Global Combat Air Programme Treaty

Baroness Smith of Newnham Excerpts

Tuesday 19th December 2023 Lords Chamber

[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.