UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 25 3-ii

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

SCIENCE AND TECHNOLOGY Committee

WORK OF THE EUROPEAN AND UK SPACE AGENCIES

WEDNESDAY 3 JULY 2013

AUGUSTO GONZALEZ

JEAN-JACQUES DORDAIN

Evidence heard in Public Questions 68 - 116

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Oral Evidence

Taken before the Science and Technology Committee

on Wednesday 3 July 2013

Members present:

Andrew Miller (Chair)

Stephen Metcalfe

Stephen Mosley

Pamela Nash

David Tredinnick

________________

Examination of Witness

Witness: Augusto Gonzalez, Head of Unit, Policy and Space Research, European Commission gave evidence.

This evidence was taken via video conference.

Q68Chair: Good morning. Thank you very much for joining us this morning. This is a parliamentary Select Committee inquiry, and as such this is a public event. There are people sitting in the audience observing our exchanges. First, I would be grateful if, for the record, you would be kind enough to introduce yourself. I cannot hear.

Augusto Gonzalez: It seems to be working fine.

Chair: That is better.

Augusto Gonzalez: We took advantage of the few moments of quiet to do the presentations very rapidly. My name is Augusto Gonzalez. I am head of the space policy unit within the Directorate-General for Enterprise and Industry. I will be representing the Commission this morning at this hearing. With me, for support, I have brought along a few colleagues, just to balance the numbers. On my right I have David Blanchard, Deputy Head of Unit, Galileo and EGNOS-Programme Management. I have Peter Breger, Deputy Head of Unit, Copernicus services; and I also have Dinka Dinkova, Policy Officer, Policy and Space Research.

Q69Chair: Thank you very much. We have at last made a good connection, so hopefully we can carry on. I will start with a general question, and then I will ask my colleagues to pose a few more. What is the EU’s role in space policy? What are its strategic priorities over the next, say, five to 10 years? How is that role shared with member states?

Augusto Gonzalez: As to the Commission’s position on space policy, first we have the Treaty of Lisbon 2009, which sets out the competence of the European Union in this domain. Beyond that, in April 2011, the Commission issued a communication entitled "Towards a Space Strategy for the European Union that Benefits its Citizens." This is Com (2011) 152, which sets out its priorities for the coming years.

In a nutshell, the priority of the European Union is to make sure that whatever we do in space delivers benefits for citizens. That is the main preoccupation. We are driven by the interests of our citizens. More concretely, we have three major programmes. We have Galileo, the satellite navigation programme. We have GMES, Galileo and EGNOS. The first priority is the successful implementation of this programme, quite clearly. The second is the successful implementation of what has now become Copernicus, which used to be called GMES, which stands for global monitoring for environment and security. It is an Earth observation programme delivering Earth observation services. We also have our research programme. Against this background of delivering services and benefits for citizens, we have these three main priorities for the successful implementation of these programmes.

There are other central priorities as well. To my mind, the most important is the connection between space and security. There is a very strong security component in Galileo. There is also a security dimension in Copernicus. By and large, the Commission attaches a great deal of importance to security, ensuring both that space infrastructure with Galileo and Copernicus help us enhance security on earth, but also making sure that we provide security for our space infrastructure. This has become one of the latest initiatives of the European Commission. We have put on the table of the Council of the European Parliament a proposal for a decision to encourage member states to co-operate in setting up, in layman’s terms, an anti-collision alert service for satellite operators.

Q70David Tredinnick: I would like to ask you whether or not you feel there have been various issues in connection with Galileo’s progress. How do you think the programme is progressing?

Augusto Gonzalez: The programme is progressing very nicely. The measure of success of Galileo is in the fact that we have four satellites in orbit that already allow us to identify and set a position by means of those satellites. That is a measure of success. The objective is to make sure that products and services are provided by the end of 2014, and member states seem to agree with the Commission that progress has been very good, in that member states’ heads of government have decided to allocate over €6 billion for Galileo and GMES in general over the next financial period. There is, I believe, ample proof that we are being successful. There is no space programme that does not suffer from difficulties, and that is the case in general, not just for Galileo but for many others. I think there is the perception and conviction that we are on the road to successful implementation of GMES, Galileo and EGNOS.

Q71David Tredinnick: How do you see developments in the next few years? What progress are you hoping to make now that you have got these four satellites in space?

Augusto Gonzalez: The whole constellation will have to be put in orbit, and the various services covered by GMES will have to become operational. There is no reason for us to believe that this will be the case within the next financial period.

Q72David Tredinnick: Do you think it is correct to say that the Galileo project was subject to political interference? Would you comment on that? If you think it was subject to political inference, what do you believe was the outcome?

Augusto Gonzalez: I have no reason to believe that there was political interference. I will limit my intervention to purely the operational and pragmatic angle. It is no surprise that a programme of the scale of Galileo runs into some form of difficulty. This is totally normal. The programme was designed in a certain way. Some adjustments were necessary, and I believe that we are now on the road to successful implementation and delivery of this programme and services as planned.

Q73Stephen Metcalfe: Could you describe for us the working relationship between the EU and the European Space Agency? Could you also tell us what you believe to be the strengths but also the weaknesses in that relationship?

Augusto Gonzalez: The European Union has relied on the European Space Agency for the implementation of its programmes. That is clearly the case for Galileo, GMES and Copernicus, and will continue in future. This is what has transpired and is already, to all intents and purposes, a project that has been formally adopted. This is what the Commission proposes as well for Copernicus. I would qualify our relationship with ESA as excellent.

In recent times, the space scene has evolved, in that the presence of the European Union has grown tremendously. The programmes that I referred to will amount, once the MFF is adopted, to almost €12 billion over a seven-year period. That is an enormous amount of money. We have gone from €4.8 billion in the previous seven years to €12 billion for the next seven years. This means that the EU’s presence in budgetary terms in the space sector has more than doubled. This is against the background of the Lisbon Treaty, which confers upon the EU clear competence in space matters.

In this changing environment, the Commission thinks it is very important to assess what improvements can be made to our relationship. Nothing is ever perfect. You have no doubt seen the Commission’s communication of November 2012, which identified a number of structural obstacles and suggested the way in which we can improve the framework for relations with ESA. Let’s not forget that one of the things the treaty says is that the European Union is to establish appropriate relationships with ESA.

Having analysed the situation, the Commission states in its communication that a rapprochement between the European Union and ESA would be a good thing and help us overcome these obstacles: the mismatch of rules; the asymmetry in membership, particularly when it comes to defence and security matters; and, more particularly, the fact that it can bring an added level of political stability to space matters through this rapprochement.

The Commission is currently conducting a cost-benefit analysis on certain scenarios that would give us a better view as to the possible options for this renewed framework of relationship between the European Union and ESA. The Commission is already working to make sure that in implementing the programmes there is a clear and consistent approach, and everything that the Commission and the EU do in financial terms to achieve their objectives has to be within the European Union’s financial regulation. We want to make sure that the approaches to the space programmes I referred to earlier are as well.

We are in a situation where we have identified the issues and are analysing the ideal options to overcome them, and make our relationship work better to achieve maximum efficiency in achieving our goals.

When we talk about ESA, we talk about member states. Member states are the European Union. We need to discuss all these things with them, and, when we talk about ESA, we are talking about its member states as well. In all this discussion, there is a very close interaction with member states to make sure that, basically, our views are aligned. ESA is also working to improve its relations with the EU. We are also talking to the executive again with a view to making sure that our views are aligned to the maximum possible extent.

Q74Stephen Metcalfe: Would you describe your relationship, therefore, more as a partnership, or is it a supplier-client relationship? Depending on which one of those you think it is, when you have disagreements, how do you resolve them? What process do you go through?

Augusto Gonzalez: It is both, in the sense that ESA is the implementing agency for Europe, so the EU has an incremental place whereby ESA delivers some services. ESA delivers where it needs to be delivered in order for our programmes to be implemented. ESA is a technical, research and development and specialised space organisation, which the EU is not, so in that respect it is the first. At the same time, ESA has activities that go beyond our programmes and therefore it is necessary that, in pursuing space policy, we also deal with ESA as a partner. We have to make sure that whatever we and ESA do is aligned. We don’t live in a vacuum; the EU lives in a socioeconomic context in which our programmes and ESA’s activities are a part. Whatever is done in the space domain can contribute a great deal to achieve the objectives of the European Union’s growth and jobs strategy. It is not just important to look at what the EU is doing there; it is also very important to look at what ESA and member states are doing on their own. This is where partnership comes in. It is very important to ensure that we work hand in hand with the European Space Agency and member states in the space domain to ensure there is an alignment of initiatives to achieve the overall goal of competitiveness and growth that the EU heads of states and governments have identified for us.

Q75Stephen Metcalfe: And the resolution of conflicts when there are disagreements?

Augusto Gonzalez: Conflicts do arise in the context of implementation of our programmes-this is a fact of life-in the sense that there may be a difference of opinion between people working on these programmes on the Commission side, which is responsible for these programmes, and the other side. These conflicts are resolved in the usual way, through dialogue, discussion and so forth. In the end, it has to be underlined that, as far as new programmes are concerned, there is clearly an overall responsibility on the Commission side. The Commission has to be in a listening mode and take into account the opinions of those who take part in discussions but, at the same time, it has to take on some responsibility for deciding what needs to be done in the end, because, after all, it is the Commission that is responsible for those programmes. I do not think there is, at a political level, a conflict of any sort beyond the day-to-day issues that may arise in the context of implementing programmes. The EU has its views; ESA has its views on possible policy developments. I don’t think there is a conflict at that level in any way. It is more a question of making sure that we talk to each other and that our views are aligned. I think that throughout this is the case, so I do not see any conflict.

Q76Pamela Nash: To continue with that theme, do you think it is still important that the EU and ESA remain very much separate? Do you agree that they have two very separate roles?

Augusto Gonzalez: I am sorry; I did not quite understand the question.

Q77Pamela Nash: Continuing the questioning by Mr Metcalfe, you were discussing the role of the EU and its relationship with the European Space Agency. Do you agree that they still have very distinct roles and should remain separate?

Augusto Gonzalez: The EU has a reason for being, and so does ESA. ESA is what the member states of ESA want it to be. The Commission has outlined its view regarding the future of ESA, which states that ultimately the goal is that both organisations come closer to each other. However, it clearly states also that some of the existing successful features of ESA should remain. We are talking here about the long-term prospects. We are talking about the Commission stating this as a long-term objective. In a way, the Commission is clearly saying that there are distinct features of ESA that should remain, while at the same time ultimately seeking a rapprochement between the two organisations. I suppose the answer to your question is that we see that some of the features of ESA are worth retaining.

Q78Pamela Nash: You mentioned in your previous answer the five structural obstacles in the communication of November last year. Could you tell us about those issues in a bit more detail?

Augusto Gonzalez: I hope that the Commission paper is clear. To rephrase a little what we said, when I talked about the financial rules this has to do with the fact that ESA is organised to implement due return, which is not something the EU does. Whenever we bring our programmes to ESA and these programmes involve the management of funds, we find difficulty in the fact that these are structured in a certain way for a certain purpose, and all of a sudden there is another way of doing things. These are difficulties. How can I put it? We have to live with them, and we can continue to live with them, but we also believe that, if we make an effort, we can perhaps make things work a little better and eliminate these obstacles, and there are ways in which we could do this. This was what I said earlier about the options for change. Making decisions is also an issue. As we state in the communication, ESA has to put any decision to its decision-making bodies, which normally for us is the European Union. We find that perhaps it is disproportionate that member states who are not members of the European Union can cast a vote and influence a decision-making process on fundamental matters in EU programmes.

On security and defence matters, both GMES and Copernicus have a security dimension. When it comes to security issues, we must remember that we have the treaty on the functioning of the EU and the treaty on the European Union where security issues are dealt with, and very often we have to work within the context that the treaty of the European Union provides for, and non-membership of the EU is really an issue. We need to find a formula that allows for the fact that ESA and the EU have different membership.

At a more general level of this aspect of policy co-ordination, as I said earlier, we live in a certain context, and let us not forget that the vast majority of ESA member states are EU member states. We have an overall strategy, and the investment that member states make in space, be it through the EU or ESA, is very important. It is a very important instrument in the overall EU strategy. We believe it is very important to put in places methods of coordination to make sure that investment made on one side and on the other is geared to achieve the same goals and objectives, which are again set out in the EU heads of government statement. We think there is something we can do about that.

Finally, by bringing ESA closer to the EU, we can add a layer of political accountability. Any new policy or EU action has to be accountable to the European Parliament and European citizens directly, and we believe there is also a potential benefit that we can achieve through reassessment of EU and ESA relations.

Q79Pamela Nash: Thank you. That is really helpful. You sound very confident that all of these issues can be addressed and ironed out. Has there been any progress since this was published last November?

Augusto Gonzalez: I am confident that we can definitely do the work of analysing, and looking for solutions to, these issues, but agreeing and implementing them might be slightly more complicated. As far as our work is concerned, yes, there has been progress. We have an external contractor looking into the cost-benefit of potential options. It must be underlined that ESA is undertaking a similar exercise on its side, stemming from the Council of Ministers’ letter of November 2012, ESA has also taken the initiative to assess the way in which it can work most efficiently with the EU. ESA is conducting a parallel process, which the ESA executive discusses regularly with the Commission in order to make sure that both bodies are aligned.

On the Commission side, we think that we will be able to come out with a public paper at the end of 2013, where we will summarise what we have done so far. On the basis of that paper, there will be discussion that will take place within the EU Council. At the same time, ESA is working on a paper that will outline the various options for evolution, as they call it. I think it is aiming to table such a paper in early 2014, so it is pretty much around the same time, the idea being that, after that first discussion, on the basis of the initial ideas, we will move forward to more concrete steps and formal proposals.

Pamela Nash: Thank you very much.

Q80Stephen Mosley: Earlier this year, the Commission published a communication on space industrial policy. I believe it was Com (2013) 108. Could you quickly describe the purpose of that communication?

Augusto Gonzalez: This is a sector of communication in which the Commission looks at the space sector in general and identifies a number of objectives that it has already discussed with member states and industry. It suggests a number of measures to continue those objectives. The objectives can be summarised as ensuring balanced development of the space industrial sector, with particular emphasis on granting access of small and medium-sized enterprises to this space sector, ensuring that the European space industry is well positioned to compete in the global market-because space is by definition a global market-and that we have the skills we need to achieve the balanced development of the industry. Particular emphasis is placed on innovation and the role that we can play to ensure innovation. Stress is also placed on non-dependence, so the European space industrial sector can develop without undue dependence on technology produced outside Europe.

Q81Stephen Mosley: I noticed that you used the word "balanced" a couple of times in your response. When you are talking about balance, are you talking about technology or balance in terms of geography across member states? Is there any Commission policy to try to ensure balance across the EU?

Augusto Gonzalez: That is a good point: the notion of balance. The Commission wants to encourage a situation where there is no artificial duplication of capacity-that would not be conducive to a competitive European industry. When the Commission refers to balance, it is the balance between the big and the small; it is a balance between integration, which has taken place in Europe, but also ensuring that smaller companies that want to enter this sector can do so, as there has to be room for these companies as well. Those are the main ideas behind the notion of balanced development.

Q82Stephen Mosley: Have you made any assessment of the current global competitiveness of the European space industry?

Augusto Gonzalez: Yes. We have figures that come from the industry itself. We know for a fact that the European space industry is doing extremely well in the global market. For a number of reasons, European industry is selling very well across the globe, but this situation is changing. In the US, where there is a space industry that is even more developed than ours, we are beginning to see a reduction in the defence budget that the space industry has access to. It is often said that the most important space agency in the world is the Department of Defense in the US. Industry that traditionally worked almost exclusively for US institutions and the Department of Defense is now beginning to be a lot more active internationally. We need to make sure that our industry is prepared to compete with that, or continues to compete just as well as it has done up until now.

We also have a number of emerging nations, with strong emerging space industry-I am talking about China and India. We need to make sure that our industry, which has done extremely well in this sector, remains competitive. I think that answers your question.

Q83Stephen Mosley: How does the Commission’s space industrial policy fit alongside that of the ESA?

Augusto Gonzalez: ESA has an industrial policy, in that whatever it does has an industrial objective in mind, and due return is an instrument of ESA’s industrial policy. Its instrument to intervene vis-à-vis industry is procurement. It procures things from the industry for their missions. The Commission has that too, because we have Galileo up and running; we have Copernicus, and we now have plans through the research programme, but there are other issues that the Commission is looking into, so it is a bit broader. For example, the Commission needs to look into whether the framework conditions for industry are adequate; whether there are perhaps other initiatives that may undertaken, and we are open as to whether we need them or not. We are looking into that. There is the domain that I just mentioned, where the EU has exclusive competence: trade. Whenever we talk about the ability of our industry to compete in international markets we need to be aware, and we need to make our trade colleagues aware, of the specificities of the sector to make sure that they are taken into account when they negotiate with countries outside the European Union. It is in this context that both the EU and ESA have commonalities. ESA has industrial policies, but the European Union is broader and covers areas where ESA does not have competence or a role.

Q84David Tredinnick: You have referred several times in your presentation to the Copernicus programme. Could you set out its main aims?

Augusto Gonzalez: Copernicus is an Earth observation programme. The EU is in support of the setting up of a space infrastructure coupled with ground infrastructure, which will provide data that are then used for services. We have a series of services: land, marine, atmosphere and emergency services. Those services will use the data collected through our space infrastructure, and also through the in situ infrastructure to operate and basically serve the user needs. Copernicus is the final solution requirement of the programme. The Commission works very closely with the users of those services that I have just outlined to see how, through our space infrastructure, we can provide the data needed for the delivery of those services for users’ use, not the Commission’s use.

Q85David Tredinnick: How do you see the cooperation between the European Union and the European Space Agency as part of this programme developing in the future?

Augusto Gonzalez: Cooperation has been very close. Let’s not forget that GMES was a programme co-funded by ESA and the European Union, so it was a programme born from an initiative of the European Space Agency, and was taken over by the European Union, so the collaboration remains very close, in that there are parts that are still funded by ESA and parts funded by the European Union, and will continue to be so in the future. Therefore, we are bound to continue to co-operate very closely as we have this programme.

Q86David Tredinnick: Do you think the European Union is what we might call an intelligent customer of the European Space Agency’s services? If so, are there any areas that could be improved?

Augusto Gonzalez: You say "an intelligent customer."

David Tredinnick: Yes. It is my phrase.

Augusto Gonzalez: I think the European Union relays the needs that are out there and develops initiatives. It has put in place Copernicus, together with ESA, and relies on ESA to serve the user community. It is more than a customer. The EU is making policy based on evidence and is getting assistance from ESA in implementing this policy, whose ultimate goal is to serve the public interest.

David Tredinnick: Thank you very much.

Q87Pamela Nash: The Committee has been reading about the Horizon 2020 programme. How do you think this is going to be able to support research in the space sector?

Augusto Gonzalez: The framework programme for research has been in operation for many years, and there has been a space component for a number of years now. We have seen the role that the seventh framework programme has played in space, in particular with GMES, which has now become Copernicus. The investment through this programme has been instrumental in bringing these benefits, and it has been effective in supporting initiatives coming from industry, research institutions and academia to develop space research initiatives. We will continue to see that under Horizon 2020. Horizon 2020 has not yet been adopted, but there are indications that there will be a space research component to it. The fact is that Copernicus has now become a programme on its own with its own budget allocation under the MFF. There will be more funding of Horizon 2020 for activities other than GMES than was the case in the past-GMES was 8% of the MFF budget. So there will be more funds to continue to support space initiatives from industry, research institutions and academia, serving the overall goal of the programme, which is to support innovation with the ultimate goal of supporting competitiveness within the European Union.

Q88Pamela Nash: Will the money that space research receives be around the same share of the research funds in Horizon 2020 as the previous programmes?

Augusto Gonzalez: Yes; it is roughly in the same range as the previous programme.

Q89Pamela Nash: The Committee has received some evidence from organisations expressing concern that Horizon 2020 may not be completely compatible with ESA. Is that something that you are aware of? Do you have any concerns that you may not be able to co-ordinate?

Augusto Gonzalez: "Concern" is not the word I would use. ESA supports research-that is quite clear-in a way that is somehow different from the way in which the framework programme and the Horizon 2020 programme will work, but this works in a complementary way. ESA research can be defined in terms of mission driven; it is research whose objective is to serve SMEs fundamentally. Horizon 2020 has a more non-prescriptive approach, where the initiative lies more with proponents: people who are interested in space research come up with initiatives. Obviously, there is a framework for that; there are orientations for that. It is not as if everything is open-ended, so there is clear guidance as to what we seek to achieve through the support of the research, be it the support of Galileo applications, or Copernicus applications, or more generally the development of space technologies that industry needs for their business. So, although it is not open-ended, the approach is more portable than the ESA approach.

We have very close cooperation with ESA in implementing the seventh framework programme, and we will continue to have such collaboration with ESA in the future. ESA provides expert advice in evaluating products. They also tell us whether there is any potential duplication of activities funded through the ESA research programmes, so we are quite confident that both approaches are complementary. There is a certain degree of what we call calculable. I think there is nothing wrong in the fact that sometimes we cover the same areas, even though they do so in complementary ways. Duplication is what we seek to avoid. We are doing this quite well at the present time with ESA, and we are confident that that will continue in the future. The voices that we hear are encouraging us to keep the system working as it is at the moment.

Q90Pamela Nash: On the implementation of Horizon 2020, have you or anyone else in the Commission had any discussions with the UK Space Agency about its implementation?

Augusto Gonzalez: All the programmes-Galileo, Copernicus and Horizon 2020- involve discussions with member states. There is a programme committee on which representatives of member states sit, and very often we find people working with space agencies, so, almost by definition, in all those programmes there is regular formal contact with member states and their space agencies, because member states often relay the opinions of the experts in the space industry. More than that, there is also informal discussion with member states, including their space agencies. We have had a series of workshops to help us prepare the draft work programme for Horizon 2020 in which the space agencies, including the UK Space Agency, have been very active.

Q91Pamela Nash: Do you think the UK Space Agency should be more active in these discussions, or do we have it just about right?

Augusto Gonzalez: I think they have a very satisfactory level of involvement in our process.

Pamela Nash: Thank you.

Chair: That is a very nice note on which to finish. Mr Gonzalez and colleagues, can I thank you very much for joining us this morning? It has been a very interesting session.

Examination of Witness

Witness: Jean-Jacques Dordain, Director General, European Space Agency gave evidence.

Q92Chair: Good morning and welcome. I would be grateful if you would, briefly, introduce yourself for the record.

Jean-Jacques Dordain: I am the director general of the European Space Agency, and have been since July 2003, so 10 years ago. Before that, I was director of launching at the European Space Agency for three years. It was during that time that I introduced Soyuz and Vega, the two launchers which are now flying and fully operational. Before that, I was director of strategy. I initiated the relationship between ESA and the EU at that time, working on the framework agreement. Before being at ESA, I was with ONERA, which is a research organisation for aerospace, depending on the Ministry of Defence. I came from the Ministry of Defence before being at ESA.

Q93Chair: And your two colleagues, for the record?

Jean-Jacques Dordain: I can introduce Magali Vaissière, who is the director of telecommunications and integrated applications, but now is head of the Harwell Business Incubation Centre at Oxford.

Alan Cooper is my colleague in charge of the Brussels office.

Q94Chair: Thank you very much. Let me start off with a general question. What do you see as the role of the European Space Agency? What should its strategic priorities be over the next four or five years?

Jean-Jacques Dordain: First and foremost, to explain what the European Space Agency delivers is the best way that I can define what we are doing at ESA. We deliver science and knowledge, technologies and competitiveness to European industry, and we deliver services to the citizens. Those are the three pillars of our objectives. To do that, the science part is related to the universe, to planet Earth. So we are looking at the origins of the universe, the solar system and planet Earth. This is not only for scientists but because understanding the universe and the solar system is the best way to understand planet Earth, and that is our goal. We are spending a lot of effort on understanding planet Earth’s environment and climate change. That is for the knowledge part.

On the competitiveness and technology part, we are looking at how we can make European industry competitive on the world market. This is mostly telecommunications, which is the commercial field of space activities. We also launch services and generate technologies. We do everything we can to develop new technologies and the competitiveness of European industry.

Services to its citizens include meteorology, environment and security, operational services and navigation services. Now, with Galileo, there are a lot of different services that we can provide to our citizens. That is what we are doing. What is the perspective in front of us? It is to develop that with more and more partners. Even if I take the last 10 years, ESA has evolved a lot in the way that it is working more and more with other actors, such as national agencies and industrial operators. We have more and more private-public partnership with industry and operators, with international partners, with the EU, meaning that ESA has now an importance that goes much beyond the borders of ESA because of that partnership. In my view, in the next years we have to see under which conditions we can continue to develop this partnership, because that is leverage. It means that any euro invested in ESA is much more important thanks to the partnership. This is certainly the challenge of the next years.

Q95Chair: So how does that partnership between ESA and the national space agencies actually work in a practical sense?

Jean-Jacques Dordain: It works beautifully. Let us take the science programme. The science programme is a partnership between ESA and the national agencies. It can look strange because, at the same time, these national agencies are contributing to the ESA part, but they are providing their national part. All science missions of ESA are based on this partnership, meaning that ESA is providing the common part of all the science missions and the national agencies are providing the instruments.

Let us take one of the most fantastic science missions. All science missions of ESA are fantastic, but let us take the last one-Planck. We disclosed the data results of Planck on 21 March. This is the origin of the universe. You can look at it yourself by looking at this picture because we are all coming from there. This is the origin of the universe and our origin. I am very proud that we could do that. Nobody will do that again for several decades. Planck is a mission that has been financed through ESA for the platform technology, while the instruments of Planck-the two major detectors-have been provided by Italy and France. ESA has provided the technology breakthrough because the breakthrough to get this scientific data required a lot of technological improvement. That technological improvement has been provided by ESA. It is because we could cool down detectors at 0.1 degree kelvin that we could provide to the scientists this type of data. This is the first part of the relationship of co-operation between ESA and national agencies. All science programmes follow that model.

On telecommunications, for example, we have a lot of partnerships with the national agencies. The next launch of ESA will be Alphasat, the biggest telecommunication satellite developed in Europe, with several partnerships. This case is interesting because we have the partnership between ESA and the French national agency, CNES, to develop the platform of that satellite; the partnership between Telez and Nacion, which is not usual, but sometimes they can be partners; and the partnership between ESA and MASAD, which is a virtuous partnership because the member states of ESA are taking the risk to develop new technologies. The operator in MASAD is taking the risk to use these technologies to open up a new market. It is a virtuous public-private partnership. That is another example of our co-operation with national agencies, too. I can continue the list, but this is just to give you two very different examples, one on science and one on telecommunications, which, again, is industry and sciences.

Q96Chair: Certainly in our visits to Frascati and Harwell, we have seen some world-class science. There is no doubt about that. Just looking forward a little, what do you see as the main challenges facing ESA?

Jean-Jacques Dordain: I shall start by giving my usual answer. ESA is European and space at the same time. So it already has two challenges. To be European is a challenge. To work in space is a challenge. To be European: we have 20 member states and getting 20 member states to work together is a challenge, I can tell you, for the director general of ESA. Each meeting of the Council with the representatives of 20 Governments is always interesting. It works beautifully, but it is a challenge. The evolution of Europe is putting that challenge on a continuous basis because we have more and more member states at ESA. We have our relationship with the European Union. All that is a challenge. To be European is a challenge. To work in space is a challenge because it is difficult to work in space. It is risky, even. We are taking risks to work in space, not because we like the risk but because this is the only way to make progress. It is a risky business. At each ESA launch, I know all the reasons for its mission not to work, but it works. It works because of the expertise of our industry, the expertise of ESA, because we know how to manage the risk. Those are the two generic challenges.

The other challenge is to give back to member states what they are giving us. I am attracting money at ESA on the basis of delivering value and jobs. Obviously, I have to give back that value and jobs. This is what we are trying to do. Okay, yes. This is our challenge.

Chair: It sounds like you have had a career change from being a great scientist to a great diplomat.

Q97David Tredinnick: Bonjour, monsieur. You have just mentioned value, which moves me neatly on to an area that I want to ask you about. Do you think that the UK gets value for its investments in the European Space Agency compared with other member states?

Jean-Jacques Dordain: First of all, yes, you get value. I shall try to tell you what value you can draw out of ESA. After that, I shall try to compare you with other member states. Let me speak, first, in absolute terms. After that I shall come to relative terms. In absolute terms, the value that you draw from the contribution to ESA is on several aspects. First of all, industry: all euros put in ESA put euros back to industry. As I say, in many of my speeches, I hear the word "re-industrialisation" in Europe. In space, you do not have to re-industrialise because there is no delocalisation of industry. All industry is now in the member states. That is the first value. It is industrial activities. Beyond industrial activities, there are the industrial skills and the industrial process, which can be used in fields other than space. That means that the return is not just the return on the ESA programmes. This industrial return has much more value than just the pure geographical return on ESA programmes. All capabilities that you are developing through ESA programmes can be used on the commercial market, production, downstream services and so on. That is the industrial value.

Q98David Tredinnick: One of the points that have come up in our visits is the difference between investing in the mandatory programme and the more optional programmes. Do you think that the UK would get a better return on its investment in the European Space Agency if it invested less in the mandatory programme and more in the optional programmes?

Jean-Jacques Dordain: You think that the mandatory programme is the smallest part of ESA. One interesting aspect of ESA is that it is a very flexible structure of co-operation. We have one mandatory programme but 60 optional programmes. In terms of budget, the total of optional programmes is more than 80% of the total budget of ESA. That means that the optional part is much more important than the mandatory part.

Q99David Tredinnick: So it is a size issue, then?

Jean-Jacques Dordain: That is number one. Our countries have no choice in the mandatory programme. They have to contribute according to their GNP. The rule is very simple. The richer you are, the bigger your contribution is. That is the principle of the mandatory programmes. As to the big contributors-France, Germany and Italy-they are contributing more than their GNP percentage to the optional programmes. The mandatory programme is mostly science. Behind science comes technology, which is necessary to make scientific progress. I would not like to give the impression that it is only for the scientists. It is a lot of technology. Behind this technology is, again, industry and industrial value.

On the optional programmes, this is where the big contributors are getting the best leverage because the optional programmes are more related to the business and the economy. This is the reason why. ESA is a very interesting agency because 55% of the budget of ESA comes from two countries, and 80% of the budget comes from four countries. This means that, whatever number of member states I have, the core of ESA is made from six countries, which are France, Germany, Italy, UK, Belgium and Spain. That is the core of ESA. Since I became director general, I have got six member states more. It is more member states, not more money, if I can be straight, because the money is coming from the big contributors.

Q100David Tredinnick: You would take a very positive view of the increase in the British space budget, would you?

Jean-Jacques Dordain: Yes. It is very good news.

Q101David Tredinnick: You think that is significant. It is not for me to put words into your mouth, as a politician.

Jean-Jacques Dordain: I have said that at a press conference. I have started a press conference 10 minutes after the Council at ministerial level, by saying, "I shall speak in English because the most important news of the Council at ministerial level is the increase of the UK investment in the ESA programmes." I am taking that as a very important signal. I am not saying this because you are British, but in the UK there is a spirit of entrepreneurship that does not exist in the other countries. The most important public-private partnership that we have started to develop in telecommunications was with a UK entrepreneur. The first real one was Ilas 1, which was with Avanti, developed by Mr David Williams. I always quote Mr David Williams because he has made the best compliment about ESA that I have ever heard. He said in one his speeches that by using the name of ESA he can raise money on the stock market. That is the value of ESA. This is the originality of the UK. This is the entrepreneurial spirit that ESA can take benefit from the UK.

For me, the increase in the contribution of the UK in ESA is very good news because it brings a different culture at ESA. I hope that it is good for the UK but I am convinced that it is good for ESA. This is always the way. I hope that it will continue like that because, thanks to that, we have in the UK a very competitive industry. We have very competitive operators. We have world-class scientists, and this is because you are also investing. You don’t get that for granted. You get that because you are investing-I am sorry to say it-in the right place, and ESA is providing back to the UK a lot of value, which, after that, can be used in other fields, either the commercial market or non-space fields. You are right to increase your investment in ESA and I hope I shall give back to the UK what you are hoping for.

David Tredinnick: Je ne parle rien Français. Merci beaucoup.

Jean-Jacques Dordain: Merci beaucoup.

Q102Stephen Metcalfe: Good morning. How would you describe your relationship with the EU? There has been talk about a "rapprochement of ESA towards the European Union." Do you think that that is necessary?

Jean-Jacques Dordain: I think that the relationship between ESA and the EU is necessary-difficult but necessary. As I told you, before being director general of ESA and the director of launching, I was director of strategy. I was the first person in the history of ESA to have written a joint document-with the European Commission, in 2000 or something like that-with a colleague. We wrote 15 pages together in a paper that we called "The European Space Strategy." It was the first joint document ever written with the European Commission. I am a strong believer in the relationship between ESA and the EU and the necessity of that.

Why is it so important? It is because by doing that we connect the space world with the world of citizens. I consider that the EU is the world of the European citizen, while ESA is the space world. I am not expecting, let me put it this way, the Commission to explain to me how we make a satellite. We know how to make a satellite. What I am expecting from the European Commission is for it to tell me which of the European policies can benefit from space infrastructure. There is a lot, starting with-I am French-the agricultural policy, but also the environment, security and development policies can all benefit from space infrastructure. I need the European Commission. I need a guide. I am not a specialist in agriculture or security. This is what I am expecting from the EU.

Again, I am not expecting from it satellites-we know how to make satellites-but I am expecting from it to describe the demand of European policies that can benefit from space infrastructure. This is the origin of my belief in the relationship between ESA and the EU. That, for me, is the driving force in this relationship. It is not to get more money. It is to connect citizens and the space world. That is, for me, the important factor.

It is not easy to work with the EU and especially the European Commission. It is a cultural shock. We are a world of engineers and scientists. We are project-oriented. We are interested in making the best satellites in the world and the best launchers in the world. We are project-oriented. We are, again, scientists and engineers. The EU world is very different. I am not saying that it is bad, but it is a different world, and mixing two different worlds, working together, takes time. It takes some pain and effort, but it is necessary, and this is the reason why. Let’s face it, I have colleagues on the Commission and they are friends. It is nothing personal. Sometimes I am tired of trying to solve problems between ESA and the European Union, but this is necessary, and even essential, because this is good for European citizens. This is the reason why I am a strong believer in that relationship.

In the current relationship, there is room for improvement. Our relationship is not the most efficient that I can dream of. This is very clear. On the other hand, we have started to work with them on Galileo and GMES. Yes, we have problems of efficiency, but it is not a reason to give up, because that would be bad. This is the reason why I am still working to make the best possible relationship between ESA and the EU. I, myself, am not keen for an institutional change. I think that ESA is one of the best space agencies in the world. Okay, I can dare to say the best space agency in the world. I would not like our relationship with the EU to change that. I value ESA too much to take the risk of causing detriment by what we are doing to our relationship with the EU, but it is as a complement.

I can even be more precise. What I am expecting from them is, again, the demand of the European policies that can benefit from space infrastructure. There is still a lot of effort to be made on their side. It is not on my side but on their side. I would not say that I am more interested in the commissioners in charge of environment, security and agriculture than I am in the commissioner in charge of space because I am looking at the European policies, the European-sectoral policies. That is what I am expecting from them.

The one thing I am expecting from them is for them to organise a European institutional market. What we are missing in Europe is a European institutional market on which European industry can be based. I will take a clear example, and Magali can give even more details if you wish: open sky. We are working together with the Commission to see how telecommunications satellite can help the navigation of aircraft in an open sky. That would be the breakthrough in the way that the traffic management would be organised. Today, what is the obstacle? It is because there are telecommunication regulations at national level, not at the European level, which means that we cannot cross the border. It is very strange to have an open sky and to have borders in telecommunication regulations. ESA cannot do something on that. I cannot go myself and say, "I wish to change the telecom regulations." I have no voice on that. That I am expecting also from the European Commission, too. I have a lot of expectations from the European Commission, but I would prefer it if it leaves us to make the Galileo satellites as we want, rather than tell us how to make a Galileo satellite.

Q103Stephen Metcalfe: You captured your view on the relationship between ESA and the EU in your very first word, which was "necessary," but you do accept that there is room for improvement. If you were to improve that relationship, what are the tangible benefits? Would it be quicker to get changes in relation so that your open sky project would work? Is that one of the kinds of benefits if there was an improvement?

Jean-Jacques Dordain: Absolutely. I am sure that we could design our satellites according to their demand. The worst is to have the engineers inventing a satellite for environment and security without having someone to define the needs. It is not for us to define the needs. For me the best model of relationship is ESA-EUMETSAT. What is the relationship between ESA and EUMETSAT? It is very simple. EUMETSAT are the masters of meteorology. We don’t know a clue about meteorology. They know. They are defining what their needs are in 10 years from now on meteorology satellites. They are giving us their needs. Our engineers from these requirements are inventing the best satellite that they could to answer to these requirements. The member states financed the development of the first satellite. After that, EUMETSAT is financing the recurrent satellites. They are financing the exploitation of the infrastructure and they are delivering the services. If I could do that with the European Commission, that would be fantastic. Our relationship with EUMETSAT is based on 30 years of experience. It is very successful and efficient. The meteorology service in Europe is the best in the world. Let’s do that for environment, let’s do that for security, and let’s do that for transport. Let’s do that for everything, and it will work.

So, Copernicus’s genius is based on most of that because the member states financed the development of the first satellites. Now, the Commission is taking over the recurrent of the satellites and services. It works.

Galileo, unfortunately, for historical reasons, is not built on that model because this is the European Commission financing the development of the satellites.

Chair: We will come on to Galileo in a moment.

Jean-Jacques Dordain: Again, I expect a lot from the European Commission.

Stephen Metcalfe: Good. Thank you.

Q104Pamela Nash: Because of the excitement of the video link, I didn’t declare an interest earlier. I am a member of the Parliamentary Space Committee here and of the European Interparliamentary Space Conference. There are details about that and of my visits on my register of interest.

On Mr Metcalfe’s question earlier, we heard about the five structural obstacles that the Commission set out in November of last year. I wanted to ask if you recognise those five structural obstacles. ESA’s position is that they agree that those obstacles exist.

Jean-Jacques Dordain: I do not remember the five obstacles, but I remember that I have read that. I remember that I do not consider those as obstacles, frankly speaking. I remember, for example, the asymmetry of member states. This is not an obstacle. Yes, we have Switzerland and Norway, but they are two good countries. I do not think that there is any secret problem in having Switzerland and Norway in ESA, frankly speaking. I am not taking that as a handicap for ESA. In the same way, the new member states that are not yet members of ESA are all co-operating with ESA. We have launched the first Hungarian satellite. We have launched the first Estonian satellite, and they are very glad. I can tell you that we have had thanks from all politicians of Estonia because we launched the first Estonian satellite on 7 May of this year. So there is, frankly speaking, no problem.

I remember that another obstacle was the financial regulations. We have totally changed the financial system at ESA. I can tell you that I prefer to make a satellite than to make a financial reform. It was a heavy burden for ESA. We are just coming out from this change. We have made that financial reform to be consistent with the European start-ups. This is not an obstacle.

Security and defence: ESA is for peaceful purposes. It is written nowhere that ESA cannot work for defence. As long as the defence policy is for a peaceful purpose, ESA can work for a defence policy. By the way, "peaceful purpose" is the wording in the Outer Space Treaty. All the signatories of the Outer Space Treaty have to be in space for peaceful purposes. ESA is not prevented from working for security and defence. I do not think that there are obstacles, and this is the reason why. Again, I see that we have to work with the EU. I am more than ready to make all the efforts to work with the EU but provided it is based on roles which are well defined, and ESA has the space role. I think that we are a good space agency. I said that ESA is the best space agency. We do not need the European Commission to tell us how to make satellites but to give us, as I said, things that we cannot do by ourselves.

Q105Pamela Nash: This is very important because it is slightly different from the evidence that we took earlier this morning from the Commission representative. He indicated that his understanding was that ESA was working to remedy the five obstacles at its regular meetings. What is the process of that?

Jean-Jacques Dordain: As I said, we have made financial reform. Yes, I am ready to make ESA evolve, to be according to European standards, but I shall not kick out Switzerland and Norway, because, frankly speaking, we need Switzerland and Norway. I do not think that these obstacles are real obstacles that would prevent ESA from working with the European Union. We have to work with it-I have no reservation whatsoever about that-but what I want is to work more efficiently with it.

Q106Stephen Mosley: Could I focus in on one particular project, which is the Space Situational Awareness project? How successful has that been?

Jean-Jacques Dordain: The Space Situational Awareness project has three different subjects, which can be embedded in threats. The only common part is threats, but they are totally different subjects. The first object is tracking of debris. I shall come back to that. The second subject is space weather, the solar flares. The third subject is near-Earth objects. As I said, the common part is threats. The debris is a threat for the space operational systems. Whether you have a navigational system or a GPS delivering your operational systems, you had better protect these operational systems vis-à-vis the threats coming from debris. Those are the threats to space infrastructure coming from debris.

Space weather causes threats to infrastructures, not only in space but also on the ground in the supply of electronic system. So space weather is a different type of threat. We have to take care of that. Near-Earth objects are threats to planet Earth. When you have a small piece coming into Russia, for example, like the experience we had a couple of months ago, that raises the problem of the threats coming from space. There are three different types of threat. We have embedded that into what we have called Space Situational Awareness. The problems are not the same. With tracking, the problem is that we need to detect and monitor the debris. This is not the whole of ESA. We are accustomed to that. What we need is to protect our space infrastructures.

I have said many times that I don’t think that that is part of the core role of ESA, but, on the other hand, since nobody was doing anything on that, I took the initiative to put that on the table. It was more to raise an awareness of that problem than to do that at ESA. I am coming from the Ministry of Defence. I can tell you that I was at the origin of the first French system of detection, which was called Graves. I know, unfortunately, that when you are tracking debris, you are also tracking other objects that I don’t know now-I knew them when I was in the Ministry of Defence, but I have forgotten them for ever. One of the problems of tracking is how you can make two channels from what you see: the channel that is protection of your space infrastructure and the channel going to the different guys who want to know what is going around. That is a difficulty. That difficulty is not yet solved. This is the reason why the French have a lot of reservations vis-à-vis ESA or even the European Commission taking some part of that. As long as the problem of separation of the data-the one interested in debris and the other interested in other things-is not solved, they will have the reservations. So this is a problem of tracking, but we need that.

We can look for ever to develop the operational space infrastructure. I am not aiming to have such a system in Europe.

In relation to space weather, first, we have to make a lot of progress in understanding the physics. It is good to speak about early warnings. I know it is a threat and there was an historical event where solar flares, even in the 19th century, disturbed the oldest telegraph in the world. So it is a threat, because when everything is automatic on planet Earth, when the power supply is automatically driven and so on, if a solar flare destroys all that, that is a problem. Today, we are not yet at a point where we have fully understood the physics. First comes scientific research. We are doing that at ESA, especially all the activities that we are making on the interaction between the magnetic field, solar flares and the Sun-Earth interaction. There is a lot of science on that, and we are doing that.

Near-Earth objects is a big question mark. The detection is one part but the action is much more important, because on the day that we know there is an asteroid of several tonnes, which will come on planet Earth, either you pray or try to take action. Taking action will require significant effort. There is this famous mission initiated by the United States of going to an asteroid that can look like exploring our solar system but may be the starting point on whether we can act on an asteroid. Can we deviate the trajectory of an asteroid? That, today, is an initiative of the United States. We are working with them on that but it is a very long-term activity.

Q107Stephen Mosley: That was very detailed. I have just two questions. The first question is how you interact with the member states, and particularly the UK, in delivering this project. The second question is how you co-operate with non-EU organisations. You mentioned the US and other organisations. Looking internally, first, how do you work, particularly, with the UK?

Jean-Jacques Dordain: We are working with the member states on two sides. First of all, we work with the member states who are contributing to the ESA part of that programme. The UK is contributing to that programme, but that is normal business. It is an ESA programme. They are the programmes of the participating states. We are also interacting with the member states about their national concerns. We do not want to develop capabilities if they are existing on a national basis. This is the reason why. There are facilities existing in France, which I know very well, because I come from there, in Germany and in the UK. We are trying to complement that with a facility in Spain. With that, we could start to have a network that could be useful for having a space situational awareness global system. Those are the two types of interaction. With the UK, we are working with the facilities that I visited here.

We have some connection ourselves with the United States, but the connection is more with the European Commission to see how we can have an agreement, as we have with Galileo and GPS, to try and avoid making things that would be against co-operation between the United States and Europe, and especially for the different aspects. It is clear that what is behind all that are the different aspects, but we are discussing with them.

By the way, as long as we don’t have any system in Europe, we are using data coming from the United States. The problem is that they are giving us data on short notice, unfortunately. I can give you an example of that. It was Christmas four years ago. I was told during the night of Christmas, "Oh, by the way, debris may cross the path of our satellite two days from now so you had better check." I would have preferred to have got that information much earlier.

Q108Stephen Mosley: So what do you in a situation where you know that debris is crossing the path?

Jean-Jacques Dordain: When we are warned by the Americans, we can use the facilities existing in France, Germany and the UK. What we are missing in Europe is a system that is giving us the full space situational awareness. When we know that there is a corner of space where there is something, we have radars that can monitor that, but the problem is that we have no early warning. This is the problem.

Q109Pamela Nash: I want to ask about Galileo. The evidence that we have taken from Telespazio indicated that it thought the procurement process with Galileo had problems with political interventions that may have led to some delay. Is that correct? Do you agree with that?

Jean-Jacques Dordain: I shall make a difference between the normal problem of a space programme and the Galileo space programme. When you are developing new technologies and exploring the unknown, as we are doing, yes, we have some technical problems, because Galileo is a new technological system. We are not duplicating GPS. The atomic clock is at the front. The signal generator is different. These are new technologies. This is going into the unknown. That is the general problem of space programmes.

Galileo has had a lot of specific problems, but most of them are behind us. Yes, there were delays on Galileo. First, it was at the start. I am putting that at the door of the member states. It was the first part of the In-Orbit Validation system, which was financed 50% by the member states of ESA and 50% by the European Commission. It was a choice made at that time. Unfortunately, the member states of ESA were so fond of Galileo that they contributed much more than we wanted at that time. There was a big debate among the member states that took two years to see how they could agree on who would contribute to that. They came up with the worst decision that they could have taken. I am saying that because this is history. They said, "Okay, France, Germany, UK and Italy will finance in equal contributions of 17% each." Unfortunately, this was the worst decision because that was preventing us from using competition to select the primary industrial contractor. That meant it forced us to create the worst infrastructure that you could have invented, which was Galileo Industries, which was a cartel of four industrial companies, leading to a monopoly of the development of Galileo. It took another two years to kill Galileo Industries and to come back to a more reasonable structure. That was the first. That is behind us. It was the In-Orbit Validation Programme. The four satellites are in orbit. This is a significant part of the delays.

The second part of the delays came from the dream of the European Commission to make Galileo under a public-private partnership. It took three years to realise that it could not work because there were no real private investors ready to put money on Galileo. The only private investors who they found were just three. It was not because they were not interested to pay for a system but they were more interested by the fact that they could make the satellites. But it is not a public-private partnership. It took three years to move to a public-funded development programme. But that is over.

The third problem was the procurement system within the Commission. After that it was 100% funded by the Commission. They invented a six-part package, but one preventing any European company being the winner of more than two packages, which has introduced a lot of controls in the system and which was more distributional activities than real competition. That also took some time. I dare to say that all of these problems are behind us. We have now four satellites in orbit-the four IOV-which are working fantastically. The first localisation, which was made in March of this year, with these four satellites, shows a localisation that nobody in the world is making. That is good news. We are working to launch the next satellites, which are the FOCs, which will be launched by the end of this year. I am committed to have the first operational services by the end of next year. We are working on that. There are some problems of efficiency because of the relationship between ESA and the European Commission, but it is a lack of efficiency and is not insurmountable.

Q110Pamela Nash: In relation to the next big project, are you confident that the major issues with funding and procurement will not happen again?

Jean-Jacques Dordain: As I said before, the best model to work with the European Commission would be to have the member states of ESA financing the development of the first of a new generation of satellites because the way we are, procuring the first of any new generation of satellites, is well experienced. We are organising the competition. The most important competition that has ever been organised in Europe on satellites was for meteorology satellites. The ESA system works very well to make a good mixture of competition and industrial return. For me, the future should be that ESA member states finance this first satellite of any new generation and the European Commission finances the procurement of the recurrent satellites, the exploitation and the services. That would not pose any problem because this is a model that we know very well in our relationship between ESA and the EUMETSAT. It works well.

If it could be made that way, I don’t see any problem. If it is made with the European Commission paying for the development of the first satellite, we shall have to see. I have spent a lot of time on this. My biggest fear is that the rules of the European Commission are opening the call for proposals beyond the borders of Europe. The European Commission cannot restrict the invitation to tender to the European industry. It was a big debate on Galileo. It is only because I myself went to the European Parliament and said, "I am the director general of ESA but I am speaking as a European citizen. If I am asked to make Galileo by purchasing parts in China, a satellite platform in India and the payload in the United States, I have a much cheaper way to make Galileo, which is to use the GPS that are for free, because, if this is to finance non-European industry, it is totally useless." It took some time to convince the Commission to restrict the invitation to tender to European industry. I said that sometimes the Commission is complaining about the geographical return of ESA, but I said that, before complaining about the geographical return of ESA, they should look at the European return, because that is a subject of discussion. The United States is the most liberal country in the world, but they will never issue any ITT of any procurement programme to any non-US industry. Take notice of that: but I am not in charge of that.

Chair: We have a couple more quick questions.

Q111David Tredinnick: Why does the United Kingdom not have a director at the European Space Agency?

Jean-Jacques Dordain: Why do we want to have a director? Okay. First of all, we need candidates. We have candidates, it is true, but, since I was expecting that question, I have looked at the number of candidates at the last round of selection, and I can tell you that 8% of the total of candidates were British candidates. If I compare that figure to the French, Italian and German candidates, it is less than two times, and even, for what concerned the Italians, it was three times less Italian than French and German candidates. That is number one. So it is the number of candidates.

Secondly, it was not easy to attract the director that I would have liked to have at ESA. I can tell you that my dream was to get one from the UK for such an important post, because I wanted that person to introduce a new culture. As I said, the UK is bringing a new culture to ESA. My dream was to have that person coming to ESA to bring a new technical culture, but it was not possible. So, it happened that there is no UK director today.

Your next chance, and you have a good chance, is next year. The member states will have to select a new director general. It will be a good opportunity to have the proper candidates, maybe not for the DG, but when there is a selection of the new DG there is always a lot of discussion on the management. This is your next opportunity.

I would not like to have given the impression that to have a British director is the most important condition to have an influence at ESA. Frankly speaking, the influence of UK at the time when Professor Goldsmith or Professor Southwood were in the management team was not much bigger than today. I would say that it was less than today. The influence of a country is more related to the contribution of that country. The more you contribute, the more influence you have. We have more and more weighted votes at ESA. The influence is much more to have a competitive industry because they are making the proposals, and to have competitive scientists. Your influence is also to have investors, like in Masad and Avanti. I can tell you that UK is driving totally the telecommunication programme. Madame Vaissière, a French national, is in charge of the telecommunications programme. I can tell you that the UK is much more important than the nationality of the director, because of the contributions of Avanti and Masad, who are putting in a lot of money.

Last but not least, the decision-making body in ESA is the Council. The role of the minister and the delegate is also more important than the role of a British director. I am not telling you that it is good not to have a director. I hope, and I am ready to help, to have a British director, but this is not the solution.

Q112David Tredinnick: You explained it very well. The impression I get, and I referred to it earlier on, is that by increasing our contribution, we have now become what is in football terms called "top of the second division" after France and Germany-

Jean-Jacques Dordain: No, no, no. You have been the sub-contributor at the last Council of Ministers.

Q113David Tredinnick: I would like you to comment on this point. I think that the impact has been disproportionately to our advantage. The fact that we have put in this new investment has brought a whole lot of benefits in attitude, even to the language that might be spoken at a meeting, which you referred to, which is significant. Is it right that we have had a disproportionate advantage and that the investment has brought a greater return than just the money? I am suggesting to you that the increased British investment in the programme has brought a better benefit to this country. I do not think I am being very clear.

Jean-Jacques Dordain: I do not know how to answer your question or comment. Again, yes, it is a fact that there is no British director.

Q114David Tredinnick: I am not worried about that. I am saying that we have done very well by increasing the investment. It has helped this country a lot.

Jean-Jacques Dordain: Yes. Absolutely. Let’s face it, the increase of your contribution has put your industry, your scientists and your operators at a much different level than they were before. There is also Harwell. Harwell is also a part of your contribution to ESA.

Chair: We are just going to go on to that. The final question is about Harwell.

Q115Stephen Metcalfe: We visited Harwell last week. It was a very informative visit. One of the things that is taking place there is the business incubation centre. How successful is that being at nurturing small businesses, and where would you see the centre in five years’ time?

Jean-Jacques Dordain: Harwell is more than the business incubation centre. Harwell, for me, is not only a new centre of ESA in the UK but it is a new type of ESA centre. For me it is a pilot for what I would like to have as ESA centres in the future, which are open centres, and not any more ESA centres with a wall around, a fence. The beauty of Harwell is that we are putting ESA facilities in a compass where there is already a lot of competence and expertise. That makes a difference. That is Harwell. Innovation is coming from connecting different expertise. Innovation does not come from a closed circuit. It is only by collecting different expertise that you raise innovation. At Harwell, I am sure we will raise innovation by connecting expertise from ESA and expertise that is currently in Harwell.

Coming to the business incubation centre, I am sure you have read that already 26 start-ups have been nurtured from this business incubation centre. The business incubation centre is a very powerful instrument to create value and jobs. We have created eight of these business incubation centres in Europe. The first one was in Bavaria. I can tell you that the objective for any ESA business incubation centre is to create 15 start-ups per year. This is the minimum objective that we are giving to each business incubation centre. In Bavaria, in four-and-a-half years, we have created more than 120 start-ups and 1,000 jobs. In April of this year, I celebrated with the Minister of Bavaria the fact that 1,000 jobs had been created by the business incubation centre in Bavaria.

Two weeks ago, I signed in Le Bourget the eighth business incubation centre, which will be located in Toulouse, and I shall sign the ninth one in Barcelona in September. Again, all these business incubation centres are very successful for the very simple reason that they connect resources. It is not only connecting money, because we have money from ESA and the STFC in Harwell. We also have private investors. In most of our business incubation centres, we even have banks putting money there. As I said, when a banker is investing it is good news because they are people who are taking the least risk in the world, so I think it is good news. We are connecting the money and the expertise. By doing that, we are creating innovation. Good ideas are always coming from there, which means that we are creating value. I am convinced that the business incubation centre at Harwell will be as successful, and may even be more successful, because of the environment of Harwell. There is a lot of science and technology there. I am convinced that the ground is very fertile and, yes, it will be successful.

Q116Stephen Metcalfe: When judging how successful the incubation centres are, do you look at the amount of exports that have been generated, particularly exports that are outside of Europe, so where we are able to sell product or services to countries outside of our traditional funding base?

Jean-Jacques Dordain: We have several criteria. Basically, there are two criteria. This is what I am doing, by the way, with all industrial companies with which we are working. I am now asking them to say what share of their commercial business is generated by ESA versus non-ESA business. I am afraid of industrial companies relying upon only ESA business. We have ups and downs in our programmes, and when they rely only on ESA business, we have to take care of them, whereas if they are not only on ESA business but on commercial business, we have more chance to maintain the capabilities, even if we have some decrease on the ESA side. This is now systematic for each company, be it big or small. I wish to have a share between commercial business generated by ESA and ESA business. That will apply, obviously, to the business incubation centre. The number of sustainable jobs is also very important. Again, when we signed for the business incubation centre in Bavaria, four years ago we decided that we were so confident that we said to the Minister that we shall meet when we have created 1,000 jobs from ESA business, and we have done that. It was last April. I am ready to take the 1,000 jobs at Harwell and to celebrate that with the Ministers.

Stephen Metcalfe: We look forward to our invitations. Thank you, Chair.

Chair: Professor Dordain and your colleagues, thank you very much for your attendance this morning and for your very full answers. It has been extremely interesting. Thank you very much.

Prepared 12th July 2013