I was delighted to see Ed Balls's initiative today on EU financial management. The Economic Secretary to the Treasury has taken up the European Parliament's suggestion that each Member State government take full auditing responsibility for its own EU budget spending (80% of EU spending is carried out by national governments).

He has announced that the UK will do this. It will in future provide a written statement on how EU funds have been spent in Britain. This statement will have to be cleared by the National Audit Office.

In doing so, Britain will lead by example. Other EU governments will find it difficult to resist pressure to do likewise. Indeed, Ed said he would urge all other member states to follow suit when he meets fellow finance ministers in Brussels on Tuesday.

He also warmley welcomed the House of Lords Report which I mentioned in my blog last Tuesday (14 November). This, he said, "serves to dispel some popular myths about fraud and corruption in the EU", which the Lords indeed said was minimal.

But financial management systems can be improved, especially at Member State level where most of the problems of not fully complying with procedures has occured. As Ed Balls said: "While we have been making some progress, it's not fast enough."

Well done, Ed!