54.Aerospace investments have a long lead time and a life span measured in decades, so decisions being made now will have consequences long after the UK is due to depart the EU in March 2019. The lack of certainty and clarity over the arrangements for transition after 2019 and the ultimate relationship between the UK and EU in the aerospace sector is affecting decisions on investment and the location of capacity and supply chains already. The Committee has been told that the UK sector is currently in a “holding pattern because they are trying to sweat their assets for as long as possible before they commit to new investment”. Airbus told us that it is “extremely committed” to its existing sites, but that the UK would need to compete for future investments. We also heard that UK companies are being excluded from bidding for contracts on the Galileo satellite project, because a requirement has been put in place that companies bidding for work must be based in an EU country beyond March 2019.
55.Additionally, the Aerospace Technology Institute says that a lack of certainty over the freedom of movement of personnel for European R&D projects beyond March 2019 could harm the UK’s ability to secure work under the Horizon 2020 Work Programme for 2018.
56.More immediately, the aerospace industry is considering whether to initiate costly and disruptive contingency plans in case the UK does not secure a smooth one-step transition towards its post-Brexit relationship with the EU. These Brexit plans have around a twelve-month lead time, meaning it is crucial for businesses that clarity is given without further delay. Airbus has said that very soon it “will have to press a button on a decision on stockpiling parts”. The Committee has also been told that the US Federal Aviation Authority will start the work of recertification of UK plants and components in 2018, unless it is assured that the UK will remain a member of EASA after Brexit.
57.It is in the interests of the UK and the EU27 that both sides in the Brexit negotiation reach a firm agreement in the coming weeks on the arrangements for a transition or implementation period after March 2019, to avoid firms having to commence costly contingency plans. Looking beyond transition, the Government and its EU counterparts should also offer clarity on the future UK-EU relationship as soon as possible, so that firms on both sides can invest with confidence.
77 [Everitt, ADS]
80 Aerospace Technology Institute, ()
81 Boeing, () and General Aviation Manufacturers Association, ()
82 The Guardian, , 5 march 2018
83 [Henley, RAS]
Published: 19 March 2018