European Communities (Amendment) Bill

Part of the debate – in the House of Lords at 6:00 pm on 20th November 2001.

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Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch Conservative 6:00 pm, 20th November 2001

I feel that this amendment is unlikely to reduce the vast sums. As I hope that I shall explain to your Lordships, this is likely to make for a weaker Court of Auditors. If we follow, for the record, the Euro-creep at work in this amendment to the TEC, we need to look at what was said before the Treaty of Nice and before the Treaty of Amsterdam. The original wording that we are now changing may go back to the Treaty of Rome. Article 247, as it became at Amsterdam, was previously Article 188b. It is illuminating to see how much more rigorous the court was supposed to be under the original treaty.

Article 188(b) simply said:

"The Court of Auditors shall consist of 15 members".

We then have the same qualification that they should be chosen,

"from among persons who belong . . . in their respective countries to external audit bodies or who are especially qualified for this office. Their independence must be beyond doubt".

That is not altered, although sometimes one wonders. The wording that we are changing with this treaty says:

"The Members of the Court of Auditors shall be appointed for a term of six years by the Council, acting unanimously after consulting the European Parliament".

That was the position.

I submit to your Lordships that the fact that it did not matter from where these auditors came but that they had to be approved by unanimity by the Council must be a point in their favour. On the other hand, we now move to an arrangement whereby there must be one national from each member state. I suppose the Treaty of Amsterdam masquerades as preparing the European Union for enlargement. The draftsman of this new clause had in mind one national from each of the new member states which, it is alleged, will one day join the European Union.

Paragraph 2 of Article 247 continues as it was before and as I have quoted, and paragraph 3 states:

"The Council, acting by a qualified majority . . . shall adopt the list of Members drawn up in accordance with the proposals made by each Member State".

I am sure your Lordships will be grateful for the elucidation that my noble friend Lord Howell has asked the Minister to give the Committee on exactly how that will work.

Before, it did not matter where the auditors came from, but they had to be approved by unanimity and, therefore, they had a stronger chance of being the best people for the job than if one of them had to come from each member state. They were appointed for six years only and now their appointment is renewable. In view of the fraud or irregularities, or whatever one wants to call it, I believe that this is a serious situation.

As we are talking about the Court of Auditors, perhaps I can ask the Minister whether he can tell the Committee what has happened in the wake of the mass resignation of the Santer Commission. I know that Mr Kinnock, a Commissioner, is in charge of cleaning up the place, but is there any evidence that the Court of Auditors' report has found great improvement as a result of Mr Kinnock's efforts? Is the £5 billion that is at stake any less than it was before?

I have a question for the Minister that I could have tabled as a separate amendment. Of course, I could do so at the next stage of the Bill. However, it appears to me—I do not know what the Minister will think of this—that instead of having one person from each member state of the European Union, many of which are recipients and many of which caused the problems referred to by the noble Lord, Lord Tomlinson, with the common agricultural policy and so on (I do not exclude the United Kingdom from that), would it be better if the Court of Auditors consisted of representatives of the donor countries? Would that not be much fairer? What would the Court of Auditors find if it consisted of some good, solid German, Danish and British accountants? Does the Minister believe there is any chance that it would find a figure as small as £5 billion missing every year? I doubt it.

As to the plea of the noble Lord, Lord Tomlinson, on the innocence of the whole system—that irregularities take place in member states—the well-known policy when dealing with fraud is to follow the money and, if necessary, to withhold the money. If such matters are taking place in member states, we simply should not give them the money in the first place. Can the Minister tell me whether I am being oversimplistic or unreasonable?