1 European Defence: implementation road
map
| Committee's assessment
| Politically important |
| Committee's decision | Not cleared from scrutiny; Opinion received from Defence Committee; for debate in European Committee;
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| Document details | Commission Report: Defence Implementation Roadmap towards a more competitive and efficient defence and security sector
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| Legal base | —
|
| Department | Ministry of Defence
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| Document numbers | (36180), 11358/14, COM(14) 387
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Summary and Committee's conclusions
1.1 This Commission Report sets out a high-level
roadmap for implementing activities proposed in its July 2013
Communication Towards a more competitive and efficient defence
and security sector. That precursor Commission Communication
was part of the preparations for the December 2013 "Defence"
European Council: the first for five years on the EU's Common
Security and Defence Policy (CSDP), it was designed for Heads
of State and Government to review and agree its strategic direction
over the next few years. It was one of a trio of "scene-setting"
documents, all of which raised sufficient areas of concern to
warrant being debated (see the "Background" section
below and the previous Reports cited for the full details).
1.2 In this instance, though the Minister declared
himself encouraged by the approach being taken by the Commission
as it began the follow-through process, we were nonetheless inclined
to recommend that the Commission report be debated in European
Committee, as there were still a significant number of areas that
could go in the wrong direction, notwithstanding the Minister's
best endeavours. Before so doing, however, we sought the Opinion
of the Defence Committee on the Commission's approach and the
"deliverables" it sets out in its Roadmap.
1.3 We thank our colleagues on the Defence Committee
for their thoughtful and comprehensive Opinion, which is set out
below. In brief, the Defence Committee:
— shares the Minister's concerns
· that detailed action in respect of
the EU-wide Security of Supply regime and the CSDP-related Preparatory
Action on dual-use research needs to be "managed carefully",
and that action in relation to the Security of Supply regimes
should not lead to unnecessary regulation or a retreat to European
protectionism or constrain the sovereignty of national governments
in determining their own exports;
· about the proposals to "clarify"
certain exclusions from the scope of the Defence Procurement Directive,
especially were this clarification to constrain the UK's ability
to make its own decisions about procuring the best equipment for
its armed forces or risk undermining the UK's and other European
partners' relations with the US;
· about the proposed Green Paper on the
control of defence industry capabilities, and shares his scepticism
about the value of new legislation in this area; and
· about Commission action in third country
markets, and does not see what value would be added by the Commission
extending its activities into this area.
— agrees with the Minister that export
policy should be a matter of national sovereignty;
— says that any CSDP-related Preparatory
Action on dual-use research should ensure that UK national interests
are protected and that intellectual property rights remain with
industry and not the Commission;
— notwithstanding the increasing synergies
between the defence and civil sectors, questions what value the
European Commission could add in a number of areas for action
outlined in the report;
— states that research and development
into science and technologies applicable to defence — "the
life-blood of the military capabilities of advanced states and
alliances" — must remain free from unnecessary bureaucracy,
especially where dual-use technologies are in development; and
— is also concerned that initiatives
may arise from this roadmap that lead to unnecessary legislation
and duplication of effort with NATO, and that Commission involvement
in policy around country-to-country sales and third-country exports
could undermine European states' relations with the US, which
is "still the bedrock of UK security through the NATO Alliance".
1.4 In sum, the Defence Committee strongly endorses
the Committee's view that this Report should be debated. We now
so recommend. Among other things, this will enable the Minister
to bring the House up to date on developments in all the areas
encompassed by the report, outline how he envisages this Roadmap
now being taken forward and demonstrate how UK interests will
thereby be sustained.
1.5 In the meantime, we shall retain the document
under scrutiny.
Full
details of the document:
Commission Report: A New Deal for European Defence:
Implementation Roadmap for Communication COM(2013) 542; Towards
a more competitive and efficient defence and security sector:
(36180), 11358/14, COM(14) 387.
Background
1.6 The July 2013 Commission Communication, Towards
a more competitive and efficient defence and security sector,
proposed a number of high-level actions on its part to improve
the competitiveness of the EDTIB. That July 2013 Communication
plus separate reports from the EU High Representative (HR) Baroness
Ashton, on the EEAS and on the EU's "Comprehensive Approach"
to conflict prevention, crisis management and stabilisation prepared
the ground for the December 2013 "Defence" European
Council. The first for five years on the EU's CSDP, it was designed
for Heads of State and Government to review and agree its strategic
direction over the next few years.
1.7 Subject to the Council discussion, the Commission
intended to create a detailed roadmap with concrete actions and
timelines, in conjunction with the EDA and the EEAS.
1.8 The actions listed in the Communication included:
ensuring the full application of the existing Directives on defence
and sensitive security procurement (2009/81/EC) and on intra-EU
defence transfers (2009/43/EC); developing hybrid standards to
benefit security and defence markets; supporting defence SMEs;
and exploiting civil-military research synergies. The Communication
also proposed to assess the possibility of EU-owned dual-use capabilities
and to consider supporting a preparatory action for CSDP-related
research. The Communication also argued for increased cooperation
and more efficient use of resources among Member States to compensate
for budgetary constraints and to ensure that defence capabilities
were maintained and developed in order to meet current and future
requirements.
1.9 When he submitted it for scrutiny a year ago,
the Minister said that many proposals were consistent with the
Government's growth agenda. But the Government had made it clear
to the Commission that it would oppose any measures by the EU
to develop and, particularly, to own high-end military or dual-use
capabilities such as Remotely Piloted Air Systems (RPAS), high-resolution
satellite imagery or military satellite communication equipment;
any "proposal for which capability needs, if any, could
best be fulfilled by assets directly purchased, owned and operated
by the Union" was "red line" for the Government,
who did not believe that there was, or should be, a role for the
EU in this area.
1.10 The Government also wished not to see the Commission
involved in external market matters; was concerned over the potential
for duplication of effort, including in areas where
the Minister considered that Member States, NATO or EDA currently
had the lead; and also concerned about the implication in some
proposals of unnecessary regulatory interference in the defence
market.[1]
1.11 The European Council adopted 11 pages of Conclusions,
at the end of which it invited "the Council, the Commission,
the High Representative, the European Defence Agency and the Member
States, within their respective spheres of competence, to take
determined and verifiable steps to implement the orientations
set out" therein and said that it would "assess concrete
progress on all issues in June 2015 and provide further guidance,
on the basis of a report from the Council drawing on inputs from
the Commission, the High Representative and the European Defence
Agency".[2]
1.12 This being the first European Council discussion
of this topic since the Lisbon Treaty came into being, we first
sought the Opinion of the Defence Committee on the Commission
Communication and then recommended a debate prior to the European
Council, and for it to be on the floor of the House.[3]
1.13 In the event, it was debated in European Committee
B on 13 March 2014, along with the HR's Report on the EU's Comprehensive
Approach. In explaining the reasons for its recommendation, a
member of this Committee:
— noted that in his
Written Statement of 6 January, the Prime Minister said: "The
conclusions of the European Council are clear that nations, not
the EU institutions, are in the driving seat of defence and must
remain there";[4]
— also noted that,
when the Munich Security Conference on 1 February, the President
of the European Council, Herman von Rompuy nonetheless said:
"When it comes to defence, we know we will
need to do more with less. European countries have security responsibilities
to fulfil ... and they need the means. Starting this year, Europeans
will be launching new joint defence programmes, for cutting-edge
drones, satellite communication, cyber defence and air-to-air
refuelling. It is the start of a process. All these tools: at
the service of Europe's interests and security;"[5]
— and observed in conclusion that, while
who is in "the driving seat" was moot, the direction
of travel was clear, as set out in the Lisbon Treaty: "the
common security and defence policy shall include the progressive
framing of a common Union defence policy. This will lead to a
common defence, when the European Council, acting unanimously,
so decides".
1.14 At the end of the debate, the European Committee
resolved:
"That the Committee takes note of Unnumbered
European Union Document, the High Representative's Report on the
Common Security and Defence Policy ahead of the December 2013
European Council Discussion on Defence, and European Union Document
No. 12773/13 and Addendum, a Commission Communication: Towards
a more competitive and efficient defence and security sector;
agrees that the EU should complement NATO, which remains the bedrock
of national defence; and shares the Government's view that defence
cooperation and capability development should be driven by the
nations of Europe, whether they be EU Member States, NATO allies
or both."[6]
The Commission report
1.15 The stated overall aim of the report is to make
the defence and security sector more efficient and strengthen
the EU's CSDP. The Commission takes the European Council Conclusions
as the basis to pursue the following objectives:
· an Internal Market for Defence where European
companies can operate freely and without discrimination in all
Member States;
· an EU-wide security of supply regime where
armed forces can be sure to be sufficiently supplied in all circumstances,
no matter in which Member State their suppliers are established;
· a Preparatory Action on CSDP-related research
to explore the potential of a European research programme which,
in the future, may cover both security and defence; this is in
addition to exploiting all possible synergies between existing
civil and defence research; and
· an industrial policy that fosters the
competitiveness of European defence industries and helps to deliver
at affordable prices all the capabilities Europe needs to guarantee
its security.
1.16 The Roadmap sets out the Commission's approach,
and puts forward "deliverables", under seven main headings:
Internal Market; Promoting a more competitive defence industry;
Exploiting dual-use potential of research and reinforcing innovation;
Development of capabilities; Space and defence; Application of
EU energy policies and support instruments in the defence sector;
and Strengthening the international dimension.
1.17 The Commission undertakes to co-operate closely
with Member States, the European External Action Service (EEAS)
and the European Defence Agency (EDA), and consult widely with
industry and other relevant stakeholders, in order to develop
further and implement the actions contained within the roadmap,
prior to a Council review of progress in June 2015.
1.18 In his Explanatory Memorandum of 15 July 2014,
the Minister for International Security Strategy (Dr Andrew Murrison)
said that, thanks to close working with its LoI[7]
partners and industry lobbying, the Commission's approach
had been more cautious than might have been the case, with proposals
within the roadmap being generally at a high level with the detail
still to be developed. He identified potential benefits to defence
in a number of areas; other areas with potential benefits, but
where action needed to be managed carefully; and yet other areas
that "continue to pose some risk to the UK" and where
he will "continue to take a robust line". These latter
include proposals to clarify certain exclusions from the scope
of the Intra-Community Directive (Government to Government sales
and international arrangements/organisations), where he was concerned
that Commission "guidance" might "limit our ability
to procure the best capability for our armed forces or undermine
the transatlantic relationship".
1.19 The Minister also continued to question the
evidence for a Green Paper on the control of defence industrial
capabilities and to believe there should be no new legislation;
and said that he would continue to make it clear that export policy
"is a matter of national sovereignty" and that he would
not want to see the Commission involved in Member States own export
campaigns.
1.20 Going forward, the Minister would "continue
to be proactive" in working closely with the Commission,
other Member States, the EDA and industry "to resist the
areas we consider to be risks", including any actions that
"could potentially cross the UK red line on no EU ownership
of capabilities (although the Commission has assured us that this
is not its intention)"; and remain fully engaged in the debate
at expert, official and ministerial level "to shape development
of the actions to deliver benefit for the UK and to ensure that
there is no extension of competence on the part of the Commission".
Indications to date were that "the Commission welcomes this
engagement and will continue to seek our views and expertise as
this work is taken forwards". (see paragraphs 19.19-19.32
of our previous Report for full details).[8]
1.21 Notwithstanding the encouragement taken by the
Minister from the Commission's approach, we felt that there were
still sufficient significant areas that could go in the wrong
direction, notwithstanding the Minister's best endeavours, to
warrant the Commission report being debated in European Committee.
1.22 Before so recommending, however, we asked for
a further Opinion of the Defence Committee — this time,
on the Commission's approach and the "deliverables"
it sets out in its Roadmap.
1.23 In the meantime, we continued to retain the
document under scrutiny.[9]
The Opinion of the Defence Committee
1.24 Recalling that the Minister had identified a
number of areas of potential benefits for defence in the precursor
Commission Communication (encouraging the defence industry to
take advantage of existing EU funding mechanisms; monitoring the
phasing out of offsets; increasing synergies between the EU civil
research programme and defence research; and supporting defence
SMEs), the Defence Committee says:
"We note these anticipated benefits but
reiterate a note of caution that we sounded in October 2013. Whilst
measures in the proposal to support SMEs are welcome in themselves,
they need to be set within the context of long-term, funded procurement
programmes and the operation of a healthy prime contractor or
systems integrator. Without these conditions, measures to support
SMEs in themselves are unlikely to prove successful.
"We note the Minister's assessments that
progress in respect of the EU-wide Security of Supply regime and
the CSDP-related Preparatory Action on dual-use research need
to be "managed carefully". In relation to the Security
of Supply regime, we share the Minister's concerns that detailed
action in this area should not lead to unnecessary regulation
or a retreat to European protectionism nor should it constrain
the sovereignty of national governments in determining their own
exports.
"In respect of the Preparatory Action on
dual-use research to assess the value of an EU contribution in
this area, we note the Minister's concerns that UK national interests
are protected and that intellectual property rights remain with
industry and not the Commission.
"We share the Minister's concerns about
the proposals in the Communication to 'clarify' certain exclusions
from the scope of the Defence Procurement Directive in relation
to Government-to-government sales, purchases under international
agreements and via international organisations. We too would be
concerned if this clarification were to constrain the UK's ability
to make its own decisions about procuring the best equipment for
its armed forces or risk undermining the UK's and other European
partners' relations with the US.
"We note the Minister's concerns about the
proposed Green Paper on the control of defence industrial capabilities.
We share his scepticism about the value of new legislation in
this area.
"We also share the Minister's concerns about
Commission action in third country markets. We do not see what
value would be added by the Commission extending its activities
into this area and agree with the Minister that export policy
should be a matter of national sovereignty.
"The Communication notes a decline of 38%
in EU-wide defence R&D expenditure between 2011 and 2012,
concluding that
"The gap between defence and civil R&D
is increasing. Therefore defence industry dependence on technologies
with a civilian origin is increasing as is the tendency to diversify
into civil businesses. Meanwhile civil companies are buying up
technologies, such as robotics, which are also of interest to
defence firms. Therefore essential technologies such as those
relating to big data, synthetic biology, 3D printing etc., will
become an important source of innovation for both defence and
civil industries. […]
"In the next 20 to 30 years […] civil
elements will become increasingly important for the [defence]
sector. This trend makes many of the Commission's policies even
more relevant for defence and offers opportunities for new synergies
and greater efficiency which Europe should not miss.
"Overall, we note the assessment of the Minister
that
"The Commission has taken a more cautious
approach than might have been the case, which is encouraging.
Proposals within the roadmap are generally at a high level with
the detail still to be developed and the Commission intends to
hold more consultation.
"We share the Minister's view that this
cautious approach is to be welcomed. This Communication does outline
some areas for action which could deliver benefits to the European
defence and security sector. However, notwithstanding the increasing
synergies between the defence and civil sectors, we question what
value the European Commission will add in a number of areas for
action outlined in the Communication.
"Research and development into science and
technologies applicable to defence is the life-blood of the military
capabilities of advanced states and alliances. This area in particular
must remain free from unnecessary bureaucracy, especially where
dual-use technologies are in development.
"We are also concerned that initiatives
may arise from this roadmap that lead to unnecessary legislation
and duplication of effort with NATO. At worst, Commission involvement
in policy around country to country sales and third country exports
could undermine European States' relations with the US, still
the bedrock of UK security through the NATO Alliance, and with
other strategic partners worldwide. We therefore strongly endorse
your Committee's provisional recommendation for a debate on this
Communication.
"The fundamental reason for shortcomings
in European defence capability is a failure by European countries
to spend enough on defence. The September NATO Summit in Newport
reiterated the commitment for NATO Member States to spend 2% of
GDP on defence within a decade (currently only 3 NATO Member States
do so) and to spend 20% of annual defence spending on major new
equipment, including on research and development. The only European
NATO countries that currently meet the 2% target are the UK, Estonia
and Greece, and there has been speculation that the UK could fall
below this level. Initiatives to enhance the competitiveness and
efficiency of the European defence sector will mean nothing until
European nations become serious about spending on their own defence.
It cannot be assumed that the US will always be ready to guarantee
European security if European nations show that they are unwilling
to do so themselves."
Previous Committee Reports
Ninth Report HC 219-ix (2014-15), chapter 19
(3 September 2014); also see (35234), 12773/13: Twenty-seventh
Report HC 83-xxiv (2013-14), chapter 5 (11 December 2013);
Twenty-second Report HC 83-xx (2013-14), chapter 14 (6
November 2013); and Thirteenth Report HC 83-xiii (2013-14), chapter
23 (4 September 2013).
1 See Thirteenth Report HC 83-xiii (2013-14), chapter 23
(4 September 2013). Back
2
See http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/140245.pdf. Back
3
For the Committee's further consideration of the Commission Communication,
see (35234), 12773/13: Twenty-seventh Report HC 83-xxiv (2013-14),
chapter 5 (11 December 2013) and Twenty-second Report HC 83-xx
(2013-14), chapter 14 (6 November 2013). Back
4
See HC Deb, 6 Jan 2014, Col 7WS. Back
5
See http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/140883.pdf,
p.3. Back
6
See Stg Co Deb, European Committee B, Common Security and Defence
Policy, 12 March 2014, cols. 3-24. Back
7
France, Germany, Italy, Spain and Sweden. The Letter of
Intent (LoI) Framework Agreement Treaty was established on 27
July 2000, to create the necessary measures to facilitate the
restructuring of the European defence industry. It aimed to create
the political and legal framework necessary to facilitate industrial
restructuring in order to promote a more competitive and robust
European Defence Technological and Industrial Base (EDTIB) in
the global defence market. The Framework Agreement is an inter-governmental
treaty and is not an EU institution. It does not have an office,
secretariat or budget and relies on the parties to agree and deliver
the work programmes. It was one of the first examples of closer
European co-operation in the armaments field. See https://www.gov.uk/letter-of-intent-restructuring-the-european-defence-industry
for full information. Back
8
See Ninth Report HC 219-ix (2014-15), chapter 19 (3 September
2014). Back
9
Ditto Back
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