Space Policy

The Committee consisted of the following Members:

Chair: Sir Roger Gale 

Birtwistle, Gordon (Burnley) (LD) 

Connarty, Michael (Linlithgow and East Falkirk) (Lab) 

Crabb, Stephen ( Lord Commissioner of Her Majesty’s Treasury )  

Dakin, Nic (Scunthorpe) (Lab) 

McKechin, Ann (Glasgow North) (Lab) 

Moon, Mrs Madeleine (Bridgend) (Lab) 

Mordaunt, Penny (Portsmouth North) (Con) 

Rees-Mogg, Jacob (North East Somerset) (Con) 

Simpson, David (Upper Bann) (DUP) 

Stevenson, John (Carlisle) (Con) 

Uppal, Paul (Wolverhampton South West) (Con) 

Walker, Mr Robin (Worcester) (Con) 

Willetts, Mr David (Minister for Universities and Science)  

Wright, Mr Iain (Hartlepool) (Lab) 

John-Paul Flaherty, Adrian Jenner, Committee Clerks

† attended the Committee

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European Committee C 

Monday 11 February 2013  

[Sir Roger Gale in the Chair] 

Space Policy

4.30 pm 

The Chair:  Good afternoon, ladies and gentlemen. Does a member of the European Scrutiny Committee wish to make a brief explanatory statement about the decision to refer the relevant documents to this Committee? 

Penny Mordaunt (Portsmouth North) (Con):  Thank you, Sir Roger. It is a pleasure to serve under your chairmanship. 

It might help the Committee if I take a few minutes to explain the background to the document and the reasons why the European Scrutiny Committee recommended it for debate. The European Space Agency is an intergovernmental organisation dedicated to the exploration of space. It has 20 member countries; some, including the UK, are in the EU, while some are not. The ESA space flight programme includes human space flight, mainly through participation in the international space station programme; the launch and operation of unmanned exploration missions to other planets and the moon; earth observation; science; telecommunication; maintaining a major space port—the Guiana space centre in French Guiana; and designing launch vehicles. 

There is close co-operation between ESA and the EU on some projects, such as the EU’s global navigation satellite systems. The Lisbon treaty made space policy a shared competence between the EU and member states. That is done through article 4(3) of the treaty on the functioning of the EU. Article 189 of the same treaty provides that the EU 

“shall establish any appropriate relations with the European Space Agency.” 

The Commission communication presents initial ideas on the future relationship between ESA and the EU in the context of article 189. The Commission sets out its view on the structural obstacles in the current relationship between ESA and the EU, proposes a process for establishing what the future relationship should be and suggests a number of short-term measures. 

The Commission says the issues raised can be resolved only by rapprochement of ESA towards the EU, with a time scale of 2020 to 2025 for that objective. It proposes that options should be developed in co-operation with ESA and presented to member states by the end of 2013. Options suggested for discussion include retaining the status quo, but with better co-ordination between ESA and the EU; bringing ESA, as an intergovernmental organisation, under the authority of the EU; and transforming ESA into an EU agency. 

The European Scrutiny Committee noted the Commission’s call for a response from the Council to its communication, and we assume the Government will wish to be prominent in the consideration of that response. We therefore recommended that the document be debated. Members might particularly want to consider the possibilities of

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competence creep in any future arrangement; the related issue of future limitation of the UK’s choice of whether to participate in any space project; and the possible consequences for the EU budget, particularly the post-2020 multi-annual financial framework. 

4.33 pm 

The Minister for Universities and Science (Mr David Willetts):  It is a great pleasure to serve under your chairmanship, Sir Roger. I am sure all of us, from all parties, are here because of a shared commitment to space and a shared aversion to horsemeat. It is great that we can focus on the future of Europe. 

The European Commission communication sets out the Commission’s perspective on the relationship between the European Space Agency, or ESA, and the EU. The Commission proposes a year of analysis and discussion so that proposals for change can be made by the end of 2013. The Government agree that discussions should begin on the relationship between ESA and the EU. 

The relationship between ESA and the EU is a significant strategic question and needs careful consideration, given the impact it could have on what is a successful and growing industry. Space-related turnover in the UK is £9 billion, and the sector is growing at about 7.5% a year. The Government strongly support this UK success story. 

The European Space Agency is an independent intergovernmental organisation entirely outside the European Union. The UK was a founder member in 1975. For nearly 40 years, ESA has been the mechanism through which European countries have collaborated to undertake cutting-edge research and science. It has helped to deliver a world-class European space industry. 

The Commission sets out possible changes to the EU-ESA relationship, ranging range, as we have already heard in the excellent opening remarks from my hon. Friend the Member for Portsmouth North, from simply improving co-ordination mechanisms between the organisations to the much more radical option of bringing ESA into the EU as a formal EU agency. 

Let me make it clear that, of course, the British Government understand that it is right to review the EU- ESA relationship; we hope that the Committee can endorse that. However, we doubt whether transforming ESA into an EU agency would deliver meaningful improvements for industry or improvements in the performance of the European Space Agency. I made that clear in the first preliminary discussion we had at the EU Competitiveness Council. 

The Commission seems to suggest that transforming ESA into an EU agency might be necessary to make it easier to manage EU funds through delegations to ESA. We believe that instead we should focus on what is best for growth and science, rather than tidy-mindedness. ESA has served our space sector well as an independent intergovernmental organisation. In preliminary discussions in both the EU and ESA, several member states, notably the UK and Germany, have arrived at the view that there is no obvious case for ESA to become an agency of the EU. There are legitimate questions about how it can work better with the EU. It gets about a quarter of its funding from the EU and sometimes it acts as an agent for the EU, as it is commissioned to carry out work and deliver programmes such as Galileo. There

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are issues about different auditing and funding rules, which can be tidied up, but it is not obvious that the solution to such problems is to go as far as ESA becoming an EU agency. 

As the European Scrutiny Committee indicated in its useful report, key issues during the discussions will be implications for the EU budget and EU competence for space matters. We must also consider the value of the system of optional programmes in ESA. It has been an effective way of allowing countries to choose to co-operate on particular programmes in addition to the core, mandatory science programmes. The UK selects which programmes to join, and at which level, based on clear national objectives. 

I agree with the Committee’s questions about the proposals made by the Commission in the communication. The UK will seek a clear analysis of these issues in the discussions this year. We will approach the discussions with key principles in mind, to avoid duplication, to back a successful space sector and properly to consider the overlapping but different memberships of the EU and ESA. Some member states of the EU are not part of ESA; and some members of ESA, such as Switzerland and Norway, are not part of the EU. 

Since discussions have not yet begun, the Committee may wish to raise more questions. I would welcome the opportunity to provide as much information as I can to hon. Members about the Commission communication and the issues that it raises. 

The Chair:  We now have until 5.30 pm to put questions to the Minister. I ask all hon. Members to rise now if they wish to ask questions, so that I can plan a little. 

Several hon. Members  rose  

The Chair:  I have been courteously informed that the Opposition spokesman has a series of questions that he wishes to ask. In that case, as there are only two Back Benchers seeking to put questions, perhaps we could take those first and then take that series of questions. 

Jacob Rees-Mogg (North East Somerset) (Con):  Sir Roger, I have three questions to ask relating to the report and I should like, with your permission, to put them all at once. First, on the Commission’s proposal on the steps that ESA could take, namely, that it could be provided with an 

“‘EU-like environment’ for financial management and governance”, 

I wonder whether anyone thinks that an EU-like environment for financial management and governance is a good idea, considering its own record and its failure to get its accounts signed off for the past 15 years. 

My next two questions are on the Government’s response. First, on the Government’s view on the Lisbon treaty, although we have signed up to that treaty, do the Government feel it is necessary to fully enthuse about aspects of the Lisbon treaty when it requires us to go further than what is already happening? Is it not actually in Britain’s interest to have a little foot-dragging? Irrespective of article 189 of the Lisbon treaty, it is not necessary for the Government to push ahead. 

Finally, the Minister states that the EU is among the largest contributors to ESA. However, should we not bear in mind that the UK is one of the largest contributors

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to the EU, so it is not necessarily appropriate to give the EU credit for spending our money? Many important ESA members are also major contributors to the EU budget. It is therefore the ESA members that make the fundamental contribution, rather than the European Union. 

The Chair:  Before I invite the Minister to respond, I remind him that this debate is about the European Space Agency. I am quite sure that the will find a way of neatly encapsulating his responses to the hon. Member for North East Somerset while maintaining good order. 

Mr Willetts:  Thank you, Sir Roger. I will follow that advice. My hon. Friend’s intervention should remind us that there is a range of approaches to Europe: enthusiasm, about which we were warned in the 17th century, and of which we remain wary to this day; scepticism, at the other extreme; and, in the middle, the shrewd foot-dragging tendency. My hon. Friend made an important point. It is not obvious that ESA’s financial management would be improved by copying the model of the European Union. I will certainly make that important point in the discussions. 

On my hon. Friend’s second point about the Lisbon treaty, we did not object explicitly in the Lisbon treaty to the EU taking a role in space. There are EU projects, including the Galileo programme. However, that does not mean that the EU should take over the European Space Agency. It can look to ESA as the delivery mechanism for objectives that the EU sets out. However, I agree with him that there is no need for the EU to take on many more programmes. When the ESA ministerial met last autumn in Naples—it meets only every four years, which I think is the right frequency—we agreed in an intergovernmental way on some strategic objectives and programmes for ESA. We can do it that way without requiring an EU remit. 

My hon. Friend’s third point is correct. We do spend the money. We either spend it directly through direct contributions to ESA, or indirectly via our contributions to the EU budget. As we speak, it is being announced in the Chamber how successfully we have been able to control our future contributions to the EU budget. 

Penny Mordaunt:  I was encouraged by what the Minister said about the Government taking a cautious approach and not wanting to bring the European Space Agency under the wing of the EU. I have a couple of questions. First, ESA’s procurement principles guarantee that member states get their money back to their own industries pound for pound, apart from 20%, which goes to the management programme for ESA. That has ensured an efficient economic return for the UK on that public investment. Obviously, many people want that to be retained. 

In comparison, the EU’s value for money procurement principles mean that financial return is not guaranteed. However, as the Minister pointed out, we have been successful in competing for and winning contracts. Galileo is just one those contracts. Industry believes that it can continue to compete successfully in an open market for EU funding for space programmes. Does the Minister think that both procurement approaches, which are obviously different, can co-exist side by side? 

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Finally—this is timely given the Prime Minister’s statement—we were told that, despite the reduction in the budget, spending in percentage terms on research and initiatives supporting growth would increase from 9% to 13%. Just before Christmas, I witnessed the launch of Skynet 5 from an Astrium platform on an Astrium rocket—built in my constituency—in French Guiana. All the European Space Agency partners involved in that launch were vocal in their praise for the UK increasing investment in the sector. We ought to be doing that, and I hope that it will not be lost. I invite the Minister to elaborate. 

Mr Willetts:  I am grateful to my hon. Friend. The procurement principles issue is interesting, but it is not straightforward, because the ESA model is essentially that the money put into the budget is on a rubber band and it comes back out. Whatever money is put in, a proportion comes back out. That is one way of doing it, and it does affect member states’ investments. The EU model involves, in theory at least, a competitive tendering process without an exact juste retour requirement. There is an argument that, given the strength and cost-effectiveness of our space industry, we might do better in that model than with juste retour. The matter is not completely straightforward, but it can be argued that we have a judicious mix. In the EU’s Galileo programme, which is allocated by EU principles, we have ended up with every satellite having a significant UK element. Through the ESA ministerial budget, our industry can be confident of sustained investment, and we believe that the £240 million a year that we are directly investing in the ESA budget will trigger at least £1 billion a year of private investment in the UK space industry. 

On my hon. Friend’s second point, she is absolutely right that the Government went into the EU negotiations with the objective of the EU research and development being a larger part of a smaller budget. That is exactly what the Prime Minister secured. It is one of the EU budgets that are of benefit to the UK, partly for the reason that, given the excellence of our research, we succeed in securing funds and get back more than we put in. There is also evidence, however, that research programmes conducted across national boundaries and involving more than one country are particularly productive and imaginative. Looking at problems with more than one set of eyes means that there is genuine added value. Within that, we look to see high-tech British firms such as Astrium thriving. My hon. Friend is a great advocate of the firm, which is based in her constituency, and we are fortunate to have firms of that scale in the UK. I am sure that both the ESA ministerial budget and the EU research budget will offer great opportunities for Astrium in the future. 

Mr Iain Wright (Hartlepool) (Lab):  It is a pleasure, as always, to serve under your chairmanship, Sir Roger. I remember with great affection being in this room for the Committee deliberations on the Housing and Regeneration Bill, which you so ably steered us through. I was on the Government Benches at that time, and I must say, Sir Roger, that you look much better from that side, but let us move on. 

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I have three broad levels of questioning. First, I have questions around general EU space policy. Secondly, I want to ask about the five structural objectives. Thirdly, I want to explore the three options around rapprochement. 

Will the Minister explain how the Prime Minister’s policy of holding a referendum around 2017 will impact on the relationship with EU space policy, ESA, and investment and procurement opportunities, particularly in the next funding round from 2014 onwards? The Prime Minister has just answered questions in the Chamber on the European Council and the EU budget, and I want to press the Minister on the line of questioning raised by the hon. Member for Portsmouth North. I was in the Chamber for the earlier part of the Prime Minister’s statement and I noticed that the Minister was there too. He will have heard the Prime Minister mention changes to the budget on innovation and competitiveness. The Prime Minister mentioned energy, broadband and digital, but not space policy, which is a crucial industrial sector. As the hon. Member for Portsmouth North did, may I press him and ask how the EU budget for 2014-21 will impact on ESA and the EU? Does he expect the budget for that will rise? 

The Prime Minister said that 

“this money is handed out of the basis of quality, so Britain’s universities are particularly well-placed to benefit.” 

On that same principle, does the Minister think that the space industries we have in this country—the hon. Lady mentioned just one excellent example—will benefit disproportionately? 

Thirdly, what is the Minister doing to ensure that we have a UK director on ESA’s board? Finally, reading the Commission’s deliberations, I was struck by how much attention is given to institutional wrangling and rearranging rather than thinking of space as a way in which we can maintain and enhance our competitive advantage in the fierce, global 21st century economy, when rivals such as China are snapping at our heels. The whole House would support him with regard to that, so what steps will he take to ensure competitiveness and economic advantage, rather than navel gazing, are the priorities when it comes to space policy? 

Mr Willetts:  The Prime Minister’s commitment to a referendum has been of great value in clearing the air and made it absolutely clear that, across Whitehall, we need to look rigorously at the competences that we accept need to be discharged at an EU level and those we think are better to be decided at the national level. It would stray too wide and be in conflict with your earlier advice, Sir Roger, if I were to speculate about competences that should be returned to the national level, but it is fairly clear, and has been the decision Britain has taken for decades, that these big space programmes cannot be done by individual western European countries so we need to come together to deliver them through ESA, and sometimes through the EU. In my experience of negotiating both at the EU Competitiveness Council and the ESA ministerial, I have seen that active engagement by Britain can often secure our negotiation objectives. We saw last weekend at Brussels how, post the Prime Minister’s powerful speech on Europe and the referendum, people said that we would be isolated and nobody would deal with us, but actually he was able to negotiate a very successful deal indeed. 

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On space and the EU budget, I am afraid that the details are still coming through. Currently, there are essentially two major areas of EU expenditure on space: Galileo and Global Monitoring for Environmental Security. Within the total, my understanding is that Galileo—these figures are still provisional; I hope that the Committee will forgive me—is €6.3 billion for the next budget period and GMES is €3.7 billion. That is, however, a relatively small part of total spend on space; much more of it comes through the European Space Agency. As those are the only two elements of EU space spend, that is why the Prime Minister drew attention to some other larger items; our universities and research areas, for example. 

On having a UK director on the ESA board, the hon. Gentleman is absolutely right. I find it deeply frustrating that we do not have a UK director on the ESA board. Of course, we understand that the individual nationalities are there to serve ESA as a whole and not to be delegates from the nation state. Nevertheless, when I look at the board’s composition, it is frustrating that there is no British member. I regularly raise that in conversation with the director general and others. The fact that I have been harried so relentlessly on the subject in the House of Commons will only further strengthen my hand when I go back for further discussions. 

Finally, regarding the Commission, again I rather agree with the hon. Member for Hartlepool; in some ways, there is nothing more tedious than talking endlessly about exact institutional arrangements. What is exciting about space and important for the future is the technologies that are advanced and the services our constituents will get as a result of better positioning systems, better information about future weather and better use of satellite data. Those are far more interesting than the exact details of institutional arrangements. 

Nevertheless, both ESA and the EU recognise that post-Lisbon, they need some kind of new understanding. I feel confident that there will be a strong opinion, which I sense is the mood in the Committee today, that it should not take the form of ESA simply becoming an agency of the EU. I hope that we can get a straightforward and simple agreement that protects ESA as an inter-ministerial agency and go back to the real business of using ESA to drive technological advance across Europe and ensuring that it benefits the great industries and companies located in the UK. 

Mr Wright:  That was helpful. Let me move to the five structural obstacles that the Commission identified, which I will take in turn. 

First, how will the financial management of EU funds to ESA be simplified and made more transparent? I agree with the hon. Member for North East Somerset, who said that we do not want to see an EU-like environment for financial management, given the EU’s track record on financial management and governance. How will the Minister achieve better transparency, accountability and improvement in financial management? 

Regarding the asymmetry of membership between ESA and the EU, does the Minister believe that all 27 members of the EU will eventually become members of ESA? Does he think that qualified majority voting will be introduced in ESA? If so, when? 

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The Commission makes a fair point about asymmetry in space and defence matters, especially when developments in space will increasingly have an impact on security and defence policy. How will the Minister address that point on behalf of the UK? If, say, Switzerland votes against something that the UK and EU members believed to be in the best interests of national and EU space policy, and it had an impact on our defence and security policy, how does the Minister think that would be resolved? 

The explanatory memorandum from the Minister seems to suggest that the absence of mechanisms for policy co-ordination is a hindrance. It says that 

“a more strategic co-ordination mechanism may be needed”. 

How does he anticipate that will be achieved? 

The fifth obstacle is lack of political accountability for ESA. In the document, the Commission laments the lack of a formal link with the European Parliament. Does the Minister think that we could address any concerns by having an annual debate on space policy, including the role of ESA, in this House and the other place, rather than concentrating on the European Parliament? What steps can we take together—him as the Minister and myself as the shadow Minister—to ensure that business managers arrange an annual debate on space policy in this place? 

Mr Willetts:  Those are the five structural obstacles set out by the Commission. Some of the obstacles listed seem to be more theoretical than real. They are not necessarily problems that anyone has so far encountered in the real world in making space policy work. Part of the approach the Government will take is, “If it ain’t broke, don’t fix it”. Some of the obstacles are more real than others. 

The first obstacle—the mismatch of financial rules—is a real problem. Managing different budgets according to both EU and ESA rules is complicated. There were problems when programmes such as Galileo transferred from being an ESA research programme into an EU programme, with rather different accountancy rules and audit requirements. That is an area in which rules can be simplified. At this stage, we are a long way from delivering simplification, but even a commitment to simplification would be progress. 

Regarding the asymmetry of membership, it is fascinating that Norway and Switzerland are members of ESA but not members of the EU. I also noticed at the ESA ministerial that Canada turned up, which was exciting. I think the Canadians have some special status, although I am not sure whether they are quite full members, but they were very welcome. It was good to see Canada there —perhaps we will get the USA next. That is the kind of broad interpretation of Europe to which Conservative Members rather subscribe. 

The Commission notes that since each member state has equal voting weight, matters affecting the EU could, in theory, be disproportionately affected by a single non-EU member state. All I can say is that we are not aware of any occasion when that has actually been a problem. As I say, we are perhaps rather more relaxed about the two different memberships. I cannot say whether all EU member states will end up as members of ESA. The agency has been growing, and 18 EU member states are now members, but it would not be right for

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me to speculate. There were new members last time, when Poland and Romania joined, so perhaps others will join in future. 

On asymmetry in security and defence matters, the EU is supposed to be concerned that because ESA contains non-EU member states, it is hard for the EU to use it for security and defence purposes. However, the treaty setting up ESA makes it clear that it is established for exclusively peaceful processes, so the problem is no more than theoretical. 

On the absence of mechanisms for policy co-ordination —the hon. Gentleman’s fourth point—there may be some scope for improvement. One can imagine, to take a rather different context, a purchaser/provider distinction. We could try to be a bit clearer that the EU would occasionally want to purchase the delivery of some space objectives and would turn to ESA to deliver them. That is quite a useful way of seeing the role. However, it would be a mistake for the EU then to try to set up a parallel organisation to manage or supervise ESA. The nightmare would be if ESA carries on with its current staffing, and the EU grows a second kind of space officialdom to monitor ESA’s work. That would be a waste of money, and it is not policy co-ordination. 

On the lack of political accountability for ESA—the fifth problem—the argument is that if only ESA became a European agency, it would have the pleasure of being debated by, and properly accountable to, the European Parliament. Again, that does not particularly set our hearts racing. Many international organisations have no formal link to the European Parliament, but they still have political accountability through national Parliaments—the UN, for example. If the hon. Gentleman would like more frequent debates in the House of Commons on space matters, many Government Members would welcome that opportunity, and we very much look forward to Opposition time being granted for such debates. 

Mr Wright:  A degree of consensus is breaking out in the Committee, and although I am concerned I have not read the brief completely on this issue, I will press on with that consensus. 

I want to turn to the three options for rapprochement set out in paragraph 1.7. From reading all the documents in the bundle, I understand that the Government’s stance on which option should be preferred is to remain neutral. Is that still the case? What is the time scale for coming to a view? How will the House and Parliament in general be informed and be in a position to scrutinise what the Government decide? 

I said the Government’s stance on the three options was to be neutral. However, paragraph 21 of the Minister’s explanatory memorandum states that some of the three options would give rise to significant financial implications. Will he outline what those implications will be and how he will oppose them? Similarly, will he tell us whether he is, at this stage, disregarding outright an EU takeover—for want of a better word—of ESA to transform it into an EU agency? Reading between the lines of his document, given what he has said this afternoon and given that the EU and ESA have distinct roles in European space policy, I think the Government’s preferred option, which

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Opposition Members would support, should be retention of the status quo, subject to improvements in financial management, certainly of the programmes. Will the Minister confirm that Parliament would prefer the fourth option? 

Mr Willetts:  That is a fair summary of our position. Some people in the EU—in the Commission—dream of ESA becoming another European agency, but that idea has not received widespread support. We are fortunate, in that a lot of us who meet as Ministers around the table for the ESA ministerial then meet around the table in Brussels as members of the Competitiveness Council. I can report that when the matter was discussed first at the Competitiveness Council before Christmas, there was quite a lot of scepticism about whether ESA needed to be an EU agency. I was particularly sceptical in my intervention on behalf of the British Government, as was the German intervention, so I would be surprised if that option found favour, although it is on the table and some people back it. 

Given that our philosophy is if it ain’t broke, don’t fix it, radical change does not seem necessary. Some clarification of funding and audit rules would be helpful, so that there is not unnecessary duplication. Some distinction—a kind of purchaser/provider split between the EU and ESA—would also help, as would some tidying up and a neater and more lucid arrangement. 

We will see how the discussion goes, but I do not detect in this Committee any appetite for radical change, which gives me added confidence that the British Government should take that position in any discussions in the EU or ESA. 

Motion made, and Question proposed,  

That the Committee takes note of European Union Document No. 16374/12, a Commission Communication on establishing appropriate relations between the European Union and the European Space Agency; and supports the Government’s aim to work with the European Commission and ESA to begin a period of discussions about the future relationship between the ESA and the EU in which it will seek to ensure that any Commission proposal for evolution of the relationship supports the growth of the UK space sector, avoids duplication of expertise and functions between the ESA and the EU, protects the UK’s ability to participate in certain space programmes on a voluntary basis, and fully analyses the implications for the EU budget and EU competence, so that a fully informed decision can be taken next year.—(Mr Willet t s.)  

5.7 pm 

Ann McKechin (Glasgow North) (Lab):  Sir Roger, it is a great pleasure to join this debate, which I welcome. The impact of the space technology industry on the UK is important, as the Minister said. European co-operation is a vital part of that. We are in a tough global market, but in that market the industry is forecast to be worth £430 billion by 2030. I hope that the UK can be an important player in that market. 

It would remiss of me not to mention an important announcement this month in my constituency, in Scotland, regarding space. A whole series of people have made the final journey to Maryhill in recent weeks, including the Minister, followed by the First Minister last week and the Russian consul general, because Scotland’s first satellite will hopefully be launched in June. It was developed and created by Clyde Space, based in my constituency, under the leadership of Craig Clark, its

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chief executive officer, whom the Minister has met on a number of occasions. A graduate of Glasgow university, Craig Clark went to work in the UK space technology research centre in England and then returned to develop nano-satellite technology. 

The UKube-1, a UK Space Agency mission, will include experiments using global positioning systems technology to measure space weather and test how cosmic radiation could improve the security of communication satellites. I am delighted to note that the payload will include up to five experiments that students throughout the UK and the public can interact with, and an outreach programme for school pupils. I hope that that will be followed with interest throughout the UK, not just in Maryhill. The satellite is no bigger than a desktop computer, weighing in at just 11 lb, which is a sign that space technology is going into the micro and nano sector, where the UK can be a leading world player. We look forward to that successful launch. Despite Clyde Space having only 20 staff, the company includes within its customer base the European Space Agency, NASA and the US air force, which shows the scale of interest. Interestingly, 80% of its sales are outside the European Union and more than 95% outside the UK. 

As discussed, European co-operation is important—it is important that we do not get into a fight between two different international bodies at European level. I am sure that our competitors are not engaging in such a tussle and are focused on developing their industry, their competition and their products, which is exactly what we need to do in the UK and in Europe as a whole. I welcome the debate and hope for further debates. 

5.10 pm 

Jacob Rees-Mogg:  I reiterate what a pleasure it is to serve under your chairmanship, Sir Roger, and to go through the document and to say how much I support the Government, which is always pleasant on a European issue. That, I must confess, is becoming more and more frequent, and I do not know whether it is because I am going soft or because the Government are becoming more robust—I very much hope it is the latter. It is also nice to see Labour Members becoming quite Tory in their approach and being in favour of the status quo, which is marvellous and something I am often in favour of. 

I want to look first at what the Commission is doing, because it seems to be going for a power grab: it wants to extend its area of responsibility. The Commission is always suspicious of the intergovernmental model in Europe because it prefers to bring the full weight of the European institutions into involvement with any aspect where EU member states are involved. It is quite interesting how it plays the card of the European Parliament—that great bastion of democracy, that wonderful, illuminating Parliament that has such high standards of openness and transparency, so much so that it is thinking of voting on the budget in secret. It is historic, I think, that a Parliament should vote in secret on setting a budget and what money is raised from people. The other side of the coin is not mentioned: that once one comes under the European Union, it is not only the Commission and the Parliament but the European Court of Justice and the whole ambit of EU rules. 

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The five points made by the Commission are essentially to move towards the power grab in opposition to intergovernmentalism, if there is such a word; it is one of those EU jargon words that one has to use from time to time. The second of the Commission’s issues, on the ability of a non-EU member state to influence EU member states within an intergovernmental body, is completely bogus. If the United Kingdom has volunteered to belong to an intergovernmental body to which the Swiss also belong, we are there as the United Kingdom and not as a subset of the European Union. If all the member states of the European Union that happen to be on that body take one view, and Switzerland takes another and votes something down, that is not a European Union matter, it is a national matter of the British Government. 

The Minister said that the security and defence issue is not applicable because the ESA is a peaceful organisation. I love the thought that no formal link with the European Parliament deprives it of the direct link with citizens that any EU policy enjoys, as if we all go to bed at night being pleased at this wonderful link with democracy that we have through the European Parliament. I think that most of my constituents hardly know that the European Parliament exists; they could not name any MEPs even if offered ready money to do so; and, mostly, they would think that it is better if it did not exist at all. 

Then we have the time scale for a rapprochement. I like that word, because normally it means a friendly coming together, but in this case it means a takeover. Similarly, in the City, when people talk of mergers, almost invariably a merger is actually a takeover by one part of the other. That is what the European Union is on about: it wants to take over ESA. It is interesting that the Commission put forward three proposals, only one of which is the status quo, having made five points that basically say that the status quo will not work. The EU documentation is, as so often, internally contradictory. It wants to impose EU elements such as QMV and accountability to the European Parliament. I have always thought of QMV as a system that is inimical to nation states, because the British people can be outvoted by other member states when an important national interest is at stake. That is important in the context of space—I agree with much of what the Minister said—and it is important in the highest level of technology. The hon. Member for Glasgow North said that the UK is doing well, but if we are spending £240 million a year, we want that £240 million coming to the UK. We do not want it going to advance the Romanian space agency, however worthy a cause that may be. 

I mentioned in questions the EU-like environment for financial management. I cannot quite believe that the EU can think that its own propaganda can conceivably be true when the EU’s financial management is a byword for corruption and failure. Even the EU judges ruled in their own favour that they should have pay rises, which is a quite disgraceful and unjust example of how the EU manages money. The ministerial response is excellent and worthy of support. I was particularly pleased by what the Minister had to say in answer to questions. The report by the European Scrutiny Committee about competence creep is right. The budgetary issue is important—where is the money coming from? 

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To conclude, it is always a great pleasure to hold these European Union debate in Committee Room 10, where there is a great picture of King Alfred fighting off the Danes. I have always thought that this most cerebral of Ministers was not one that one would naturally compare to King Alfred with his sword in hand, but I was forgetting that King Alfred was perhaps our most intelligent king as he essentially became king because he learned to read when his brothers could not. I now see the Minister in a new light as King Alfred fighting off an encroachment from the European Union. 

5.16 pm 

Mr Wright:  I cannot really follow that, although King Alfred does bear a likeness to the Minister—with hair. 

I want to commend you on your expert chairmanship, Sir Roger, and to commend the knowledgeable work of my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), who has now shadows the Cabinet Office. I cannot pretend to have my hon. Friend’s technical expertise and grasp of science, but I passionately believe that space is a leading industrial sector in this country and one in which we should continue to invest. I approach this issue as an enthusiastic ignoramus, rather than anything else. 

This country has always been a world leader in innovation, discovery and exploration. We have always pushed geographical boundaries. Doing so has always been part of our nation’s values and has provided scientific breakthroughs, commercial gain and national prosperity. Space policy should be seen in the same regard. We should hold firm. It is not something that, at a time of acute financial difficulty, should be abandoned or scrapped as an expensive or unnecessary luxury. It should be seen as something that enhances our industrial base and provides a greater economic return than the initial investment. 

Penny Mordaunt:  Does the hon. Gentleman recognise that the three sectors from the Prime Minister’s speech that he mentioned all depend on investment in space technology? 

Mr Wright:  The hon. Lady makes an important point. I was reading the FT Weekend Magazine, and it contained a little gem about work being carried out in a medical research laboratory on the early detection of the risk of stroke. It was actually the commercial application of research undertaken by the European Space Agency. That sort of cross-sector work that can be carried out for the country’s gain is important and should be maintained and enhanced. 

The UK space industry is growing at a long-term average of some 8.6%, producing a turnover, as the Minister said in his opening remarks, to the UK economy of over £9 billion and directly employing about 30,000 people in highly skilled, knowledge-intensive and well-paid jobs, as well as employing indirectly over 100,000 people in British-based jobs. For every £1 pound directly invested, we get an additional £1 back for the UK economy, and 70% of what we produce in the space industry is exported,

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often a long way. That is exactly the sort of sector that we should be identifying as important for us in the 21st century. 

On that point, I have a question for the Minister. Given the importance of space as a sector, does he think that we should have a space sector-specific strategy to add to the 11 that the Government plan to produce throughout the course of 2013? I would like space to be recognised as a leading industrial sector for the UK to ensure that companies have enough long-term stability to invest. I am pleased that the present Government have maintained much of the previous Government’s policy direction, providing that much-needed stability, and I hope that the House can work together to raise the status of space in the modern UK economy and maintain and enhance our competitive advantage in this important industrial sector. Thanks to this debate, we have started that work. 

5.20 pm 

Mr Willetts:  This has been a useful debate. I will comment briefly on the three speeches. The hon. Member for Glasgow North spoke eloquently about Clyde Space in her constituency. I am a great admirer of that company, which is an example of initiative and enterprise. CubeSat, which it will soon launch, is an excellent example of the future. CubeSat is a satellite 10 cm by 10 cm by 30 cm carrying six different scientific experiments. It shows what can be achieved with miniaturisation. We have been backing it through the UK Space Agency. I was slightly surprised to open my copy of The Times the other day and read that the First Minister of Scotland was treating it as a triumph of the Scottish Government, when I rather thought that some of the cheques we had written here had helped finance it. 

Ann McKechin:  Better together. 

Mr Willetts:  Exactly. It is an excellent example of how we are better together. 

I can sense the Committee’s interest in space. Every two years, alternating with the Farnborough international air show, we try to organise a major national space conference. The next one will be in Glasgow this summer on 16 and 17 July, and Members are all welcome to attend. 

My hon. Friend the Member for North East Somerset made a powerful speech. He was right to be suspicious of the word “rapprochement”. At the council where we discussed the document in its first provisional form before Christmas, I remarked that I was always worried when a thought was so subtle that it had to be expressed in the French language in an English text, and I asked what it meant. He was right. “Rapprochement” could mean—to some, it does mean—a takeover, and we do not want any takeover. I am grateful to him for his touching comparison with King Alfred. The Danes are now part of the like-minded group, so Alfred won in the end. They are now plucky allies of ours in many European matters. 

Finally, I can confirm to the hon. Member for Hartlepool that when it comes to a space sector strategy, I am a bit wary of grand strategies. In fact, the distinctive strength of the space sector in Britain is that we have gone for a different model from most other countries, which have an enormous central public-sector technology organisation. NASA is an example, and some individual European

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countries have similar examples. We have a very small UK Space Agency, which has a co-ordinating role, and our private sector is much bigger. 

We have a different balance of public spending and private activity from all other leading economies. The balance is completely different: we have a far smaller public sector and a much bigger private sector. That is one reason why our space sector is agile and successful, but of course we have a dialogue with the sector. In fact, through the Space Leadership Council, we bring together the scientific community, the business community and the Government and our agencies, and we work together. The previous Government set up the Space Leadership Council, and we have been happy to carry on with it, but we should always remember that the crucial initiative lies with a flexible and enterprising private sector. 

Increasingly, the European Space Agency looks to us as an example of how such things can be done in future. So many member states have financial pressures. Increasingly,

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we must look for commercially financed space activity. I believe that the judicious mix that we achieved in the European Space Agency ministerial council last autumn—a modest increase in our budget contribution but a commitment to public-private partnership, including, increasingly at UK centres such as Harwell—bodes well for the future of this crucial sector. I hope that we will have a mandate from the Committee to ensure that it is not subject to clunky and intrusive regulation. 

The Chair:  I thank the Committee for allowing me to preside over a courteous, well-informed and important debate. 

Question put and agreed to.  

5.25 pm 

Committee rose.  

Prepared 12th February 2013