It gives me great pleasure to be here today to open the Farnborough Air Show and the first thing I want to say is a very big thank you. You are a vitally important industry for the United Kingdom and for the future of our country and our economy.
In a hugely difficult time in the global economy, when we’re tackling a massive budget deficit at home, UK aerospace is flying high:
- employing more than 100,000 people;
- turning over more than £20 billion a year; and
- winning contracts for more than a decade in advance.
Every two and a half seconds a plane powered by a Rolls Royce engine takes off. Our Hawk aircraft are used by 25 air-forces around the world. British firms are developing new technologies to send tourists into space and inventing telescopes that can see the oldest parts of the universe.
Across civil aviation, defence, security and space research, this is a real success story and I want to thank everyone here for helping make it happen. I also want to welcome guests who have come from overseas today and to say here how much we welcome firms like Lockheed Martin, Boeing, GE, Finmeccanica, Thales and Airbus who come and create good jobs here.
Those collaborations are crucial to the success of the UK industry. But my biggest message today is that there can be no complacency. Yes, we’ve got a 17 per cent share of the global market, but as everyone here knows, the rest of the world is breathing down our necks.
We’ve got to be constantly alive to this competition - constantly looking to get ahead - and that includes government just as much as industry. I don’t want anyone here to be in any doubt that this is a massive industrial priority for me, for this whole government.
Some might say ‘you’re talking like some 1970s-style central planner - aren’t you meant to be a free-market Conservative?’ Frankly, I am a do-what-works Conservative. I don’t believe in picking winners but I absolutely believe in backing them.
I’m not going to just sit back while China and India invest in more high-tech engineers; while countries across the world snap at Britain’s heels. We are determined to do everything we can to back UK aerospace and I hear three big things that you want from us:
Number one - you want stability and certainty about the future. We’ve heard this loud and clear. When it takes fifteen years from the start of a programme to getting that aircraft in the sky, fifteen years more to break even and fifteen years more to make a profit, you cannot have governments that think short-term.
But that has been the story. There was a great surge of investment in the 70s and 80s and since then it’s gone a bit stop-start, with government scraping around, getting some cash and saying ‘can you start a new programme tomorrow?’
You can’t do business like that - and we get that. That’s why we’ve launched the Aerospace Growth Partnership. This is about us working together, thinking really long-term about how to make the UK the best place to design, manufacture and export.
Crucially, it’s not someone in Whitehall working out how many bolts should be in the next AgustaWestland helicopter; it’s a long-term industrial partnership that is being led by you; bringing more predictability to how you’re funded, how you research and how you plot your moves into new markets.
And speaking of AgustaWestland, the new AW189 which is going to fly here at Farnborough for the first time is a really good example of how government can work with you. We announced a £32million support package last year, already it’s bearing fruit, and that bodes well both for the diversification into civil aircraft and a closer partnership between government and business.
The second thing we hear from you is about skills. You want more vision, more investment - and with this government you’re getting it. We’re delivering a quarter of a million extra apprenticeships, rolling out 25,000 new Higher apprenticeships in sectors like aviation and establishing 24 new University Technical Colleges in the next couple of years.
Our universities are the finest in the world and we’re building on that reputation; investing £4.6 billion a year in science and research. And today we announce something else: a partnership with industry to have 500 new Master’s level graduates in aerospace engineering over the next three years. We are only as good as the people we’ve got and the skills they have got - and this just shows we are determined to be the best.
Third, we hear you want more support on exports - particularly defence exports. Now I personally have loaded up plane after plane with executives so we can get signatures on British contracts - and however much flak I got for that, I will do it all over again.
But there’s more that we as a government should do. We recognise there is a clear relationship between what the Ministry of Defence buys and the export orders you secure, because those overseas buyers want products that are mature and battle-proven. Over the past two years we have come in and taken a defence budget that was falling apart at the seams and we’ve sorted it out.
This isn’t some exercise in accounting for its own sake - it’s allowed us to turn the unfunded wish-lists we inherited into real commitments: new Chinooks; new work on the Warrior programme; an upgrade to our reconnaissance and intelligence-gathering capabilities.
And because of the work we’ve done, we can say that not only are we still going to have the fourth-largest defence budget in the world - but it’s going to be sustainable. Now when it comes to future decisions, we’ve made clear the priority has got to be getting maximum defence capability for every pound that’s spent.
Our armed forces deserve nothing less. But I don’t see this as an ‘either/or’ situation - buying for value or buying British. There’s more we can do to join the dots; to think in a more careful way about how to back this industry while getting the best deal for the Ministry of Defence as a customer.
To that end I can tell you that just as we have started up the Aerospace Growth Partnership for the civil sector, so we want to start a similar dialogue with the defence and security industry - building on the White Paper published this year - so we can help you grow and thrive and create new jobs.
And as just a taster of that new, more collaborative approach I can make another announcement today. Typhoon and Tornado, equipped with outstanding low-collateral, high-precision munitions, were the battle winners in Libya. As Prime Minister I can tell you that it means an enormous amount to know that we have highly capable crews on highly capable aircraft. You know they are going to do exactly the job you have asked them to do and the precision is absolutely brilliant.
Building on that success, we have agreed with our partners to exploit the growth potential of Typhoon; boosting its already world-beating capabilities with integration of new weapons including the METEOR missile, an Electronically Scanned Radar and enhanced ground attack capability.
That’s good for the RAF which needs these capabilities, good for our export customers who want these capabilities and it is very good for the British manufacturers and British workers who are going to benefit.
It is now for industry to come forward with innovative and affordable proposals so we can move ahead together. And this is what our approach is all about: reconciling what’s best for UK security and the UK economy - and above all, thinking long-term.
So this, in short, is what you’re going to get from us: an unstinting, unrelenting, unflagging commitment to making Britain the best place in the world for aerospace. Our driving vision is to build an economy that is built on hi-tech manufacturing, that is fuelled by exports, that is making and selling the products the world wants to buy.
I look forward to working with everyone here to achieve that and now it gives me real pleasure to announce that the Farnborough Air Show 2012 is officially open for business.