Examination of Witnesses (Questions 220
- 239)
TUESDAY 25 OCTOBER 2005
LORD DRAYSON
AND SIR
PETER SPENCER
KCB ADC
Q220 Mr Borrow: On that point, you
have confirmed what the Committee was told last week, which was
that significant progress had been made in the last few months
in terms of technology and information transfer. But, looking
ahead, what is the strategy of the department and our government
in terms of ensuring that we meet the challenges for technology
transfer in the months ahead? Is there a clear strategy to ensure
that it happens?
Lord Drayson: Yes, there is a
clear strategy and that strategy is to be mindful in looking at
the project plan, as the project progresses, where certain lumps
of technology transfer need to take place and at what point, and
to have clear visibility—if you like, it is a sort of trigger
to make sure that we are clear when those technology transfer
points need to take place in the programme consistent with our
long-term plan—and to have a very close eye on that, and
if that is starting to slip to be expressing our concern on the
specifics. It is moving from a general concern to one where we
will have a specific concern on certain triggers if it does not
take place. We have not got there yet but we have a clear plan
to know when we do get there.
Q221 Mr Jones: I am interested in
the plan because I was in Washington at the end of July talking
about this very same subject, and I accept that there are quite
good relationships obviously between the two governments and at
government level they are very good. But the issue here is not
actually about government is it, it is about Congress itself?
There are some very key individuals there who, from my meetings
with them in July, including breakfast with Duncan Hunter, will
not actually allow this technology transfer thing to go through
Congress. So what is actually being done in terms of not just
talking to government but also trying to tackle the issue around
Congress? I know last week we talked about the sovereignty into
the use of this, but the biggest concern I have is not in this
programme but in terms of your industrial strategy, where does
it fit? Because in future, if we are not careful, we are going
to be in a situation whereby technology will go one way but it
will not come the other way, and I think that is going to be important
not just on this project but other projects as well, if we are
going to do joint projects as you said we are going to.
Lord Drayson: Chairman, I think
you make a very good point. In my experience, working in industry
it is very important for us to recognise that the process of innovation
which takes place, over a number of cycles of technology, needs
to be maintained in the long-term. The fact that we entered into
this project with the Americans on this fighter, not on the basis
of work share but on the basis that the best companies with the
best know-how would get the work, the fact that British companies
have a far greater proportion of the work than you would have
otherwise expected on the basis of our numbers of aircraft, actually
shows how strong the UK companies are today. We need to make sure
that as we go forward technology transfer which is taken, for
example in terms of the lift fan which is the thing that makes
the STOVL aircraft work, that the relationship we have with the
United States in the long-term ensures that the intellectual property
base in this country is refreshed, maintained, such that in future
programmes we still have industry which wins on the basis of this
performance. That is something of which I am very mindful and
something which I am looking to strengthen in terms of our overall
intellectual property strategy with the Department, and taking
this longer-term view of how we make sure in our international
collaborations that over the cycles of equipment we do maintain
that knowledge base.
Q222 Mr Jones: I actually agree with
you on that, but can I ask what work is being done to ensure that
it happens? Because clearly in terms of this project there are
problems still, and talking to some Congressmen quite clearly—even
though they make nice-sounding noises about "our best ally"
and everything else like that—what is actually needed is
possibly a treaty which covers not just this project but a whole
range, in terms of what you were just talking about, Minister,
of technology transfers? If we do not do that then we will come
up to this roadblock every single time, and it is important that
we try to remove those roadblocks, which I do not think are in
the administration in the United States but actually in Congress.
Some of those people are pretty hard in terms of any transfer
of technology anywhere, even to an ally like the United Kingdom.
Lord Drayson: I think we absolutely
need to recognise the reality of the structure of American administration,
American politics. Notwithstanding that, though, I do think it
is important for us to focus on gritty elements of projects where
technology transfer is real and important at that point. That
is what I would like the Department to focus on more—clarity,
visibility about the specifics; to use its test cases. I note
what you are saying in terms of a treaty but in terms of specific
projects getting clarity where those projects are affected, and
when, by specific areas of technology transfer, gives us the best
chance of actually addressing this.
Sir Peter Spencer: I wanted to
put this into context because Mr Jones did point out that government
to government relationship is good, and with the Under Secretary
of Defence, Acquisition, Technology and Logistics, is about as
close as I get to an equivalent. I have had some quite detailed
discussions over the summer, most recently last week, and what
he is keen to do is to recognise that far too much senior management
and government ministerial time is taken up on relatively small
bits of details, and he is looking at the processes by which the
DoD interact with State Department, which is where the decisions
are taken, and to make sure that industry is better briefed to
understand the basis on which individual applications are made,
all of which has hugely speeded up the process recently. I find
all of that really very encouraging. But of course when it really
comes down to it it is not so much individual members of Congress
who are involved in the specifics, it is the State Department
and staff officers who do have an obligation to comply with United
States' law, as you would expect, but who occasionally do need
to have a case presented to them in a way in which they feel they
can give us what they need, what the United States need—because
bits of design which are being done by UK companies are being
done by all on behalf of the all the aircraft, including those,
of course, that go to the United States. So it is not in the United
States' interest if the programme is held up by delays in technology
transfers into members of Team Lockheed, and that is very clearly
understood both in United States' industry as well as in the United
States government.
Q223 John Smith: Last week the Committee
was told that the most important area of technology and information
transfer relates to operational sovereignty and I think we as
a Committee absolutely agree with that. We can understand the
point that was made clearly, that access to technology at the
right time during the process of design and production is important,
but surely access to information and technology that will guarantee
operational sovereignty is vital, and it is vital now and not
at some time in the future, because we could have the absurd situation
where we have one of the most advanced jets in the world but we
cannot operate independent of the United States, and no matter
how great an ally they are to us I do not think it will be acceptable
to this Committee or the British taxpayer. What are you doing
to get the information required to ensure that we do have total
operational independence for the Joint Combat Aircraft?
Lord Drayson: We have set out
the requirements that the United Kingdom needs, in terms of the
key user requirements we need to see for the aircraft to meet
our needs, for example work on our carriers. We also set out the
requirements that we have in terms of the type of systems that
the aircraft need to have within that, the interfaces between
those systems and the weapons that the aircraft may carry. We
also need to recognise that one of the lessons in the recent past
is that the nature of operations that our Armed Forces are asked
to go on has changed quite a lot in terms of the requirement on
equipment to carry out a wider range of tasks. Therefore, it is
not going to be possible for us to set out in 2005 all that these
aircraft may be asked to do in 15 years' time. Therefore we need
to be mindful of that in terms of the systems, the future up-gradability
of those systems, making sure that we have an open architecture
for the software, making sure that the links between the different
types of missiles that the aircraft may be needed to use, we have
those options open. Where it stands today, my understanding is
that we do not have any concerns relating to our ability to meet
those type of issues relating to operational sovereignty, but
we are mindful of that and that is why we have made sure that
we have visibility of when those issues are going to come up—that
we have clarity of that—and that we make sure that those
requirements are being met at that point in terms of technology
transfer. My understanding is that we do not have an issue on
that today but as we go forward with the project this is something
that we have to monitor closely.
Q224 John Smith: But if you do not
have today a clear commitment to operational support it is not
just major upgrades but the support of the aircraft, on the evidence
we were given last week, and it would appear that we do not have
the information to be able to guarantee that we do have future
support for the aircraft in operations when it is in service.
That appears to me, at least, to be pretty fundamental and certainly
the evidence that we had last week would suggest that. It appears
at this moment in time that we do not have that commitment from
the Americans that we will have that level of independence with
this aircraft, but I may be wrong.
Sir Peter Spencer: We do, via
the Exchange of Letters which were signed earlier on, have commitment
from the United States government to the United Kingdom government
that it understands the basis of the need to enjoy operational
sovereignty, and it is spelled out in a number of key headlines,
which are signed up to as general principles. The challenge now
is to convert that into what this means down into the detail of
what bits of technology need to be handed to whom and where and
how, and some of that technology has not yet been invented. So
this was the process I was referring to earlier, with the Under
Secretary for Defence, where he is putting in place a process
so that when these bits of information become available—and
we understand the relevance—we then have the ability to
process much more rapidly, and I think it will be a confidence
building exercise over time. What has happened in the last year
is hugely encouraging compared with our concerns 12 months ago.
I believe that we need to work together in close harmony with
the United States' administration and with our own industry and
the American industry and continue to demonstrate that there is
a process which would work, but, as the Minister has said, and
you have echoed, we are right to be extremely alert here for signs
that this information might not be arriving in the timetable that
we need. But nobody is going to sign a blank agreement at this
stage saying, "I will tell you everything that you need to
know about Joint Strike Fighter, full-stop."
Q225 John Smith: That is not what
I am saying.
Sir Peter Spencer: I know it is
not what you are saying but that is how it tends to appear to
some of the working level officials in State Department if a rather
ambiguous or very broad request comes in, which has not been properly
constructed, and that is where we are getting the help.
Q226 John Smith: But the request
is that we have this independent operational capability and that
does not exist at this moment.
Sir Peter Spencer: We have the
agreement on the six provisions. Would it help if I read through
the headlines to show the ground which is covered, because it
does put some flesh on the bones?
Q227 Chairman: If you could be very
quick.
Sir Peter Spencer: It will be
very quick. Inter-operability with other UK national defence capabilities;
rapid evaluation of air system effectiveness in UK specific scenarios;
rapid integration or modification of UK-specific weapon and sensors;
inclusion of national variations in elements of the mission system;
satisfaction of UK-specific safety requirements and UK based logistic
support infrastructure to safeguard national capability. As headlines
that is good. That is agreed. The challenge is now to convert
that year by year, step by step into a robust working arrangement
at detailed level, and there is a lot of support that we are getting
government to government to do that.
Q228 Mr Havard: I am sure that Congressmen
Hunter would have given Geronimo a treaty as well, Kevan, so I
would not worry too much about that! What I am interested in is
the process which you are describing, because we have the Exchange
of Letters, which is the political description. I know in the
Defence Industrial Strategy description that you have given me
about how that work is being conducted that you talk about the
technology matrix. We have been told in terms of this particular
project that there is a technology matrix. Am I right in taking
from this that there are process issues being put in place that
will deal not only with this project—and you talk about
who, what and where, but it is the "when" bit that is
the real key, is it not? That is what you were saying, Minister.
On certain things you are going to have that debate more than
one time, but at least now you will have a process between the
two governments at a lower level and the political level to actually
process each technology as you need to process it. Is that what
you are telling me?
Lord Drayson: I am saying that,
as Sir Peter has described—
Q229 Mr Havard: Is that going to
be a standing process?
Lord Drayson: The principles are
set out in the Memorandum of Understanding, as Sir Peter has just
described. Those principles now need to be embodied in hard decisions
around programme engineering facilities, as the project goes forward.
We have a clear need to have operational sovereignty for these
aircraft, and we have described the principles under which that
needs to take place. What I will say in my earlier answer, relating
to technology transfer, is that we need to make sure that we know
where in the project those issues become "pregnant",
if you like, and need to be addressed, and that we focus on those
at that point and we make sure that the principles are being adhered
to in reality on specifics as we go forward. I think that there
are some opportunities, in the same way that we have done very
well in terms of the UK's proportion, in terms of the build of
the aircraft. There are some very innovative things I have seen
coming into the Department in terms of which the RAF supports
the aircraft in the field—stuff is being done on the Tornado,
for example, at RAF Marham—and these are principles that
we would like to also see applied to a future aircraft, such as
JSF, and therefore we need to see this take place within this
programme as it goes forward. It is about getting down to specifics
at the point they come up within the programme and making sure
that they adhere to the principles.
Q230 Chairman: If we could go on
to risks in this programme. What are the main risks to meeting
the timetable for these aircraft and how are these being managed?
Lord Drayson: I think the top
risk, the technical risk, which came up a short while ago, in
terms of weight of the aircraft has now been mitigated. Both the
MoD and the United States are satisfied that the way in which
that has been done has put us in a good position.
Q231 Chairman: Mitigated but not
solved.
Lord Drayson: It is never solved
until you actually have the aircraft built and flying. As it is
known within aircraft development production, as aircraft go through
the design and development phase you need to watch very carefully
the weight growth, and therefore you maintain a contingency to
make sure that as that takes place you can manage it. Where we
stand today, the engineers are saying that, yes, that is now back
under control, we have got back to the place where we needed to
be to meet the key operating requirements of the aircraft. That
does not mean to say that we can now relax; we need to maintain
that focus as the design and development progresses.
Q232 Chairman: And the other main
risks?
Lord Drayson: I think the other
generic risks which you need to watch very carefully—the
weight growth one is not unusual in fast jet development—the
other one common to other aircraft, helicopters as well as jets,
is what is going on with the software. We need to keep a very
close eye in terms of the software development to make sure that
the systems are properly integrated. That is an area that I know
a lot of work is going into in terms of making sure that that
is managed well.
Q233 Chairman: Cost escalation?
Lord Drayson: Within a programme
such as this, recognising that this is an American programme which
we are participating within, the way in which our elements within
the programme—for example the work that is being done here
in terms of the lift fan and so forth—the other elements
of the systems which are being done in the United Kingdom, all
of these need to be managed in the long-term to ensure that these
risks are mitigated, that this is within an American programme,
and we need to recognise that we are garnering the benefits from
being part of that American programme in terms of the level of
technology and the cost which we are accessing. As it stands at
the moment my understanding is that the project is in good shape.
Q234 Chairman: In good shape for
the timetable?
Lord Drayson: Yes.
Q235 Chairman: You gave us a very
helpful memorandum, which said that, "The In-Service Date
will be set when the main investment decision for JCA is taken.
Our previously announced planning assumptions based on an ISD
of 2014 have not been changed."[1]
Is that still the case, since you sent us this memorandum?
Lord Drayson: Yes, that is still
the case, recognising that we are in the assessment phase of this
project, that we have not signed the contracts for the production
and take-off of these aircraft.
Q236 Chairman: So you have planning
assumptions for the aircraft; do you have planning assumptions
for the ship?
Lord Drayson: The key difference
in terms of the aircraft and in terms of the ship is that the
aircraft is being done as part of the American programme. What
is being done on the ship is part of what we are doing in terms
of the evolution of maritime industry within this country. The
decision that we are going to be taking on the Main Gate for the
ship, the reasons which we have been through at some length this
morning, will be taken on the basis of having clarity around the
risks associated with that, and at that point we will set the
In Service Date for the ships.
Q237 Chairman: Really it was a question
that was asking for a yes or a no, the question of whether you
had planning assumptions?
Lord Drayson: We have planning
assumptions for the elements of the carrier strike, the way in
which we bring together all the various elements of the carrier
strike, the ships themselves, the aircraft within it; yes, we
do have planning assumptions within that.
Q238 Chairman: But you have no overall
planning assumption for the carriers?
Lord Drayson: We do have planning
assumptions for the carriers in terms of the programme with which
we are going forward. In terms of the commitment to In Service
Date and the commitment for the various parties which are coming
together, we have not set that date; but we have to maintain in
terms of the way in which we manage the whole defence equipment
for the various elements which need to come together for carrier
strike, and maintaining that in the future, and, yes, we do have
planning assumptions, which we are managing.
Q239 Chairman: What is the planning
assumption for the carriers?
Lord Drayson: The planning assumption
for the carriers is based upon our expectation of when the carriers
will come in, together with the aircraft, together with the other
aspects of the equipment relating to carrier strikes. In terms
of publicly announcing a commitment to an In Service Date for
the carriers, we will do that when I am satisfied that we have
confidence based upon the investment decision that we will take.
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