Steve Baker MP: We must robustly and resolutely condemn fraud and error in the EU budget

Steve Baker is MP for Wycombe.

Today in the House of Commons, MPs will be asked to spend 90 minutes debating and delivering a verdict on the following Government motion (emphasis mine):

That this House takes note of the Unnumbered Explanatory Memorandum dated 25 November 2010 submitted by HM Treasury on the implementation of the 2009 EU budget, the Unnumbered Explanatory Memorandum dated 24 November 2010 submitted by the Department for International Development on the activities funded by the Eighth, Ninth and Tenth European Development Funds in the financial year 2009, European Union Document No. 12393/10 and Addenda 1 and 2 on Protection of the European Union’s financial interests, European Union Document No. 13075/10 and Addendum, relating to an Annual report to the discharge authority on internal audits carried out in 2009, the Unnumbered Explanatory Memorandum dated 22 October 2010 submitted by HM Treasury on the European Anti-Fraud Office’s tenth activity report for the period 1 January to 31 December 2009, and European Union Document No. 16662/10 and Addenda 1 and 2, Commission Report to the European Parliament and the Council on the follow-up to 2008 Discharge; and supports the Government’s continued engagement with its EU partners to improve financial management of the EU Budget.

Not exactly a full-throated expression of principle, is it? You would barely know that one of the main topics of consideration is an EU report highlighting, yet again, that EU spending is riddled with fraud and error.

EU spending, of course, that is financed in no small part by the hard-pressed British taxpayer.

The report in question is from the EU’s Court of Auditors and deals with the 2009 EU Budget specifically – a Budget that the UK poured £11.8 billion into. The areas of spending that the Court was able to give a ‘clean’ opinion, when looking at whether the spending was according to the applicable rules and was correctly calculated, represented only 8.3% of EU spending that year. The remainder was, in accountant-speak, “materially affected by error”.

In other words, 91.7% of this public money was given out inappropriately.

Unsurprisingly given this breakdown, the Court was unable to give EU spending overall in 2009 a clean bill of health. The auditors believed it was most likely that between 2% and 5% of this spending should not have taken place, according to the EU’s own rules. That is between £2 billion and £5.1 billion that simply leached out of the already grossly wasteful EU spending machine.

Of course, we have been here before, many, many times: this was the 16^th annual ‘statement of assurance’ from the Court of Auditors on the EU Budget, and the 16^th time the Court has been unable to give EU expenditure a clean opinion.

This has become a grim, yearly ritual. I do not think MPs should any longer make do with just nodding through these motions.

With our constituents facing the impacts of the Government’s essential deficit reduction plan, now more than ever, the scandal of EU financial recklessness must be tackled. The motion the Government has put to the House simply does not do this matter justice.

I accept that noting a long list of EU documents may be necessary to fulfil the requirements of the House’s system for scrutiny. What concerns me is the final part of the motion, which will be the House’s opinion on this issue. Supporting the Government’s “continued engagement with its EU partners to improve financial management of the EU Budget” falls somewhat short.

We need to end this large-scale mismanagement of our constituents’ money, and we need to end it quickly.

But what can the House usefully do via a mere resolution? I do not think it is empty for us to express clear condemnation of this latest showcase of fraud and incompetence. We are here to represent the British people and I don’t think we need to organise special public meetings to find out that our constituents take a very dim view of EU budgets – resourced from their pockets – failing their audits year after year after year.

The House should adopt a clear statement that it will not accept high levels of EU misspending. Taxation in this country remains the prerogative of the House of Commons, and so does payment to the European Union. Such a statement would not be without resonance in Brussels; while they may usually treat Westminster as, at most, a mild irritant, the Eurocrats know deep down how dependent they are on UK money.

Only a robust and resolute approach will jolt them from their complacency.

Even now, in one of the other EU documents before the House, the European Commission’s astonishing target for improvement is merely to increase the proportion of the EU Budget that receives a clean opinion by 20% by 2014. But then, why should they be ambitious if the money keeps on coming anyway? It is up to us to secure the improvements needed.

I know that Justine Greening, the Minister responsible, and the Government are committed to delivering the change we need in this area. The sort of resolution of the House I am describing would strengthen ministers’ hands as they negotiate the changes in EU expenditure, rules and practices that would bring this abysmal situation to an end.

The EU would be put on notice that the days of easy British money were drawing to a close.

It would be a great improvement if the Government came forward with a more specific plan of action to achieve a clean audit opinion of EU spending in the not-too-distant future, which the House could explicitly endorse. We had years of platitudes under the last Government and our constituents are looking to us to get results. On behalf of the British people, the House has every right to oversee and be part of this endeavour. Its backing would lend great weight to the Government’s position in the EU.

However, even if it ticked all the auditors’ boxes, the EU Budget as it currently stands would remain a reprehensible beast. We have the bloated, destructive Common Agricultural Policy and the charade of wealthy Member States paying in, only to receive billions back in development funds with endless EU strings attached. We seem to have accepted the principle of central planning and redistribution at EU level. Many questions about EU spending will fall to be determined in the upcoming negotiations on the new EU Financial Framework, for the years following 2013. Such questions should be debated and, where relevant, decided in the House of Commons.

It is, after all, our constituents’ money.