As a Government, we value the aerospace sector. As the Prime Minister said yesterday, when opening the show, this is a £24bn industry with 100,000 direct jobs and many more besides.
And the prospects for the sector are remarkable. 27,000 fixed wing aircraft alone will be needed between now and 2030. That’s a $3.2trillion market. These are just some of the reasons why we formed the Aerospace Growth Partnership.
And by partnership, we mean not just Government and industry working together, but also industry with industry (greater collaboration/innovation).
Today, the Secretary of State has launched our Strategic Vision for Aerospace. It is a statement of intent from both Government and industry, that far from giving up our position in global market; we are going to build on our strengths and broaden our customer base.
It underlines this Government’s commitment to a clear industrial strategy - working with industry to recognise where the UK has strong capability and then backing it.
That means in the short term the Aerospace Growth Partnership looking at what capability currently exists in UK, and what needs to be done to improve it.
It means in the medium term looking at opportunities for UK business on upgrade programmes and to introduce new technology.
And it means in the long term that we want to be more competitive and win the maximum work on next generation of aircraft, which is why work is already underway to identify the key technologies to achieve that.
On technology, we know that business is looking for greater certainty about the quantum and flow of funding available. We realise that an industry like aerospace needs longer term predictability from Government if you’re to have the confidence to invest. So we are committed to work with you on this through the Aerospace Growth Partnership.
The danger of any Government/industry forum is that it could simply be about words. The Aerospace Growth Partnership is not about words. Indeed it has already acted.
Thus in the Budget, we’ve agreed to £60m to create UK Centre for Aerodynamics.
And over past two days we have now announced nearly £200m of jointly funded programmes with business. These include:
- The first £47m research and technology projects on aerodynamics as priorities for the Aerodynamics Centre;
- A series of manufacturing process research projects totalling £80m to be delivered through the TSB and led by Rolls-Royce
- Creation of 500 Masters level places for aerospace engineers, (in which business will invest alongside Government)
- And in addition, there is a £15m joint Government and industry investment announced today, through the Technology Strategy Board, for 11 major business-led R&D projects.
But the Aerospace Growth Partnership is not just about money. Much of our work is about how business engages with government; and how business engages with itself especially across supply chains. Our work will continue until December when Aerospace Growth Partnership produces a final report, but we’re already seeing positive progress.
Looking ahead, as the Strategic Vision is developed into a long-term strategy, the Government will play its part by:
- Maximising the impact it can have on growth, by aligning all our policy levers to encourage investment and exports;
- And creating a more educated workforce, that is the most flexible in Europe.
To date, the Aerospace Growth Partnership process has involved some 80 business people directly involved in our working groups - for example on Technology, Supply Chain Competitiveness, Manufacturing Capability, and External Engagement. They have been supported by eight full-time secondees from business - some really bright young talent.
Indeed, the experience with the secondees has been so beneficial, that we are now considering how we can make secondees a permanent feature of the dialogue between government and business.
Government listening and acting
I spoke earlier about partnership. Partners listen to each other, so in that spirit I have some good news.
Airbus, Rolls-Royce, Boeing and others have come to us and requested that the UK Government ratifies the Cape Town Convention and Aircraft Protocol. The aims of this are to bring speed, certainty and cost savings to the process of repossessing aircraft and engines, in cases of insolvency or default, where these assets are in a country whose legal system may not make that an easy process. The hope is that the benefits to financiers then result in reduced finance costs for airlines.
I am pleased to confirm to you today that we are committed to ratifying the Convention. We first have some more work to do with business, following our Call for Evidence, to clarify the costs and benefits involved. And as part of our policy process we plan to consult on changes to the law needed for UK ratification. So we will be working closely with business to complete the process, as quickly as possible.
Another example of us listening is on defence - a major part of our advanced manufacturing base. The Government has twin responsibilities in relation to defence:
- Firstly, to ensure that our armed forces, national security, and law enforcement agencies have the best capabilities we can afford, at the best value for money for the taxpayer.
- Secondly, to recognise that a healthy and competitive defence and security industry, contributes to growth and a re-balanced economy.
As I have made clear this morning, our experience on the civil side with the Aerospace Growth Partnership has been a positive one.
So we now intend to start a similar dialogue with the defence and security industry. That will help maximise the value to our economy of this industry without undermining our efforts to get best value for the MOD as customer.
We are doing much already to promote defence exports and encourage defence SMEs. There are other areas where we can do more to encourage investment into the UK. For example:
- We need to exploit synergies between civil and military technologies; and
- We also need to promote reforms that encourage the movement of people between defence and other parts of our advanced manufacturing base to help develop and sustain vital engineering skills.
So the Prime Minister has asked my Secretary of State to lead on work in this area and you will be hearing more from us about that soon.
Now I want to say something briefly about skills in aerospace.
This sector is not only growing at an incredible rate (effectively doubling in size every 15 years), but we also know technologies in next generation aircraft are likely to be radically different. So it is essential that we continue to attract young talent with the right skills.
We are expanding substantially expanding the number of apprenticeships right across industry.
We are also creating 24 University Technical College, so from 2014 onwards, thousand more young people can gain good engineering skills.
I’m also pleased to see that up to 10,000 young people are expected to participate here in Futures Day on Friday in a wide range of events, and so get a taster of the exciting career opportunities in aerospace. BIS is proud to be a Gold Sponsor and I would like to congratulate ADS in putting together such a fantastic programme.
I would like also to thank you for your involvement in 2 other joint projects with Government:
- See Inside Manufacturing - the aerospace industry hosted over 60 events in June alone aimed at young people, undergraduates and teachers.
- Make it in Great Britain - aerospace is a major participant of exhibition later this month at Science Museum, which showcase the best of our design, engineering and manufacturing. I hope to see you there.
I hope that these events will inspire the next generation of engineers.
So, ladies and gentlemen, this is a sector with a big future. One that will create growth and prosperity for the UK for many years to come. It won’t be easy, but together we can win out. I look forward to working with you all, to turn that ambition into reality.