International Immunities and Privileges

Mark Francois Excerpts

Wednesday 24th July 2024 Commons Chamber

[The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Catherine West)]

I beg to move,

That the draft Global Combat Air Programme International Government Organisation (Immunities and Privileges) Order 2024, which was laid before this House on 23 May, in the last Session of Parliament, be approved.

It is my pleasure as the Minister responsible for the Indo-Pacific in the Foreign, Commonwealth and Development Office to speak on behalf of the Government. In December 2022, the UK, Japan and Italy launched the global combat air programme, known as GCAP, to deliver a next-generation aircraft by 2035. The Prime Minister reaffirmed the Government’s commitment to promoting co-operation and collaboration between the UK and Italy on 5 July with the Italian Prime Minister, Giorgia Meloni, and between the UK and Japan on 6 July with the Japanese Prime Minister, Fumio Kishida. In the call to Japan, our Prime Minister concurred that the security of the Euro-Atlantic and the Indo-Pacific are indivisible.

His Majesty’s Government are committed to ensuring the security of the Indo-Pacific, working closely with our allies. For the UK, the aircraft will sit at the heart of a wider system; it will be networked and will collaborate with a range of wider air capabilities, including the F-35, and broader military capabilities. It will use information systems, weapons and uncrewed collaborative combat air platforms to complete the capability. Replacing the capability provided by Typhoon, this system will sustain the UK’s operational advantage.

In addition, GCAP will attract investment in research and development on digital design and advanced manufacture processes, providing opportunities for our next generation of highly skilled engineers and technicians.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

Will the Minister give way?

[Catherine West]

I will continue, if the right hon. Gentleman allows.

The signing of the convention on the establishment of the GCAP international government organisation, commonly known as the GIGO, by the parties of the UK, Japan and Italy took place in December 2023 and was conducted by the Defence Secretaries of those three nations. The GIGO will function as the executive body, with the legal capacity to place contracts with industrial partners engaged in GCAP. Through the GIGO, the UK will lead on the development of an innovative stealth fighter jet with supersonic capability and equipped with cutting-edge technology, and will facilitate collaboration with key international partners that raise the profile of the UK’s combat air industrial capacity.

The GIGO headquarters will be based in the UK, employing personnel from the UK, Italy and Japan. The chief executive and director posts shall be filled by nationals of different parties according to a mechanism that shall preserve a balance between the parties. Given the nature of the GIGO as an international defence organisation, the Ministry of Defence, with support from the Foreign, Commonwealth and Development Office, has been leading on trilateral engagement and negotiations on its establishment. The convention, once in effect, will enable closer collaboration between the parties—the Governments of Japan, Italy and the UK—and support the development of His Majesty’s Government’s defence capabilities, stimulated by development of the UK-based headquarters. That will enable further collaboration with key industry partners, with the headquarters supporting hundreds of jobs, and working in close partnership with Rolls-Royce, Leonardo UK, MBDA UK, and hundreds of other companies across the UK in the supply chain, to deliver GCAP.

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[Catherine West]

To be clear to Members new and old, this instrument is the legal framework within which the programme will sit. It does not have specific funding recommendations attached to it because it is the scaffolding, or the nest, within which all the work will happen.

This order was laid before Parliament in draft on 23 May 2024. It is subject to the affirmative procedure and will be made by the Privy Council once it is approved by both Houses. Subject to approval and ratification, the treaty will enter into force on the deposit of the last instrument of ratification or acceptance of the parties. That is anticipated to be in autumn 2024 to meet the 2035 in-service date.

This order confers a bespoke set of privileges and immunities to enable the GIGO to operate effectively in the UK. The Government consider those privileges and immunities both necessary and appropriate to deliver on the interests and commitments that the UK has towards the organisation.

[Mr Francois]

I am not a Minister, but I was for three years. Will the Minister give way?

[Catherine West]

As the right hon. Gentleman has so much experience on the Defence Committee, I am happy to take his point.

[Mr Francois]

I thank the Minister for giving way. She is a Foreign Office Minister heading this up, I believe, not a Defence Minister, which is interesting, but it is an international agreement. Can she tell the House whether, because of the threat to the programme from the defence review, she has had any representations from the Japanese Government or the Italian Government, our two other major programme partners, to express their concern about any threat to GCAP?

[Catherine West]

The right hon. Gentleman asks an important question. I can confirm that this is the legal framework around which the programme will sit. I can also confirm that the Defence Secretary yesterday met with his Japanese counterparts at the show and they were able to have further interesting discussions. The right hon. Gentleman will be able to continue his questioning when he is surely once again a member of the Defence Committee in the autumn.

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[James Cartlidge]

I am grateful to the hon. Gentleman for his question, but I do not regard it as a strange partnership. All my experience of dealing with GCAP and meeting my Italian and Japanese counterparts, particularly industry representatives from all three countries, and working so closely together—there is already so much work going on—tells me that this is about developing a brilliant platform that is needed by all three nations. There will always be a multiplicity of platforms from different countries, which I think is perfectly healthy. What is good about the hon. Gentleman’s question is that he has opened up the debate about sovereign capability, which I will come to shortly. I just wanted to finish my point about the uncrewed domain, and what it means to be sixth-generation.

[Mr Francois]

Before my hon. Friend does so, would he give way very briefly?

[James Cartlidge]

Of course—it is a pleasure.

[Mr Francois]

My hon. Friend was a very good Defence Procurement Minister, and we on the Committee liked him because, crikey, he actually answered the questions. He will know from that experience that even the Americans, who have a new thing called the next generation air dominance fighter, are struggling to afford it; there have been media reports in the US that they may even cancel that programme, because even the Americans cannot afford to do everything unilaterally anymore. In the light of that, does my hon. Friend believe that a three-way programme represents good value for money?

[James Cartlidge]

My right hon. Friend, who not only served on the Committee but was an Armed Forces Minister, makes an excellent point. There are those who argue that we should go beyond 2.5%; I would argue that 2.5% is still a significant jump for this country. We had a funded plan, and that 2.5%—crucially and critically, with the pathway we set out, which became an accumulation of significant additional billions of pounds for the MOD—enabled us to afford GCAP and stabilise that programme.

I want to make one crucial point about the uncrewed domain. To be frank, for the uncrewed side of the Navy, Army and Air Force, those programmes are not funded: hitherto, the funding has come primarily from support for Ukraine. That is entirely logical because, under the defence drone strategy, we were very clear that there is no point in the Army, for example, ordering large-scale drones now; it might order them to train with, but the technology is changing so fast. What we as a country need to build, as I set out in the drone strategy, is the ecosystem to develop those drones, and we are doing that.

I have always said—I said it during my statement on the integrated procurement model—that my most inspiring moment as Defence Procurement Minister was visiting a UK SME that was building a drone for use in Ukraine. It was a highly capable platform, but brilliantly, it was getting feedback and spiralling it—as we call it—the very next day. On GCAP, it should be a technology for the whole of defence—it should be a pan-defence technology of how we team with uncrewed systems, how the Navy fights with an uncrewed fleet above and below the surface, for the Army and of course for the Air Force.

I have two final points on military capability, as a couple of points have been floating around in the press. The first is that the Army is putting out its opposition to GCAP. I find that idea impossible to believe. Of course, if the Army wants to succeed, it needs the support of the Air Force and so on. That is why an integrated approach to procurement is so important, not single service competition. There has also been the point that we should choose between GCAP and AUKUS, as if, when the next war comes, the Russians will step into our dressing room and ask if we would like to bowl or bat: would we like to fight on land or sea—what is our preference? The fact is that we do not know where the threat will come from, but we know that it is growing, so we should support both GCAP and AUKUS, not least for the enormous economic benefit they bring.

You will be pleased to know, Mr Speaker, that that brings me to the last part of my speech, on the economic benefits of GCAP. There are those who say we should buy off the shelf. We would stress how, in a state of ever greater war readiness, it pays to have operational independence and sovereignty. In particular, investing in the great tradition of UK combat air offers huge economic gains for every part of the country.

In 2020, PricewaterhouseCoopers estimated that the Tempest programme alone would support an average of 20,000 jobs every year from 2026 until 2050. Those are well-paid jobs in every constituency up and down the country—including many in Lancashire, as you will know, Mr Speaker. Scrapping GCAP would hit our economy hard. Even delaying or deferring GCAP expenditure would undermine our brilliant aerospace industry, which was on display this past week at the Royal International Air Tattoo in Farnborough, and cast doubt over the vast sums of private investment that are waiting, from which hundreds of UK SMEs stand to benefit.

An interesting point was raised by the Leader of the Opposition when asking the Prime Minister about exports and discussions with the Kingdom of Saudi Arabia. It is an incredibly important point. I was clear that, in reforming procurement, we have to have exportability at the heart of it because otherwise industrial supply chains wither. It is as simple as that. The demand from this country is not big enough. This has been the French lesson for many years, which is why they have put so much effort into export, and we need to do the same—whether it is GCAP, or any other platforms or capability manufactured by the United Kingdom.

To undermine GCAP is to undermine our economy, our future war-fighting capability and relations with our closest international partners. The Government should instead embrace GCAP wholeheartedly and confirm that they stand by their previous position of steadfast support. Then they should commit to a clear timetable on 2.5%, so that we can turbocharge the programme by investing not only in the core platform, but in the associated technology of autonomous collaboration and a digital system of systems approach, enabling the mass and rapid absorption of battlespace data.

To conclude, the best way to win the next war is to deter it from happening in the first place. Part of our overall deterrence posture is to signal to our adversaries our preparedness to always be ready to out-compete their technology. How can we send that deterrent signal if we have such mixed messages on our largest conventional military programme? We support this statutory instrument, we support GCAP and we support the powerful gains it will give to the United Kingdom’s economic and military strength.

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[Mr Mark Francois (Rayleigh and Wickford) (Con)]

Madam Deputy Speaker, may I begin by congratulating you on your election and welcoming you to the Chair? I am sure that you will chair our proceedings excellently. We wish you all good luck.

May I also thank the hon. Member for Leyton and Wanstead (Mr Bailey) for a fine, fluent and—if I may say so—at times poignant maiden speech? He spoke well on behalf of his constituents. I have it on good authority that when my hon. Friend the Member for South Suffolk (James Cartlidge) was the procurement Minister, the hon. Member took him on a tour of Brize Norton and helped to brief him on the A400M. My hon. Friend has asked me to pass on his thanks. As a former Army officer, may I say to a former RAF officer what a great pleasure it is to see the RAF turn up on time? There is indeed a first time for everything. [Laughter.]

The purpose of the order is laid out clearly in paragraph 4.1 of the explanatory memorandum, which states that it

“gives effect to the Convention between the Government of the Italian Republic, the Government of Japan and the Government of the United Kingdom…establishing the Global Combat Air Programme International Government Organisation signed on 14 December 2023”.

It points out that

“The Convention was negotiated by the Ministry of Defence.”

My third welcome is to the Minister; it is good to see her in her place. However, as the convention was nominated by the Ministry of Defence, could she explain for clarity why the FCDO and not the MOD is handling this statutory instrument?

The Minister kindly nominated me for a place on the House of Commons Defence Committee. As today appears to be a day for people taking up nominations, I will gladly accept that and announce that I am going to run—for that Committee.

I also point out that in the explanatory memorandum the policy context for the order—this is important—is described as follows:

“In December 2022, the Prime Ministers of UK, Japan and Italy launched GCAP to deliver a next generation aircraft by 2035. The signing of the GCAP Convention between the partners took place in December 2023 and was conducted by the respective Defence Secretaries of the three nations. The GIGO will function as the executive body with the legal capacity to place contracts with industrial partners engaged in the GCAP.”

So far, so good. The debate takes on some additional resonance, however, because we now have a defence review, which some people have interpreted as a sword of Damocles hanging over this important programme. My fourth welcome is to the new Minister for the Armed Forces, the hon. Member for Plymouth Sutton and Devonport (Luke Pollard), who represents a military constituency; it is good to see him in his place, too.

A few minutes ago at Prime Minister’s questions, the Prime Minister described GCAP as a “really important programme”. It is. It is good that he was able to go to Farnborough, see the mock-up of the aircraft for himself and receive a briefing.

When I served on the Defence Committee in the last Parliament, in March 2024 we travelled to Japan to examine the programme as best we could from the Japanese perspective. We spoke to politicians, civil servants, industrialists and the Japanese air self-defence force—its military. We were going to write what I believe would have been a very positive report, and then someone went and called a general election. We cannot blame the Minister for that, but she and some of her colleagues did somehow appear to benefit from it.

I would like to stress three themes from that trip, which came out strongly. The first was the absolute unanimity of purpose among the Japanese to deliver the programme. As one politician put it to us,

“We live in a tough neighbourhood, including three autocracies with nuclear weapons. We need to strengthen our defences, and this programme is fundamental to that.”

I think that is a very good summary of the Japanese perspective.

Secondly, we were struck by the willingness of the Japanese to consider third party exports of GCAP to make the aircraft affordable by increasing its production run. My hon. Friend the Member for South Suffolk was always hot on that when he was the procurement Minister. For various historical reasons, I do not think that the Japanese would necessarily have taken that view even a few years ago; that is important.

Thirdly, the Japanese have an absolute determination to achieve the in-service date of 2035, which is referred to directly in the memorandum. The Japanese air self-defence force uses a mixture of F-15J Eagle aircraft and the F-2, which is sort of a souped-up version of the American F-16. They are both good and capable aircraft, but they are getting rather long in the tooth. The Japanese have to plan forward against a threat from the Chinese J-20 or the Russian Su-57. The risk is that by the mid-2030s those aircraft will be outmatched by those two powerful new combat aircraft.

Reference has been made to the F-35. It is a fine aircraft, but it is expensive to buy and very expensive to run. The Americans have found that to their cost—the F-35 was nicknamed by the American media

“the plane that ate the Pentagon”.

It might not necessarily be the answer to the Treasury’s dream. Moreover, for the record, deliveries of the F-35 to the United States forces were suspended for nearly a year—they have only just been resumed—because of problems in upgrading the computers and the software. If we are to talk about the realities, the F-35 has been quite a troubled programme and, to some extent, continues to be so.

What would be the implications of cancellation of GCAP? This is an international agreement and, as it says in paragraph 7 of the explanatory memorandum:

“No external consultation was undertaken as the instrument implements provisions of an international agreement to which the United Kingdom will be obliged to give effect as a matter of international law once it enters into force.”

The first implication were we to cancel it is that it would put back Anglo-Japanese relations and Anglo-Italian relations, arguably for decades. I would not want to be the CEO of a British company trying to sell something to the Japanese Government in the aftermath of the cancellation of GCAP. Secondly, given the scale and the prominence of the programme, there would be a serious risk that we in the United Kingdom would achieve a reputation as an unreliable partner in major military collaborative programmes—everything from AUKUS through to collaboration in space. In an era when things such as a sixth-generation combat aircraft are so expensive that, as I intimated earlier, even the Americans are struggling to afford one on their own, the reality for us as a medium power is that we need to collaborate. We would find it very difficult to find future partners if we suddenly cancelled such an important and sizeable programme for financial reasons.

Thirdly, it would make a nonsense of the UK’s so-called tilt to the Pacific, which was inherent to the so-called integrated review and was reinforced when the review was refreshed before the general election. How can we tilt to the Pacific if we then cancel a major collaborative programme with a critical Pacific partner, which faces challenges from Russia and China even more immediately than we do? Bluntly, our name would be mud in that theatre of operations if we were to do that.

Fourthly, there is what one might call the prosperity agenda. As they said in the King’s Speech, the Government are very committed to growth—let us not debate building and the green belt now, but focus on this issue. In the last few years, about 80% of the UK’s defence exports have come from combat air—mainly sales of Typhoon or our 15% workshare on the F-35. That has averaged roughly £6 billion a year. Again, what would be the threat to our exports and our reputation as a reliable supplier if we were to cancel the programme?

What should we do? The GIGO, which this memorandum establishes, will incorporate prominent representatives from all three countries—the UK, Japan and Italy—and it will be headquartered here. If the programme is to survive, which I strongly believe it should, the GIGO has a vital role to play as the management organisation. It will have to be leaner and less bureaucratic than its predecessor organisations, which oversaw the Tornado and Typhoon programmes—two wonderful aircraft with a proud heritage in the Royal Air Force. I think everyone in the industry would admit that those organisations were a bit too bureaucratic.

The GIGO will have to be a lot leaner and meaner to get the job done. The principal industrial partners—BAE Systems, Rolls-Royce, Mitsubishi Heavy Industries and Leonardo, among others—will have a real challenge. Historically, the answer to such a dilemma might have been, “Look, it’s a very complicated programme. It will take years to achieve, and it all depends on how many countries join, how many aircraft they buy and what configuration they go for. Will the Saudis participate? Will they want it built in the Kingdom of Saudi Arabia if they do participate? There are lots of imponderables, so we will come back to you in about five years’ time with a unit price.” That will not wash. I would submit that one of the first tasks of the GIGO, working with those industrial partners and the three Governments, is to come up with at least a realistic pricing envelope for the programme, which the Treasury can look at and, hopefully, take a positive view on. If they do not do that, there can be no blank cheque, even for this.

To conclude, there is no such thing as an uncancellable defence programme—although I still hope for Ajax—but this comes close. To cancel this programme for short-term financial reasons would be a disaster militarily, politically, diplomatically and industrially. If it comes down to GCAP, AUKUS or Ajax, for me, Ajax has to go, and I say that as a former soldier. We need to understand how extremely serious the implications are of cancelling this programme.

I was a soldier, but the Royal Air Force has a proud tradition in the defence of this country and its interests, going back to the Battle of Britain and the first world war—when it grew out of the Army, I hasten to say.

[Sir Julian Lewis]

And the Navy.

[Mr Francois]

And the Navy, in which my father served, for completeness. The Royal Air Force needs this aircraft. We need it. The Japanese, the Italians and the west need it. By all means, let us control the costs, but let us keep it. We are not going to scrap the Spitfire of the future.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

It is a great pleasure to see you in the Chair, Madam Deputy Speaker. I look forward to you extending your authority to unruly fourth parties, even if they are new to that role.

I welcome this statutory instrument, which gives effect to the convention on the establishment of GCAP. GCAP is not important but vital to a range of different priorities, to which I urge the new Government to pay very close attention. It is vital to the United Kingdom’s ability to play its role in defending our values against peer or near-peer adversaries and the threats that they present to our way of life. We will not do that in the very near future if we cannot command a sixth-generation capability. It is vital to developing and maintaining sovereign air capability. If we had no legacy of manufacturing complex combat air systems, we could not start it. That enterprise cannot be begun from nothing.

The flipside of that inevitable truth is that if we neglect what we have developed, at great cost to the public purse over the past 100 years, we defeat the legacy of world-leading extraordinary aircraft, civil and military, that have come out of the United Kingdom over the past 100 years. We also create an extraordinary gap in our ability to defend the realm—the first duty of any Government. The programme is vital for the 600 stakeholders in the UK alone who have been engaged with GCAP to date, and it has not even got up to speed yet. Those are just a few elements of why this is vital. In a geographical sense, it is extraordinarily important to defence manufacturers in the central belt of Scotland and the north-west of England, but I see no reason to disbelieve the claim that it has positive effects for constituencies all across the United Kingdom.

I seek to impress on the Minister for the Armed Forces—who I know gets it, and I am glad that he is here today—that he should challenge any rise in Treasury dogma when it comes to GCAP. It is an opportunity for the United Kingdom to repeat the world-leading performance of Harrier and the Blackburn Buccaneer, the extraordinary capabilities of the Panavia Tornado and the exceptional abilities of the BAE Typhoon. That is what it can do. What it expressly must not do is repeat the incredibly self-defeating cost to the public purse and defence capability of the TSR-2 fiasco in the 1960s. Unfortunately, an incoming Labour Government scrapped that at huge cost to our defence capability and huge cost to the public purse. It was a demonstrable exercise in a Treasury obsessed with the price of everything and myopic about the value of everything. I repeat, in case I sound political, that I know the Minister for the Armed Forces gets it. We trust him to do the right thing.

[Mr Francois]

The hon. Gentleman is quite right to highlight what happened to TSR-2, which was a generation ahead of its time and a world beater. It was scrapped because the Treasury wanted to buy the F-111 instead, which was an American aircraft, and then it did not end up buying it. There is a lesson from history there too, is there not?

[Dave Doogan]

If we take, as the United Kingdom has, an extraordinarily complex programme somewhere down the road, then the opportunity cost, much less the financial and operability cost, of turning back on that must be well set out. I am afraid that those are the details the Treasury has a history of not being that interested in. It is more focused on the number at the bottom right-hand side of the balance sheet, but this is far too important to yield to that level of priority.

It is much to be regretted that the future combat air system and GCAP are proceeding in the European theatre in parallel. That is a grossly expensive duplication. I greatly fear that there is nothing we can do about it now. Nevertheless, it is much to be regretted. I am not certain that the partners in the competing French-led FCAS programme will be happy partners throughout, but that remains to be seen. The Minister for the Armed Forces must ensure that the door is left open for any latecomers or laggards who want to get on board with GCAP. I would appreciate his assurance, either today or at a later date, on that willing acceptability and acceptance.

As it is a Foreign, Commonwealth and Development Office Minister who is leading today, let me say that the one thing the extraordinary aircraft I listed did not enjoy was particularly healthy export success. GCAP must have exceptional export success because, quite apart from the standard avionics engines and air frames that we have to deal with in conventional traditional aircraft, this aircraft is a breed apart in terms of its electronic warfare capability. It is a combat system, which happens to be in an aircraft, that is extraordinarily expensive. If the price of that is left to the Italians, the UK and the Japanese, we will face no small measure of difficulty.

On the statutory instrument itself, article 34(2) of the convention makes provision for host countries experiencing “serious balance of payment” issues. I draw Members’ attention to the sovereign debt liabilities of both Japan and Italy—and the UK itself, although it would be the third of that list. But the convention merely seeks—to inform the Minister—to “consult” in such circumstances. It would be appreciated if we could know what type of consultation that would involve. Further, article 19(1)(c) clarifies that funding from each party will

“be set out in a further arrangement”.

However, the convention does set out that the steering committee will have equal representation from each of the parties. How will the convention decide what the funding will be based on? Will it be based on orders, or on the number of national employees employed in the steering committee? How will that work? It is unclear.

In closing, Leonardo in Edinburgh is the brain and nerve centre of GCAP; it is the central nervous system of this world-leading capability. The system is being designed and finalised in Edinburgh, and it will be built in Edinburgh at Leonardo. That brings me on to the final provision in the SI, which states that the headquarters of GIGO will be established at a later date, but that it will be in the UK. It is really important that wherever it is established, it has close connectivity with the key prime manufacturers of GCAP: Rolls-Royce, Thales, BAE and Leonardo. It must be in a part of this island where an outstanding quality of life can be enjoyed, with access to good schools, good quality of life, transport infrastructure, an international airport and good links with London. That place is Edinburgh.