Lords in attack on 'massive' EU fraud

EUROPE'S taxpayers are being cheated on a 'massive scale' by farmers and other traders, a House of Lords committee said yesterday.

Peers branded the European Commission's new anti- fraud strategy, proposed in March, an 'action plan with no plans for action'.

In a scathing report - the fourth in six years - on financial control and fraud in the European Union, the Lords' committee on the European Communities said it was not possible to calculate the full extent of fraud.

'So many irregularities have been discovered in every sphere of community financial activity that it is impossible to avoid the conclusion that fraud exists on a monumental and growing scale,' it said.

The European Court of Auditors report, published last November, identified 'little or no improvement' in EU financial management, despite repeated criticism.

Examples of fraud included: farmers claiming money for storing grain which they do not have; payments of subsidies to cotton producers twice over; and cattle-smuggling across borders to evade customs levies.

The peers criticised the European Council of Ministers' 'unwillingness' to take strong measures to combat mismanagement and financial irregularity.

They called for a task force of outside experts to review how European institutions discharged their financial responsibilities; a strengthening of the Court of Auditors; and more lucid anti- fraud legislation.

The scale of EU fraud could amount to anything between pounds 2bn and pounds 6bn a year, according to estimates given to Parliament this year.