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I like the idea of ambition in Europe. I shall discuss the European Scrutiny Committee’s reservations, but there is the ambition in Europe to do something that parallels and, let us hope, gets ahead of other projects. As the hon. Member for North Shropshire (Mr. Paterson) said, the Americans know that only with GPS III can they go beyond what Galileo is aiming at, which is why they are trying to get ahead.
The drive for technological advance is something that we should applaud. It is the wrong tactic to suggest that ambition is wrong.
If there are questions about financing, they should be discussed by the Select Committee, as I shall outline. Indeed, we have done so, and we have demanded that the meeting of Chancellors at ECOFIN look closely at the question of viability and financing. We do not work on the basis that we lack ambition, but the new prescription from the Conservatives is to be so conservative that they do not wish to see any advances at all.
Mr. Paterson: That is a ludicrous misinterpretation of what I said. I clearly explained a vision of linking EGNOS with GPS and giving Europe the best and most defined service—down to a metre. Let me address the idea that we are against business. I visited Trafficmaster last week; it now employs 300 people. The jobs are downstream in areas such as e-Call rather than to do with the actual creation of the satellite systems. It supplies 100,000 vehicles and its jobs are downstream and have been created on the back of GPS. The entire Satellic system in Germany is also based on GPS, and it is worth €250 million a month.
Michael Connarty: To underline my point, that system is reliant on GPS provided as a free service by another country. That is an interesting model. I do not envisage it being provided free of charge in future when those who use it have in a sense been captured because they use it. We should think about the Microsoft model if we wish to understand what monopoly means.
Mr. Jenkin: What circumstances might lead the United States to corrupt the signal so that users would have to pay for it, given that a free GPS signal is integral to the success of its economy?
Michael Connarty: Different economic circumstances can arise at any time. No one originally predicted what would happen in terms of Microsoft and the internet. No one thought that bodies would make charges and monopolise the internet to the extent that Microsoft has done—and to the point where the EU has fined it on a number of occasions for abusing its monopoly.
There is much scaremongering. The key question is whether it is a good idea to involve the nations of Europe in a project to get a better satellite system than EGNOS. It is not a vanity project. It is driven by ambition, and there is nothing wrong with ambition. If that ambition is on such a grand scale that the project is not economically viable, there should be some way of constraining it.
Our Committee is not of the opinion that there is a blank cheque for those involved to do whatever they wish. This debate is not founded on the desire to take a serious look at what Europe is attempting to achieve. The project was labelled and attacked as a vanity project, and that debate has not addressed the purpose of Galileo.
Let me raise some serious points. The Committee and its predecessor were concerned that there might have been some pressure on member states irrevocably to move forward in an incremental fashion towards
Galileo, without at every turn having a financial check and balance. We were worried that some decisions might be made too hastily and would be insufficiently scrutinised. We were looking for evidence on which to base each stage of the process.
The latest development throws up some fundamental questions. I say that not because we support some of the points that have been made, but because we wish the project to succeed. The Government must pursue certain questions in the meetings that they attend. Is there a full assessment of what Galileo can realistically achieve together with a credible cost-benefit analysis? That is where ECOFIN has a role to play in justifying the project. Is the project likely to become unviable, particularly with the progress being made on GPS III? The extent of that progress has been proposed as a given, but it might not be. GPS III might not be able to achieve what Galileo can achieve. What Galileo and GPS III can achieve should be examined. Might the ECOFIN analysis be that we would be throwing good money after bad?
Mr. Cash: The hon. Gentleman is a fellow member of the European Scrutiny Committee, and I wish to ask him a question. He is making some percipient points and he advocates costings and a cost-benefit analysis. Does he agree that this matter should be thoroughly investigated not only by means of a cost-benefit analysis by the Court of Auditors, but also in the context of whether there are any irregularities in the manner in which the contracts are put together? In terms of the British contribution, does he think that the matter should go before the Public Accounts Committee, too?
Michael Connarty: The hon. Gentleman, although he criticises them a great deal, keeps referring to the involvement of European institutions. I would prefer ECOFIN and the Finance Ministers of the various countries to look at this issue, rather than referring it to the Court of Auditors. I hope that that is what they will do.
If, following the analysis, the answer is that the project is to proceed, the Government have said that they will look at it seriously. They are opposed, for example, to “mandating” Galileo charged services. In other words, there is no question of any Government saying, “You will use Galileo, rather than GPS”. The decision must be based on preference, but the Governments of Europe might indeed prefer to use Galileo rather than GPS for their own reasons. There needs to be a proper environment in which small and medium-sized enterprises can participate and get some benefit for our economy. Having achieved that, the Government have to look at whether the present public-private partnership negotiations can be restarted. They are firm in their view that the public procurement model should not be used for either the 18-satellite or the 30-satellite proposal. If the project is going to founder, that is the issue it will founder on. This is an issue for the private sector properly to look at.
In the light of those points, our Committee recommends that we support the Government’s position, which is that they continue to negotiate, that the financial perspectives are not breached, that any agreement on post-2013 financing be without prejudice to the outcome of future financial perspectives—in
other words, that we consider not just 2013, but beyond—that the funding arrangements are agreed by the Finance Ministers in ECOFIN, and that there is sufficient time for national parliamentary scrutiny. In other words, there should be sufficient time for this Parliament to debate any proposed financial outcome.
Those are the important issues. We have raised serious doubts, but we should not knock the proposal down because we want to score points. Once again, Conservative Front Benchers have tried to use an issue such as this to posture on Europe. I am pro-Europe and if Europe can do something better and much more securely in the long run, instead of relying on another nation to provide satellite facilities to Europe and its countries, this Government should be supported in such efforts to assist that. However, they have taken a tough negotiating stance and should be supported for doing so. That is what we are being asked to do tonight, and I hope that Members will vote with the Government if the Opposition push the motion to a vote.
10.7 pm
Mr. Alistair Carmichael (Orkney and Shetland) (LD): I will not detain the House long. I welcome the Minister to her new position. She comes to the job with a good reputation in other Departments, and I very much hope that she can continue that in the Department for Transport. I am also pleased to see the hon. Member for South Thanet (Dr. Ladyman) in his place; I have enjoyed working with him since taking up this brief. I understand that he intends to spend more time with his Alfa Romeo. I am sure that I speak for Members in all parts of the House when I wish him well in whatever he does next.
As I said to the Minister during an intervention, for once I am pleased about the timing of a debate such as this, inasmuch as we are scrutinising a subject before the decision is going to be made. Too often in these European debates, we end up examining a measure after the decision has already been taken. All we are able to do is criticise and describe how things might have been. Having said that—the Minister might now be thinking, “Some people are never satisfied”—I fear that, because so much of the detail on the Commission’s position is to be made clear in the months to come, the House is unable to have a fully informed debate. I hope that there will be further opportunity for some measure of debate. I appreciate that, as a result of the way in which we organise our business in the House, it is not necessarily going to be possible to have that debate before an October Council. However, be it through the European Scrutiny Committee or some other mechanism, I hope that those who have expressed an interest tonight in this issue can be kept informed before the December Council.
We Liberal Democrats continue to hold the view that the principle behind Galileo remains sound. We hold the strong view that what is needed is needed for reasons of economic and strategic importance. We do not, however, take the view that that can be an open-ended commitment, which is why we think that the real debate here is the one highlighted by the Committee chaired by the hon. Member for Linlithgow and East Falkirk (Mr. Connarty). It states:
“we suggest that there is a prior assertion from the Commission, which the Minister touches on only briefly, which perhaps also needs to be fully tested — that is the case for continuing the Galileo project at all, rather than writing off the sunk cost and letting Europe's industry continue to exploit the existing and developing opportunities available through GPS uses.”
That is a point that the hon. Gentleman made a few minutes ago and I entirely concur with it. It is an eminently sensible approach to take. The question essentially for the House is how sustainable is the PPP model for which the Government express such enthusiasm. The true point, which will have to be addressed eventually, is if the PPP model does not look like delivering, what will the Government’s position be? Frankly, we cannot answer that question at the moment, because it is a judgment that can be made only once the figures are available. That is why I remain concerned that we are still being asked tonight to buy a pig in a poke.
We concur with the Government’s position for now. I cannot go beyond that and I do not think that the Government would be sensible to try to do so. We remain keen to support this, but the sums must add up.
Mr. Cash: There have been references to the European Scrutiny Committee report this evening, and the hon. Gentleman just mentioned paragraph 2.24 of the 23rd report. Perhaps it would not be a good idea if hon. Members were left with the belief that the Committee had supported the project. The report states that the Committee agrees with the suggestion that
“no final decision on the future of Galileo should be taken until the Commission’s ideas on how to carry forward and fund Galileo are fully developed and explained.”
In other words, the Committee is making the lukewarm suggestion that perhaps, in due course, it might possibly—in extremely unlikely circumstances—come up with an answer to all this rubbish.
Mr. Carmichael: I thought that that was what I had just said. I also thought that that was what the hon. Member for Linlithgow and East Falkirk had said. The hon. Member for Stone (Mr. Cash) made a lengthy intervention, so I trust that he will not have to make any further contribution to the debate. On that basis, I am happy to let matters rest.
10.13 pm
Mr. Bernard Jenkin (North Essex) (Con): I have taken a 10-year interest in this subject, off and on, and I first join others in congratulating the Minister on her new role. This is a baptism of fire. She has walked into the lions’ den and I think that I speak for every right hon. and hon. Member when I say that nothing is intended personally against her by the criticisms that we are making of this project.
I also congratulate my hon. Friend the Member for North Shropshire (Mr. Paterson), who spoke for the Opposition. He has today been appointed shadow Secretary of State for Northern Ireland, which demonstrates that the Conservative party takes seriously the arguments that he makes in this House, including on European matters such as the Galileo project.
If I step back from the immediacy of this debate, I see in this project a microcosm of what is wrong with the Government’s overall European policy—an inability to say “no”. We know exactly the position of the Department for Transport on this project. Indeed, it was reported a little while ago that the Department for Transport had attempted to secure funding for the project from the Ministry of Defence. The obvious reason for that is that the Department for Transport knows, and we know, but nobody will say so publicly, that it is a covert defence project for the European Union. If we ask any other European country, it will know that the project is part of the European Union defence agenda. That is why the Department for Transport opened negotiations with the MOD, saying, “If this is so important to Her Majesty’s Government, surely the MOD should pay for it. It shouldn’t come out of the transport budget.”
Michael Connarty: I put the same question to the hon. Gentleman as he put to me. If defence systems currently rely on satellites provided through GPS by the US, and he is adamant that the US will never withdraw that, why should Europe think that it requires anything other than GPS?
Mr. Jenkin: I agree totally with the hon. Gentleman. Some countries, however, share the anti-American paranoia—to which, I think, he subscribes—whereby if the signal is not transmitted by a European-owned satellite, it is somehow not decent, proper or reliable. I assure him, however, that the signal that we get from American satellites is extremely reliable for all defence purposes that I can envisage. Some European countries might believe in what they call a bipolar world, in which the EU should somehow become a counterpoint, and a balance against, American power. Under those circumstances, they might be deluding themselves that such an independent capability is vital for strategic purposes.
The hon. Member for Orkney and Shetland (Mr. Carmichael) spoke about the strategic importance of the Galileo project, although he did not explain what that strategic importance was. Clearly, however, he subscribes to the idea that there is something strategic about our having our own European satellite system. However, given that our closest ally on the other side of the Atlantic, whether we are European, British, German or French, is the United States of America, I can see no strategic case for such a satellite system. I can foresee no circumstances in which we would need an alternative system.
Mr. Cash: In encouraging my hon. Friend in his important argument about the extent to which anti-Americanism lies behind the promotion of this project, may I ask him whether he heard this morning an extremely interesting programme by Justin Webb on the attitudes of the French—including, for example, Hubert Védrine—who are absolutely obsessed with anti-Americanism? The very point that my hon. Friend makes is demonstrated over and again in the attitudes that they adopt. But if we consider the big landscape, which I think he is seeking to paint, we ought to remember that between 1940 and 1945 the Americans did an enormous amount to save Europe, let alone the United Kingdom.
Mr. Jenkin: I very much hope that my hon. Friend gets an opportunity to speak in his own time in this debate, because he has such a valuable contribution to make. I should point out that the United States not only helped us win the second world war but guaranteed western European security throughout the cold war, and underpins the new struggle, which the new Prime Minister calls the new cold war, against international terrorism. I repeat to the hon. Member for Linlithgow and East Falkirk that I can foresee no circumstances whatever in which it would be in the national interests of the United States to corrupt the signal or to turn off or start charging for the system that it currently provides to the world for free. Providing that free system is part of the Pax Americana that it dreams of. It is part of its influence in the world. It would be contrary to its national interest to start playing politics with a system of that nature. As has already been explained, to corrupt it for us, it would have to corrupt it for its own businesses and commerce, and of course it would never do such a thing.
Ann Winterton (Congleton) (Con): My hon. Friend has skilfully kicked away the arguments for the strategic importance of Galileo. Will he now turn his attention to its supposed economic benefits, and will he respond to what the European Commission has proposed, which is that it will create 150,000 jobs Europe wide?
Mr. Jenkin: I am always a little sceptical about figures produced by the European Commission on the success of its policies, given that Europe has been far more effective at producing public sector jobs than private sector jobs over the past 10 or 15 years. But if I may just pick up the challenge laid down by my hon. Friend, the key question is where the private sector revenues will come from. If there was any prospect of a secure revenue stream for the project, the private sector would be willing to invest in order to harness that revenue stream. Not only does that revenue stream not exist, but there is no prospect of it coming into existence. The idea that this could be a privately funded project, resting on private capital, charging a privately generated revenue stream to get the satellites into orbit, has now been exposed. The project has been in the public domain for 10 years. The European Commission has been promulgating the idea that somehow the money will appear as a result of the satellites’ commercial potential for 10 years. The money will not appear. The revenue stream is not there. There comes a point when the Government must ante-up to their own position, which is that they should oppose the system in principle. It is a waste of money. It will not fly. It is a dud system.
David Taylor: This is like the dead parrot sketch. Is not the hon. Gentleman’s unquestioning, illogical and chronic technical deference to the USA, as shared by the hon. Member for Stone (Mr. Cash), really just covert anti-Europeanism? It is, is it not?
Mr. Jenkin:
There are many things that the EU could do very well. It could do free trade well. Unfortunately, it does not. It could do lighter regulation. It could do co-operation much better. There are many things that we hope and pray the EU can be reformed to do very
much better, but with the best will in the world, it will find it very difficult to provide a global satellite positioning system for free, which is what the Americans provide for us. There is a saying about gift horses and looking them in the mouth. We have a gift horse and we are looking it in the mouth. We do not need to pay for our own gift horse when we have been given this gift by the United States for the world to enjoy. It is not anti-European. I am waiting for the proponents of the system to demonstrate that there is some commercial logic behind it, which is what I was promised in European Standing Committee B. To pay credit to the Government, they did say that they would not go ahead with this unless there was a commercial logic to it. I put it to them that there is no commercial logic to this system.
I want to get back to the crucial opening point that I made, which is that this is a microcosm of what is wrong with the Government’s European policy. We all know that the Minister is sitting on the Treasury Bench because the Foreign Office has decided that the Department of Transport must not veto the project.
Mr. Jenkin: Ten years ago, the Government could have vetoed the proposal, but as my hon. Friend says, they cannot do so now. Their attitude is, “We must never say no; we must always say ‘yes, but’.” There comes a point, however, when once the money starts being wasted we should say no, because if all those satellites become airborne, it will be the common agricultural policy of the stars.
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