Protection of the EU’s Financial Interests

Damian Green Excerpts

Monday 8th February 2016 General Committees

[The Chair]

Before we begin, I will outline the procedure. First, a member of the European Security Committee may make a five-minute statement about that Committee’s decision to refer the documents for debate. The Minister—or, in this case, the Ministers—will then make a statement of no more than 10 minutes, and questions will follow. The total time for the statement and subsequent questions and answers is up to an hour. Once the questions have ended, the Minister will move the motion and it will be debated. We must conclude our proceedings by 7 o’clock. Does a member of the European Scrutiny Committee wish to make an opening statement?

[Damian Green (Ashford) (Con)]

It is a pleasure to serve under your benign tutelage, Sir Edward. I will take a few minutes to explain the background to these documents and the reasons why the European Scrutiny Committee recommended this debate.

The first document is the Commission’s annual report for 2014 on protecting the EU’s financial interests, in which the Commission summarises and evaluates measures taken by it and member states to counter fraud and irregularities against EU expenditure and revenue in 2014. It is supplemented by six detailed annexes, including a statistical evaluation of irregularities reported in 2014, a follow-up to recommendations to member states in the 2013 report, and the methodology regarding the statistical evaluation of reported irregularities for 2014.

The European Court of Auditors must report each year on implementation of the EU’s annual general budget and the European development funds for development aid. The second document is the ECA’s 2014 reports on the general budget and the EDFs budget. The documents also contain the statements of assurance—commonly referred to as the DAS, from the French—concerning the reliability of the accounts and the legality and regularity of the underlying transactions that the ECA is required to produce.

Because the ECA’s annual audit reports have for many years revealed serious inadequacies in the implementation of the EU general budget, it has become customary each year for the latest report to be debated with the Commission’s annual anti-fraud report. Although the current ECA report affirms the reliability of the accounts for the 21st successive year, there is not a positive statement of assurance, so the European Scrutiny Committee had no hesitation in recommending that this document be debated. We suggested that Members might wish to focus on the Government’s efforts to improve EU financial management. They might also examine the ECA’s comments about the ineffectiveness of some of the UK’s management of EU funds, the Government’s response, and the reasons for the welcome that the Government gave to the qualified statement of assurance in the report of the European development fund audit.