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EU: Budget

Volume 727: debated on Thursday 28 April 2011

Question

Asked By

To ask Her Majesty’s Government what proportion of the United Kingdom contribution to the European Union Budget has been signed off by the Court of Auditors over the last 16 years.

My Lords, the UK contributes to the EU budget as a whole, not to individual spending programmes. Therefore, data on UK contributions to the EU budget not signed off by the Court of Auditors are unavailable. However, the recurrent failure to achieve a positive audit opinion from the court on the EU’s accounts is unacceptable. The Government set out recommendations to improve EU financial management and transparency at ECOFIN in February this year.

I thank the noble Lord for his explanatory exposition of this aspect of the unacceptable, on which we have not spoken previously. I merely seek to establish a transparent, independent regime and to deal with the problem of inclusion in the budget of expenditure which has been signed off in the accounts by the Court of Auditors. Perhaps I may ask a short question. Is it not a relevant consideration in the ongoing negotiations to seek to establish an acceptable regime?

I am grateful to my noble friend for once again drawing attention to the unacceptable situation that we face with regard to the European audit. I think that he puts his finger on one of the key issues, which is that we need to work towards a much simpler and more transparent regime. If the rules around the various European expenditure programmes were made less complex, it would be much easier for member states to comply with those rules. It is very much on that practical aspect of the regime that my honourable friend the Economic Secretary is working with the Audit Commissioner, others in Brussels and member states to make sure that we move to a simpler, clearer and more auditable regime.

Is the noble Lord aware that, just before he retired, the former Comptroller and Auditor-General of the United Kingdom, Sir John Bourn, said that if he had to apply to the expenditure accounts of the United Kingdom the system for audit employed in the European Union, he would refuse to give a positive assurance on any of those accounts because the real problem with the statement of assurance in the European Union is the statistical basis on which that audit is conducted? Will the noble Lord undertake to look at that question and to see whether, if one ever wants to get a clean audit, it is appropriate to try to initiate a reform of the statistical base of the statement of assurance?

My Lords, I am happy to say that we are already on the case in this matter. At the ECOFIN in February, the UK issued a joint statement with the Netherlands and Sweden making various points about what we believed needed to be done by the European Commission and the auditors in coming years. That included, among other things, moving the European audit basis to a more risk-based approach, which I think precisely addresses the point that the noble Lord rightly brings up.

My Lords, did not my noble friend’s earlier answer, when he described how information was not available, give a bit of a clue as to one way in which we can make progress? Would it not be much more satisfactory if there were full details of any failure properly to account for national expenditures in the EU budget? In that way we would at least know who was not doing things properly, by how much and when, and that shaming could have some role in getting people to behave better.

Again, I completely agree. That is precisely why the other two of the three key points made in the joint statement at the February ECOFIN were about greater member state responsibility for items of expenditure and greater transparency. Therefore, I think that we have already identified the three key areas where improvement needs to be made and needs to be made quickly.

We of course wish the Minister and the Government well in their labours with regard to this issue but we do not underestimate the challenge of the task and are not anticipating early progress. However, there is one set of sums of money relating to Europe in which the nation is greatly interested and on which I am sure the Minister is well briefed and aware of what is involved, and that is the amount of money we are committed to on eurozone bailouts. Will the Minister enlighten the House with those figures?

My Lords, much as I would like to talk about European bailouts, we talk about them on other occasions and I think that we are straying a bit far from the audit issue on which other noble Lords may want to ask questions.

My Lords, I recall some 20 years ago the late Lord Bruce of Donington asking very much the same questions repeatedly. Can the Minister say why it is taking so long to resolve this problem?

My Lords, I think that the answer to that lies on the Benches opposite. If we want to get into history, the previous Government in 2005 gave away a substantial part of the UK’s abatement and signed on to a financial perspective that set a course of significantly increasing EU expenditure. If, instead, they had worried more about the management of the funds that were going out from Europe rather than merely signing on to an ever-increasing UK contribution to an expanding budget, we would not be in the position that we are in today.