for the Foreign Office. Having said that, I can tell noble Lords those areas where the Commission, with the agreement of member states, has accepted that there is a benefit from working together—counterfeiting the euro, non-cash means of payment fraud, money laundering, people trafficking, a tax against IT systems, private sector corruption and maritime pollution. I think all of us would probably agree that most of those kinds of crimes do not conceive of borders as being an impediment to committing them.

Lord Pearson of Rannoch: My Lords, we hear the noble Lord's assurances—

Lord Ackner: My Lords—

The Minister of State, Northern Ireland Office (Lord Rooker): My Lords, it is the turn of the Cross Benches.

Lord Ackner: My Lords, is the answer to the question simply "No"? The European Court of Justice has not issued a judgment agreeing that the European
 
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Commission has the power to require. All it has done is to issue a judgment which enables it to make a proposal, which is quite different.

Lord Triesman: My Lords, I thank the noble and learned Lord for his clarity. I was striving for it, but he has achieved it.

EU: UK Budget Rebate

2.58 pm

Lord Howell of Guildford asked Her Majesty's Government:

What are their current proposals for the future of the United Kingdom's European Union budgetary rebate.

Lord Triesman: My Lords, the Government, as EU presidency, issued their proposals for the next EU financial perspective (2007–2013) on 5 December 2005. We proposed an overall budget of 1.03 per cent GNI, a robust review of the budget during the next financial perspective, an increase in the UK contribution to meet the costs of enlargement, and we have offered two options which are under discussion, but no fundamental change to the abatement mechanism until there is a fundamental reform of the budget.

Lord Howell of Guildford: My Lords, I thank the Minister for that reply; I do not want to overtire him in his work. Why are the British Government negotiating at all, when the French have made it quite clear that they are not prepared to move an inch, or rather I should say a centimetre or perhaps even a millimetre on their side, so no negotiations will involve concessions by them? Secondly, why is government policy that is being pursued now actually alienating our friends in central and eastern Europe? Isn't it understood in the Foreign Office that those countries are our friends in the future European reform? What on earth has possessed the Foreign Office that it should allow such a policy to go forward, with such counterproductive results?

Lord Triesman: My Lords, I hope that I shall not appear too tired to your Lordships' House. First, if we had ceased negotiating on every occasion on which the French showed no sign of movement, I fear that the European project would have ground into the sands many years ago. In the run-up to major negotiations, noble Lords far more experienced than I will know, the French sometimes give a little way after a period of what may seem to be Herculean resistance. On the second set of issues, there will be significant movement of funds to the new countries and structural changes in the way that they can use those funds. The compromise proposals that have been put forward will not meet the objective of all of them—a 45 per cent increase in funds—because it is right to point out that the interests of the UK and EU taxpayers must also be put in the equation and weighed in the balance. Perhaps there is
 
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some disappointment there, but as the negotiation reaches its conclusion I do not think that it will be overwhelming.

Lord Tomlinson: My Lords, does my noble friend agree that any reading of the Fontainebleau agreement that gave rise to the United Kingdom rebate would show that the noble Baroness, Lady Thatcher, before getting the rebate, had to agree to a substantial increase in own resources? That had two consequences: one was that we substantially paid for our own rebate, and the second was that that increase in own resources fed the voracious appetite, especially of the French, for the common agricultural policy.

Lord Triesman: My Lords, there is some truth in that. We are now just reaching the position where we will be making a contribution that is broadly comparable with countries of the same size—such as France. It is certainly true that when we started the process, our contribution was twice the size of France's and Italy's. We are now seeing a convergence of the pattern. That is to our benefit.

Lord Stoddart of Swindon: My Lords, I have two questions. First, do the British Government agree with the comments made by the British ambassador to Poland about the obduracy of the French? Secondly, is my memory at fault when I suggest that our Prime Minster said that the rebate was non-negotiable unless there was a fundamental reform of the common agricultural policy? Why was that changed?

Lord Triesman: My Lords, to start with the second question, as I said earlier, the position has not changed. There will be no justification for a change in the rebate unless there is a fundamental change in a number of European structures, but most especially in the common agricultural policy. I regret that I shall have to study what the ambassador to Poland said to ensure that I have understood it properly and to see whether it is aligned with the Government's view. I know that ambassadors are always aligned, but I should probably just confirm the fact that he will be on this occasion, so I hope that the House will forgive me if I check the exact words before replying to the noble Lord.

Lord Newby: My Lords—

Lord Stoddart of Swindon: My Lords—

Lord Peyton of Yeovil: My Lords—

Lord Rooker: My Lords, it is the Liberal Democrats' turn.

Lord Newby: My Lords, does the Minister agree that it is particularly unfortunate that the Prime Minister has succeeded simultaneously in annoying our natural allies in eastern Europe and in raising completely false hopes about imposing CAP reform? Does he therefore agree that that raises the prospect, set out by the
 
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Commission president in a newspaper interview published today, that Britain runs the risk of being relegated to the periphery of EU decision-making and influence?

Lord Triesman: My Lords, I do not agree with the fundamental points made or the conclusion to which they give rise. Had we accepted the Luxembourg presidency's original budget proposal, it would have cost this country vast sums for which there was no justification. The Commission proposals were not much better. We are now talking about a relatively small change, but one that gives the accession countries a fair sum of money and a fair prospect of playing on the same level playing field. I conclude with this: if any Member of your Lordships' House believed that the decision on accession, the strategic decision to make former Communist regime countries into modern economies with decent standards of governance, would cost nothing, he was living in a deluded world.

Lord Peyton of Yeovil: My Lords, did I understand the noble Lord correctly to say that French obstinacy and selfishness were a regular blockage in the way of progress in almost any negotiation? If my understanding is correct, what are the noble Lord and the Government going to do about it?

Lord Triesman: My Lords, I think that that is the Agincourt question. I fear that some differences of view have persisted across the history of our two great countries. France will no doubt want to argue its corner as rigorously as it ever did. But I ask the House to accept that, despite those arguments, from Agincourt on, we have generally speaking managed in modern history to find an accommodation. Will the French argue to the last moment? I am sure that they will. Will we succeed on this occasion? I hope so, but as yet, we do not know.