This article is from the July issue of Total Politics
Shortly after becoming business secretary in 2010 I had an opportunity to attend the Farnborough Air Show, chairing a roundtable discussion with aerospace manufacturers from across the UK. Since then, both I and other ministers have been working with the sector to understand the opportunities and barriers for growth in the UK.
Last October, the prime minister opened the new Airbus A350 wing factory at Broughton – one of the most technologically advanced aerospace facilities anywhere in the world. In February, the deputy prime minister and I visited the similarly impressive GKN Western Approach factory near Filton.
As we come to the end of this year’s Farnborough Air Show, it’s important to celebrate the contribution that the aerospace sector makes to the UK economy. We must re-affirm the work that government and industry are doing together to ensure that we have a strategy that maximises the continuing attractiveness of the UK as a home for aerospace technology and manufacturing.
I’m proud to say we have the largest aerospace industry in Europe, ranked second only to the United States on a global scale. To put this into perspective, the sector is worth £23bn to our economy each year, provides around 100,000 direct jobs and supports an even greater level of indirect employment.
We are helped in this by the strengths we have in high-value areas such as the design and manufacture of large aircraft wings and components, aero engines, and advanced systems (such as landing gear, actuation, fuel and power supply), along with maintenance, repair and overhaul.
There are early opportunities for UK companies on upgrades of existing aircraft, as well as on all-new platforms entering service in the middle of the next decade. It is forecast that nearly 27,000 new large civil airliners (worth $3.3 trillion) will be needed by 2030.
However, our current success does not guarantee UK companies a place on these new aircraft programmes. The UK faces stiff competition from not only established aerospace nations such as the US, France and Germany, but also developing aerospace nations such as Canada and Brazil, and new entrants including China, Russia, India, Singapore, Korea, Mexico and the Middle East. These nations are investing heavily in technology, skills and supply chains, with strong support from their governments.
Without concerted action by both government and industry to ensure that the UK remains an attractive environment for aerospace manufacturing, the sector faces a potential cliff-edge as current aircraft go out of production.
To achieve the necessary improvements in environmental impact and operating costs, the next generation of aircraft will be based on radically different technologies, requiring new manufacturing processes and placing new challenges on the UK supply chain to remain globally competitive. Work in these areas is starting now for the next generation of aircraft due into service in the middle of the next decade.
The scale of the task faced by industry in developing an all new aircraft programme is enormous. Governments across the world recognise the importance of working in partnership with the sector to help address the technological, manufacturing and financing challenges of these projects.
There is a substantial prize if we get this relationship right. This is why on coming into office we established a new Aerospace Growth Partnership (AGP), including the aerospace business leaders group, which I chair, and which provides a forum to consider the major strategic issues facing the sector.
The AGP has grown in scale and stature since its creation in 2010. It now operates through a series of working groups involving the commitment of over 80 senior business people, supported by eight full time secondees provided and funded by business. This is a major investment by the industry, indicating the importance that they attach to this initiative.
Government has already signalled how important it considers our aerospace industry and its appetite to drive growth. In the Budget this year, the chancellor announced £60m of support to create a UK Centre for Aerodynamics.
This initiative built on work within the AGP which highlighted the critical importance of this technology to future aircraft programmes. It is an area where the UK has been historically strong, but where past under-investment has put capability at risk.
Government’s new investment will lever the additional private sector investment required. The new virtual UK Centre for Aerodynamics will pull together existing facilities into a virtual aerodynamics centre, with a small programme team, and a focused package of research (co-funded with industry) to rebuild UK leadership and competitiveness.
This is a clear signal of intent to the world that neither the UK’s government or its aerospace industry are complacent about our position in this increasingly globally competitive sector. This is a sector of advanced manufacturing at which we excel. This is a sector with a future.
Vince Cable is the business secretary and Lib Dem MP for Twickenham