European Public Prosecutor’s Office (EUC Report)

Lord Pearson of Rannoch Excerpts

Thursday 19th March 2015 Lords Chamber

[Lord Pearson of Rannoch (UKIP)]

My Lords, I cannot resist speaking briefly in the gap, because I think this is the first time in 25 years that I am able to congratulate an EU Select Committee on one of its reports, and indeed the Government on their reply.

I also take the opportunity to apologise for scratching last Wednesday 11 March from our debate on the competences review, or balance of power between Brussels and our Government. A long-standing family engagement meant that I could not have stayed to the end—not that I would have asked the Minister, the noble Lord, Lord Wallace, any questions. I would just have explained why the whole exercise is pretty much a waste of time that will do little to curb the appetite of the corrupt octopus in Brussels.

I will, however, take this opportunity to say that I am disappointed that the Minister, the noble Lord, Lord Wallace, took the opportunity—at col.748—to criticise me and my views on the European Union in my absence. The richest bit of this criticism was perhaps that the noble Lord opined that Euroscepticism in this country is a belief, a faith, a prejudice. Yet it is surely our Europhiles who demonstrate a disease-like blind faith in the project of European integration, which is failing before our eyes, causing great misery across the continent, and which will continue to do so until it eventually collapses.

This report and the Government are rightly critical of the Commission’s stubbornness in continuing with its plans for a European public prosecutor. I therefore thought that it might be helpful if I put the powers of the unelected Commission on the record, perhaps for the first time, so that people can see what our powerless national Government are up against.

First, the Commission enjoys the monopoly to propose in secret all EU legislation, and thus a large proportion of our national law.

Secondly, its proposals go for still-secret discussion in COREPER—the Committee of Permanent Representatives, sometimes described as EU ambassadors—where the bureaucrats from the member states negotiate their national interest, the members of the Commission having sworn allegiance to the EU and not to support any partial national interest. I have never understood how our privy counsellors square their oath of allegiance to Her Majesty with that one. That is their problem, I suppose.

Thirdly, when the proposals emerge from COREPER as pretty much a done deal, they go for ratification to the Council of Ministers from the member states, in still largely clandestine discussion, and to the European Parliament, with its powers of co-decision.

Fourthly, our Parliament can scrutinise the emerging legislation but cannot change it. Indeed, it has never done so, as we see with this proposed public prosecutor.

Fifthly, the Commission then becomes the sole enforcer of all EU law and can impose massive fines for transgression, subject only to the Europhile Luxembourg court.

Sixthly, the Commission manages the EU budget so badly that the EU’s accounts have not been signed off by its internal auditors—there being no external auditor— for the last 19 years. If a public company was in a similar position, its directors would have been in jail many years ago.

Seventhly, the Commission negotiates all our foreign trade arrangements, again badly. Singapore has had free trade agreements with India, China, Japan and the United States for 10 years, but we have none because the Commission is in charge on behalf of all the member states.

I cannot help feeling that if the British people understood the full extent of the unelected Commission’s powers, which I have set out above, and how powerless their Parliament has become in this and other matters, their dislike of our EU membership would increase even further.

I have only one question for the Minister: what happens if the Commission decides to plough on with this proposal?

--- Later in debate ---

[Lord Bates]

That very clearly makes the point that we are talking about, and perhaps explains why it has been impossible to find a way forward so far. I would also mention some of the challenges, which may be insurmountable, in trying to progress down this model. The Government are absolutely committed carefully to watching the negotiations and ensuring that our interests are defended.

The noble and learned Lord also asked about shared competence. Ideally member states would retain competence. It is the only way in which they could contain the elements of the Commission’s proposal that they favour. An independent prosecutor would investigate cases inside member states free of bribery and corruption. We believe that that would be the only way in which the EPPO would add any value to the fight against EU fraud. The UK would prefer the EPPO to have as little competence as possible.

In response to a number of questions raised particularly by the noble Baroness, Lady Corston, in her introduction, it is worth putting on the record and restating the fact that the UK Government are absolutely committed to the fight against fraud. We certainly cannot envisage any circumstances in which it would be tolerated that the UK could become a safe haven for fraud. We are expressing confidence in our own legal systems and existing cross-border co-operation to ensure that that does not become the case.

[Lord Pearson of Rannoch]

While he is on that subject, can the Minister give noble Lords any estimate of the annual amount of EU fraud across the European Union? Do we have a modern figure for that?

[Lord Bates]

A figure has been mentioned. I am trying to put my hand on it. I wonder whether the noble Lord would accept the Commission’s estimate of the level of fraud. Those of us who are participating in this debate are still trying to recover and see whether we are on the right track when praised by the noble Lord, Lord Pearson, on European matters. It slightly shook our confidence, but we are recovering from that, and I think we are all on the same page here.

The Commission’s estimate of the level of fraud in July 2013 in the impact assessment put EU fraud at not detectable, and therefore unknown, at around £2.55 billion a year. I am reading out this figure and am aware that it is slightly contradictory to say, “not detectable, and therefore unknown”, when the estimate is around £2.55 billion a year. But that is the Commission’s estimate.

--- Later in debate ---

[Lord Bates]

I could not have put that better myself.

[Lord Pearson of Rannoch]

I am not quite sure whether the Minister was attempting to answer the question that I put to him, but just to be sure I will repeat it. What happens if the Commission decides to plough on with this proposal? Are we capable of stopping it or must we just live with the muddle, the increase in fraud and the damage that will ensue, thanks to the Commission’s activities?

[Lord Bates]

If the Commission continues down that line, there will have to be treaty changes. Negotiations will have to take place on the implications for non-member states and third-party countries as well as for member states. However, the proposal is in such flux at the moment that trying to judge what it is is nigh on impossible at present, let alone what a future Government’s position would be in responding to it. The fact is that we would have a position, there would be a negotiation and there would have to be agreement as to how it would operate in this country. The report, which has been presented so ably today, has highlighted the many complex issues that will need to be addressed by a future Government.