Court of Auditors 2009 Report

Lord Dodds of Duncairn Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

Thank you, Mr Deputy Speaker. I just hope that my maths is better than that of the European Commission, so that I know how long to speak for. There is one thing that everybody seems to know about Europe, which is that the European Commission’s accounts are not being signed off—this is the 16th year running that that has happened. What most people do not know and what never gets reported is that after the Court of Auditors gives its opinion, a very long process starts, which lasts at least nine months and gives MEPs and the Council of Ministers the power to look into every euro and cent that the Commission has spent in the previous year.

The plain fact is that the Court has no power over the European budget. I shall say that again: the headlines we read every year about accounts not being signed off refer to an institution that has no power over the institution it is checking. The European Parliament and Council, by contrast, have genuine power. If either of them refused to grant discharge—to sign off the accounts—or even if they questioned strongly the measures that the Commission had taken, the Commission would, although not compelled to resign, be under considerable pressure to sort out the problems within its accounts and accounting systems once and for all. There is a ton of jargon around the budget discharge process, but the process itself deserves a lot more scrutiny from the press, public and parliamentarians alike.

The Court of Auditors seems almost embarrassed about its refusal to sign off the Commission’s accounts and give that positive statement. It is amazingly difficult to find that information in the Court’s own report. As soon as the Court publishes its report, a debate is held in the plenary session of the European Parliament, the Committee on Budgetary Control considers the report, various questions are asked and eventually the European Parliament and the Council of Ministers decide whether to refuse or grant discharge.

The European Parliament has never decided not to grant discharge, so for the past 16 years the Court has refused to sign off the accounts and the Council and the European Parliament have refused to take the Court’s advice. They have just said, “Carry on chaps; it’s all going pretty well.” Let me give a political example. Back in April 2008, when I was still a Member of the European Parliament, Labour MEPs voted, as usual, as they always have, to let that farce carry on, whereas Conservatives MEPs voted against it. We numbered over half the entire opposition in the European Parliament and the discharge was given by 582 votes to 49.

Concurrently, there is also a debate in the European Council among member state Finance Ministers, and the results of that discussion are reported back to the European Parliament, which is why lucky people such as me know about them. That debate rarely lasts longer than a few hours and very few countries seem to care. Rarely does anyone question why money cannot be accounted for correctly, and the purpose of that meeting is pretty much to rubber stamp the accounts. To give credit to the Dutch Government, a few years ago they decided to take a stand against the waste of their citizens’ hard-earned cash and they have been finding a few friends more recently. However, I am very wary that what the Minister has said is very similar to what her Labour predecessors have said. This year, the discussion and the vote take place on 15 February.

Alas, the same cannot be said of the British Government as of the Dutch Government. In all the time that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) was the Chancellor of the Exchequer, neither he nor his Department ever raised any questions about the state of the Commission’s accounts in those meetings. He nodded through the accounts like everyone else. The amount of money that is estimated to go missing each year is between £3 billion and £8 billion, which roughly corresponds to the UK’s net contribution to the EU every year.

[Mr Nigel Dodds (Belfast North) (DUP)]

If these vast sums of irregular, fraudulent or wasteful expenditure were being talked about in relation to the UK, the Chamber would be packed with people on both sides who would be outraged. Would the hon. Gentleman care to speculate on why more Members on both sides of the House are not more concerned about this ongoing waste, fraud and irregularity? Why does he think that the accounts are just passed on the nod?

[Chris Heaton-Harris]

I shall come back to that in a moment, but I think it is because the money is spent so far away in such a disjointed fashion. It goes up through a system: it goes through our taxes, goes to the European Commission and is spent by third parties. It is all very confused and distant and I think that people are just bored by the fact that the accounts are not being signed off. It is a huge shame.

The Court of Auditors bowed to political pressure a long time ago and no longer gives a figure on the percentage of money it thinks is being spent incorrectly or wastefully, so for years now we have not had any solid figures with which to work. As a former Dutch member of the Court of Auditors, who retired recently, said:

“There was a practice of watering down if not completely removing criticism...All these abuses never came out in the open because of the Kremlin-style information we provided. But it didn’t enhance our reputation one bit...I had to threaten to resign as head of the investigation and to inform the outside world”

to get some of this information out. We have some real problems.

The accounts are pretty poor. People compare the problems with those accounts with the problems that the Department for Work and Pensions has with its accounts, but EU accounts involve perhaps between 2% and 5% going missing each year through fraud and irregularities, if not a lot more, while the Department for Work and Pensions qualifies about 1% and deals with millions upon millions of transactions. The European Commission simply does not.

What is our money being spent on? We would all be excited to know. Last year, Open Europe brought a number of things to the public’s attention: €411,000 for a dog fitness and rehabilitation centre that was never built, €16,000 to Tyrolean farmers to boost their connection with the landscape and €7.5 million of EU funding for a PR campaign for more EU funding for a region of Spain.

In a time of tight budgetary constraint, the Government should make it a proper priority to use our financial clout to sort out the problem once and for all. I believe that we should threaten to withhold even a small part of our contribution until we see some action that protects UK taxpayers’ hard-earned cash.