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House of Commons Hansard
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14 June 2018
Volume 642

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(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on the UK’s future participation in the Galileo Public Regulated Service.

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The Government have been clear that our preference is to contribute fully to Galileo as part of a deep security partnership with the European Union and that negotiations should be allowed to run their course. That includes UK involvement in the design and development of Galileo’s encrypted signal for use by Governments, the Public Regulated Service.

On 13 June at the European Space Agency council, member states agreed to proceed with the procurement of the next phase of Galileo. UK companies are not eligible to bid for those contracts. By forcing through that vote while excluding UK companies from the contracts on security grounds, the European Commission has put all of this at risk. The Commission also published slides setting out the EU’s response to the UK’s technical note on Galileo published on 24 May, which explained our requirements for future participation in the programme. The EU proposal does not meet UK defence and industrial requirements, and we could not justify future participation in Galileo on that basis.

The UK has explained that without full, fair and open industrial involvement, guaranteed access to the signal and full understanding of the system’s technical characteristics, Galileo would not offer the UK value for money or meet our defence needs, and that we would be obliged to walk away, resulting in delays and additional costs to the programme that will run into the billions. The Government will need to consider the implications of the recent ESA vote, but we are looking at other options, including a UK global navigation satellite system.

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The future of the UK’s relationship with Galileo is extremely important, and yesterday’s release from the Commission reveals the enormous gulf between the UK Government’s position and the Commission’s view. This matter must be dealt with urgently.

The strategic defence and security review highlighted the importance of Galileo for our armed forces, saying:

“we will enhance the resilience of military users and key domestic resilience responders using new technologies incorporating the European Galileo system.”

Having secure access to global positioning and navigation systems is vital for our armed forces, given the increasing threats to GPS integrity from cyber-attacks, jamming and spoofing. Will the Minister tell us what arrangements will be in place for the armed forces if the UK is excluded from the public regulated service, and what implications that will have for their ability to conduct planned operations?

The Commission’s latest release is clear that the UK outside the EU cannot have the same relationship with the programme as we would have as a member state, but it does say that access to the PRS is possible for third countries if a specific agreement is in place. Is that what the Government plan to do, and if so, what urgent steps is the Secretary of State taking to get such an agreement? How many times has the Secretary of State personally met or spoken to Federica Mogherini about the specific issue of Galileo?

We do not simply want to be third-party users of the EU Galileo systems; we want our industry to be at the heart of the design process. However, the Commission is insisting that working on the design and development of security-related and PRS elements is restricted to EU member states only. The UK space industry is worth nearly £15 billion annually to UK plc, with over 40,000 direct employees and 1,400 apprentices. What discussions has the Minister had with industry stakeholders about the impact of the UK dropping out of Galileo?

Finally, the Secretary of State and his Ministers have made repeated reference to a UK alternative to the Galileo system. Will the Minister tell us what steps they have taken to explore such an alternative, and what discussions about it they have had with key non-EU allies? We know that this would be an extremely expensive endeavour to undertake, so what contingency money has been set aside for the project and what advice has he received about a timeframe for delivery? Galileo and the PRS are of major importance to us, and I hope that the Minister will be able to provide us with some concrete answers.

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I thank the hon. Lady for her questions. Indeed, it is important that we have a very strong cross-party view on this issue, because all Members of this House would find the idea that the UK is being excluded on security grounds to be completely unacceptable. The merest concept of the UK being considered a security risk should be challenged by all Members of this House, and I am sure the hon. Lady will join me in highlighting our disappointment that such a decision has been taken.

On the questions asked by the hon. Lady, at this point in time the PRS system under Galileo will not be in operation until the mid-2020s, and in the meantime we will be working under the current GPS system. The hon. Lady is absolutely right that the Ministry of Defence has made no secret of the fact that we consider the capability we will offer our military from Galileo to be increasingly important and crucial, and it is an issue of real concern that we will have to look at this in very great detail.

The hon. Lady asked whether the Secretary of State and Ministers are looking at this issue and talking to the industry. I assure her that the Secretary of State has had numerous meetings on this issue, and I have personally taken it up with every single counterpart from the European Union whom I have met over the past few months, including with the junior Defence Minister from Poland yesterday. The Department has communicated this very strongly to our counterparts, and we are disappointed that we have not as yet secured the agreement we need.

May I stress that the agreement we need is one that will be good for the security of Europe and for the security of the United Kingdom? I state again that the United Kingdom, in leaving the European Union, has made it very clear that we are not leaving our obligations to the security of Europe. Those obligations are unconditional and, frankly, we find it disappointing that the European Union has not taken those guarantees and assurances in the spiritin which they have been offered.

On discussions with the industry, I applaud the hon. Lady for acknowledging the strength of the UK industrial offer on space. Indeed, only recently when I spoke at the defence space conference, I highlighted the opportunities we see for the future of the space industry in the United Kingdom. We are now having to look extremely carefully at the possibility of developing our own options.

I stress again that this Government would prefer to remain involved with the Galileo project, but given the strength of this industrial sector and the strength of what we can offer the Galileo project, I think it is really a case of the European Union doing damage to itself, while we are in a position to move forward, building on the strength and expertise of the industry in the UK, to ensure that we meet the requirements of UK defence and the wider defence sector. I assure the hon. Lady that we will not allow any flight of expertise from the space sector as a result of the decision taken yesterday.

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I hope we are planning on getting even.

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I can understand my right hon. Friend’s frustration, and I say again that I genuinely feel that the United Kingdom’s exclusion on the basis of what I consider to be a false security case is unacceptable, but this is not about getting even. It is about doing the right thing for the industry, the United Kingdom and our defence capabilities. I would prefer to get the right decision.

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This is an extremely concerning situation and clearly demonstrates how shambolic the negotiations are. It is in the UK’s strategic defence interest to maintain a UK-EU security partnership. We will not build or maintain trust by taking a high-handed approach to the negotiations. Back in April 2017, I asked a series of written questions about our commitment to Galileo. The then science Minister, the hon. Member for Orpington (Joseph Johnson), replied:

“it is too early to speculate on the UK’s future relationship with specific EU programmes”.

Is it still too early to speculate? When I asked

“what contingency he plans to put in place in the event the UK is unable to access the Galileo or GPS navigation systems after the UK leaves the EU”,

he responded:

“The UK’s arrangements to access the encrypted GPS signals will be unaffected by UK exit from the EU.”

What representations has the Minister made to the European Space Agency about future access to contracts and the encrypted signal? For the second time, I ask: what contingency plans are in place in the event the UK cannot access Galileo? No doubt we have the expertise here in the UK to develop our own system, but where does that leave UK-EU collaboration, which is critical to our future security?

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I would again stress that it takes both sides to come together. The United Kingdom has been very clear that it wants to continue to be involved in and contribute to Galileo, but those requests have been rebuffed. Clearly, we hope that this situation can be resolved and reversed, but the good will that the UK has shown has not resulted in similar good will from the European Commission, which is a significant concern.

On the question about ministerial discussions, I can stress that those discussions have been across ministerial responsibilities. Defence has been involved, but others have clearly also been involved. In many ways, the frustration for Ministers is that although the bilateral discussions with counterparts in Europe have invariably been positive, it seems that the Commission sees this as a negotiating tactic. The United Kingdom has been clear that it will never negotiate on the basis of our security concerns. That is a key point we are highlighting. From a security perspective, we have always been committed to the security of Europe. It is a shame that the Commission does not share our good will.

On our obligations to industry, I entirely agree with the hon. Lady that we have the capability and capacity to develop our own system in due course. The Galileo system will not be online until the mid-2020s. We have had deep and meaningful discussions with the defence industry on alternative options, and I stress again that, if need be, the United Kingdom will respond and develop its own system, but we would prefer to ensure that the Galileo system works for the security of the whole of Europe.

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This is a classic example from the unelected Commission of cutting off one’s nose to spite one’s face. I encourage my hon. Friend to do all he can to resolve this matter, but if we cannot, I would say to him, without fear, that the other options he mentioned should be considered very strongly and that we should work with British industry to develop our own systems.

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I agree with my hon. Friend that we do not want the European Union or the United Kingdom to cut off their nose to spite their face, but we will not take any risks with the security of our armed forces or the capabilities they need. Our space industry is responsible for 6.5% of the global market. We have an ambition to grow that to 10%. Be in no doubt: our discussions with the space sector show that, although it is very disappointed with the Commission’s decision, it is also very excited at the prospect of developing our own capability.

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The European Commission’s approach in this matter is counterproductive and, in suggesting that the UK could suddenly become a security risk after we have left, frankly insulting. If the current position holds, does the Minister share the concern some have expressed that some manufacturing capacity on space and satellites, which is currently located in the UK, might move to the EU?

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I thank the right hon. Gentleman for his very clear statement on the comments made about the UK being a security risk. I think that that is appreciated by all Members. Is there a concern about UK industry leaving as a result of this decision? Of course there would be concern, but the key point is to respond to those concerns. That is why various Government Departments, including the Ministry of Defence, have been in constant communication with the defence sector. Indeed, if it were not for this urgent question I would be on my way to meet companies involved in the space tech sector in Oxford at this very moment. I will still be visiting them, but after this urgent question. I can assure the right hon. Gentleman that the prospect of developing our own initiative is very much to ensure that the skills that are so crucial for the future economic prosperity of the United Kingdom are retained in the United Kingdom.

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The Chancellor is reported to have said that if we fail to continue in the Galileo programme we will build our own GPS system. Does the Minister have any idea of the cost and the timescale?

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I thank my right hon. Friend for her very pertinent question. It is the case that the Chancellor has been very clear and across Government we have been very clear on this, but it would be too early for us to highlight the actual cost involved. She should have no doubt about the fact that the cost involved would be no greater than our current contribution to the Galileo project, and I think the benefits to the UK could be even greater. I assure my right hon. Friend that the Chancellor’s support on this issue should be taken as a clear sign.

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Surely the Minister understands the size—18 hugely expensive satellites and so many years of research and development—of the Galileo project? My contacts in Cambridge say it would be catastrophic for us to be excluded, not just because of security and defence but for international air travel and much else. He must not underestimate how damaging this is. It is a symptom of leaving Europe and European co-operation.

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I agree entirely with the hon. Gentleman about the importance of this matter, which is why he should also address his concerns to the European Commission. This will be damaging both to our partners in Europe and to the United Kingdom. We have done everything in our power to highlight the fact that we want to continue to contribute fully to the programme. Those efforts have been rebuffed thus far. That is a great shame and it is a mistake on behalf of the European Commission, which places all our security at risk. I stress that we will continue to invest in our capabilities if that has to be the situation.

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I commend my hon. Friend for his response to the urgent question and for seeking to build cross-party consensus to condemn the European Commission’s reaction, which is clearly undertaking protectionist policies in part because it sees the strength of the space industry developing in this country. EU-based companies are currently considering relocating some of their space capability to various regions around the UK to take advantage of the skills we have here.

The Prime Minister has been very clear to the EU that defence and security matters should not be affected by Brexit, and that we wish to have a continuing strong partnership with our EU nations. Does the Prime Minister intend to bring this matter up at the EU Council or at the NATO summit in July to ensure that our partners in Europe recognise that we are making a very fulsome offer for continued security co-operation, including on the Galileo project?

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I thank my hon. Friend and predecessor in this role for his question. I also thank him for his work highlighting the contribution of defence to UK prosperity. As part of that work, he highlighted the contribution that defence makes to the space sector in the United Kingdom. I would argue that our lead in the space sector in the European context is coveted by others. It is key that we again express our willingness to work with our partners in Europe, but if that is again rebuffed we should build on the skills and the developments of the industry in the United Kingdom and highlight the fact that we could still push this issue forward with our fantastic industry capability.

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Can the Minister confirm that the possible threat to the Galileo project and the future of the British space industry was fully considered during the EU referendum debate?

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Many and varied issues were discussed during the European referendum campaign. It is certainly the case that nobody, on either side of the campaign, took the view that the democratic decision of the British people would be met by a decision from the European Commission that would threaten the security of the whole of Europe. Nobody thought that such a response was likely.

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It would be a shame if our defence and security services were not fully a part of the Galileo system, but we can get around that. We have a world-beating, world-class space technology industry in our country. Does the Minister agree that, if that industry were not involved in the Galileo project, the project would be the poorer for its non-involvement?

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My hon. and gallant Friend strikes the nail on the head. He is absolutely right that this decision will be damaging for the capabilities of the whole of Europe. In view of the Prime Minister’s statement on our willingness to co-operate on security issues, the situation that we are now facing is genuinely disappointing. Again, he highlights the fact that we have the capability, skills and expertise to develop our own system if that is what we have to do.

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I declare an interest as a trustee of the Royal Observatory in Edinburgh. The Government have said in response to a written question:

“In the long term, we believe that”

a British global navigation satellite

“system could be operated for around the same annual cost as the UK’s current contribution to the EU’s Galileo programme.”

Could the Minister tell us: what are the short-term costs?

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The written answer highlights the fact that our current contribution is about £200 million a year. The total billed cost would be estimated at about £4 billion. So in the short term we still want to ensure that we have an involvement with Galileo: that is still our aim. The Prime Minister will take this issue up, and it is clearly important that she does so. It should be noted that, thus far, every single satellite utilised within the Galileo system has been built in the UK, so I wonder whether this urgent question should be taken in every other Parliament in Europe as a result of the decision taken yesterday.

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A decision that would cut the UK out of Galileo would set very difficult precedents for our future ongoing partnership on security. Yesterday’s decision was made by the European Space Agency Council. May I join my hon. Friend the Member for Ludlow (Mr Dunne) in calling for this now to be raised at a higher level, such as through NATO or at this month’s European Council?

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I hear my hon. Friend very clearly. I have no doubt that the Department will ensure that our representations are made to the Prime Minister, and I am absolutely confident that she will be raising these issues at the NATO conference and at further meetings with the European Union.

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We know from the National Audit Office report that the funding gap in the Minister’s Department is about 20 billion quid. What will it be if he has to set up his own Galileo system?

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I now feel as though I am back at Defence questions and having to explain that the National Audit Office report on the so-called black hole was based on the worst-case scenario occurring in every single project, with no efficiencies whatsoever being generated. The truth of the matter is that we are increasing defence spending. There is an important message here: the United Kingdom is currently one of the few countries in the European Union that is meeting our NATO obligations and that is willing to put taxpayer-funded money into our protection. I know that that type of issue upsets the hon. Gentleman, but the reality is that we take the defence and the security of Europe seriously. [Interruption.] On the question of how much, we have a large and increasing defence budget—increasing above inflation every year—and we will be able to do this if we need to.

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Encrypted signals and encrypted signals intelligence are absolutely vital for our armed forces and other agencies to communicate safely and securely. Is not it the case that this flawed decision produces one beneficiary in national security terms, and that is Russia?

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My hon. Friend makes a crucial intervention, and this decision will be welcomed in very few European capitals. However, the question depends on the unlikely situation of the United Kingdom not responding to the current situation by developing its own capability. My hon. Friend said that such capability is crucial for our armed forces, and I find it inconceivable that Parliament would allow such a situation to arise. I am sure there will be cross-party support for any decision we take to ensure that that capability is available to our armed forces.

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This decision has immense implications for the security of our region, and it is frightening to think that our missile defence capability and our ISTAR capability could be damaged in this way. I commend the Minister for the tone in which he has responded to the debate this morning. It is imperative that that reasonable tone continues, as well as a recognition that Britain remains as committed as ever to NATO and the defence of Europe. This issue also has implications on further discussions that we will need on Permanent Structured Cooperation—PESCO—and the European Defence Fund. How does the Minister see our ability to let the Commission, and others across Europe, understand the grave implications for regional safety and security that this small-minded decision has led to?

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I thank the hon. Lady for her kind words, and I commend her for her fantastic work on behalf of our armed forces and for her contribution to defence issues in this House. She rightly touches on the impact of this decision on the security of the whole of Europe, including the United Kingdom, and I hope that in bilateral discussions with colleagues in other countries, she will highlight the dangerous nature of this decision. She asked about the European Defence Fund. Bilateral discussions with my counterparts have indicated that they would like us still to be involved with that, and we have been clear that that is our intention. Does this decision throw doubt on that? I think the answer is yes. Will we carry on negotiating and discussing in a constructive manner because we believe strongly in the common defence of Europe? The answer to that is also yes and I hope the hon. Lady will continue to support us in our endeavours.

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British intelligence agencies, including GCHQ in my constituency, make an enormous contribution to European security. In those circumstances, for Britain to be threatened with exclusion on the grounds of security is unreasonable, unfair and bordering on the insulting. Does my hon. Friend agree that the Prime Minister should make it crystal clear in June that, in forthcoming negotiations, security should remain inviolable and not a matter for negotiation?

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First, I pay tribute to the workers at GCHQ, many of whom are my hon. Friend’s constituents. I visited GCHQ last Thursday, and he is right to highlight the contribution that people there make to the security not just of the United Kingdom, but across Europe and on a global basis. I entirely agree with my hon. Friend—I think the Prime Minister should raise this issue and highlight once more that we do not consider a threat to our security and that of Europe part and parcel of our negotiations to withdraw from the European Union.

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The UK’s space industry is world class and world leading, and a good example of that is Clyde Space in Glasgow, which is a world-leading manufacturer of cube satellites. The CEO of Airbus, Tom Enders, has called on Britain and the European Commission urgently to find a solution to this issue for the safety of the entire region. What reassurance can the Minister give to industry stakeholders that this issue will be resolved so that they do not move elsewhere, especially bearing in mind the huge time constraints on the procurement process for Galileo?

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The hon. Gentleman will be pleased to know that the Government argued strongly that UK companies should not be excluded from the current round of contracts offered through the Galileo project. We have met industry partners and representatives on an ongoing basis. I have done that as well in my role as the Minister responsible for defence procurement. I assure the hon. Gentleman that we will continue to engage fully with this UK industry because we know how important the industry is for our future prosperity. We want to give confidence to that sector of our economy that there is a strong future for it in the United Kingdom. We have the technology and skills, and we will need to reassure the industry that the Government are fully committed to ensuring that we have the capability we need from the Galileo system in a UK context, if that is what has to happen. I stress, however, that our preference would be to have a reasonable response to our very fair request to the European Commission.

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What discussions have the Government had with non-EU NATO allies on the possibility of a NATO-wide scheme, which would actually suit Britain quite well?

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I know for a fact that this issue has been raised with NATO allies, certainly by Defence Ministers. In terms of whether it is the way forward, we have always believed that NATO is a key component of our security, which is why we are one of the few nations within NATO that meets the obligation for a 2% spend on defence. Everybody within NATO understands the importance of having these systems in place. We understand the challenges to the current system that we are utilising, and I therefore have no doubts that this issue will be raised by representatives of this Government at the NATO conference.

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My constituency neighbour, the hon. Member for Glasgow North East (Mr Sweeney), is absolutely right about how crucial the satellite manufacturing and space industry is to Glasgow, as is the world-class space research that takes place in the University of Glasgow and other institutions in the city. As well as discussions with industry, what discussions has the Minister been having with the university sector and research institutions about the impact on their contracts and research as a result of the possible withdrawal from the Galileo programme?

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I thank the hon. Gentleman for his question. He is absolutely right to highlight the key importance of academia to this issue. While I have not been in contact with any universities on this matter, I am assured that the Minister for Universities, Science, Research and Innovation has. The university sector has a huge contribution to make to the development of the UK space sector, and I think that those discussions should be ongoing, as they have been over the past few months.

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This decision shows that there are key elements in the European Commission who are determined to punish the United Kingdom for Brexit, even if it is at their own expense. Our response to this decision has implications for the wider negotiations, so I urge my hon. Friend not to go back on bended knee, but to make it clear that, given that our good will has been rebuffed, and given our status as a security guarantor for the continent of Europe, unless this decision is reversed at the European Council, we will proceed forthwith to set up our own bespoke system.

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I thank my hon. Friend for his question. It is certainly a huge disappointment that our straight offer on this issue, which was a very clear statement of intent to remain fully involved in the Galileo project, has been rebuffed. Time and again, Members—certainly on the Government Benches, and I think across this House—who were on different sides of the referendum campaign have been very clear that, while we have taken a democratic decision to leave the European Union, we have no intention of leaving or abandoning Europe. Those positions were made very clear in our negotiations on Galileo. It is a huge disappointment that they have as yet not been responded to in kind by our European Commission partners. I think that this issue will have to be taken up at a very high level. It has to be highlighted that the loss to the Galileo project from the UK not being involved should not be underestimated. But, if necessary, as I have said several times this morning, the United Kingdom will move ahead to develop our own system.

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Does the Minister fear that the decision is a precedent, or is it a mere blip with regard to future negotiations about the myriad agreements, particularly in science and defence, that are coming that will need to be discussed?

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I sincerely hope that this decision will be reversed and, therefore, it will be a blip on the journey towards a sensible solution to the United Kingdom’s decision to leave the European Union. Again, we have made it very clear—the Prime Minister has made it very clear, as have Members across this House—that we are fully committed to security co-operation with our European partners. We want to be involved in the European Defence Fund. We want to remain involved in Galileo. We certainly want to continue to contribute to NATO in the way that we have over the years. Our messaging has been very clear on this issue, and it is hugely disappointing that the European Commission has responded in the way that it has. This issue will continue to be taken up by this Government, and I sincerely hope that good will will prevail.

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Are there currently any non-EU member states that participate in Galileo and whose companies have access to contracts from Galileo?

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My hon. Friend makes an important point, but of course, there has not previously been a country that has been so heavily involved in Galileo and committed to the project being threatened with exclusion. The key issue is this: do we have more to contribute to Galileo? The answer is yes. Do we want to carry on making that contribution to Galileo? The answer is yes. Do we have the capability to develop on our own if we need to? The answer, again, is yes. The decision is now clearly one for the European Commission. In my view, it made the wrong call yesterday—the wrong call for the security and prosperity of Europe—and I think it is absolutely essential that we move forward very strongly in partnership both with those countries within the European Union and with those partners within the system who are not currently in the European Union.