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Leaving the Eu: Airbus Risk Assessment

Part of the debate – in the House of Commons at 3:37 pm on 25th June 2018.

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Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy 3:37 pm, 25th June 2018

The aerospace sector is one of the UK’s greatest manufacturing strengths. Directly and through its supply chains, it employs in the UK around 300,000 people in high-skilled jobs, with an average salary of £41,000—that is 43% above the national average. Of the sector’s £33 billion turnover, some 90% is accounted for in exports. From Bombardier in Belfast to Airbus in Filton, the supply chain that the sector operates is complex, precise and just-in-time. The industry is in demand around the world and that demand is growing rapidly, with the sector doubling in size every 15 years. Airbus is a very important part of that success, employing 14,000 people across 25 sites, with 110,000 people working in the supply chain of 4,000 small, medium and large companies.

On Friday, Airbus published a risk assessment, in which it stated to suppliers and to the UK and EU member states that if an agreement between the EU and the UK were not reached by 29 March 2019, its production would be likely to be severely disrupted, with a significant impact on the company. It also said that any agreement that involved significant change to customs arrangements would take time to implement through Airbus’s supply chain, and that any agreement that involved new procedures, complexity or frictions would undermine the efficiency of the company’s operations. That is completely consistent with what every part of the industry collectively has been saying directly, as well as through the ADS industry trade body and the international body the General Aviation Manufacturers Association, including in a letter to Michel Barnier at the European Commission earlier this month. Any company and any industry that supports the livelihoods of so many working people in this country is entitled to be listened to with respect.

The Government have been clear that we are determined to secure a deal with the EU that meets the needs of our aerospace firms and the thousands of people whose livelihoods depend on them and that, in particular, products made in the UK can be approved for use across Europe, that there should be no tariffs or any unnecessary friction in the trade between the UK and the EU, and that skilled employees will be able to work across the multiple sites of an integrated operation. Those objectives have been clearly set out by the Prime Minister in public and in our negotiations.

In the months ahead, my colleagues and I will work closely with businesses to ensure that, under the terms of our new relationship, we can continue to enjoy the prosperity that working in aerospace brings to so many people in all parts of the United Kingdom.