A damning parliamentary report claiming that the EU is being defrauded of more than £4bn a year means its time to take drastic action, writes Godfrey Bloom MEP
•The European Union's own fraud figure of £348m a year is staggering enough but a British House of Lords committee report estimates the figure to be 12 times as much. The Fight Against Fraud On The EU's Finances published by the Lords' Justice, Institutions and Consumer Protection EU-sub-committee says that the real size of annual EU budget losses is likely to be around £4.8bn or even more.
The major areas said to be most susceptible to fraud were the cohesion fund at £176m and agriculture at £66m, which goes to the poorest countries including the former Soviet bloc as well as Spain, Portugal, Greece and Cyprus. Member states, which administer 80 per cent of the EU's funds, are also said to be failing in their duty to report suspected abuse including bribery, corruption and cigarette smuggling.
European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud Algirdas Šemeta said that the European Commission's annual report made it clear that the actual level of fraud is higher than that of detected fraud, but he did not believe that EU funds were "more prone to fraud than national budgets". Well, if the level of fraud in the United Kingdom can be estimated at 3.4 per cent, the Lords Report calculated that we arrive at a total for "fraud on the EU's budget, based on 2011 figures, of €4.82bn".
The Lords committee states that the figures suggest that the vast bulk of fraud against the EU's budget is never brought to the commission's attention and probably never sees the light of day. The peers point out that a complex web of EU agencies leads to "weaknesses" in the anti-fraud system. That is the way the whole edifice is designed and trying to untangle such a web is "mission impossible" and meant to be so.
The UK hand over £53m a day to Brussels and it disappears down a big black hole of corruption, self-interest and inefficiencies. Fraud and misuse of money is par for the course in Brussels and this bureaucratic monolith is too cumbersome to sort it out, even if it wanted to. Everyone in Britain, and across Europe, is feeling the financial pinch except the over-paid Eurocrats - who offer platitudes and carry on regardless.
Meanwhile, the EU's auditors have found that the overall error rate in the accounts has risen for the third year in a row to 3.9 per cent - despite the commission claiming that the situation was "stable". Quis custodiet ipsos custodes is a Latin phrase traditionally attributed to the Roman poet Juvenal. Sometimes roughly rendered as: "Who will guard the guardians?"
That brings us to the European Anti-fraud Office itself - OLAF. The peers found evidence of corruption by EU officials, found by OLAF. One investigated case showed that an EU official had committed irregularities, in the form of demanding bribes. The EU official in question worked as a project manager in a commission delegation and part of his job was the selection of contractors and the implementation of the project. When there is big money involved and there is insufficient oversight, fraud happens.
The peers discovered that OLAF had a "significant breakdown" in relations with its supervisory committee, a panel designed to ensure the fraud investigators are working independently of external pressure. This is not an acceptable situation. Taxpayers have a right to know how they money is spent, to know that fraud is being investigated, that fraudsters are being punished and that money is being recovered. I suspect what we know is just the tip of the iceberg. What lies beneath? We may never know.
Godfrey Bloom is UKIP MEP for Yorkshire and North Lincolnshire