Global Combat Air Programme Treaty

Tuesday 19th December 2023 Lords Chamber

Statement

The following Statement was made in the House of Commons on Monday 18 December.

“With permission, I would like to share details of the treaty that I signed with my Japanese and Italian counterparts last Thursday.

A year ago, the Prime Ministers of the UK, Japan and Italy agreed to work together on a joint programme to develop a new generation of military combat aircraft. Supersonic and armed with an array of revolutionary new capabilities, our Global Combat Air Programme, or GCAP for short, will deliver vital military capability, strengthening and sustaining our combat air sectors, and setting the standard for future combat air. Above all, it will bolster our collective security. The fact is that we are living in a much more dangerous and contested world. Our skies and international airspace are increasingly contested, not least from threats posed by Russia and China. All three treaty countries are already making significant investments in combat air to pursue these lofty ambitions. During recent years, the Ministry of Defence alone has invested £2 billion in UK combat air technology, with a further £600 million from industry to shape the capabilities and develop the necessary skills pipeline to deliver this state-of-the-art aircraft for the future.

Today I am pleased to announce, as an early Christmas present to the House, a major milestone in that programme. On Thursday 14 December in Tokyo, alongside my Italian Defence Minister colleague Guido Crosetto and my Japanese colleague Minister Minoru Kihara, I signed the GCAP treaty. It establishes the legal basis for the formation of a new GCAP international governmental organisation. As everyone seems fond of acronyms, the GIGO—or, as Guido Crosetto told me, the ‘JIGO’—is now formed. It is with great pleasure that I now confirm that the headquarters of the GIGO will be in the UK.

The GIGO will be responsible for delivering vital military innovation, strengthening our trinational industrial capacity, and getting the most punch out of our pounds, euro and yen. While located in the UK, it will, however, be a partnership of equals, which is why the first chief executive of the new GCAP agency will be from Japan, and the first chief executive officer of the joint venture will be from Italy.

It is worth spending a brief moment reiterating why GCAP is so strategically important. It will immeasurably enhance our freedom of action, ensuring that the RAF has the global reach and cutting-edge capabilities it needs to conduct operations and exercises for decades to come. It will deepen our collaboration with partners in the Euro-Atlantic at a time of increasing instability, and it will ensure that we remain a key player in the Indo-Pacific theatre, which will only grow in geopolitical influence and importance over decades to come. Indeed, our new treaty already builds on our existing defence relationships with Japan, complementing the recently signed reciprocal access agreement, which facilitates mutually beneficial defence co-operation, and I was able to speak about that in Japan last week.

Like AUKUS, today’s treaty is a truly multi-decade endeavour with like-minded partners who share our view of the international environment. The agreement arrives two years after we deployed our magnificent Royal Navy carrier strike group in 2021, and it is two years away from a planned carrier strike group deployment in 2025, which will include Japan. Collectively the signal we are sending both to our allies and to our adversaries is clear: the UK is deeply committed to Indo-Pacific security and Euro-Atlantic security, as well as global security. In increasingly uncertain and deadly times, we will do everything in our power to preserve an open and stable international order.

We should never forget, however, that GCAP is more than just an engine of security; it is also an engine of prosperity. With key combat air hubs in the north-west and south-west of England and in Edinburgh, GCAP will help accelerate economic growth across the country. There are already around 3,000 people working on the future combat air programme in the UK, with almost 600 organisations on contracts across the country, including many SMEs and academic institutions. The GIGO headquarters alone will support hundreds of jobs here in the UK. It will attract substantial inward investment in research and development, providing opportunities for our next generation of highly skilled engineers and technicians, not to mention the prospect of thousands more high-value jobs right across the supply chains of our three nations.

More than that, it is a programme of such size and sophistication—it is a programme that will innovate on such an extraordinary scale, using artificial intelligence, digital twinning, open architecture and robotic engineering —that I believe it will inspire a whole new generation to get into engineering, aerospace and defence. Today, we are glimpsing the future, and it comes after months of intensive work to get this together with Japan and Italy, establishing the concept of a GCAP aircraft and the joint structures to launch the development phase in 2025.

One year on from the landmark deal that three Prime Ministers put together, our GCAP partnership is soaring to new heights. Getting here has been the product of immense effort and long sleepless nights from colleagues in all three countries. I pay tribute to their tireless effort, because today we fire up the thrusters to turbo-boost our nations towards a revolutionary air capability. That capability will one day surpass an earlier pantheon of legends in the sky, from the Spitfire to the Tornado and from the Typhoon to the F-35. It is a capability that will initiate a step change in the industrial co-operation between our three nations and will usher in a new era of combat air power. Given all it will do for our country, I have no doubt that, when it comes to formally laying the treaty for ratification before this Parliament, it will meet with the approval of colleagues on both sides of the House. The treaty has been published on GOV.UK today, and I commend this Statement to the House.”

17:14

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, I remind your Lordships’ House of my entry in the register of interests, including my role as an honorary officer of the Royal Navy.

I had the privilege of leading the first debate in the other place on the need for a new fast-jet work stream for a post-Typhoon world. That debate, and the cross-party campaign, laid the foundation for the Tempest programme and, in turn, the announcement of this treaty and GCAP. So it should be no surprise that I am personally invested in the development of a sixth-generation British fighter jet. His Majesty’s Opposition welcome the development of the trination treaty and confirmation that the GCAP programme will be developed with Italy and Japan.

As with AUKUS, this alliance demonstrates our commitment to global long-term security in both Europe and the North Atlantic, as well as in the Indo-Pacific. It sends a clear message to those nation states that may wish us ill. With our allies, we can and will invest in our collective defence as a deterrent to hostile actors, because there is nothing more important than global stability and security.

There have been moments this year when the world has felt anything but stable. Therefore, in a more complex strategic environment, it is increasingly apparent that only by working with our closest allies will we be able to guarantee our global reach. However, given the scope of the project and the current challenges in the department’s procurement budget, as outlined by the National Audit Office only a fortnight ago, I have some questions for the Minister.

In June, the defence Command Paper reaffirmed that the UK would spend £2 billion on this project out to 2025. Given that the development phase will begin in 2025, can the Minister confirm what funding has been made available for GCAP in the defence budget for 2025 and 2026? The procurement budget currently has a £17 billion black hole. Can the Minister confirm that this vital additional investment in GCAP will not lead to further cuts of the F-35B procurement budget? The Minister will be aware that our carrier strike capability is at the heart of our defence planning, and we cannot afford to put it at risk by failing to procure enough airframes.

We are very lucky to have a vibrant and engaged defence industrial base in the UK. However, it is dependent on the development, manufacture and export of new technologies. As GCAP is to be headquartered here, can the Minister confirm what proportion of the workshare for GCAP will be based in the UK, so we can support British business and workers? Finally, can the Minister confirm within what scope the treaty allows us to work with other allies, both at secondary level and as primary partners?

As this is my last contribution of 2023, I take the opportunity to wish the noble Earl and all Members of your Lordships’ House—as well as our wonderful staff—a lovely break and a joyous, happy and electorally successful 2024.

[Baroness Smith of Newnham (LD)]

My Lords, starting where the noble Baroness, Lady Anderson, left off, I think the noble Earl, Lord Minto, and I have the dubious distinction of being the last two people standing this afternoon, because we have the next two items of business as well. I am not quite ready to wish everyone happy recess, happy Christmas, happy holidays or anything else, and I am afraid I am going to ask the noble Earl a few more questions. In many ways, they are in a similar vein to those of the noble Baroness, except that I cannot take credit for any activities in the other place, never having served there.

From these Benches we welcome this treaty and the commitment, which is very clear, to the Global Combat Air Programme. I would be interested to hear, in addition to the answers that the Minister will give to the questions from the noble Baroness, Lady Anderson, a few more specifics about what this programme is going to mean in practice for the United Kingdom and for our wider relations with NATO and our other security partners. Clearly, one of the other partners in this trilateral arrangement is Italy. Japan is obviously an ally, and one with which we have strong bilateral relations, but how will this programme relate to our commitments within NATO? Is it enabling the United Kingdom and Italy to play a greater role, strengthening our positioning in NATO? The original Statement in the other place seemed to suggest that this is really about demonstrating our commitment not just to the Indo-Pacific but to the Euro-Atlantic area. I should like to hear a little more about the strategic thinking behind this.

Like the noble Baroness, I want to press the Minister a little more on the financial arrangements. We are in an unprecedented situation, with the present conflicts in Ukraine and in Israel and Gaza, and with further problems in the straits in the Red Sea—that is associated with the situation in Israel and Gaza but could potentially become even more difficult for our trading relations, and beyond that there are further ramifications for our naval commitments. What assessment have His Majesty’s Government made about this programme, alongside the carrier strike group and other commitments that we need to be thinking about?

I am sure the Minister’s briefing says something about the integrated review refresh saying X, Y and Z, but we need to move beyond that. The situation globally, and the commitments that His Majesty’s Government are rightly making, mean that many of the financial questions that might have been addressed a year or 18 months ago will not necessarily be adequate now. This is a programme looking forward, as the Statement says, not just for the next few years but for decades ahead, like AUKUS. Some sense of the long-term planning, relations with our wider allies and questions about interoperability are the key issues.

Furthermore, what work is being done with the defence industrial base to ensure that the contracts can be let, as far as possible, to companies that will give jobs in this country and to our partners in the European supply chain?

[The Minister of State, Ministry of Defence (The Earl of Minto) (Con)]

My Lords, first, I welcome the cross-House support, because this is a very important treaty and a meaningful allied programme. The launching of the Global Combat Air Programme in December 2022, along with Italy and Japan, our partners in this key initiative, was a significant moment in the future development of the new generation of military combat aircraft. In signing the GCAP treaty last week in Tokyo, my right honourable friend the Secretary of State for Defence proved that this programme is proceeding at pace, with a commensurate level of commitment that anticipates treaty ratification in early 2024, concept and assessment phase complete by 2025, and Tempest in service and operational by 2035.

This treaty is excellent news for the UK and our partners. It establishes the legal framework that allows contracts to be awarded, GIGO, and the joint business construct that is the government industrial delivery organisation. GIGO will be co-located here in the UK, alongside the joint business construct. Importantly, as a partnership of equals, the first CEO of GCAP will be from Japan and the first CEO of the joint business construct will be from Italy. On the noble Baroness’s point about the sharing out of the work programme, I think it is clear that the intention is that it should be joint, in so far as it is possible. Having said that, the choice of locating the GIGO and the joint business contract here in the UK is recognition of our ability within this area. Of course, international connectivity and all sorts of other things make the UK a sensible place to do this.

I will address some of the issues specifically. The noble Baroness, Lady Anderson, is right: so far, we have spent about £2 billion on this programme and industry has spent about £600 million. From the UK’s perspective, the expenditure is expected to be between £10 billion and £15 billion, running over the next 10 years. Remember, this is equal shares here.

The F35B is within the budget figures that we have been talking about, which noble Lords will recall were £228 billion over the next 10 years, of which only 25% is committed so far. There is still huge flexibility within the budget to ensure that the important priorities for this country are properly addressed at the appropriate time. It is too early to say exactly what percentage of the workforce will be in the UK, but the intention is that it should be equally shared between the three partners. We will have to see. It is a long time into the future, so who can tell?

On the question of whether other allies are to be involved, the base model programme, the platform, will be very flexible, so there is an absolute intention to involve other allies, whether they be NATO or not, and more customisation can be built into the programme as and when appropriate. The impact on NATO is an extremely good point. This is to do with the global situation that we face. As we all know, we are in an unstable place at the moment. There are issues popping up everywhere, Houthis attacking one of our warships and our warships downing a Houthi missile being the latest examples. These are uncomfortable times, and it is important that we address both the Far East and our responsibilities under NATO. There is no issue in this respect.

On the question of the financial arrangements and the cost of Ukraine, Israel and these latest commitments, Ukraine, as the House will know, is dealt with through a separate budget. Both the Prime Minister and the Defence Secretary have given an absolute commitment that we will carry on for as long as it takes. Our commitment is unwavering, and our support will be there. The situation in Israel and Gaza is a very moveable feast but we have given full support and are right there, ready to provide supportive aid whenever that is necessary. The movement of ships into the Red Sea and the Gulf is to act as a deterrent to any escalation in that area and to ensure that our forces are protected.

I think that I have answered the question on the global commitments. The last point outstanding was about the industrial base in the UK. There is a Team Tempest, which involves BAE Systems, Rolls-Royce, Leonardo UK and MBDA UK, but there are over 1,000 companies across the three countries involved, including academia and SMEs. We have huge strength in this country on digital design and additive manufacturing, both of which reduce lead times and costs. We can hope and aspire to this being an extremely successful and very important programme as we progress it, for UK defence and industrial strength in this country.

17:28

[Lord Lancaster of Kimbolton (Con)]

My Lords, I declare my interests as a serving member of the Armed Forces and as the Prime Minister’s defence and security advocate and add my congratulations to the Government on the signing of this very important treaty, hot on the heels of AUKUS. These together underline the United Kingdom as a partner of choice in the international defence community.

I have two questions for my noble friend, built on the latter part of his previous answer. First, the key cornerstone members of the treaty are, obviously, the UK, Italy and Japan, but is the door now closed for other founder members of this treaty? I cannot help but feel that with potential competition in Europe, the more founder members that we buy in from the start, the greater the security of this programme and decreasing costs for the UK going forward.

My second point concerns the industrial base. In the past, successive Governments have allowed various parts of our industrial base to atrophy. This is in part because, all too often, we have procured the exquisite in the United Kingdom, building, for example, ships such as the Type 45—undoubtedly the best in the world but simply unaffordable for other nations. The key to ensuring that the industrial base continues for many years to come is, as the Minister has hinted, ensuring that this platform is exportable. Sometimes, exportable variants do not have the same kit that we may want for ourselves, but the whole point is that we need open architecture so that variants of this platform can be exported, thereby ensuring the longevity of both the platform and the UK industrial base.

[The Earl of Minto (Con)]

My noble friend makes some good points. My understanding is that, as the treaty is now signed, the founder members are in effect locked in—although there is, I believe, a bit of flexibility. There is no question that this platform is being built with the view that it will be of interest to allies across the globe. As I am sure we all know, 85% of defence exports are combat aircraft, so it is extremely important that this is a successful and flexible platform that appeals to others. There may be a worry about us trying to be all things to all men. I do not believe that that is the case; I believe that the intention of the three equal partners is to ensure that the platform is definitely fit for purpose and will definitely be of interest to allied countries.

My noble friend made a good and salient point about the industrial base in the UK. I imagine that there will be stiff competition in deciding where the GIGO will be located because it will engender a lot of inward investment; some 1,000 people in various organisations have already been taken on to work on it. Obviously, a lot of new technology is involved, rather than older technology. Again, it is about this country having been chosen for the headquarters, which suggests a certain level of commitment to our industrial strength.