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Dept of Trade and Industry

Answer

Mr. Batiste: To ask the President of the Board of Trade if he will make a statement on the outcome of the ESA ministerial conference held in Paris on 4 March. [21425] Mr. Ian Taylor: I attended the meeting at ministerial level of the European Space Agency Council in Paris on 4 March. Important decisions were taken which will reinforce ESA's contribution to the UK's industrial and scientific goals in space. Ministerial colleagues agreed on a new industrial policy and a new system for calculating scales of contribution for mandatory programmes. This should improve the agency's value for money and reinforce the competitiveness of European space industry. The changes which have been agreed will end the traditional system of geographical return--juste retour-- the system by which member states receive contracts in direct proportion to the levels of their ESA contributions. The level of juste retour has crept up from 80 per cent. when ESA was established to 96 per cent. in 1994-96 and was seriously undermining value for money in procurement and the agency's ability to improve the competitiveness of European space industry. The old system will be replaced with a mixed system of alternatives which offer lower guarantees for the mandatory and optional programmes and which would allow open competition in much preparatory and some technology activity. We also endorsed new measures to ensure fair allocation of activities among all industrial firms, including measures to safeguard the position of SMEs in bidding for ESA contracts. The new system, which will be introduced over the period 1997-99, signals a fundamental change in the agency's traditional practices towards a more competitive and open system of project procurement in which fixed expectation will play a less dominant role than they have in the past. I believe that UK companies are well placed to exploit fully this new system and increase their share of ESA business. It was also agreed to introduce a new system of calculation for scales of contributions to mandatory programmes which has resulted in a saving to the UK of about £ million a year. A further formal ministerial meeting was envisaged 1998.

Secondary information

Type

Written question

Reference

21425; 292 c778-80W

Session

1996-97

Subjects

Finance Technology Research Science European Space Agency Space technology