In a speech in the House of Commons on 2nd February, Bill Cash ,MP for Stone, made the following intervention, after the Court of Auditors failed to pass the European Commission’s accounts for the 16th year running

Mr William Cash (Stone) (Con): I do not need to speak for very long on this matter, for the simple reason that I have been making the same speech about different auditors’ reports for the last 26 years. I am afraid that nothing much has changed. The Economic Secretary is a very dedicated Minister and I have great enthusiasm for what she seeks to achieve. She puts the best possible face on the situation, but unfortunately nothing changes: plus ça change.

The reality is that the British taxpayer is, as the Minister has rightly admitted, under severe duress.We are having to cut back and implement austerity measures, but at the same time this report – which, for the 16th consecutive year, has not been signed off – demonstrates that there are serious errors and mistakes in the system. Those errors consist not merely in the manner in which the accounts have been presented, or in the fact that irregularities and fraud have been identified, but in the very system that has been created. Because of the nature of the problem and its range – and the fact that the documents relating to this debate run to 1,035 pages – it is impossible in 90 minutes to do more than give a general survey of where the whole problem lies.

I mentioned Bulgaria and Romania. The European Scrutiny Committee said that it was inappropriate for them to be brought into the accession procedure when they were, for all the reasons that we identified, which included the fraud that exists in those two countries. I am glad that the Economic Secretary has had a meeting with the Minister responsible for audit in Bulgaria, but I have to say that I do not think that the culture in that country will change very much because of a meeting. The cohesion funds – from the figures that I have already given – are clearly exploited and seriously misused. They represent a significant proportion of the problem. We have a serious problem that is deeply entrenched in the system.

As the Minister knows well, I proposed that we should not only reject the proposals put before us in a debate some months ago, but reject the increase in the budget, and I am glad that the House agreed to do just that. But that is only one side of the equation. The other is the vast sum of money being allocated for the purpose of running this failing European Union. I do not ask the Minister to agree with me on that point, because it would be politically incorrect to do so, but the reality is that it is a failing system. However, I do not need to rehearse the arguments that I have already given for why that is.

One of the elements at the heart of that is the responsibilities of what is called OLAF, the European Anti-Fraud Office. I would like to refer to OLAF’s mission statement, which is on page 729 of this mammoth bundle of motion documents. I can barely hold it up, actually – but fortunately, my wrists are quite strong. The mission statement says: “The mission of the European Anti-Fraud Office…is to protect the financial interests of the European Union, to fight fraud, corruption and any other irregular activity”.

Hon. Members should note the last words, especially when people talk about actual proven fraud. And by the way, with regard to the cohesion funds, the documents that the European Scrutiny Committee has examined note that the survey in question is only a sample survey – that is something that always fills me with considerable reservations – not a full audit of the kind that one might have expected from the National Audit Office. Indeed, I would go further and say that if we made it Government policy to insist that no standards lower than those of the NAO and the Comptroller and Auditor General should be applied to the European Union, we would really be getting somewhere. Frankly, if the NAO had the opportunity to have a go at these 1,035 pages, plus all the supporting documents, or if it had the opportunity at least to get entrenched in the system, as I have said many times in the past that it should, so that NAO standards and principles were applied to those audited accounts, we might just begin to see some relationship between costs and benefits.

The reality, however, is that vast sums of money – our net contributions and all the rest of it – are poured into that black hole, and it does not work. I am not going to enlarge on all the reasons, which worry me, for our slow economic growth, which in my opinion have something to do with the fact that what we have out there is a dead parrot. The European Union is a system that is incapable of growth – indeed, growth is liable to decrease, compared with that in China, India and the rest – and on top of all that, we have the problems of audit and irregularities that the report demonstrates.

The statement on OLAF’s mandate says: “In pursuing this mission in an accountable, transparent and cost-effective manner, OLAF aims to provide a quality service to the citizens of Europe.”

OLAF’s mandate covers “all EU expenditure and part of the revenue side of the budget. It includes the general budget, budgets administered by the Union or on its behalf, certain funds not covered by the budget but administered by EU agencies”, perhaps that includes the External Action Service, which I hope we will look at in due course – “and extends to all measures affecting the Union’s assets.” That is a very big remit, and I have my reservations about that state of affairs.

The statement continues: “OLAF’s status is hybrid in nature. It is part of the Commission”.

Would we have much confidence in the NAO if it were part of the Government? I very much doubt it.