Select Committee on Defence Minutes of Evidence


Examination of Witnesses (Questions 400 - 419)

WEDNESDAY 8 MAY 2002

LORD BACH, SIR ROBERT WALMSLEY KCB, AIR MARSHAL SIR JOCK STIRRUP, KCB, AFC AND MR JOHN COLES

  400. It is not a decision for you or the Minister to take whether this aircraft should be upgraded or not?
  (Sir Robert Walmsley) It is certainly not a decision for me. All the decisions are taken by Ministers, as you well know.

  401. I am trying to be helpful to the Minister. I am trying not to give him a hard time.
  (Sir Robert Walmsley) I am not passing the buck but explaining that, of course, Ministers have an interest in such decisions. There are perfectly sensible answers to that question. You know that this new engine is hugely important for operations in hot countries. We only have (more's the pity) relatively small aircraft carriers at the moment and you know perfectly well you cannot put all our GR7s or GR9s on our two serviceable carriers. 40 does not sound a completely stupid number but it was not my decision and that is just a comment.

  402. It will mean that we will not have what was designed to be a commonalty of fleet with 70 aircraft with the same engine. We will have 30 with the one engine which has enhanced capability and 40 aircraft with engines with a more limited capability.
  (Sir Robert Walmsley) That is true but of course any modification programme takes a while to execute. We are thoroughly used in the Ministry of Defence to coping with different configurations inside one fleet while the modification is brought into complete service. You only have to look at the Tornado GR4 and how long that has taken to evolve from the GR1. It is not as nice as having a common fleet but we know how to do it.

  403. Is it a cost-cutting measure?
  (Sir Robert Walmsley) I have no idea but it would be a cost saving.

Chairman

  404. When you are all in a position to tell us then please write a letter as soon as you can.
  (Lord Bach) Certainly, Chairman.

Rachel Squire

  405. Just coming back to the broad range of NATO's equipment requirements now and in the future, I also meant to ask—and I believe Sir Jock Stirrup is due to give a lecture that might touch on some of this shortly—about what consideration has been given in the new DCI or whatever of 11 September and the new chapter of the Strategic Defence Review that is currently in the process of being written and the questions that certainly 11 September raises about the equipment needs to tackle and deal with international terrorism even more effectively than at present?
  (Lord Bach) As you know, the Department is right in the middle of deciding what should be in the extra chapter to the Strategic Defence Review and, of course, the reason for the extra chapter is really 11 September and the world after 11 September. If Sir Jock is giving the lecture perhaps he can give a précis now.
  (Air Marshal Sir Jock Stirrup) I would need to know to whom I was giving the lecture; I was not aware of it.

  406. I may be wrong. It is the whole issue of doing a critical review of equipment needs in view of 11 September as well as a whole variety of issues.
  (Lord Bach) The fault is mine. Of course, as I understand it, the extra chapter is likely to include comments about equipment need following 11 September and that will of course link in with what we were saying earlier about the need for the Defence Capability Initiative to take account across NATO of the world as it is after 11 September in terms of equipment.
  (Air Marshal Sir Jock Stirrup) We will clearly encompass the outcome of the new chapter, when we know it, in our equipment planning process.

  Chairman: We would prefer to have the Sir Robert Walmsley of Germany answering the next questions but in the absence of such a person we will have a deal with you, Sir Robert, because we are going to have some questions on the A440M.

Jim Knight

  407. I regret we will not have the time to explore this subject as deeply as I would have liked. Obviously it follows seamlessly on from discussions on the Defence Capability Initiative and the Helsinki goals to talk about A440M and whether or not the theory of our European partners all pooling in together is matched with the reality of the sort of commitment in defence budgets and so on that we would like to see, and I am sure everyone in the room would like to see. What is the latest position on Germany's difficulties in signing up to its full A400M commitment? At what point will you call it a day with the A400M and go with the solution on which the RAF seems to lobby us constantly which is to hang on to their lovely C-17 which they seem to love and want to tell us how much they love at every opportunity.
  (Lord Bach) Let me start on this but you are right to mention Sir Robert in this context because he has been involved in the, some might say, protracted discussions about A400M for a long period. Just a word of caution before we get too excited about this. This is seven or eight countries, depending whether you count Luxembourg which is part of the Belgium order, in joint co-operation on what I believe will be an absolutely outstanding aircraft. It would be ridiculous to suppose that such an aircraft can come into being without there being difficulties at all stages. There is bound to be; it is in the nature of the beast, I would argue. I do not think the Committee or anybody else outside should get too excited about the fact that it has taken rather longer than we would have liked. As we understand it, there is no question about this, the Germans are committed to the A400M project and we are expecting that the contract will be signed or will come into effect in the very near future. As we sit here today that is our expectation.

  408. Your memorandum suggested March 2002. I recall that has been and gone. Is there any indication as to when that financial commitment might come from the Germans?
  (Lord Bach) The financial commitment has come from the Germans and has satisfied the other partners, which is why the other partners are in the process of signing up to the agreement that has been reached. I would hope that we would be able to put into effect the contract very soon indeed now. Of course, I cannot resist the comment that one of the reasons for the hold up is under the German system their Bundestag Committee which is perhaps in some ways almost equivalent to the HCD but perhaps not the exact equivalent of the Select Committee, has considerable power—

Chairman

  409.—We would like those powers, if you could do anything for us!
  (Lord Bach)—which although this Committee has huge powers, it does not at the moment have. There may be some envy, I do not know, but that is a point just worth making. My serious point is this: We are absolutely committed to the A400M. We think it is going to work out and what we have needed, what everyone has needed, what we all need on these collaborative measures is one quality and that is patience.

  410. I have been very patient. I remember waiting for the Future Large Aircraft. I was very slim and had a lot of hair in those days and we seem to be no closer. Patience is something which I am afraid has been running out. I do not know what the German word for commitment is. What is it, Sir Robert? Does it begin with a K or a C? The Germans said they wanted 72, now the number has been pared down.
  (Lord Bach) Their number is still 73.

  411. 73? Are they going to sign up to 73, Sir Robert?
  (Sir Robert Walmsley) Can I say something about the timetable because I do not want you to think because I was joking that there is no German word for commitment that we do not in the MoD at official level and of course at ministerial level take the urgency of this project extremely seriously. It is also fair to say it is not just Germany who have not signed unequivocally. There are two other countries we have to get into the corral, which simply underlines the difficulty of getting a seven or eight country partnership under way. As to timetable, I think the question was "and when will you decide that enough is enough?" or words to that effect. You underlined that, Chairman, in your remarks by talking about the urgency of satisfying this requirement and getting the show on the road. The alternative to the A400M is the C-17. I think everybody is aware of that. It is my job to make sure that I have in my back pocket a financial proposal that we could quickly convert to a contract at a known price for two C-17s. I have that arrangement in place and it remains valid for some time to come. The C-17 aircraft can be procured essentially off the production line. I am sure we could come to an agreement with the United States Airforce and I am in absolutely no doubt whatsoever that we can bring C-17s in on the date required by the Royal Air Force for the A400M. That should be almost beyond dispute because it took us a year to get the first four from the moment the decision was announced and it is many years from now before the A400M is due to come into operational service in the Airforce. We have got the back door covered against the A400M collapsing. The much more difficult decision of course is how long do you continue waiting. What I would say to that, Chairman, is announcing a deadline in public is simply backing yourself into a corner when we, the United Kingdom, then have to agree to other people's conditions. There may well be, as you can imagine, tiny residual work share issues just between some other nation's pen and the paper beneath it. We are not going to back ourselves into a date deadline so that we then have to give some of our work share to another nation. That would be an example of how foolish I think it is to announce a date. So long as I have got this backstop offer in my pocket I do not feel I am running the Royal Air Force a risk of failing to provide the aircraft they require.

Jim Knight

  412. In terms of the capability of European partners do your counterparts have that deal ready so we are not the only ones with this capability as we seem to be at the moment?
  (Lord Bach) Of course I do not know the answer to that question. I am clear that we have the most mature back pocket offer in place. We along with France and Belgium were the ones who wanted this competition between the C-17 and A400M which is why we got this offer. We took it to a degree of maturity because of the seven to nine year lease of the C-17s, which the other two nations did not. As far as I know, the then five countries (because Italy was then involved) did not pursue alternative procurement fall back arrangements. I am quite clear that they will be thinking in their own minds, "What on earth are we going to do if the A400M does not work", because with eight countries it is not solely within one nation's control to make the project work.

  413. With all of the prevarication there seems to have been with all partners on this project about how many they want and what they want and so on, it would appear that the perspective in the price has gone up in that time. To what extent has this forced you to delay the United Kingdom in-service date and the level of capability it will have in the first few years of operation? We are led to believe that some of the capability will not be there until a little later.
  (Sir Robert Walmsley) That is true but that is completely separate from the delay. The price has gone down a little bit but what we require is specialist national add-ons. I honestly cannot remember the detail but it is a tiny proportion of the aircraft. I think we have made some sensible economies to say we will not do all that on day one. It is back to the evolutionary acquisition principle—get the plane into service, learn what it can do and improve it steadily through its life.

  414. I am very pleased to hear your comments and I know that workers at Filton and Broughton will be delighted. I hope that the MoD can be brought round to being pleased as well since the excellent performance we have had of the C-17. For our part are we in the United Kingdom absolutely firm about the number of aircraft we need? How can you be sure how many we need if you have not yet worked out its concept of employment in the RAF, as we have been told. In your memorandum it says: "No decision has yet been taken on the exact make up of the A400M fleet. The concept of employment is currently being developed."
  (Lord Bach) I do not think any concept of employment that is being still developed necessarily means that we do not know how many of these aircraft we will actually need. We have said for some time now, well before I ever came to the Ministry of Defence, that 25 was the number that we needed as part of our capability requirement.
  (Air Marshal Sir Jock Stirrup) The concept of employment is more to do with what tasks you are going to use it for, where it is going to go, and to an extent that will drive the requirement for special equipment and capabilities on the aircraft itself, not the aircraft numbers.

Chairman

  415. I hope the A400M proceeds. It was this Committee that proposed a long long time ago that we should go down the half Lockheed and half the European option. I still hope that part of the deal will be feasible but a point may well come, which I hope it does not, when some very, very serious decisions are going to have to be made because we went through that process, Minister, over the Eurofighter which because of delays added very considerably to the cost and the prime concern is not in my view the Europeanisation or the Americanisation of it, it is not even employment, it is what the Royal Air Force requires and I hope that the various companies and countries engaged in procuring the A400M will make their decisions in time for the Air Force to get this heavy lift aircraft it requires.
  (Lord Bach) Can I agree with you, Chairman. It is absolutely about capability; it is not about anything else in our view.

Jim Knight

  416. Can you let us have a note on why the competition for the engines was relaunched and whether there was any link with the Italians withdrawing and so on?
  (Sir Robert Walmsley) I do not think I can. I absolutely do not mean that in an obstructive sense. The decision to relaunch the competition for the engine was a matter for the private contractor. If I get involved in that then I have got my fingers deep in a mangle which I do not want to be anywhere near.

  Jim Knight: You need them clean to get in your back pocket, I know.

Chairman

  417. Mr Jim Crausby on BVRAAM and Meteor. A nice easy one for you, Minister! Why did you take this job, that is what I would like to know? Why did you take it on such a ridiculously low salary? You should be Minister of State. Pass that on to the Prime Minister please!
  (Lord Bach) I do not know if I can tell the Chairman of the Select Committee that sounds a bit like a kiss of death!

Mr Crausby

  418. The plan was to sign a contract for the BVRAAM missile for Eurofighter in mid-2001, the MoD selected BMDA's Meteor in May 2000, so what is the hold-up to getting the Meteor contract signed?
  (Lord Bach) Again a very good question, if I may say so. I am going to start off my response by saying, very similar to the response I made on A400M, when in this case six nations collaborate it is very unlikely—impossible—there will not be difficulties with signatures including some delay. The reason why it has not been signed yet is because your German equivalent, or something like it in the German Bundestag, has some decision-making powers in relation to when and if the German Government signs first the MOU, which they said they do not want them to sign until the contract is ready. As I understand it, the draft contract is absolutely ready. It is now up to this Bundestag committee to give the go ahead because, as I understand it, the German Government has renewed its commitment to Meteor and we are waiting to get that German MOU signature as urgently as you are and we want to get it before the Federal election recess, which will take place in the summer leading up to the September elections. So the next couple of months are absolutely critical and we are putting on what pressure we can on the German Government in order to get this signed and Meteor on the road. Of course, the amount of pressure that one foreign government can put on another country's Parliament is strictly limited and can be jolly counter-productive unless you are careful. But that is the reason why this MOU, which has been signed by all other countries, and the contract that will follow from it has not been signed. If I have got that wrong or if there is something that needs to be added to that, again Sir Robert has been very closely involved with this project.
  (Sir Robert Walmsley) I could add any detail you want but that is the story, that is exactly how the situation is.

  419. Can we proceed without the Germans on board?
  (Sir Robert Walmsley) No.


 
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