European Communities (Amendment) Bill — Exchange of information between Court of Auditors and other bodies — 19 Jan 1998

I beg to move, That the clause be read a Second time.

This is an important new clause. I hope that I shall speak briefly enough to enable the Minister to accept it without question in the short time available to us before 8 o'clock.

Very simply, there is a pressing need to beef up co-operation between the European and the national auditors. As we know, 80 per cent. of European

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expenditure is administered by national Governments; that is where the bulk of fraud, maladministration and other irregularities are found.

The Court of Auditors is doing a very good job. It seems to me that it is showing up some of the inadequacies in the present system. In its most recent report, for the third year running the Court of Auditors was unable to give formal approval to the spending accounts.

Fraud costs the European Union about £3 billion a year--an amount equal to about 5.4 per cent. of its entire budget. Between 1988 and 1996, VAT fraud alone cost the EU about £750 million.

I believe that the audit systems that are in place in this country are extremely good. I used to be a member of the Audit Commission and I obviously had some interest in the way in which that body worked. If we can link the very good audit systems that we have in this country with that available to the Court of Auditors through Europe, we shall provide a very good example of a seamless system of audit, which will substantially reduce fraud. We can then be much more open in our selling of that process to other member states, in the hope that they will accede to similar arrangements and that we can substantially reduce the fraud bill and redirect the money saved back to member states or into European programmes that need support. Obviously, a standing link would be the most efficacious way to achieve that.

If the Government are serious about cracking down on fraud--as I believe they are--they should take the opportunity to accede to the suggestion in the new clause and to provide that standing link, as an example to other member states. I ask the Minister to support the new clause.

Question put and negatived.

Bill reported, without amendment, pursuant to the Order [17 December].

Order for Third Reading read.

may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation"?

Question put, That the Bill be now read the Third time:--

The House divided: Ayes 370, Noes 145.

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