The Damage from Doubt: Labour’s Clumsy Handling of the GCAP Programme

The Labour Party consistently supported Tempest and the Global Combat Air Programme (GCAP) in opposition. Speaking in Parliament in December 2023, then Shadow Defence Minister John Healey, after stressing the multidimensional importance of the project, welcomed the signature of the treaty establishing an intergovernmental organisation to manage the programme.

The 2024 Labour Party Manifesto, while not mentioning GCAP explicitly, had words compatible with its backing: 

'Strengthening Britain’s security requires a long-term partnership with our domestic defence industry. Labour will bring forward a defence industrial strategy aligning our security and economic priorities. We will ensure a strong defence sector and resilient supply chains, including steel, across the whole of the UK.

Labour will build and strengthen modern partnerships with allies and regional powers.

Britain will be a reliable partner.'

The Public Insertion of Doubt

July is the month when the UK hosts global discussions on air power with the Royal International Air Tattoo and the biannual Farnborough air show. Military and industrial gather from around the world. But, at the related Air Chiefs Conference, Armed Forces Minister Luke Pollard did not mention the GCAP programme in his speech and then would not confirm the government’s commitment to it. He was quoted as saying ‘it’s not right for me to prejudge what might happen in the Defence Review’. The ‘reliable partner’ image was immediately blurred. 

The reference to GCAP being conditional on the review caused a shock within the Japanese government. The Japanese media are well represented in London and take a strong interest in GCAP, and Pollard’s words were clearly reported. For Japan, GCAP is the route to escape domination by the US combat air industry after what it sees as a disappointing experience working with the US on the F-2 aircraft. It has invested its own money in the GCAP project, as has Italy, and they would struggle to complete it without the UK. There is no publicly available explanation of why the armed forces minister chose to speak as he did shortly before the Japanese defence minister was to arrive in the UK for the Farnborough air show and a trilateral ministerial meeting including the Italian minister. 

Internal and overseas concern about GCAP’s link to the defence review must have been exacerbated by the reality that new government had already committed itself to four major areas of defence expenditure even before the review commenced: the assured £3 billion a year in aid to Ukraine, the nuclear programme of submarines and weapons, the AUKUS programme and the £6.5 billion Complex Weapons agreement with the industrial group led by MBDA. To these can be added the 6% pay rise announced for military personnel. The question of why GCAP had been treated differently must have occurred to many. 

Not to be overlooked is the impact of GCAP uncertainty on industrial workforces motivated to develop a technically demanding but exciting project, and on companies’ efforts to attract, inspire and retain the young apprentices and engineers needed to deliver the programme. The companies are under short-term pressure to produce a UK flying demonstrator in 2027. 

The boards and financiers of the multiple companies involved in GCAP also had cause for increasing anxiety. After all, under the Team Tempest arrangement from 2018, the leading four UK companies involved had agreed to invest a substantial amount of their money alongside government funding to get a new aircraft project to the point where government approval could be secured to launch the full design and development phase in 2025. Industry funding to date on what is now GCAP is at least £600 million, but the author understands it to be more. 

Persistent doubt about GCAP and especially the possibility of withdrawal would also put a strong stick in the spokes of government hopes for defence acquisition improvements. Discourse from the Ministry of Defence (MoD), especially the refreshed version of the National Shipbuilding Strategy, has stressed the importance of consistent ‘demand signals’ – lists of equipment types that each domain sector intends to buy. This has been in the hope that industry would prepare – that is, invest – enabling it to make better offers. The July 2022 MoD document ‘Setting the context: current capability plans to enable Integrated Force 30’, the Land Industrial Strategy and the annual Defence Equipment Plans also included lists of intended acquisitions – that is, ‘demand signals’. Such signals already have limited credibility, which the words about GCAP much have reduced further. Which companies, and especially their financial backers, would be ready to invest in UK defence and partner with the MoD without a contract when they have a government interlocutor that has so quickly presented itself as uncertain?

The Consequences of Withdrawal

A rejection of GCAP in the review would bring multiple negative consequences. In terms of industrial capability, GCAP is the focus for reinforcing long-standing UK defence industrial aerospace capability, not just in airframes and aircraft integration but also engines, radar and avionics and weapons. Once dissipated, this capability could never be recreated except with massive foreign help, at enormous expense and over a long period of time. The economic consequences would include further deindustrialisation and social deprivation, especially in the northwest of the UK where there is a cluster of aerospace businesses focused on BAE Systems plans. But Leonardo is the largest single employer in Edinburgh, and the GCAP radar and other defence electronics are central to its capacity to enhance its commercial success in the future. Rolls Royce’s military engine business is based in Bristol and Derby; its military engine future would look bleak without GCAP. Experience with the F-35 and Apache has also underlined how difficult it has been to get UK weapons integrated into UK platforms, so the end of GCAP would damage the Complex Weapons Portfolio led by MBDA. The Labour Party’s ambition to use defence to promote economic growth would lose almost all credibility. 

Internationally, abandoning GCAP would cause irreparable damage to UK relations with Japan, relationships which have been built up particularly since 2013. The GCAP International Governmental Organisation (GIGO) Treaty makes clear that withdrawal from the organisation would be a difficult and likely protracted process, which would have to involve the other signatories. Given that it would involve at least a year’s notice, there would be little or no chance to save much MoD money in the short term. The Memorandum of Understanding that set up GCAP in 2022 is not public, but could mean significant withdrawal costs. More widely, it would deal a substantial blow to the UK’s standing in the world. Commitment to the aircraft programme has underlined the country’s ambition and drive. Walking away from it would send the world a clear signal of the UK government’s lack of confidence in the country’s technological and industrial prowess.

Happily, for all these reasons, plus the reality that GCAP is actually progressing well, withdrawal is unlikely. It would be damaging to the secretary of state himself if he had to conclude that he was wrong to say in late 2023:

'Most importantly, developing a sixth-generation fighter will ensure that we can continue to safeguard our UK skies and those of our NATO allies for decades to come. It will inspire innovation, strengthen UK industry and keep Britain at the cutting edge of defence technology.'

Damage Limitation

In the event, the government seems to have tried to minimise disquiet with a damage limitation exercise. The prime minister spent time at the Tempest/GCAP stand at the Farnborough air show and spoke of the great importance and progress of the project, and the Japanese and Italian defence ministers were reassured by John Healey. Japanese concerns have been allayed, but nervousness in Tokyo will remain until formal approval is forthcoming. 

If things go to plan, the Review will not cause delay to GCAP: interim funding should be made available (but is not yet assured). Delay would be damaging in three dimensions: it would hit the hopes of Japan, given its need for a new aircraft in 2035; it would push up costs; and it would encourage other partners to behave similarly when they also have a process hurdle to clear. 

Lessons from the Past

Finally, it is worth noting that some previous UK withdrawals from collaborative activities in defence and aerospace now look spectacularly short-sighted. 

In 1968 the UK government abandoned its participation in the Airbus A300 project, and yet Airbus went on to become the developer and producer of multiple aircraft, with a current order book for almost 8,600 planes.

In 1973 London withdrew from the European space launcher programme, and now Arianespace is on its sixth-generation rocket. Today, France builds its own submarine-launched ballistic missiles, while the UK relies on the US for the supply and servicing of Trident missiles. 

In 2003 the UK left the Boxer programme, abandoning sunk development spending and paying tens of millions to enable the Dutch-German partners to finish the work. Germany got its first Boxers in 2009; the UK realised it should rejoin the programme in 2018, and will have its first vehicles in 2025.

This obviously omits analysis of the consequences of leaving the EU. 

Conclusion

Even by raising doubts about the future of a favourably progressing GCAP, the Labour government suffered a self-inflicted and unnecessary wound, and to attribute it to the need for a defence review outcome was hard to explain when other projects were spared this qualification. 

There is also an obvious need to clarify when and how the 2.5% of GDP for defence is to be delivered. It is a matter for a separate discussion but, if the international situation does not improve, the history of the 1980s shows that the UK will have to spend more than 2.5% of GDP on defence unless major reductions in defence policy stances are brought into play. 

Commitment to GCAP must, however, be conditional on consistent progress, with the MoD-industry team being able to grow confidence of success in other government departments and Parliament. It is important for the companies to agree by the end of the year on an empowered delivery structure that will interface with the GIGO on the supply side and be a source of timely decision-making. There must also be demonstrative agreement on the sort of design needed to meet the requirements set by governments. The flight of a demonstrator in 2027, serving a similar role to the Experimental Aircraft Programme performed for Typhoon, must be a further important target. But GCAP should not be derailed by naval and army lobbying for funding to remedy their previous mismanagement of their acquisition money.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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