European Scrutiny Committee

Oral evidence: PESCO and UK-EU Defence Co-operation, HC 168

Wednesday 28 February 2024

Ordered by the House of Commons to be published on 28 February 2024.

Watch the meeting

Members present: Sir William Cash (Chair); Richard Drax; Adam Holloway; Dame Andrea Jenkyns; Mr David Jones; Gavin Robinson; Greg Smith.

Questions 95 to 196

Witnesses

I: Dr Radomir Tylecote, Managing Director, Legatum Institute; and Georgina Wright, Resident Senior Fellow and Deputy Director for International Studies, Institut Montaigne.

II: The Earl of Minto, Minister of State, Ministry of Defence; and Gareth Williams, Interim Head of Euro Atlantic Security Policy, Ministry of Defence.

Written evidence from witnesses:

– Dr Radomir Tylecote, Managing Director, Legatum Institute [DCP0007]

Examination of witnesses

Witnesses: Georgina Wright and Dr Radomir Tylecote.

Q95            Chair: On behalf of the Committee, I welcome and thank our witnesses very much for giving evidence this afternoon. This is the first time that Dr Radomir Tylecote and Ms Georgina Wright have appeared before this Committee, and we look forward to hearing from you. This is the final session of our inquiry into PESCO and UK-EU defence co-operation. I hope and very much expect that you will provide the Committee with different and valuable views on various areas that we have previously explored. Before we start, and for those watching at home, would you be kind enough to introduce yourselves? Perhaps we could start with you, Dr Tylecote.

Dr Tylecote: Thank you very much. I am Dr Radomir Tylecote, managing director of the Legatum Institute.

Georgina Wright: Hello, I am Georgina Wright. I am the Europe director at the French think-tank Institut Montaigne. I am also a visiting fellow at the German Marshall Fund of the United States, which is a US think-tank.

Chair: And you are speaking to us from Paris. Is that right?

Georgina Wright: Absolutely.

Q96            Chair: Thank you very much indeed. I will address the first question to Dr Tylecote. What added value, if any, does PESCO provide for the European continent’s military capabilities?

Dr Tylecote: Thank you very much for the question. I think PESCO stands to provide some added value in the practical sense. I am sure that we will dive in due course into the possibility of military mobility, which obviously has some potential practical benefits; but I would draw attention to the assumption behind the question—that PESCO does have net added value. Although it came into being in 2017, PESCO originates in the Lisbon treaty and is a part of an overall project towards the centralisation and harmonisation of defence on the European continent, so I think that UK policymakers in general should be wary—this is my overall top line—of even ad hoc co-operation with and in PESCO-led projects. By way of example, although the UK Government position springing from the 2019 political declaration is that participation in PESCO would only be on an exceptional basis, we have received warnings, for example from the former CEO of the EDA, stating that any third-party involvement in PESCO would, by implication, lead to the support by the third-party country of the common security and defence policy. So my overall take is that we should be careful of claims of net added value.

Chair: Thank you. Georgina Wright, please?

Georgina Wright: I sort of broadly agree. The context of why PESCO came to be is very important. Yes, it is rooted in the Lisbon treaty, but it really came to be after 2017, with Crimea and rising cyber-threats and hybrid threats, in the context of greater EU and NATO discussions about what added value the EU could have, how the EU could take on greater responsibility for European security and defence, and how it could complement NATO.

As you know, all member states apart from Malta are members of PESCO now, and a majority of them want to make sure that PESCO does not in any way duplicate what NATO does. It is really designed to complement NATO, and I agree that some projects of PESCO do that. I am sure that we will get into the military mobility project, but there are others as well.

It is also important to think back to 2017, with member states not quite sure how much they wanted to spend on defence and that constant battle within NATO with the Americans saying, “How can we get Europeans to spend more?” This was a way to get member states to promise to spend more and to work towards more joint planning, but always with the underlying acknowledgment that defence is a national competence, so even if there is a legally binding commitment that says that member states promise to spend more and do more together, that cannot be enforced. I think we have seen 68 projects—I was counting today—some with mixed results, but there is this possibility of renewing or reviewing them every two years.

In the geopolitical context today, when we see the potential return of a US president who has questioned the US’s involvement in European security, that warrants a good discussion about how the EU can complement what NATO does. I think that that is why having the UK as part of that discussion—all the while making the decision on when it is in its own interest to participate in PESCO projects—is a good thing, and I am really glad that the Committee is holding this session today.

Q97            Chair: Thank you very much. May I ask a supplementary question? Do you see the situation on the European continent at the moment as being of sufficient concern—because of all the activities that are going on in Ukraine, and throughout the rest of the world, in fact—to give special reasons for being insistent that NATO has to be at the heart of this, and that anything that PESCO does will effectively be an adjunct to it? In other words, I want to nail down this simple question: NATO comes first, does it not, compared with ancillary activities that may or may not be beneficial? Dr Tylecote?

Dr Tylecote: Thank you for that. The overall sense that I think most people get from the Western response to Ukraine is that there was a change of habit in British leadership. I refer in particular to the previous Prime Minister, Boris Johnson, who was able to act independently and was no longer a part of a culture that expected him to refer to Brussels before—I think it is fair to say—leading the Western defence of Ukraine and setting the pace. I think the conclusion to be drawn from the continuing Russian invasion of Ukraine is probably not that the continuing centralisation of defence policy in Brussels is going to improve the European defence situation. However, you asked about whether NATO still comes first. I think that the answer to that is yes, but I also think that there is now a risk that that will not always be the case, partly because of the European Defence Fund and other aspects of European defence harmonisation.

I draw your attention to two particular themes that I think are worthy of this Committee’s consideration and that are likely to undermine the effectiveness of NATO in the years to come. The first is that the effective meaning of articles 20 and 23 of the 2021 regulation establishing the EDF, which I will not go into ad nauseum, is that if one of the 25 nations that co-operate within PESCO, funded by the EDF, wishes to transfer ownership of one of their PESCO projects to the UK or the United States, which could be perceived as having different security interests, there would be a 100% effective tax on any funding that had been granted via the EDF. Not only is that potentially protectionist, but it would seem to hinder NATO-oriented defence R&D and planning.

The next point that I think will call into question whether NATO comes first for European Union members is that the Lisbon treaty gave the EU its own version of NATO’s article 5 on collective security. We see that in article 42, which is a collective defence obligation that appears to have binding legal effect. I think the Committee should take that very seriously. Could that be legally superior to the mutual defence commitment in article 5? That needs to be understood to understand why, or whether, EU countries will continue to see NATO as the first port of call.

Chair: Thank you very much. Georgina Wright?

Georgina Wright: Sitting in Paris, I absolutely see no risk of the EU becoming a sort of new NATO. I say that sitting in a place where they really do push for EU defence. For every European member state that is a NATO ally, NATO is the bedrock of European security. France’s national security strategy, which it published in 2022, made that clear as well.

If anything, the war in Ukraine showed that it was really a NATO moment more than an EU moment, but it was a wake-up call for the EU. What can we do to take more responsibility for European security and defence? As you know, there has been a step up in co-ordination with NATO. In particular, What can we do to support NATO? Where can we be diligent, and where can we act where it is perhaps more difficult for NATO to do so? There, of course, I am thinking of the PESCO mobility project, but also of where we can finance and support Ukraine—there were lots of developments there—and how we can we support the EU defence market as well. How can we support member states that want to ramp up arms production?

On the protectionist elements, of course this is something that not just the UK, but Canada and the United States, will be paying very close attention to if they are asked to join a PESCO project. To what extent do they have access to the intellectual property? What does it mean, concretely, for third-country participation? I think that the protectionist element only really concerns PESCO projects that are funded in some way by the European Defence Agency, and that is not the case for all PESCO projects, so it is about due diligence. If you are going to participate in something as a company, that is what you do; you look at everything; you look at the conditions.

The geopolitical context matters, particularly given the US election. The EU has at times been inflexible, but everyone recognises the crucial role that the UK has played in responding to Russia’s aggression in Ukraine. There might be flexibility, even in the design of projects, if the UK and the EU see the project as helping or supplementing NATO in some way, and potential for the EU to give space for the UK to participate in the design of that project. It would be up to the UK Government to decide whether it is in the UK’s interest to do that, but I really do not think we need to worry about the EU somehow supplanting NATO. I just do not see that happening.

Chair: David Jones next, with another question to follow.

Q98            Mr Jones: You mentioned, Ms Wright, that you do not think PESCO has the potential to supplant NATO. To what extent would it have the potential to impact positively or negatively the UK’s strategic autonomy in defence? You mentioned France; to what extent is there potential for improving bilateral relations with major European players? Previously, of course, we have participated in joint missions with the French; is there potential for that to continue, or does PESCO intrude on that?

Georgina Wright: You can absolutely do both at the same time; that has happened in the past and it will continue. The war in Ukraine was the catalyst that brought the UK and France closer together, and we have seen the Governments and the armies working much more closely together. Seeing the UK participating in PESCO projects in the future would not in any way diminish Franco-British defence co-operation, or for that matter UK defence co-operation with groups of EU countries or bilaterally with individual EU countries. I really don’t think that is a problem.

My hope is that France and the UK do more together. When I travel to Germany or Poland or Italy, people often ask me, “What’s happening between France and the UK? Are they going to announce something?” There have been some missed opportunities in the past two years, and I really hope we will see those two countries do more together. They do not always come to the same conclusions and there are a lot of things they disagree on, but they share broadly the same strategic culture, the same size of army and the same experience. They have a lot to learn from each other, and European security would be better off if France and the UK did more together.

Q99            Chair: I would like to come in on that before the next question. What President Macron has talked about in the last 48 hours is perhaps somewhat out of line with what you have just said. After all, if we were to be putting boots on the ground in Ukraine, that would be a massive difference of opinion, not just a minor adjustment. Would you like to comment on that? He was quite specific, and he has been pretty well slapped down.

Georgina Wright: He has also been slapped down in France. One thing is that the Franco-British defence relationship is about much more than the relationship between the French President and the British Prime Minister. I know you know that, but it is worth reminding ourselves.

Secondly, I think Macron’s comment was taken slightly out of context. I listened to the whole press conference. He said that we cannot say right now that there will not be boots on the ground at some point. He did not mean engaging in conflict, but helping perhaps to put missiles in place, or whatever it was, to help the Ukrainian army. He certainly did not say, “This is what we’ve decided together.” The purpose of that conference was to acknowledge that Europeans needed to do much more to support Ukraine.

Frankly, I think it is a good thing that President Macron did that, because at the start of the war he was a bit slow and France was definitely not doing what the UK was doing, so it is very good that he convened the conference. Unfortunately, he did not deliver significant pledges, which had been the hope at the start, but the focus was, “What can we deliver and how quickly can we deliver it? If we have sophisticated weaponry that requires a skilled workforce or people who understand how to use it, might we be able to support the Ukrainian army with that?” That was the context of what he said. It was not him saying, “I, the President of France, will decide on behalf of everyone that there will be boots on the ground.” It is important to give that context. Macron’s problem sometimes is that he says things and he forgets that nuance can be lost, because when you talk for a very long time, it is only normal for people to just jump on certain things. He needs to work more on his strategic communications, I think.

Q100       Mr Jones: Dr Tylecote, do you think that PESCO has the potential to have an impact—whether positively or negatively—on the UK’s strategic autonomy? How do you feel about more bilateral arrangements with potential EU allies?

Dr Tylecote: The risk to UK strategic autonomy is probably best analysed through the lens of the military mobility question, but I would like to allude to a couple of things that Ms Wright said.

I am not the first person to observe that the attitude of the Élysée Palace to both NATO and the Ukraine can be typified as somewhat enigmatic, and I do not claim to understand the exact rationale of what President Macron has just said.

That said, whether Franco-British collaboration in the defence sphere improves will be down to the administrations in both countries. We have, however, seen continuing strong bilateral defence co-operation by the UK, including with France. That is typified and shown in the Lancaster House agreement of 2010, but that was part of a British approach that prioritised the ad hoc and the bilateral over the multilateral, and I think that was maintained, to a degree, through our membership of the European Union. Why has there been such a strong concern in this country that this should remain the case?

I think what we are getting towards here is a fundamental philosophical concern: the existence of a state is understood to depend on the monopoly on violence, among other things, and if that monopoly on the use of force begins to drift towards unelected bodies in Brussels, I think we are increasingly asking whether European states remain viable.

I don’t want to speculate too far, but I think that awareness is one of the things that is going to bog down PESCO and is another reason why members of PESCO are not meeting their binding commitments—2% spending, data sharing and so on. I am happy to submit more written evidence on that point.

I think continued UK interest in even third-party affiliations with PESCO-led projects—military mobility is, of course, a project that arises from PESCO and exists to continue the development of the common security and defence policy—is also likely to distract this country from, in my view, more useful defence partnerships, such as building AUKUS. Overall, that is my take.

Q101       Mr Jones: You mention AUKUS, but the United States seems quite comfortable with participation in military mobility.

Dr Tylecote: It does; I think NATO is also comfortable with the European Union going ahead with this project. The current view in NATO is that it is better done within the EU.

Although we should very strongly support NATO, even more than we have done in the last 10 years, that does not mean that what NATO does and says is necessarily gospel. We need to be alert not just to the risks to sovereignty that are presumably contained within the administrative agreement, which we need to be able to see, but to the fact that, even though NATO’s intentions are good, there might be some kind of opportunity cost here for NATO.

If we become accustomed to the EU developing military mobility, what else does that mean? Does that mean that there is defence funding and R&D funding that is channelled through the EDF for this project, that then has strings attached and has the protectionist elements that I have alluded to? It is not that NATO is necessarily wrong or the United States is necessarily wrong, but what is beginning as a limited project in this case is always liable to come with strings attached. I think that is the main caution.

Q102       Greg Smith: Dr Tylecote, you just referenced the European Defence Fund in your answer. Can you expand a little bit more on the implications of the EU defence funding programmes like the EDF for the United Kingdom, particularly given the number of defence contractors that we already have in the United Kingdom that clearly serve a global market, including the continent of Europe? What is going to be the practical outrun of this if UK defence contractors are essentially frozen out?

Dr Tylecote: I would return to some of the indications appearing since 2019-20 that EDA and EDF participation are likely to imply support for other PESCO aims such as CSDP. I think it is worth pondering a couple of examples of protectionism that we are seeing arise. It is worth investigating intellectual property controls, particularly where non-EU countries will be unable to access IP that is ultimately funded by the European Union. You mentioned defence corporates and investment. I think it is also reasonable that the United States has noted the emergence of what it calls a bi-European preference. Part of this is because of ITAR—international traffic in arms regulations. This is a US set of regulations whereby non-US companies need prior approval for the re-export of sensitive material. European procurement seems to be increasingly excluding ITAR-restricted products from procurement.

What does this demonstrate? The EU model inherently involves the harmonisation of technological standards, and it now involves the harmonisation of defence IP. I think the last generation has taught us that European prosperity over the last 300 years was based on competition between companies and competition between nation states, in terms of technological standards, business law and so on. That allowed our economies to grow and improve. I think the fact that the defence area, including R&D, is now being harmonised around one, unified European set of standards is inherently anti-competitive and likely to slow growth. I would suggest to the Committee that we should not take our eye off that ball. There are fundamental questions for European defence and sovereignty directly, but there are also questions about future growth and prosperity, and this continuation of the European model.

Q103       Greg Smith: Georgina Wright, do you have something to add to that?

Georgina Wright: There are different kinds of PESCO projects. There are those that centre around research, development and procurement, on which there are absolutely questions about how intellectual property is shared and used. That was voiced at the time when the UK was a member state and it has been put forward by other third countries that would like to participate in projects. The geopolitical context is such that there might be flexibility to talk to the EU about setting those conditions. In any case, I think the UK Government should only ever agree to take part if they feel fully confident with what is put forward on the table. There are other PESCO projects, such as the mobility project, which do not have those same concerns, because it is basically about facilitating the movement of troops or defence equipment across Europe. That is why Canada and the United States, but also the UK, would like to take part.

The other thing we need to remember, especially on defence, is that this is not the European Commission imposing things; this is very much member state-led initiative. For example, every PESCO project is led by a member state. The role and involvement of the EU Commission is quite limited, and I think it is really there to support, rather than to guide and prescribe the way the projects should be done. Within the EU, there are 27 member states, and a number of them—if not a majority—do not want to see the EU duplicate what NATO does, and say that repeatedly. If I were the UK Government looking at a project, I would be thinking, “What added value does it bring, and how will I be involved? What is expected of me and what can I get out of it?”

Just to bounce back on the ITAR component that was just discussed, and why the EU is perhaps trying not to use ITAR components, it is also because we have seen the reach of US extraterritorial norms, which means that for any product that uses an ITAR component or uses a software that comes from ITAR, the US Government can determine where that product goes.

For a European company, I think it then becomes much more difficult because they do not have full freedom to decide who they sell to or where they can export their goods, because they would always need the approval from the United States. The PESCO project is a way to simplify processes and grant European companies a maximum level of freedom in deciding how they export products that they produce.

Q104       Greg Smith: Would it not be fair to say, particularly with the example of the European Defence Fund, that it is almost blind to the reality of how defence innovation happens? That it does not, in broad terms, happen in one country, and that most of the contractors and innovators in this space operate across the Atlantic as much as they operate across the English channel and into the continent? If you are locking out one area and saying, “We are not going to play with anyone else”, that is going to lead to a two-tier NATO and a very mishmash set of defence requirements and equipment base within the alliance.

Georgina Wright: There are risks, and it is absolutely the right question to ask; it is a question that we hear over and over again in Brussels. Macron, for example, had been pushing very heavily for any EU funding that we use for defence to only be used to buy EU-based or EU-produced equipment. He let go of that after the conference this week because other member states pushed back and said, “This is mad. We need to be thinking about the defence market and the best way to make it competitive, how we can produce quickly at low cost and promote innovation, and how restricting that would be a bad idea.” France has moved on that.

I think a number of member states would agree with what you have just said, and I would hope that the EU would be open to discussing that with its allies—even those with whom it does not have a defence partnership, as such.

Q105       Richard Drax: I may be jumping into the next question, but I hope I am not. I sit on the Defence Committee with another Member, Gavin Robinson, and we have just come back from Italy, where we visited Joint Force Command Naples. It was clear from all that we saw—we had a pretty top-secret brief—that NATO is not ready at all for a major conflict, God forbid, with Russia or another peer adversary. As I am sure you would admit, Georgina, Europe is now facing the most serious challenge on security that we have faced since probably the end of the second world war.

Whatever you think of the man, Trump, if he gets back in, has consistently said that NATO countries must pay their dues. I think I am right in saying that the American contribution to NATO is about 75%; we pay 2%, but very few other countries in NATO do. The PESCO project is without doubt going to detract from NATO, however you like to dress it up. Surely the top priority now is to get NATO—including members such as France—to really gear up on the NATO commitment before they start thinking of going down anything like a PESCO route. Would you agree with that?

Georgina Wright: That would be a real concern if PESCO was trying in some way to become a new NATO, but it is not. Over the next two years, because every European country has said that it wants to increase its defence budget, there will be choices that need to be made. We need to support the defence industry, but there are a number of other priorities that Governments need to spend money on.

This will be up to the design of each PESCO project, and you will know that not every member state takes part in the PESCO project. They choose whether it meets their requirements and whether they see interest in participating, and we are not talking about the same levels of funding. One problem with many PESCO projects is that they are underfunded and a bit slow. We are several years on now, and the EU can make an objective assessment about where there is added value and where there is no added value.

As I said, within the EU there are EU member states who are NATO allies, who will absolutely want to make sure that PESCO does not detract from not only increasing spending on NATO but interoperability and dialogue within NATO. I want to reassure the Committee that, even in my small capacity, that is something I hear very regularly in Paris. It will not detract from NATO because they do not have the same aims. However, I would hope that when the EU and European countries think of a project, they make that assessment of whether it will help NATO in some way or detract from it, and if so, whether they should go ahead with that project.

Q106       Richard Drax: One more small point. I think you mentioned Trump, and that if he gets in there is a concern that support for Europe might diminish or tail away, which is what he is threatening to do—hence the significance of PESCO. When I asked my question a moment ago, I don’t think you answered it, Georgina, to be fair. I asked about paying your full whack as a NATO member. Very few do that. Surely that is priority No. 1 before we start spending money on other projects that do not necessarily add anything to NATO, and in some cases detract from it?

Georgina Wright: I am obviously not in an EU Government; I am fortunate not to have that responsibility. When I hear expert discussions about Trump potentially returning to power and some of the implications that would have for US involvement in European security, the No. 1 thing I hear about is how we reinforce the European pillar of NATO, not how we spend more on PESCO.

EU countries have said that they are going to spend more, and I really hope that they at least meet their 2%, but now we are talking about spending 3% of GDP on defence. That will be a matter and a decision for each individual Government. Again, I do not design PESCO projects or work for an EU Government, but my sense is that they are very aware that PESCO should complement and support NATO and not detract from it. It is an important question. I do not have the answer, but I hope that is something they are thinking about very lucidly, given the fact that, as you said, we are facing the most important security threat since the second world war.

Q107       Dame Andrea Jenkyns: The EU and NATO have acknowledged that a stronger NATO and a stronger EU are mutually reinforcing. What does PESCO offer that is significantly different from NATO? I will ask Dr Tylecote first.

Dr Tylecote: By way of an answer, I would like to allude to some of the things that Ms Wright has said, because I think it is fundamentally different. I agree it is not the case that PESCO will become a new NATO, but that does not mean that there is not a risk of PESCO supplanting NATO. I agree with Ms Wright that it is not the intention of member states in general for PESCO to supplant NATO, but it does not necessarily need to be at this stage.

What do I mean by that? I believe that there is a risk of PESCO or EU defence harmonisation to some degree supplanting NATO, and I have talked about the comparison of the articles dealing with mutual defence. In the binding requirements of PESCO, whether or not member states are meeting them, there is a discussion about committing spending and harmonising R&D, data sharing and so on. It is a question about budgets, which are already under pressure, and where defence budgets are being dedicated.

On the point about whether PESCO is a new NATO and how it complements or contrasts with NATO, again, Ms Wright mentioned the fact that nations are not somehow dominated by the European Commission in defence decision making at this stage. While that is true, we have recently heard calls from Ursula von der Leyen, among others, to create an EU defence commissioner. With respect to Ms Wright, she is describing the status quo, but where does the Commission intend to go? What does that mean for freedom of action and for PESCO?

Jens Stoltenberg, the NATO Secretary-General, has argued against the existence of an EU defence commissioner, because it would risk duplicating—not identically, but still duplicating—NATO structures, and doing so in what I would say is the most closed-door EU body, the decisions of which are simply, as a matter of fact, made behind closed doors.

We must also understand the environment in which these proposals are being made. For example, in May 2021, the German Foreign Minister asked for the national veto to disappear, so this is a question of the extension of QMV—qualified majority voting. It is not directly a Commission issue, but it is into the defence sphere. There is a risk, not of the replication of NATO, but of the supplanting of NATO, of distraction from NATO and of the centralisation of decision making over defence questions.

Q108       Dame Andrea Jenkyns: Are you aware of the British Government’s current perspective on having this commissioner?

Dr Tylecote: I believe the current British Government is not in favour of this, but that is moot as to what happens in due course.

Q109       Dame Andrea Jenkyns: Ms Wright, please.

Georgina Wright: I am aware you asked a different question earlier, so I will try to answer that.

Dame Andrea Jenkyns: Yes, the first question about the EU and NATO acknowledging a stronger NATO and a stronger EU.

Georgina Wright: A number of member states are not very comfortable with this idea of an EU defence commissioner; I will just put that out there. Also, it would not be a duplicate of the NATO secretary general; the idea is to try to support the EU defence industries. That is promoting cross-national collaboration, seeing whether the EU can support more investments in the defence market, and whether the EU can put funding towards that. Those decisions would fall under this defence commissioner, as I understand it—not thinking about EU army or rapid deployment or anything like that.

To come back to your first question, I think the PESCO mobility project is really interesting in this regard. It was set up in 2018 to facilitate movement of troops and defence equipment across Europe, whether that is by road, rail, sea or air. It is led by the Netherlands. It is also really helpful for NATO, because it allows it to rapidly deploy forces and defence equipment across Europe. In practice, that means reducing the delays, making the paperwork easier, et cetera.

The project also has another interesting element, where it provides a sort of political strategic platform, which is this idea of, “We can reduce paperwork, but how can we standardise paperwork to make sure that this cross-border military transport happens more efficiently? How can we protect these transport routes from threats?” There are lots of interesting elements around energy security as well, so there has been some reflection around that. It is open to third country contributions, as you know, and I think that is a good example of how it can complement NATO.

Chair: Thank you very much. We now move on to Gavin Robinson.

Q110       Gavin Robinson: Thank you very much, Chair, and good afternoon to you both. Perhaps I will come to you first, Dr Tylecote. Given some of the contributions you have made, and the challenge to Ms Wright about the future of PESCO and its interaction with NATO, do you have any confidence that PESCO and its strands at the moment will be an exception, or do you see future expansion of PESCO, and therefore a threat to NATO?

Dr Tylecote: I have expressed my view about the threat to NATO, and I should emphasise that I think this is an indirect supplanting and distraction, as far as a threat goes.

I would phrase my answer in two ways. There are simply practical questions in terms of expansion. European Union member states, especially in eastern Europe—I am thinking of the Poles and the Czechs, above all—are increasingly concerned about what PESCO could mean for their national sovereignty and their freedom of action in national defence. Again, on the practical side, the successes or lack of them in the military mobility project could tell us that these projects are likely to be limited in success and become bogged down.

One way of measuring the success of military mobility could be the money spent, which so far I understand is €3.7 billion. However, on the other hand, what has it achieved? The projects—indeed, as Ms Wright said—are largely aimed at improving rail, road and airport capacity, but progress is actually rather slow. Again, I am happy to submit more written evidence on this in terms of achievements on the ground.

There are some slightly predictable new requirements that I think are bogging down and are likely to bog down progress in this area, because of the other agendas in which the EU involves itself. One example here is that the joint communication on a new outlook on climate and security under the EDA will now look at ways in which militaries can reduce their fossil fuel reliance. There is likely to be a kind of bureaucratic drift and levels of bureaucratic distraction.

However, we must keep intention in mind, and the trend in the European Union since the Maastricht treaty especially has been towards the centralisation of decision-making. There is another example; I mentioned the German Foreign Minister.

Another example is that the High Representative, Josep Borrell, has also called for the national veto to be removed and for unanimity in military decision-making to be rendered unnecessary. It is hard to predict the levels of “success” that PESCO will see, but those two tensions between member states, especially in eastern Europe, and a strong centralising intent, particularly under the commission, will be crucial.

Q111       Gavin Robinson: Thank you. Ms Wright, I saw you nodding at parts of that contribution, at least—not to tie you in with it all. When asking about PESCO and the potential for expansion, you can frame an answer around military mobility in and of itself and its success or lack thereof. However, are you aware of emerging pillars for PESCO to consider new strands that it is seeking partners to develop as a new, alternative form of PESCO achievement or ambition?

Georgina Wright: Thank you for that question. I completely agree with what has just been said, which is that even if you look at the mobility project, you need to look at how the money is being spent. Is it spent wisely? I think that is due diligence, and that is why I was nodding enthusiastically; I think that absolutely needs to be done to ensure that every euro spent is spent in the right way.

To answer your question, I am not aware of them, but I can certainly look into that. If I hear or find anything, I can submit written evidence around new pillars or new projects that could emerge. As I said, it is a two-year cycle; every two years new projects are being proposed.

What I will say is that we have seen over the past five years that the EU do things that we never thought were possible—talking about industrial policy, the way it has procured vaccines for the whole of the EU and even support through military funding for a third country that is at war. Those were all things that were unheard of. However, it is not the European Commission that is deciding on its own and then imposing it: member states are very actively involved.

As you are all aware, the Council is formed of 27 member states, of which quite a number do not want to see greater centralisation and do not want to see the EU make decisions where, frankly, they are better made at the national level collectively. That is also important when we think of the future. This is not just an irreversible path: actually, there is a lot more nuance within the EU, particularly on issues around defence.

Q112       Mr Jones: Ms Wright, you just mentioned that part of the advantage of joining the military mobility element of PESCO is the obviation of unnecessary paperwork and bureaucracy. I am finding that hard to understand because clearly NATO and the European Union have a shared interest in military mobility.

The United Kingdom is a prominent member of the NATO alliance. If these arrangements did not exist, it would surely still be possible for NATO to cross the continent of Europe without someone stopping it at a boundary and saying, “Papers, please.” I am finding it hard to see what real value there is there; I would like Dr Tylecote to comment on this too.

I have one further point, which you may be able to assist me with: this arrangement, as I understand it, is going to be established by an administrative arrangement. That is still in the course of negotiation. Have you any idea as to where that arrangement is in the process of negotiation? What will the legal status of that arrangement be when it is finally concluded? That is rather a lengthy question, but I hope you can help me with it.

Georgina Wright: I hope my answer is satisfactory. On added value, clearly this is something that NATO cannot actually do. That is why the EU, through this PESCO project, has stepped up and said, “Well, let’s try to think about how we can accelerate and simplify the movement of troops and defence equipment across Europe”. It was very notable that it was in the 2018, I think, EU-NATO declaration and that it has repeatedly been put forward by NATO as one of the only real major deliverables from EU-NATO co-operation. It is a very interesting question to ask whether NATO would be able to do that and I would have to look into it more, but I suspect it would have happened by now if it had been possible.

On the administrative arrangements, I do not know where we are in the negotiations, and I did try to find out in preparation for this meeting. As you would imagine, it is a legal document. It is obviously going to be negotiated between the EU and the UK Government. What I do know is that it sets out all the legal requirements and what is expected from parties to the agreement. That is something that the EU—but, first and foremost, the UK—has to feel comfortable with.

I would hope, at whatever stage we are with the negotiations, that the UK Government might be able, in front of the Committee or otherwise, to shed some light on how far we are on some of the UK requirements and what they would like to see in that agreement before its being adopted.

Q113       Mr Jones: What will the legal status of that agreement be?

Georgina Wright: It is legally binding. It is a legal document.

Q114       Mr Jones: For how long?

Georgina Wright: It sets out the terms of the co-operation.

Q115       Mr Jones: Do we know how long it will prevail?

Georgina Wright: I do not know because I have not seen one of these agreements. Presumably, it would last for the duration of the project but it would also have an exit clause if possible. But again, I would not know because I am not privy to that.

Q116       Mr Jones: That is fair enough. Dr Tylecote?

Dr Tylecote: I will try to answer both your questions. First, on the practical value of military mobility, it is important to remember that military mobility as a project exists within and under PESCO. Why was PESCO, springing from the Lisbon treaty, described as the “Sleeping Beauty of the Lisbon Treaty” by then President Juncker? Let us just ponder that. It is because PESCO contains binding commitments in 20 areas and one of these deals with investment expenditure. These are designed to increasingly harmonise investment expenditure.

We have heard an allusion to the European industrial base and so on. This is why I want us to ponder growth, prosperity and protectionism and how, even as an apparently limited project, this is a stepping stone towards the development of PESCO: in EDF regulations, it is described that R&D projects—we assume these will appear as a result of military mobility—will be selected in part on their “contribution to the autonomy of the” European defence, technological and industrial base “including by increasing the non-dependency on non-Union sources”. This is protectionist in intent.

It also discusses—again, I am happy to submit written evidence—how awards will be made and the closed-door nature of these awards. That is another area where I think there should be an alarm bell about even apparently ad hoc projects under PESCO. If we can just turn to the administrative arrangement, with respect to what Ms Wright just said, it is worth breaking down where that is—at least, where I understand that is. The administrative arrangement clearly warrants proper parliamentary scrutiny. That is the first point.

When the UK was accepted into the project military mobility in 2022, there wasn’t parliamentary debate. The question is: is the way open for the UK to be drawn further into EU defence structures? We can assume this agreement will deal with the scope of the UK’s participation, conditions for its review, the disclosure of sensitive information and so on. The issue is: will the commitments be legally binding? I think the evidence increasingly suggests that they will.

When we look at the Council decision in 2020, again, coming to you in written evidence, on establishing the general conditions under which third states could exceptionally be invited to participate in individual PESCO projects such as this, we note language that implies a binding agreement. I would like to briefly quote. It states that third states “may exceptionally be invited by project participants”. They “would need to provide substantial added value to the project, contribute to strengthening PESCO and the Common Security and Defence policy and meet more demanding commitments.” I emphasise “more demanding”. Various doors are opening here.

I think you are about to hear from the Minister; no doubt the status of that agreement and whether it will be made public any time soon will be a big interest of yours, but until we know whether Parliament can scrutinise the administrative agreement and everything that is in it and all its legally binding implications or otherwise, my view is to treat the project with great caution.

Q117       Chair: Thank you. We are running tight on time at the moment, and we have the Minister coming immediately after you.

I want to wrap up by asking a very direct question. I want a short answer. Are we going to have an EU army or not? Have we got the prospect of an EU army, as the Foreign Minister of Italy, Antonio Tajani, suggested recently? That is what he said he wanted—“We should have our own army.” Not us, but the European Union—it should have its own army. Yes or no? Can I ask both of you to answer that question very quickly?

Dr Tylecote: Shall I begin? Forgive me; I can’t quite say yes or no. I can say it remains to be seen and, as concisely as possible, this depends on the two competing dynamics that I’ve described and how they play out.

There is already an embryonic European army in the form of the EU battle groups, and although there is a plan to increase their number from 1,500 to 5,000 personnel by 2025, this is a merely conceptual entity, so it does not yet exist. That said, and I refer to my previous comments about the potential commissioner and the general centralising intent, the creation of a functioning EU army would entail and require the full federalisation of the European Union as a bloc.

Q118       Chair: Georgina Wright, on that question?

Georgina Wright: No, I just don’t see it happening—I really don’t—from all the discussions I take part in, in Brussels, you have a small number of people who call for it, and a very large pool of people who don’t like the idea and who don’t see the added value.

This is perhaps for another session: on the battle groups, they play a very distinct role; it is for short missions. It is in no way having a joint army that can intervene at any point and for long durations.

Q119       Chair: I have one last question. We have the Minister to come shortly. Listening to this discussion, I have been thinking about how quickly Ukraine happened. Some of the things that have come out of these discussions throughout the whole of our inquiry, not just this session, have a slightly unreal quality to them.

I was born on the very day, at the very time, when Hitler invaded Holland and France: 10 May 1940. It happened then. These questions and discussions about how it is going to be done, what the administrative arrangements will be, whether it is legally binding and all the rest of it have a way of just disappearing in a puff of smoke if somebody decides on pre-emptive action. Are you satisfied with the state of affairs regarding defence in the EU, as well as in the UK and NATO? Will we be ready if anything unfortunate happens quite quickly? I will ask Radomir Tylecote to answer that question first. Are you as concerned as I am that there is an awful lot of administrative discussion and not enough readiness?

Dr Tylecote: I have a degree of dissatisfaction with that readiness in this increasingly uncertain world that you describe because I am concerned that confusion is growing, due to the centralisation and development of EU defence harmonisation, over which mechanism would lead—I include the concept of what you would call charismatic authority—and where these discussions would happen. I think it is increasingly important for those things to remain in NATO because of the growing risk of that kind of eventuality.

Q120       Chair: That helps me a lot. Georgina Wright, what is your answer to that question on readiness, as compared with administrative arrangements?

Georgina Wright: I think we need more focus on readiness. If we can talk about positives in the context of the war in Ukraine, which I find very difficult, there has been more willingness and a realisation that we need more capabilities, alliances, partnerships and dialogue. That is one of the positives to come out of this. Ninety per cent. of those discussions are not about the administrative and legal requirements, but those are necessary because it needs money and companies are going to be producing these arms.

It is normal that a minimum amount of time is spent on that to make sure these projects are as robust as possible, serve the interests of the parties involved and deliver value for money. It is important that those discussions happen, but I absolutely agree that the main focus should be whether we are ready and how quickly we can be ready.

Chair: That is very helpful as a final contribution from both of you. Thank you both very much for coming.

Examination of witnesses

Witnesses: The Earl of Minto and Gareth Williams

Q121       Chair: For the second half of this session, I would very much like to welcome the Minister of State, the Earl of Minto, who is responsible for PESCO, and thank him and his official, Gareth Williams, for appearing in person to give evidence this afternoon.

This very important inquiry has covered multiple areas, including non-EU member state participation in PESCO projects, the general terms and conditions of participation, and what this could potentially mean for the United Kingdom with regard to the military mobility project. Also included is the UK-EU defence co-operation since Brexit, such as our participation in the military and mobility project and the European Defence Fund, and also what PESCO means for defence contractors, specifically British defence companies.

These are very important questions to ask regarding PESCO and what it means for the UK’s regained sovereignty after Brexit, and what PESCO could potentially lead to, particularly as there seems to have been a lack of scrutiny of the UK’s participation in the military mobility project so far—except for by this Committee. We are hopeful that you can shine a light on some of these issues and help us better understand the Government’s actual position on PESCO. Before we begin, would you be kind enough to introduce yourself, Earl of Minto?

The Earl of Minto: I am Timothy Minto, Minister of State at the Ministry of Defence. I thank you for your opening remarks and thank colleagues for inviting me to appear before the European Scrutiny Committee. If you allow, I would like to offer a few words of my own to help set the scene from our perspective, and then Gareth Williams and I look forward to getting into the detail of your questions.

To contextualise today’s discussion on PESCO, the EU’s Permanent Structured Cooperation on defence and security project, I feel it is worth us all remembering in the back of our minds that the UK and the EU member states, not to mention many other global partners, share common security challenges in what has evidently become a less stable world. As all in this room will appreciate, the illegal Russian invasion of Ukraine has brought this into sharp relief. From co-ordinating sanctions to the supply of equipment, ammunition and training support, the UK and EU members have proven once again our ability, and indeed our need, to work very closely together.

Of course, the EU as an institution should be careful not to replicate the focus, structure or expertise of NATO. It will come as no surprise to you to hear me say that NATO remains the bedrock and primacy of the Euro-Atlantic defence. Each organisation should play to its respective strengths.

For the avoidance of doubt, we do not assess PESCO as a threat to the primacy of NATO. The military mobility project in particular addresses the bureaucracy of moving personnel and equipment around Europe, and we view this as complementary to NATO objectives. I believe this is a view shared by many in previous evidence given to this Committee, but I defer to your questions in an effort to reassure you further of the Government’s position.

Q122       Chair: That is extremely helpful, thank you very much. In December 2020, the then Secretary of State for Defence, Ben Wallace, stated that the UK had “no plans to participate” in PESCO projects. In 2022, he said that the UK should look at joining the military mobility project. Can you tell us what PESCO is, what has changed between 2020 and 2023 to mean that the Government want to participate in the military mobility project, and what are the headline benefits of the UK’s participation in PESCO projects—and on the other hand, the trade-offs?

The Earl of Minto: PESCO, as I am sure Committee members will know, is a series of individual projects that do not overlap. They are specific in purpose and address issues related to their particular subjects. The military mobility project is not designed to have anything to do with procurement or military capability; it is to do with the ability to move troops and equipment around Europe at speed.

I suppose what has changed between 2020 and 2022 is that Ukraine has come on to the scene and made what was a perfectly reasonable plan slightly more pressing.

Q123       Dame Andrea Jenkyns: The Government are currently negotiating an administrative arrangement with the EU concerning the UK’s participation in the PESCO military project. When that is finalised, can we have access to the document?

The Earl of Minto: Absolutely.

Q124       Dame Andrea Jenkyns: Good. Will you commit to submitting the arrangement for parliamentary scrutiny?

The Earl of Minto: Perhaps I had better temper what I said. We should see where we are at that time. The administrative arrangements are memoranda, so they are not legally binding. It is not necessarily suitable for parliamentary scrutiny.

Q125       Mr Jones: You said that the arrangements are not legally binding—that is not what we were just told by Georgina Wright.

The Earl of Minto: Yes, I heard that, because I was in the room.

Q126       Mr Jones: Is she wrong?

The Earl of Minto: I do not believe that they are legally binding.

Q127       Mr Jones: Forgive me—you believe that? Mr Williams, what will be the status of this arrangement? Will it be binding and enforceable?

Gareth Williams: No. It is a memorandum of understanding, and it is not legally binding.

Q128       Mr Jones: So Ms Wright was wrong in her evidence?

Gareth Williams: I am afraid I did not hear Ms Wright’s evidence, so I am unable to comment on what she said. I can only comment on our understanding of the arrangement, and in everything we have been doing on it, it is a non-legally binding memorandum of understanding.

Q129       Mr Jones: Can we therefore withdraw from the agreement at any time?

Gareth Williams: It does not provide any legal commitments.

Q130       Mr Jones: That is not what I asked. Can we withdraw from the arrangement at any time?

Gareth Williams: Yes, and we can choose to participate in any parts of the project and choose not to participate in others. The arrangement does not tie our hands or bind us into any wider form of co-operation. It does not tie us into anything.

Q131       Chair: To go back to a point I made in the previous session, readiness and whether we would want to co-operate if something dreadful happened is right at the heart of questions of defence. As we appreciate from past experience, those things can happen at very short notice, as in the case of Ukraine. Therefore, although it is very interesting to know whether we will have access to documents or parliamentary scrutiny, surely the real question is: are we ready for what might happen in the unfortunate event that something was generated from outside the European Union and NATO? Could you comment in that context, Minister?

As you rightly said earlier, a lot of people are aware that the situation has become more poignant and perhaps more immediate since Ukraine, without making any alarming statements. None the less, readiness is everything. As I asked the previous panel, are we going to be ready if anything unfortunate happens?

The Earl of Minto: That is an extremely good point. The situation is that if we had the military mobility agreement in place, we would be considerably more ready than we are now. Having said that, one has to believe that pragmatism will rule the day, and that one would be able to move swiftly if there was a threat such as you propose.

Q132       Chair: Mr Williams, would you agree with that? I am sure you would, but I would just like to hear your confirmation.

Gareth Williams: Yes, absolutely. You will be aware that plans and procedures are in place via NATO to ensure the deterrence and defence of the Euro-Atlantic area, and we have confidence in those plans.

Chair: That is very helpful. I was going to say that we have two members of the Defence Committee on this Committee, as it happens. I am sure that when they ask their questions, they will form their own judgment wearing two hats, not just one. Thank you very much for that. With the next question, Gavin Robinson.

Q133       Gavin Robinson: I am going to don a third hat, if that is okay, from a former career in law. Mr Williams, I think you are being careful—appropriately so—about the words you use when talking about the legal enforceability of a memorandum of understanding. Are you indicating to the Committee that a memorandum of understanding cannot contain legally enforceable commitments, or are you indicating to us, prior to the conclusion of the negotiations, that the memorandum of understanding you are going to sign does not have any legally enforceable conditions?

Gareth Williams: I am just commenting on the memorandum of understanding—the administrative agreement—as it would apply to this situation.

Q134       Gavin Robinson: In the knowledge of its contents or in the abstract?

Gareth Williams: In the framework that has been discussed with regard to co-operation in this project.

Q135       Gavin Robinson: Because of course, a memorandum of understanding could contain contractual obligations, and could be construed as a contract between the parties attached to it.

Gareth Williams: As I said, in this situation I am commenting on the arrangement as it applies to PESCO military mobility rather than on generalities around memoranda of understanding.

Q136       Gavin Robinson: Lord Minto, it is good to see you. You indicated in an earlier contribution that you did not feel there was a necessity for parliamentary scrutiny. I’d like to explore that slightly further, if I may. Obviously, Parliament’s role is to scrutinise; that is what we do.

The Earl of Minto: I understand that.

Q137       Gavin Robinson: Are you delineating between scrutiny and providing approval, or do you believe we should have no role at all in scrutinising the agreements that the Executive enter into?

The Earl of Minto: No, I don’t think that was what I was implying. On the question that you have just put, I am not certain that parliamentary scrutiny is necessary.

Q138       Gavin Robinson: The question asked by Dame Andrea when she was here was about whether you will commit to submitting the arrangement for parliamentary scrutiny. You are indicating that you don’t feel that is necessary.

The Earl of Minto: I think that is right.

Q139       Gavin Robinson: Parliament would always reserve the right to scrutinise whatever the Executive do; I think you would accept that that is our role. But you don’t believe that the Government will be seeking a motion of approval or a debate on the arrangement, or that the content should be subject to scrutiny within Parliament.

Gareth Williams: Just to jump in, joining this project sits firmly within the Government’s competence. There is no requirement to consult Parliament, as I understand it, on such non-binding arrangements. That is the key point: because this is a non-legally binding memorandum of understanding, section 21 of the Constitutional Reform and Governance Act does not apply, as that applies only to formal treaties.

To be really clear, joining this arrangement does not in any way legally bind us to the EU. I note that we have very much welcomed the opportunity to provide written and oral evidence to support the scrutiny process here, including a discussion in the House of Commons on the topic.

But when it comes to publishing the administrative arrangement itself, it is not MoD policy to publish MOUs because they often contain classified military or technical details that are not suitable for wider publication.

Q140       Gavin Robinson: I think that that is a fair distinction between our role in scrutiny and the requirement or otherwise, whether it is desirable or not, to seek Parliament’s approval for entering into such an arrangement. I think you are indicating it is not required—you do not require Parliament’s approval. But I think there is a sense that the structures around our ability to scrutinise perhaps are not as strong as they ought to be. That is not to say we need to get permission, but at least we can fulfil our constitutional role of challenge. So I am very keen to hear, Lord Minto, whether you believe that what is envisaged for parliamentary scrutiny is as sufficient as it should be. You have heard the nature of the questions in the earlier session, and you understand some of the wider context around these relationships. Do you believe there should be a willingness to engage in thorough scrutiny, short of approval?

The Earl of Minto: I don’t think I was trying to indicate that we were unwilling. The point that I was trying to make was that it was unnecessary and not required.

Q141       Mr Jones: Could I pursue that last point a little further? Does the European Union also regard this administrative arrangement as a memorandum of understanding? In other words, do they have the same assessment of its legal effect or otherwise?

Gareth Williams: Yes, I believe so.

Q142       Mr Jones: The document is not available for anyone to read publicly. Is there any particular reason, apart from the technical points that Mr Williams has mentioned?

The Earl of Minto: My understanding is that it is still under negotiation, so it is not available yet.

Q143       Mr Jones: When it is negotiated will it be available?

The Earl of Minto: No, I don't think it will be, for the reasons that Mr Williams explained.

Q144       Mr Jones: It is odd, because we have had evidence from a member of the Norwegian Government, which of course is also participating in military mobility.

The Earl of Minto: As a third country, yes.

Q145       Mr Jones: He told us that the arrangement they had entered into with the European Union was readily available on the Government website. Is there any reason why that should be the case in Norway, but not in the United Kingdom?

Gareth Williams: That is clearly a matter for the Government of Norway. As stated, unfortunately it is not MoD policy to publish such memoranda of understanding due to their non-binding nature.

Q146       Mr Jones: Do you understand why this Committee finds it frustrating that we are spending several sessions talking about an arrangement that we are unable to read?

The Earl of Minto: I can see that, yes.

Q147       Mr Jones: Can you explain the rights and obligations of a non-EU country joining a PESCO project?

The Earl of Minto: A third country joining a PESCO project has to be invited to do so. They have rights to be involved in the decision-making process. They have rights to contribute. What they do not have is the power of veto, and they do not have the same level of rights that the member states have.

Q148       Mr Jones: In what sense? You say the same level of rights.

The Earl of Minto: If a decision is taken and it needs to be unanimous, and if the EU states agree and the third country or a number of third countries disagree, then the EU states have the right of decision.

Q149       Mr Jones: But in those circumstances, as Mr Williams has made clear, we can simply withdraw from the arrangement.

The Earl of Minto: That is absolutely correct.

Q150       Mr Jones: The word “permanent” is something that I think causes some concern in the Committee—permanent structured co-operation. It does not seem to me it is permanent at all.

The Earl of Minto: I think that for a third country it is not.

Q151       Greg Smith: Minister, can you inform the Committee—this should be a yes or no question before I come on to the bulk of it—do the obligations for joining PESCO projects in any way, shape or form compromise our Brexit freedoms?

The Earl of Minto: No.

Q152       Greg Smith: It is a clear no. Good. So who will have ultimate decision-making authority over the military mobility project? Inherent to that and inherent to United Kingdom sovereignty, will the United Kingdom be able to exercise a veto over how it is run and administered?

The Earl of Minto: No, the United Kingdom will not be able to exercise a veto as a third party. On this particular project, we have the United States, Canada and Norway already in as third parties, and they do not have that right either.

Q153       Greg Smith: So this is a project that the United Kingdom, which is a country that is now sovereign again, signs up to in a legally non-binding way, and it cannot then stop it if it does not like the way that that particular project—

The Earl of Minto: The third country can withdraw, but it cannot stop it.

Greg Smith: We could completely, without penalty, withdraw all our personnel, or whatever it might be, from any particular project.

Gareth Williams: Could I just make a clarification here around the PESCO military mobility project? It is very much different from all the other PESCO projects, which is why this is the only one that is currently under consideration for joining. It does not involve procurement, research, capability development or any form of funding. It is a forum for discussion and the alignment of principles, processes and regulations, to enable the smooth movement of military personnel and equipment.

As your question applies to the military mobility project, rather than PESCO as a whole—it is important to separate out the one that we are talking about joining and the wider set—there are not situations in which we can envisage there being things proceeding in a direction that we would want to move back from. As I say, this is a forum for consultation and sharing with like-minded allies. As we understand it, this is exactly why the US, Canada and Norway are participating in this—because of the value of that forum. There are not hard things that come out of it in terms of capability development or intellectual property that would trigger the problems that we know exist regarding third-party participation in wider projects.

Q154       Greg Smith: To try to boil this down to its lowest common denominator, if that forum, which you have said can agree processes, agrees a process for whatever it might be—the movement of tanks, or whatever it is—that the sovereign United Kingdom Government decide we do not like and are not going to play with, what happens? Do we just simply have to leave the whole thing? Do we just not agree it within the mobility forum? This is the scenario: we do not agree with the process. Say that even the Americans want to do it with the French and so on as well, but we do not agree. What happens?

Gareth Williams: There is nothing that participation in this project binds us to. It is a forum for discussion. It ensures that, when things are being discussed and the EU is thinking about its internal processes on this, we can feed in UK requirements and hope to shape things that are taking place there. This is a mechanism to shape existing discussions and processes, not something that binds the UK to behave in a certain way. It is about aligning with requirements that we have. It is a mechanism of influence, rather than something that ties us to a course of action.

Chair: We have a military member of the Committee. In fact, we have two here at the moment. Adam Holloway, would you like to ask the next question? You looked at if you wanted to intervene.

Q155       Adam Holloway: Yes. It is not particularly detailed, but I don’t understand why non-EU countries are getting into an EU arrangement when they are already members of NATO. Why are the Americans, Canadians, Norwegians and now ourselves doing it through the EU? I thought that NATO was what we used to defend ourselves in Europe. I mean, it’s all NATO equipment that is being moved.

The Earl of Minto: Yes, you’re absolutely right—NATO has the primacy. I think that what the PESCO project is trying to do is to reduce the amount of bureaucracy to simplify and standardise the cross-border military transport procedures. As such, it’s a pragmatic exercise and it should be of benefit to NATO as a whole. It’s complementary to NATO; it’s certainly not trying to compete with NATO.

Q156       Adam Holloway: I just don’t see why it would have to be through the EU, unless, I suppose, all the countries that this matériel moves through would be EU countries, but then they are all members of NATO anyway.

Gareth Williams: From NATO’s perspective, NATO views this as an important initiative and views it as complementary. It is specifically referenced in the NATO-EU declaration as an area where they are working closely. This is how NATO is choosing to address some of these elements; it is through co-operation with the EU.

There are elements that fall within NATO competence and there are areas where the EU is well suited, particularly given its regulatory and budgetary powers, to support military mobility. I think that a lot of it comes down to the powers and levers that the organisations have, which is why it is a complementary activity.

Q157       Chair: Can I just postulate a position that is related to our being an island—some say “this sceptred isle”, and so on. We are in a very different position from the rest of Europe, with the exception of Ireland, and when we talk about tanks going across plains or whatever they happen to be, of course it's a completely different story. I mean, the United Kingdom—certainly as regards the mainland here; Great Britain—has a border that is a sea and therefore the idea of crossing borders in tanks, which somebody mentioned just now, doesn’t quite apply in the same way for us as it does for others.

When you are talking about military mobility, there is also the question of naval mobility. I am just interested to know whether the words “military mobility” include the Navy, because one of the things that we need to be quite sure about is that we have an adequate naval force to repel, as we have so often in the past, any potential invasion if it were to occur. And of course, against that background there are also much more sophisticated missile operations and so forth.

Without going into too much detail, are you satisfied that we are in a position to do what the “military mobility” would amount to, taking account of the fact that we are an island, as compared to the rest of the mainland of Europe, if you see my point?

The Earl of Minto: I absolutely see your point.

Chair: It just seems to be quite a practical question. You can’t move tanks across a sea in the same way as you can obviously fly aeroplanes or use naval ships and things of that kind. Can you just throw some light on this? I’m trying to sort of get to the bottom of how the words “military mobility” would actually turn into a reality.

The Earl of Minto: My view is that this is primarily about borders and about moving ground troops in, in case of a disaster that might appear, and, as I say, ironing out all the bureaucracy that one can to make it simple.

As far as the Navy is concerned, I have to admit I’m not certain. Is the Navy covered by what we’re talking about?

Gareth Williams: I’m not sure that we’re well placed to answer that particular question right now. It is safe to say that as it pertains to PESCO in the military mobility project, my understanding is that by being inside that project you can shape and seek to guide the focus. I believe that you heard in your previous evidence from a Norwegian official that their assessment was that third countries have a relatively good say in how projects are run. In terms of shaping the project, being inside it would hopefully enable us to ensure that it is focused on the things that we want—notwithstanding the caveats mentioned earlier around the UK not having a veto on it specifically—in terms of shaping those discussions.

Q158       Chair: Just to wrap this up, I am not going to ask you to answer this question right now, but I would be grateful if you could send the Committee an answer to the question of what the word “military” means in this context. If it includes the Navy, aircraft and so on, it is a different kind of business. If it is actually purely related to the military—i.e. troops on the ground, tanks and all that sort of thing—it is a different story. Without elaborating on it now, I would be grateful if you could give us a pen sketch of what it is meant to mean. We have not seen this document, and we are not quite sure what it means.

The Earl of Minto: indicated assent.

Chair: Okay.

Q159       Richard Drax: Good afternoon to you both. Before I ask the next question, were you in the room before? Did you hear the previous session?

The Earl of Minto: Just the last question.

Q160       Richard Drax: Okay. The point that I raised with Georgina was that in my view, there is a risk of PESCO detracting from NATO, which we all agree is the prime force for defence. Mr Williams, you talked about consultation and sharing. I am proud to say that I am a Brexiteer, and I am instinctively untrusting of anything EU. I worry that this PESCO project will detract from rather than add to NATO, when most members of NATO do not even pay their basic dues.

We were in Naples at Joint Forces Command’s southern area, and we met the brigadier, whoever he was, in charge of logistics, interestingly. I asked him, “What is your job?” He said, “My job is to ensure that if a train goes from the west coast of France, it can get to the eastern fighting area if our opponent is Russia,” and all the things you talked about. That was exactly what his job was to do. He told us that it was proving a nightmare, not least within the EU, because as we all know it takes the 27 of them months to make a decision. Maybe war would speed it up, God forbid.

The point I am making is that efforts are being made already in NATO to do exactly what this project is trying to do, and I cannot see this project helping NATO when they are not even paying their full dues as members of it. Is that an unfair assessment, or are you equally concerned?

The Earl of Minto: My view is that it can only improve things, because it is specifically targeted at trying to ease the progress through boundaries across Europe. It does not compete with NATO.

Q161       Chair: Does that include the Eurotunnel, by any chance?

The Earl of Minto: I was wondering about that, Chair, when you talked about the island. Presumably quite a lot will go through the tunnel, but I presume that it would include the tunnel.

Q162       Richard Drax: I suspect that it probably would. I will move on to my next question. In written evidence from the Government, we were told: “The financial implications of joining the PESCO military mobility project are limited”. Can you confirm that today?

The Earl of Minto: Yes. It is very limited: it is literally just the cost of getting somebody to attend the meetings.

Q163       Richard Drax: And if that changes, will the House be informed? Will the House be told that it will cost another £10 million?

The Earl of Minto: I just cannot imagine a situation in which that would occur. If the situation changes, of course we will bring it back—

Q164       Richard Drax: We are dealing with the EU, Minister; they tend to want our money. In a previous evidence session, we were told that “military mobility has been hailed as the flagship of EU-NATO co-operation.” Why cannot NATO co-ordinate military mobility without the EU? This goes back to the point I was making before; it rather picks up on that point. I suppose the question is: why can’t NATO do it? And I think your answer was—sorry, I’m paraphrasing—that this is helping NATO do just that.

The Earl of Minto: That’s right, yes.

Richard Drax: And you have nothing more to add to that.

The Earl of Minto: Well, I don’t think PESCO is a threat to NATO’s primacy—I really don’t. It is an administrative process in trying, as I say, to reduce bureaucracy, to make certain that, should the situation arise, we can move across mainland Europe fast.

Q165       Richard Drax: To pick up on my colleague Greg Smith’s point about not seeing the deal as such, which does seem extraordinary, will we learn how this is all progressing if we do not know exactly what we are signing up to? Will we be briefed that it is all going swimmingly—for example, “We now have trains going from one side of Europe to the other. No problem at all.”, or “We now have areas of deep freeze for blood in the event of a major war.”? On all the logistical issues, will we be told, “We have ammunition dumps. We have this. We have that. It’s all fine.”? Will we hear about this?

Gareth Williams: The thing to note with this particular project, the PESCO project, is that it is a long-running project with no specific end date, because it is designed to improve and cohere and to basically make sure that everything is running smoothly. Coming back to your previous point, this focuses on the fact that both NATO and allies and the UK recognise that there is an area, a competence, for the EU here. There is a significant role that they can play in supporting and improving Europe’s military mobility that is complementary to NATO. I think it is about having those two points together, but this project does not have a specific end date.

Q166       Richard Drax: I understand that, but will we in the House be told that the money we have given, however much it is, to do whatever—we won’t know what they are doing with the money—will we be told, “Yes, in this year we have connected 100 miles of railway” or—

Gareth Williams: Just to clarify a couple of points here, under this project there is no money changing hands. I further the point that the Minister made. The only financial commitment here is to attend the meetings, because these meetings are discussions about aligning activity that is going on separately and being funded—the EU has its own military mobility project that is focused on funding the building of roads—

Q167       Richard Drax: So will we hear how the activity is going?

Gareth Williams: Those are matters for the EU project. As regards our participation in this project, in PESCO military mobility, it is a forum for discussion around those things—

Q168       Richard Drax: Mr Williams, I understand that. So we will have a representative there. Will we hear, back in the House, how that meeting went and what progress, if any, there has been on something like getting a better rail connection? Will we hear how it is going?

Gareth Williams: In terms of the process for updating, I don’t think there will be, on this project alone, a standing process for providing updates to Parliament. I imagine it would fall under the normal process of parliamentary scrutiny—the routine interactions between Parliament and the Government.

Chair: We are at a slight disadvantage in one sense: we are doing something that we would rather have expected the Defence Committee to have been inquiring into quite a long time ago. We came to the conclusion that what we really wanted to see was how, in the European context, this would function. We are getting somewhere, but it is quite difficult without the document. I am sure you understand that. The other question to ask, if I may—unless you want to pursue that line of questioning, Mr Drax?

Richard Drax: I have finished, Mr Chairman.

Q169       Chair: Okay. There is one question—I don’t think we know quite what the answer to this is. Specifically, and very shortly, do the Government have any plans to join any other PESCO projects? I think there are 68 or 67.

The Earl of Minto: There is a total of 68 discrete projects.

Q170       Chair: Are there plans—I said “plans”—to join any more or not?

The Earl of Minto: Not.

Q171       Chair: Okay. And on the basis that the answer is “Not”, can I ask, “Why not?”?

The Earl of Minto: The interesting thing about this particular project is that it is, like all others, discrete, but it seems to be the one that most third-party countries want to be involved in because of its obvious effectiveness, while any other project is not so defined.

Chair: Everything that I am hearing suggests that it is a very wise decision not to do so. I will bring in David Jones.

Q172       Mr Jones: On that point, you said there are no plans to join any other element of PESCO. I raised this with Minister Heappey on the Floor of the House some time ago and he said that the Government would consider each element on its own merits and make decisions then.

The Earl of Minto: I was asked if there are any plans now. There are no plans now.

Q173       Mr Jones: But you are not ruling them out?

The Earl of Minto: I think one would be foolish, when it comes to European defence, to rule out things like that.

Q174       Mr Jones: There is one thing you could possibly explain. You mentioned the need for complementarity between the European Union and NATO and for alignment and so on. The United Kingdom is a prominent member of NATO. Why does it need to have a separate arrangement with the European Union from NATO?

The Earl of Minto: Not all European countries are in NATO, and not all NATO countries are European. There is a complementarity that ensures cover.

Q175       Mr Jones: Yes, but why can that arrangement not be put in place by NATO? Why does the UK have to have an entirely separate arrangement? Surely NATO could make these arrangements with the European Union and we could just enjoy the benefit of that NATO arrangement?

Gareth Williams: NATO does believe that co-operation between NATO and the EU—that is, via PESCO—is an important plank.

Q176       Mr Jones: I fully understand that, but why do we need to have a separate arrangement from the arrangement that NATO has with the EU?

Gareth Williams: That is the way this particular PESCO dialogue is structured. It is structured as a dialogue with other members and a sort of parallel, complementary forum for discussion on this matter.

Q177       Mr Jones: It seems unnecessarily complicated. Surely NATO could simply have that arrangement directly with the EU. I just cannot understand why we need to have a totally separate arrangement in respect of the United Kingdom or any other third country.

Gareth Williams: The benefits of being able to participate in these discussions, which, to reiterate, emphasise overcoming impediments to the military and moving things around—

Q178       Mr Jones: I understand that, but that is something that NATO could negotiate. It does not need to have a separate arrangement with the United Kingdom. [Interruption.] Have you had some inspiration?

Gareth Williams: Yes, I have had some helpful inspiration. It is helpful to clarify that under PESCO there is no agreement with the EU.

Q179       Mr Jones: But with NATO?

Gareth Williams: It is not the UK having an agreement with the EU. It is individual agreements with the members to participate on this project.

Q180       Mr Jones: So each member state that participates in this will be a separate signatory to this arrangement. Is that right?

Gareth Williams: Yes. There is an arrangement with each of the individual parties.

Q181       Mr Jones: And not the European Union?

Gareth Williams: As I understand it, no.

Q182       Mr Jones: I find that extraordinary, because no one has ever suggested that previously. I thought that this was an arrangement with the European Union.

Gareth Williams: No, I believe that is not the case.

Chair: Greg Smith, would you like to ask the question relating to the defence fund?

Q183       Greg Smith: Yes. This is another element that we have heard evidence about from previous witnesses on this inquiry; UK participation in the European Defence Fund could be a possibility if restrictions and protections are put in place and there are certain restrictions around intellectual property rights. But participation in the EDF would have European Court of Justice oversight. Can you give the Committee an assurance that the United Kingdom is not looking to participate in the European Defence Fund, difficult as that would be given the existing restrictions around who can be a member? If it is on the table, how on earth would you square our sovereignty, having left the European Union, with ECJ oversight?

Gareth Williams: We acknowledge the benefits of many EU initiatives, particularly those that centre on the provision of munitions and equipment to Ukraine, the replenishment of the stockpiles of allies and partners, and any proposals to boost European industrial capacity and resilience for the long term. However, at the moment, the UK Government assess that UK interests are sufficiently managed through NATO, bilateral agreements and our informal relationships with the European Union and the European Defence Agency.

Q184       Greg Smith: Is membership of the European Defence Fund completely off the table?

Gareth Williams: It is not currently under consideration.

Greg Smith: Okay. That is clear.

Q185       Chair: It is. It certainly seems to me, to put it into a question, like this: are we not looking at a set of attempts to co-operate that have not necessarily been enmeshed? Would that be a reasonable way of describing it? In other words, there is an intention to co-operate.

What I am worried about, as you may have gathered from my earlier question, is that, when you are confronted with an emergency situation, the last thing you want to be doing is poring over documents to see what your legal status is, what you are committed to and so on. Generals, admirals, RAF marshals and the rest of it have to make decisions about what happens when the worst occurs, if it does. It is the clarity that comes from sovereignty that enables you to make those decisions.

We are used to NATO. It was established in 1949. We have grown up with it. The question of whether we want the complicated addition of bells and whistles may be understood in terms of an attempt to co-operate and to move stuff around Europe. I understand that point about borders, although I maintain my concern about the fact that we, being an island, are in a rather different capacity. But am I more or less right in saying that it is an attempt to co-operate in a framework that is fairly flexible and not to be regarded, in a nutshell, as a substitute for NATO? You have ruled that out already and, therefore, that is quite clear. When you disaggregate all this, you are really left with something that is not an aspiration but has a degree of co-operation about it. If there were to be a change of Government, for example, do you have any sense about the direction in which all this might go?

The Earl of Minto: You used the word “co-operation” several times there; my view is that that is absolutely the right word. This is about co-operating with our allies to ensure complementarity alongside NATO to make rapid deployment as free and easy as possible.

Q186       Mr Jones: I will go back to the point I raised with Mr Williams some time ago. He told me that the individual participant member states would be entering into this arrangement with the UK. What role does the Council have in this? Is it not the case that the Council has to sign this arrangement off?

Gareth Williams: I will need to write to you to give you exact confirmation.

Q187       Mr Jones: That is quite important, because that would make it clear that this was an EU arrangement with the UK rather than simply with individual participating member states. That is really important. If you could let us have that information as soon as possible, I would be very grateful.

Gareth Williams indicated assent.

Q188       Chair: As a supplement to that question, we were discussing a little earlier the comments made by Madame von der Leyen about the idea of a defence commissioner. Once she is involved as a member of the European Commission, and they are talking about a special role for a European defence commissioner, you are getting into very deep water in terms of the legalities. David, do you want to follow up on that?

Mr Jones: I think we need that evidence supplemented in writing, please.

Gareth Williams: I have just consulted with colleagues, and I can confirm that there is no signing of an arrangement with the European Defence Agency as part of the decision, just agreements with the individual members.

Q189       Mr Jones: Does that require approval and sign-off by the Council?

Gareth Williams: I believe that that has already happened.

Q190       Mr Jones: It cannot have, because it has not been negotiated yet.

Gareth Williams: We have already been invited into the project.

Mr Jones: No, I understand that, but I am talking about the final arrangement once it has concluded.

Gareth Williams: I do not believe that there is any—

Q191       Mr Jones: Could you write to confirm that, please?

Gareth Williams: Yes. Just to clarify a previous point around the EDF, I think it is important to remember that full third-party involvement in the EDF is limited to countries within the EDA. While other entities and third-party countries can participate, there are no such arrangements in place at the moment. As with other EU defence industry rules, we have significant concerns regarding those third-party rules. Therefore, our assessment is currently that the provisions around the EDF and third-party involvement would not meet what we or UK industry need. That is a helpful bit of additional context to that question.

Q192       Greg Smith: Within that, can you just clarify that the oversight of the European Court of Justice plays a significant part in the Government’s assessment of why it does not meet our needs, because it would re-challenge our sovereignty?

Gareth Williams: The focus that I was talking about here is regarding the terms for third-party co-operation more in relation to industrial exports and intellectual property. I am unable to comment right now on—

Q193       Chair: Are you ruling out any role for the European Court of Justice in these arrangements altogether?

Gareth Williams: That is not something I’m able to comment on at this moment.

Mr Jones: Surely it must be ruled out, because it is a non-binding arrangement.

Chair: That is my view, but it is not a question of what we think. It is a matter of what they answer.

Mr Jones: I think that is another point on which we need a clarification, Chairman.

Q194       Chair: Once the words “European Court of Justice” come into the equation, you are talking about another infringement of sovereignty, which is, of course, one of the fundamental questions about Brexit. Could you consider that? Perhaps you could go back to your lawyers and ask if they would be kind enough to give us an answer to that.

The Earl of Minto: We will do that.

Q195       Chair: In that context, I will come to the final question that we will ask this afternoon. Have the Government considered to what extent, if any, British defence companies stand to gain from UK participation in PESCO projects? Is that part of this co-operation? Is there any greater opportunity for us to participate or not? It might not be a consideration, but I would just like to know the answer to that question.

The Earl of Minto: My view is that through this particular project, the answer is no. Elsewhere, there is a lot of activity on co-operation in defence and munitions construction.

Q196       Chair: In conclusion, one might draw a line under the issue that we are not really fully engaged in PESCO as a whole. There are potentials, but there is no commitment. There is a lack of certainty about the nature of the legal relationship, which I think you can help us with when you come back to us on that.

Speaking for myself, it would seem that the minimal degree to which we are going to be involved in this, from what we have been told, would suggest that we ought to be thinking very clearly about our relationship with NATO and making sure that we get the best possible outcome from our relationship with NATO, and be somewhat less concerned about PESCO, because it is not going to be a project that we are fully engaged in, in all its respects. Would that be a fair conclusion?

Gareth Williams: I think it is fair to say that the PESCO project is distinct from the others, in that it does not trigger the things that we have concerns about, because it does not involve procurement or making anything. That is an absolutely fair assessment. Just to pick up on the point around the legal arrangements involved here, I will just flag that to participate in a project, the third country must have an agreement in place to exchange information with the EU via an administrative arrangement with the project members. The UK and the EU already have a wider security of information arrangement in place, which came out of the trade and co-operation agreement. The only thing we need to participate in the military mobility project is an agreement with the project members. It is not legally binding—there is no role for the courts in this.

Chair: It is bad enough to have a fog of war, if war were ever to break out; it would be even more difficult if we had a fog in the preparation of war. That is one of the thoughts that comes to my mind, anyway. Thank you very much indeed for your participation this afternoon. I think we have cleared up one or two points, but we still have one or two outstanding matters on which we look forward to seeing some written answers.