CAP Fraud

Oral Answers to Questions — Agriculture, Fisheries and Food – in the House of Commons at 12:00 am on 6th July 1995.

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Photo of Mr George Stevenson Mr George Stevenson , Stoke-on-Trent South 12:00 am, 6th July 1995

To ask the Minister of Agriculture, Fisheries and Food what was the cost of reported common agricultural policy fraud in the EU in 1994. [31169]

Photo of Stephen Timms Stephen Timms , Newham North East

To ask the Minister of Agriculture, Fisheries and Food how many cases of common agricultural policy fraud were identified in the United Kingdom in 1994. [31170]

Photo of Douglas Hogg Douglas Hogg Secretary of State for Agriculture, Fisheries and Food

In 1994, there were 1,610 cases, valued at £313 million, of CAP irregularities, which include fraud, reported across the Community; 228 of these were United Kingdom cases with a value of £9 million.

Photo of Mr George Stevenson Mr George Stevenson , Stoke-on-Trent South

Does that answer not confirm that fraud is endemic in the CAP and increasing? Is the Minister aware that, despite Government protestations, the cost of reported fraud in the CAP for the first nine months of 1994 was £110 million more than for the whole of 1993? What specific proposals has the Minister to address this international scandal and will he at least ensure that CAP fraud gets on to the agenda of the 1996 intergovernmental conference?

Photo of Douglas Hogg Douglas Hogg Secretary of State for Agriculture, Fisheries and Food

I do not think, by the nature of things, that we can ever say how high the level of fraud is, but I accept that it is an important issue and needs to be tackled. The Government have been doing just that. The hon. Gentleman will know well the steps that we persuaded the Commission to take as a result of the Essen Council. The hon. Gentleman will know too that the policies that move support away from refunds on intervention and exports reduce the opportunities for fraud.

The hon. Gentleman will also know the importance of pursuing a disallowance policy for Governments who do not have sufficiently tight enforcement regimes in place. All these things are part of this Government's policy and we have secured great agreement within the European Union on their implementation.

Photo of Stephen Timms Stephen Timms , Newham North East

I welcome the right hon. and learned Gentleman to his new post. Given the alarming scale of CAP fraud, is it not remarkable that the Government do not use the full allocation made available to them through the CAP for tackling fraud? Is the Minister aware that the proportion of the available allocation that has been used by the Government fell from 81 per cent. in 1993 to 74 per cent. in 1994? Can the new Minister assure the House that he will give a high priority to tackling fraud and that he will ensure that the resources available are used to good effect?

Photo of Douglas Hogg Douglas Hogg Secretary of State for Agriculture, Fisheries and Food

I thank the hon. Gentleman for his kind remarks. Yes, tackling fraud is important and I will certainly see how, within the Department, we can do that effectively. However, I am sure that the hon. Gentleman would wish to be fair to the British farming community by stressing that in all probability, the level of fraud within Britain is very much lower than the level of fraud elsewhere in the European Union.

Photo of Mrs Elaine Kellett Mrs Elaine Kellett , Lancaster

I congratulate my right hon. and learned Friend on his promotion. May I point out that what causes concern is not the level of reported fraud, but the level of unreported fraud? I welcome the emphasis that my right hon. and learned Friend put on the fact that the nation states in which most of the fraud occurs should be penalised. I also welcome his emphasis on getting rid of the policies that lead to fraud, such as export refunds.

Photo of Douglas Hogg Douglas Hogg Secretary of State for Agriculture, Fisheries and Food

It is always a pleasure to be congratulated by my hon. Friend. I am rather relieved that I am out of the reach of her handbag at this moment. My hon. Friend is correct and she has identified a number of the real points that we need to address. I can tell her that we will address them.

Photo of Edward Garnier Edward Garnier , Harborough

Will my right hon. and learned Friend ensure not only that fraud is combated in this country, but that he will use his own offices and those of the European Union in Europe to ensure that national Governments enforce fraud observation in the other countries of the European Union?

Photo of Douglas Hogg Douglas Hogg Secretary of State for Agriculture, Fisheries and Food

Absolutely. Beneath my hon. and learned Friend's question is the important point that although we have a problem of fraud in the United Kingdom, it is—I would wager almost anything on this—infinitesimal in comparison with fraud elsewhere in the European Union. That is why we have to work with the Governments of the other countries within the Union and in the Commission; and we will.

Photo of Gavin Strang Gavin Strang , Edinburgh East

The right hon. and learned Gentleman uses the word "infinitesimal". Is he aware that one of his predecessor's last acts was, in a written answer to me yesterday, to confirm that there have been serious irregularities involving the substitution and theft of beef going into United Kingdom intervention stores? Will he publicise all the information that his Ministry has on that? Will he tell us whether the United Kingdom taxpayer will have to pay a fine to Brussels and what sort of fine it might be? Does he accept that fraud is inherent in the market support mechanisms of the CAP? If we want to stop it, we need to end intervention buying and the subsidy of agricultural exports.

Photo of Douglas Hogg Douglas Hogg Secretary of State for Agriculture, Fisheries and Food

As to the latter point, the hon. Gentleman is simply reinforcing a point that I made in reply to the hon. Member for Stoke-on-Trent, South (Mr. Stevenson). As to the level of fraud in this country compared with the level of fraud elsewhere, the hon. Gentleman will know that throughout the European Union in 1994, there were 1,610 irregularities—I gave the figure earlier—which were worth £313.2 million. In the United Kingdom in the same period, there were 228 irregularities worth £8.5 million. That is why I said that it was a very small part of the whole.