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10.25 pm

Mr. Tobias Ellwood (Bournemouth, East) (Con): It is a pleasure to participate in the debate, but I am saddened to hear that this is one of the first opportunities we have had to debate Galileo, even though the project is now advanced.

I welcome the Minister to her position, although she has been thrown in at the deep end. Her body language when she answered questions made it clear that she is uncomfortable with what she has been given to do. She could not even come up with the costings when I asked how much the entire project would cost. She could not tell us how much has been spent so far, or give the long-term cost of the project. She was asked a straightforward question but she could not give an answer; instead she tried to dance around the idea that it is something the Government actually want, yet the facts show that that is not the case, as my hon. Friends have illustrated.

The proposal comes from the European Scrutiny Committee, which thought that Members would want to debate where matters stood on the Galileo project. Absolutely right, considering how much money has been spent on it. We have been given a vague promise that we will have an opportunity in October to review where things stand.

Michael Connarty: How much has been spent on the project?

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Mr. Ellwood: That is exactly the question I put to the Minister, but I could not get a response. The right hon. Lady has come to a debate on Galileo, yet she cannot tell us how much has been spent so far.

The Galileo system was due to be operational in 2008; that will not happen. It was supposed to be compatible with the GPS system and with GLONASS, the Russian system. Before I go into detail about Galileo I want to talk about those two satellite systems. The American GPS system was created in the 1980s for military purposes and now has 30 satellites in the sky, costing the US Government about $750 million a year. As we have heard, President Clinton opened it to the world in 1966. The hon. Member for Linlithgow and East Falkirk (Michael Connarty) says that it might be switched off, but that is madness on two counts.

Michael Connarty rose—

Mr. Ellwood: I shall not give way, because I want to make progress.

Michael Connarty: The hon. Gentleman is misrepresenting me.

Mr. Ellwood: I am not misrepresenting the hon. Gentleman; if I can make some progress he will understand where I am coming from.

The GPS system is making significant revenue streams for myriad companies, both national and international, not only in America but across Europe and the world as a whole. Were the system to be cut off, it would cause absolute economic chaos. That is the first reason it will not be switched off and the second is that it is part of a NATO operation. The security of this country, Europe and the wider world depend on the satellite system, so there are two profound reasons why it will not be switched off.

There are commercial aspects, too. We heard that even the Minister has a piece of GPS equipment in her ministerial car— [ Interruption. ] It is in her private car. She has one of the TomTom navigation systems that are also used for map-making, land surveying, scientific studies and air traffic control, as well as in clocks and timepieces and for shipping, not to mention their military uses, from missile guidance to transport systems. All are extremely successful and GPS sales average about £20 million a year, with 95 per cent. of the units sold for civilian rather than military use. That is a success story and we should be aware of it. Not only is the equipment efficient; it is reliable, accurate and, as has been said time and again, it is free.

The GLONASS system is a different story. It was completed in 1995, with 24 satellites, but fell into disrepair after the collapse of the Russian economy. Russia is committed to restoring the system but there have been delays in the process. Huge sums of money have had to be thrown at the system to get it back up and working. There are lessons to be learned from both those systems and we need to learn them quickly before the decision in October, which commits us one way or another.

I will quickly summarise where we stand with Galileo. The system was devised in 2002 to rival the GPS system. There were eight companies and five nations involved, but today, as we have heard, the project is floundering.
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Only one out of 30 satellites is in orbit and that is a test system. The project was supposed to be in operation by next year, but the latest estimate is 2014—if the project goes ahead and we get all the satellites up in orbit. The German Transport Minister recently described the project as in “profound and serious crisis.” That crisis is being caused by funding.

The original plan involved 50:50 financing between the EU and the European Space Agency. The UK part of the funding came from the Department of Trade and Industry and the Department for Transport. The private sector was to pay for two thirds. As we have heard, the original cost was €3.2 billion; that is now spiralling towards €10 billion over the next 20 years. I have asked how much has been spent by the British and we have not had an answer.

The original plan involved a public-private partnership, with companies footing much of the bill in the hope of selling satellite navigation services to commercial users. Who is going to buy a satellite service today when there is a free service available? The only organisations that would buy satellite services would be the Government and public sector organisations—to prop up the costly system. Perhaps we can expect to see congestion charging or the military being converted to the system in order to prop up the funding for the entire project.

If we vote on the motion, we will see Labour Members and the Government walking through the Division Lobby, but I do not believe they will fully understand what they are voting for or signing up to. We do not need this system, we cannot afford it and there is no market for it at all. It is a sheer waste of money and, as we have heard today, the project is based on the ridiculous assumption that the US will somehow turn its system off.

Michael Connarty: I hope that the hon. Gentleman will check Hansard tomorrow and then apologise to me. At no time did I say that there was any possibility of someone turning off the system. I did say that there is a possibility of charges being placed on the system when it suits the US supplier. That would be disruption due to cost. I think that there should be an alternative. If the Russians think that there should be an alternative and the Chinese are developing an alternative, Europe should think about developing an alternative— [ Interruption. ]

Mr. Ellwood: As my hon. Friend the Member for North Essex (Mr. Jenkin) said from a sedentary position, what is the basis for that assumption? Is it simply a spurious idea that has been introduced to support the system? I have not heard anything substantial about that whatsoever. The Americans have insisted that that will not happen—mostly because it would cause economic chaos, not only in Britain and in Europe, but in America. It simply will not happen. Another reason is our relationship within NATO. We have a free system and we should use it. It has been said again and again, “Why sell Pepsi Cola when you can get Coca-Cola free?”

The European Scrutiny Committee also expressed doubts in its report. It accepted the potential of Galileo to be a key project, but argued that it should not be proceeded with unless the costs were justifiable.
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The Minister has not justified those costs today. We need a system. There is one that is free and that is the one that we should use. The EU has three options. First, it could set new deadlines for the consortium to raise more funds. Secondly, it could make the project a full public sector operation and foot the bill. Thirdly, it could end the project altogether.

The project shows the ugly, bureaucratic and autocratic side of the EU. The decision on the project stands alongside such bizarre decisions as having two Parliaments for MEPs and having a defence force in the EU the replicates and mimics NATO’s. I end where I began: by saying that the Minister came here today unable to give any costs. I urge the House to vote against the motion.

10.34 pm

Mr. William Cash (Stone) (Con): It is not that often that the European Scrutiny Committee ends up having one of its proposals for debate taken on the Floor of the House. I wish that that happened more often. It is evidence of the importance to be attached to the question that this happens to be one of the rare circumstances in which such a debate takes place. This is really the European gravy train mark 1.

We have heard a lot of useful contributions from hon. Members—on both sides of the House, in fairness—expressing concerns about the costs. The hon. Member for Linlithgow and East Falkirk (Michael Connarty) made a perfectly reasonable point about the need for a cost-benefit analysis. Indeed, at the heart of the Government’s proposals is a severe question mark over the way in which the process is being conducted. As others have pointed out, the abandonment of the PPP element demonstrates in itself the lack of the proposals’ viability. However, the problem is that no one can actually stop them.

There will be interminable discussions. As I suggested earlier to the hon. Member for Linlithgow and East Falkirk, the Chairman of our Committee, there might be a reference to the Public Accounts Committee about our contribution. There might be a reference to the Court of Auditors about the amount that has been frittered away. Irregularities may well emerge, and if they do, I hope that there will be a proper investigation. However, will anything stop? It will not, because there is no power to do that, unless the Council of Ministers and the Commission change the position about which the former Minister, the hon. Member for South Thanet (Dr. Ladyman), has told us. His most recent letter of only a few weeks ago was quite clear that

Some of us sometimes point out that it is perfectly obvious that there is a Euro-elephant in the House of Commons —[ Laughter. ] I am glad that the Minister has a sense of humour. I had the pleasure of being in opposition to her when she and I had respective Front-Bench positions a few years ago. She knows perfectly well that there is not only a Euro-elephant in the House of Commons, but a pink Euro-elephant—this is a complete fantasy world.

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Let us look back at the basis and origin of this. Poor old Galileo was taken to the cleaners by the inquisition for misrepresenting, as it put it, so we could at least admit that he had his feet on the ground, when the inquisition let him do so. However, the Minister, by contrast, is being pushed into outer space on this subject. She is not having a happy christening by being plunged into one of the worst projects that the European Commission has ever put forward. The House of Commons European Scrutiny Committee has recommended that this debate should be held on the Floor of the House and the Government have accepted that. Given the conventions of the House and what goes on behind the scenes, a strong message is being sent out.

I am sure that we will vote against the motion. I presume that the right hon. Lady will troop through the other Lobby, but what a nonsense that will be, given every single thing that has come from Government Members, ranging from the former Minister’s letter to the body language of the hon. Member for Linlithgow and East Falkirk. Despite his enthusiasm for all things European, I think that even he has had to reach the conclusion, underneath it all, that this is not a runner. The proposal is hopeless, and it is appalling that a clear majority of member states, in this crazy, zany, irrational fantasy world that they inhabit, could continue to underline the strategic nature of the Galileo programme.

Several hon. Members have gone through the arguments about the extent to which the American system is free. We know that the project before us is not a runner, and we know that there is no way that it can be made into one, so what does the issue represent at bottom? That is the sort of reason why the own-resources decision has not yet been debated in the House, despite the fact that it was endorsed by the previous Prime Minister in December 2005. This is really all about the reduction of the rebate, the intricacies of the budget arrangements, and the impact that they have on our taxpayers’ pockets. Hon. Members should be under no illusion on that point.

My hon. Friend the Member for North Shropshire (Mr. Paterson) said that the project was costing, or had so far cost, the British taxpayer €35 million or £35 million; I was not sure which he meant, but whichever way we look at it, the reality is that a huge amount of our taxpayers’ money is being subsumed in this absurd project. It is not a laughing matter if we think of it as money that could otherwise be spent on useful and important projects such as hospitals and schools.

Mr. Paterson: To clarify matters for my hon. Friend, I was quoting a reply to the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). The figure of €35 million refers to the cost so far of EGNOS. On a point mentioned by my hon. Friend the Member for Bournemouth, East (Mr. Ellwood), I have received a very limited reply from the hon. Member for South Thanet (Dr. Ladyman) that shows that our country has spent €276 million on Galileo in the past three years alone.

Mr. Cash: I am grateful to my hon. Friend, as ever, for getting that point out into the open. We are talking
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about much bigger sums than I had previously thought. We are talking about a failed project; that is clear. There is no way of stopping it, and further vast amounts of money are, no doubt, about to be spent on it, in an attempt to get it right. Almost certainly, there will be massive accountancy failures. It is certain that the European Court of Auditors will point all that out in due course, but that will be after the project has been allowed to continue. The project has no useful purpose whatever. It cannot fly and cannot even be described as a duck. It cannot be described as a workable system. The proposal is completely absurd. This is the first time that the Minister has come before the House in her current role, and I sympathise with her for having to turn up on this occasion. I wish her well for future occasions, because I cannot believe that anyone else has pulled as short a straw as the one that she pulled tonight.

10.43 pm

Ms Rosie Winterton: This has been a marvellous debate.

Mr. Ellwood: Let’s do it again.

Ms Winterton: Yes, we should. I can see what the right hon. Member for Witney (Mr. Cameron) is up against when trying to make up his mind on what to do about the European People’s party, given the contributions made tonight. I am sorry to hear that the hon. Member for North Shropshire (Mr. Paterson) is leaving the transport brief so soon after my arrival, and that we will be losing the moderate voice of the Conservative party to Northern Ireland.

This has been a wide-ranging debate. My hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) and the hon. Member for Orkney and Shetland (Mr. Carmichael) took a rather more measured, sensible approach to the subject, by contrast with the slightly paranoid approach of the Opposition party. The hon. Member for Stone (Mr. Cash) made some interesting interventions, some of which were so long that I received notes at the Dispatch Box, which normally only happens during a speech. I shall try to address some of the points that have been made, particularly with regard to the UK contribution to the programme. I shall reiterate what I said earlier but perhaps did not make clear enough.

The development programme is jointly funded by the European Commission and the European Space Agency. The UK is contributing about 17 per cent., or €142 million, directly through the European Space Agency. I wanted to get that on the record.

Mr. Ellwood: A lot of money comes directly from the European Commission, into which we channel money as well. Is there an additional sum that comes indirectly from the UK via the European Commission?

Ms Winterton: The test and development phase, as I said—

It being one and a half hours after the commencement of proceedings on the motion, Madam Deputy Speaker put the Question, pursuant to Standing Order No. 16 (Proceedings under an Act or on European Union documents).

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Madam Deputy Speaker: I think the Ayes have it.

Hon. Members: No.

Division deferred till Wednesday 4 July, pursuant to Standing Order No. 41A (Deferred divisions).


Motion made, and Question put forthwith, pursuant to Standing Order No. 145 (Liaison Committee),

Question agreed to.



2 July 2007 : Column 788

Hearing Loops (Shops)

Motion made, and Question proposed, That this House do now adjourn. —[Mr. Roy.]

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