Satellite Navigation Systems
The Committee consisted of the following Members:
Mark Etherton, Committee Clerk
† attended the Committee
The following also attended ( Standing Order No. 119(6) ) :
Satellite Navigation Systems
Julie Elliott (Sunderland Central) (Lab): Thank you, Mr Bone. I apologise for the fact that there is a lot of jargon in my introduction on why the European Scrutiny Committee recommended the matter for debate, but I will do my best.
The EU has a two-phase policy for developing a global navigation satellite system—GNSS. The first phase, GNSS 1, is the European geostationary navigation overlay system—the EGNOS programme—and the second phase, GNSS 2, is the Galileo programme, which is to establish a new satellite navigation constellation with appropriate ground infrastructure. Galileo is based on the presumption that Europe ought not to rely indefinitely on the GPS, the US global positioning system, and GLONASS, the Russian global navigation satellite system, augmented by EGNOS. Galileo is being carried out in conjunction with the European Space Agency and a number of agreements are in place or being negotiated with third countries about co-operating in the project.
EGNOS is already in its exploitation phase, as services are already being offered: an open service; a service for the dissemination and development of data for the development of commercial applications; and a safety of life service. The exploitation phase of Galileo, during which services will be offered, is scheduled to begin in 2014 and to be completed by 2020. Galileo is intended to provide five services: the open service, which is basic and free of charge at the point of use; the commercial service, which, for a fee, will offer added value for more demanding uses; the safety of life service, which is for safety-critical applications that require high integrity; the search and rescue service, to complement the current COSPAS-SARSAT system; and the public regulated service, which is a high-performance, encrypted service for authorised civil government applications, such as national security, law enforcement agencies, and customs and excise.
The draft regulation would define the governance and financing framework for the Galileo and EGNOS programmes for the period from 2014 to 2020. It would replace the 2008 regulation that sets out the governance and financing arrangements until 2014, and enter into force on 1 January 2014. The financial provision for the programmes cannot be precisely determined until agreement has been negotiated on the multi-annual financial framework for 2014 to 2020, which will govern EU annual budgets. In recommending the document for debate, the European Scrutiny Committee thought that
Let me begin with an apology. I am aware that the European Scrutiny Committee wished to hold a debate on the document prior to the Transport Council on 7 June; sadly, my update letter came too late for that. As always, a trade-off had to be made between holding off so that fuller information could be provided about negotiations that were in their final stages, and writing that letter. I am sorry that, in the event, it was too late, but I am pleased to update and report to this Committee today.
Everyone will be familiar with the difficult history of the Galileo programme. Indeed, a European Committee discussed the mid-term review of the programme last year. The Commission had revealed very worrying information about delays and overspends, but the document we are considering today seeks to address those problems by fundamentally reforming how the Galileo and EGNOS programmes will be governed from 2014 onwards. There has been a series of different models for the programmes, including a failed public-private partnership, but the new EU regulation proposes a governance arrangement that is logical, that has the support of member states, the European Commission and industry, and—most importantly—that is stable.
The European Commission acknowledges that it is not best placed to deliver infrastructure programmes such as Galileo. The bulk of the work in delivering and operating the system and offering services will move to the European GNSS Agency—or GSA. The GSA will become the focal point for the programme and will incorporate ESA expertise for its delivery. Roles and responsibilities will be clearer, which will help programme management significantly. There will be clearer lines of command and accountability. The European Commission will retain overall responsibility for political oversight, progress of the programmes and the finances.
The British Government are not complacent. We do not assume that the changes will automatically guarantee 100% perfect performance in the future, but we believe that they will give the programme a much better chance of being better managed. We have been actively critical of the management of the programme, and I have discussed the need to improve transparency and information flows, and to control spending, with Commission Vice-President Tajani. He is well aware of our concerns, which are shared by other member states. The proposed regulation therefore seeks to provide better information, and negotiations on the text have produced further improvements, such as on reporting the use of contingency budgets.
Although the proposed regulation grants a budget to the Galileo and EGNOS programmes, no discussion has yet taken place on what Galileo’s final budget should be. The Commission has proposed a budget of €7.9 billion in current prices, but we think that that is too high and we will try to reduce it.
I requested a waiver from scrutiny to allow the UK to support the partial general approach on 7 June, as the negotiations on the non-budgetary parts had gone very well, as I set out in my letters. The European Scrutiny Committee declined to grant a waiver, expressing concerns over the link between the partial general approach and the wider budget negotiations. In light of those concerns, the UK made a minute statement at the Council saying that we could not yet support the partial general approach. I let the Committee have a copy of that statement in my letter of 15 May, and we did not override its scrutiny clearance.
The second consideration for the debate is the independence of the security accreditation board, which I am sure that we will come on to soon. Without prejudging the discussion, although we did not manage to secure a solution, we avoided any avenues from being closed off, so we are satisfied with that outcome.
Although Galileo has had a difficult history, it is clear that it still has significant commercial potential for the UK. UK companies have done well from the construction of the system, winning competitive contracts. We believe that those contracts comprise around 16% of the Galileo budget for the period, while our pre-abatement contribution to the EU budget is around 14%. We have been careful to check that the new regulation does not put UK firms at a disadvantage or jeopardise continued UK success.
Studies suggest potential benefits from new services and products as Galileo comes into operation. The benefits to the UK economy alone could be worth £1.3 billion a year. We want to see services begin from Galileo as soon as possible so that the benefits can be realised.
We have an excellent space industry in the UK. I had the opportunity of meeting many key representatives of the sector at Farnborough yesterday, on space day. By taking a pragmatic approach to the programme, getting a grip on the budget and ensuring that it is better managed, there will be great opportunities for the UK and benefits that will flow both for UK citizens and industry.
The Chair: We now have until 9.55 am for questions to the Minister. I remind Members that questions should be brief. It is open to a Member, subject to my discretion, to ask related supplementary questions. I call Chi Onwurah.
Given our strong competitive position in the space industry, we all want to ensure that the UK has equal access to overseas export markets. What is the Minister doing to ensure that there is a level playing field for future Galileo procurements with non-European countries? If they have access to Galileo procurements, we should have access to procurements in the space sector in their countries on at least equal terms.
Mr Willetts: That is a very important point. We are proud of the performance of our space industry on exports. Indeed, at Farnborough yesterday, I was able to release new data showing that 10% of our high-tech exports to China are from the space industry. One of our objectives in the negotiations was to ensure that our British firms had an opportunity to compete fairly for contracts not only for Galileo within the EU, but more widely. The Commission is aware of concerns about a level playing field for procurement with non-EU countries, and we are expecting proposals to tackle that wider issue in the autumn, although we have not yet seen the proposal.
Chi Onwurah: With your permission, Mr Bone, I would like to tease out some of the details about the transfer of responsibilities for Galileo and EGNOS to the new GSA. The Minister gave us some information, but I am sure he is aware of concern about the resources that the GSA will have to manage such a large project. The Minister talked about previous difficulties with projects, including project overruns, so it would be sensible to ensure that project managers are properly resourced, especially as the GSA will be controlling the initiation and monitoring of security procedures, monitoring standards and dealing with other delegated decisions. Will the Minister tell us a little more about the transfer of responsibilities and the resources that will be available to the GSA so that it can handle them?
Mr Willetts: Given the unhappy history of Galileo, I do not wish to give any false assurances to the Committee. I recognise that the hon. Lady raises a genuine point. This is a risk to the programme. We think that moving from the Commission to the GSA is the right model, but that is a big, major shift. We are talking about the GSA handling an expansion from 30 staff to 170 and relocating from Brussels to Prague—and doing all that without any interruption to its service. We, along with other member states, are pressing the Commission for an implementation plan. We have been carefully monitoring the quality of management of this programme. We will hold the Commission to account—
Chi Onwurah: What discussions has the Minister had with his European counterparts about space situational awareness? He and the Committee will be aware that space debris will continue to represent a growing threat to our critical space infrastructure. I would welcome an update on what the UK and the EU are doing to combat that, over and above what the US is doing.
Mr Willetts: Going back to our special relationship with the USA, we have an excellent facility at Fylingdales. When I had the privilege of visiting it, I was impressed by its performance: it can spot a tennis ball 3,000 km up, which is better than even Andy Murray can manage. That is a formidable Anglo-American capability.
There are some capabilities in individual EU member states. I think both France and Germany have some capability. There is, as yet, no proposal for an EU capability. Such a proposal may come forward from the Commission in the autumn or later on. We have had preliminary discussions with the French Government about a possible exchange but, of course, our commitment to the shared service with the US will stand.
That announcement is welcome, if a little cryptic. Following the Budget decision not to renew funding for the programme, will the Minister explain how it will be furthered? Will he confirm whether any new money is available, and if so, how much?
Mr Willetts: I challenge the shadow Minister’s assertion. There was no active decision not to carry on funding the programme; it is just that there was no decision to carry on funding the programme—that is a very important distinction. We have already secured funding for one year, and hopefully we can secure funding for future years. We have to take such things a year at a time. We have already secured some £27 million of new research and development work for our first year, and I have identified within the Technology Strategy Board’s programme a further £10 million for space-related work, which I also launched yesterday. I hope that we will be able to continue supporting that important technology programme in some way.
Indeed, the Minister referred to that point. However, does he recognise the potential economic benefits to be gained from increasing the UK’s investment in the ESA at the next ESA ministerial Council in November? What is the Minister’s view on that? Has he had representations from industry?
Mr Willetts: There are two distinct issues. We think that the Commission’s proposal for the total Galileo budget is too high, but there is a delicate balance to strike because, equally, we want a figure that is credible. We do not want to end up with a figure that is too low, because that might result in endless ad hoc additions to the budget. We will be negotiating robustly for a rather lower figure.
More widely, there is the question of the ESA budget, which will be discussed at the ESA ministerial in November. I had a useful discussion with Jean-Jacques Dordain, who has been over this week for Farnborough, and there will be a meeting tomorrow of the space leadership council, which I co-chair, where I am sure we will get advice from the industry. I realise that ESA programmes have the potential to be of considerable benefit to British business, and we will assess our priorities for the ESA negotiations in light of that advice from the council so that we can do our best for British business.
Chi Onwurah: I understand that the proposed budget in the regulation is sufficient to implement fully both Galileo and EGNOS, which would mean a full complement of 30 satellites. The Minister has said that the project should run within its current budget and that we will still have a useful capacity, even without the full complement of satellites. Indeed, we have debated that subject previously. Will the Minister say how many satellites he expects will launch? Is it still 18 instead of the 30 proposed last year? If not, what is the minimum number we need, and what impact will that have on downstream services?
Mr Willetts: The shadow Minister asks whether there will be 18 or 30 satellites. Perhaps unsurprisingly, given that these are EU negotiations, there has been convergence on 24—exactly halfway between the two figures. There is a lot of support for 24 satellites. Partly due to the understandable caution of the European Scrutiny Committee, we have made it clear that we have not yet agreed a budget for Galileo, because that needs to be part of a wider negotiation on the next MFF. We cannot confirm a particular figure, but I do detect a degree of convergence around 24.
Chris Ruane (Vale of Clwyd) (Lab): The Minister spoke about wider co-operation within Europe on space issues and mentioned the satellite that will be able to spot a tennis ball 3,000 km away in space. What assessment has he made of the impact on the British economy of the extremely large telescope? That European initiative will be located in the Atacama desert. The bowl will be as big as Wembley stadium and the telescope will look at outer, outer space. There are perhaps two runners to build it: Europe or St Asaph in my constituency. What assessment has the Minister made of the chances of St Asaph winning the contract and creating thousands of jobs on this £2 billion initiative?
Mr Willetts: I admire the hon. Gentleman’s ingenuity in bringing the extremely large telescope into this debate on Galileo. Of course, that is a very exciting project. Some of us will remember the James Bond movie in which the final showdown is in the bowl of another extremely large telescope.
We have not yet reached a final view and we have not as yet committed ourselves to participating in that programme. It will require the backing of 10 nations if it is to go ahead, and I do not think that that number has yet been reached. We are considering it carefully. I understand its potential significance, and it is obviously of particular significance to the hon. Gentleman’s constituency. We have to fit it within the ring-fenced science budget, and that is something that the Science and Technology Facilities Council and other bodies are considering.
Chris Ruane: I thank the right hon. Gentleman for that answer. Does he agree that the extremely large telescope, if completed, could keep an eye on those satellites 3,000 km away? That would be very handy.
Mr Willetts: My understanding of the extremely large telescope is that its purpose is to get signals from even further away in the universe—in other words, further back towards the big bang—so it might not be
Grahame M. Morris (Easington) (Lab): On the same theme, the Minister mentioned the importance of exports. He set out the proportion of UK exports from the aerospace industry that go to China. While we are weighing up the potential benefits to the British economy, has it been possible to quantify the benefits to UK plc as a whole? I know there are other benefits associated with the emergency services and so on, but are any figures available on the basis of our full participation in the scheme, provided there is the necessary funding?
Mr Willetts: We have tried to identify two sorts of benefits. There is the service benefit of the development of more accurate navigational services, which we have estimated as a wider benefit to the economy of more than £1 billion. Secondly, there is the benefit that we have secured for the providers of satellites. Surrey Satellite Technology has done very well from playing a crucial part in the production of all the Galileo satellites that have been ordered so far. There is a double benefit—a wider benefit for the economy and a specific benefit for the industrial sector—and both are positive features of Galileo.
That the Committee takes note of European Union Document No. 17844/11 and Addenda 1 and 2, relating to a draft Regulation on the implementation and exploitation of European satellite navigation systems; and supports the Government's aim to avoid prejudging the negotiations on the Multi-Annual Financial Framework whilst establishing more effective governance arrangements to address previously identified deficiencies within the programme, principally by ensuring that the Regulation provides greater clarity of the roles and responsibilities of different organisations, and greater budgetary transparency for Member States in order for progress of the programme to be monitored.
I thank the Committee for a useful debate. It is being held at absolutely the right moment with the Farnborough international air show on this week, and yesterday being space day. I hope that I have demonstrated here and in my letters to the Committee that negotiations on the regulations have gone well. The changes set out in the partial general approach make significant changes to how the Galileo and EGNOS programmes will be managed in future. We have stressed to the Commission the importance of getting its supervisory role right and not trying to manage the day-to-day activities of the programmes.
We believe that this new approach with the specialist EU agency, the GSA, carrying out day-to-day management has considerable merit. It is widely supported as a sensible structure for the programmes. The Committee will also have seen that the Government support the text of the regulation. However, we reserved our position, reflecting the concerns expressed by the Committee over the possible impact on the EU budget negotiations. I believe that this outcome—a clear UK minute statement—means that we have avoided any assumption
Chi Onwurah: I thank the European Scrutiny Committee for giving us the opportunity to discuss this important issue. I echo the Minister’s comments on the strength of the UK space sector. I wholeheartedly welcome the news yesterday that the sector continues to grow strongly at 7.5% in a recession and is worth more than £9 billion.
I always read the Minister’s speeches and I was very pleased to read the announcements at Farnborough yesterday. I would very much have liked to have been there in person, but duties in a Public Bill Committee kept me away. He made some welcome announcements regarding the UK space sector, carrying forward some parts of Labour’s legacy in the area. If the Government put in place a similar long-term strategy for the entire economy I wonder whether we would now be in a double-dip recession. I do not think that the good health of the UK space industry and the previous Government’s commitment to it are a coincidence. But I do not want to stray too far from the topic at hand, Mr Bone.
The Minister made some interesting comments today on the budget for the programme. His position has not shifted much since our last debate on this topic. I do understand, though, that negotiations on that front may be a little above his pay grade.
I note with interest that the UK’s “top priority” in those negotiations is budgetary restraint rather than growth. Industry calculates that the UK has already won back 20% more by value in industrial contracts than it has publicly invested in the Galileo programme. This makes UK industry the most successful industry in the Galileo manufacturing phase. Those in the UK space industry tell me they would like to see, perhaps understandably, an increase in the UK budget from the current 8% to 20%. They believe that that would result in a commensurate increase in the returns to the UK industry so that it would pay for itself. Clearly, the Government are not going to commit to that. But I would urge the Minster to consider carefully the effects on industry of a lack of support at the European level for the European space programme.
I welcome the progress on establishing a new satellite applications catapult, as announced yesterday by the Minister. It is rather unfortunate that the acronym will be “SAC”, and I have written to the Secretary of State for Business, Innovation and Skills suggesting that “Turing” would be a far better name for the technology centres than “catapult”, because the image of a satellite and a catapult is not fortuitous. Be that as it may, the SAC will
Galileo is now set to become a reality and an economic success story for the UK, despite its past trials, and I hope that the Government’s budget negotiations will not do anything to jeopardise that. Galileo will be interoperable with the US global positioning system, providing much greater resilience and accuracy for users of satellite navigation. Increased global dependence on satellite navigation, location and timing services throughout our economy increases the risks associated with dependence on the US GPS system as the single supplier. Galileo—a civilian-controlled system—will bring significant benefits in improved signal accuracy, which all will welcome, availability and resilience.
The European Commission has discussed the idea of de-scoping Galileo to 18 rather than 30 satellites. The Minister suggested that we may end up with some 24 satellites. It is important that Galileo does not simply act as an augmentation of the US GPS system and that it is an independent capability. I hope that that is still the case with 24 satellites—if that is where we end up. Industry and most other EU member states strongly opposed the notion of Galileo simply being an augmentation of the US system, arguing that it would be a waste of the sunk investment and would not realise any of the benefits of a second system.
The regulation sets out some welcome changes to the governance arrangements of the project. It will put in place a similar delivery framework to the UK’s, and I am sure the Minister and the Committee will be vigilant in keeping an eye on developments and holding the EU to account. I have sought some reassurances from the Minister, but I still have some concerns. As he said, the GSA currently has some 30 staff, which is about one for every satellite. We believe it is critical to the success of the entire project that the GSA has the right level of expertise and budget to carry out its new responsibilities. The Minister mentioned the GSA having 170 staff, and finding staff with the right expertise in the time available will be critical to its success.
The objective of the Commission is to have the GSA in charge of the management of both programmes, which is a huge task and is comparable to any major satellite operator’s activity. It took several years for the European Organisation for the Exploitation of Meteorological Satellites to become the world leader in weather services by operating a large fleet of satellites, delivering services to end users and co-ordinating with international counterparts. Therefore, it is a huge challenge to start from scratch the operation of such complex programmes by the GSA. I deplore the overruns on the Galileo programme, but they must not stop us from ensuring that the proper resources are assigned in order to get the most out of it, however many satellites we end up with. Our future security and, increasingly, our economy are dependent on our continued strength in that important area.
I welcome in principle the Minister’s civil space strategy, which was released yesterday afternoon, although I have not had chance to read it in full yet. I hope, however, that it marks a shift towards the UK Government playing a more active leadership role on space and the economy more widely.
We will not oppose the motion, but we will continue to monitor progress not only in this area, but on our national space policy, which is so important to our economic future. I look forward to future debates on those key issues.
Mr Clappison: It is a pleasure to serve under your chairmanship, Mr Bone, just as it is to hear the Minister’s words on the subject. I warmly welcome the critical tone of the motion, which is well justified in view of the Galileo project’s mixed history, some of which we have heard about in the debate so far. You will be relieved to hear that I do not propose to speak at great length, Mr Bone, but I will make two points in support of the Minister’s position.
First, I welcome what the Minister said about not implementing the scrutiny override on this matter. He has taken a proper approach, and when Ministers do not operate the scrutiny reserve, they deserve to be congratulated for it. After all, the purpose of scrutinising such documents and measures proposed by the EU is for Parliament to have its say, try to influence debate, consider what is proposed, and hold the Government to account. There is little point in trying to undertake such functions if the measures have already been agreed, because we would in effect be debating law and policy after it had been made and implemented. The Minister should therefore be congratulated.
The Minister should also be congratulated for not falling for what is described as the partial general approach. Perhaps only the EU could think of a partial general approach for dealing with something. Philosophers and existentialists might have a great time contemplating it, but the rest of us mere mortals are left puzzled. What I think it does is tie the hands of Government and Parliaments. People find that everything has been cut and dried in advance, and it gives the lie to what the treaty of Lisbon said. We are seeing those partial general approaches across the board; they come before the European Scrutiny Committee time and again. It shows the lie in all that the Lisbon treaty purported to say about Parliament having a greater role, because a partial general approach is inimical to proper parliamentary scrutiny.
Secondly, on the substance, I congratulate the Minister again on the tone he has taken towards Galileo and the European space project, which is exactly right. Galileo has a mixed history, to put it mildly, and the European Commission admits as much, perhaps to its credit, in the documents we are considering, which tell of delays and cost overruns. David Heathcoat-Amory, the former Member for Wells, is a great expert on the subject. He served longer than I have on the European Scrutiny Committee, and he has greater expertise, particularly in this field. I remember well that when our service on the European Scrutiny Committee overlapped, Galileo kept appearing in documents telling us what was happening. Time and again, it was the same story—“Well, there
All I can say as a layman—I pay tribute to the expertise that the Minister has shown in this field today—is that I fear that in this important venture, the individual nations of Europe are falling behind our competitors, because of what are now admitted to be the delays and overruns of the European project. That does not seem to be a great advertisement for putting important projects in the hands of the European Union.
On that note, and with admiration for how the Minister has covered the ground today, it is reassuring to learn that, in addition to all his other responsibilities, he is also the Minister with responsibility for space debris. That will enable me to sleep a little more restfully at night. I cannot think of anyone whose hands space debris would be better in than my right hon. Friend. There are also the giant telescopes, all the other things that we have heard about and this European project. I urge him to continue with the well-justified critical tone towards the Galileo project. Yes, this project is important, but do not overlook history. We cannot afford to let it fester on into the future.
Mr Willetts: I am grateful to my hon. Friend the Member for Hertsmere for his observations. I very much agree with both his points. I am also grateful for the observations of the hon. Member for Newcastle upon Tyne Central. I will conclude briefly with some comments on those observations.
There is a difference between the EU budget and ESA. On the EU budget, the Government are rightly taking a robust approach and that includes all Departments being vigilant for partial general approaches that threaten overall budget size through fixed costs or increased scope. That is why we have identified such programmes and been clear that the Government must not agree partial general approaches on them. Galileo is one of those examples.
On ESA itself, with the forthcoming ESA ministerial, let me make clear to the hon. Lady both the opportunity and the awkwardness of this. The opportunity is for us to secure a set of ESA priorities that match the strengths of the excellent British space industry and through that for us to help shape an ESA programme that matches the priorities of the British Government and the British space sector, which in turn will be in the wider interests of Europe as a whole.
The awkwardness is that this ESA ministerial occurs in the middle of an agreed comprehensive spending review period, so the challenge is that we have to go into those negotiations with a financial position in which the overall budgets for the Department for Business, Innovation
Grahame M. Morris: On the specific point of the complications of the decision-making process in the middle of the comprehensive spending review period, should the priority of the Government not be jobs and growth, especially in these difficult times? With the cost-benefit analysis to which he referred earlier, the Minister could make a powerful argument about using this as an engine of growth that would generate many benefits for the British economy.
Mr Willetts: There is indeed the potential for significant benefits for the European economy and, ultimately, for consumers of space-based services. We understand that and there is, for example, with all the uncertainties around the weather, an argument for investing in improved satellites for better meteorological data, which would help our Met Office. We fully understand those benefits. The hon. Gentleman understands that the Government are committed to tough public expenditure control, which is good for British business because it enables us to hold down interest rates. I hear what he says about the specifics of ESA, however.
The hon. Member for Newcastle upon Tyne Central raised some points about the functioning of Galileo. If we end up with 24 satellites, we believe that that would enable Galileo to be a fully functioning, independent EU system that covers the whole globe. Although it would provide that capability, it probably would not provide the safety-of-life concept as originally envisaged. That was, however, one area where we pressed and argued that Galileo was being over-ambitious.
One frustration of Galileo is that the management and expenditure control has been a nightmare with a very unhappy history, as my hon. Friend the Member for Hertsmere mentioned. On the other hand, the system offers genuine benefits if it can be got right. We have already seen that the sheer competitive impact of the prospect of Galileo led the US to open up GPS data in a way that it might not have done otherwise, as it saw that its monopoly was coming to an end. My understanding as a layman is that all the different systems are additive so, if the resource is pooled, the more satellites we have up there, the greater the precision of the data. If Galileo and GPS are pooled, the accuracy of position data in cities with skyscrapers is significantly improved. Gains would result from combining the systems, but even the 24 satellites provide a fully functioning global system.
I hope that I have been able to satisfy the Committee that we are approaching this robustly, and that we are committed to expenditure control but fully aware of the long-term economic benefits of Galileo if it is well managed.