Posted: Mon 19th Mar 2018

Diverting aerospace industry away from EU rules would be “utterly self-defeating” warn MP’s

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Monday, Mar 19th, 2018

The aerospace industry would be badly damaged if the country leaves the EU’s regulatory framework after Brexit, a parliamentary committee has found.

A report on the impact of Brexit on the aerospace sector, says any departure and divergence from global standards would be ‘utterly self-defeating’ with no trade-off between close harmonisation with the EU and access to markets beyond. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The aerospace sector is one of the most productive and fastest-growing in the UK, it accounts for around 7% of manufacturing output and directly employs 114,000 people throughout the country. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Over 6,000 people work at Deeside’s largest employer Airbus, more than half of those employed at the Broughton site live in Wales, a further 2000 people are employed by suppliers to Airbus, located on, or in close site such as Electroimpact. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The report by the Business, Energy and Industrial Strategy Committee says that non-tariff barriers remain a significant concern to the industry, with delays at the border of even just a few hours a risk to the competitiveness of the sector. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The success of UK aerospace is highly dependent on integrated cross-border supply chains which enable it to concentrate on key specialisms including wing manufacturing – checks at the future UK-EU border could add £1.5billion a year to costs for the industry. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

In evidence to the Committee Airbus said it’s really ‘important’ that the company’s wing transport plane Beluga has a two-hour turnaround. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“We have several of those movements a day, so we really do not need any customs paperwork or bureaucracy getting in the way.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The committee said Tariffs are not a significant threat to aerospace, since the UK and other major global aerospace markets are parties to the WTO Agreement on Trade in Civil Aircraft. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

This also means that the sector has little to gain from the UK making free trade deals beyond the EU, since it expects to trade on tariff-free terms with the major worldwide aerospace markets in any case. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Safety Certification.

The European Aviation Safety Agency (EASA) was established in 2002 to harmonize safety, airworthiness and certification regimes across EU member states. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

A “no deal” exit from EASA would be highly costly and disruptive to aerospace and aviation in the UK, and have serious adverse impacts in the EU and globally the report says. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The ability of the UK aviation industry to export goods both to the EU and global markets is reliant on EASA certification. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

As things stand, if the UK leaves the EU at the end of the Article 50 notice period without a deal being struck, it will also leave EASA. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

In giving evidence ADS – the trade organisation representing the aerospace industry told the Committee that the UK’s CAA does not currently have the capability to take over the functions of EASA, and that “We have estimated a five- to 10-year period in order to even begin that process.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“Our working assumption in those cases is that we have no relationship with European Aviation Safety Agency … . ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

In those circumstances, our regulatory regime is effectively non-functioning, because whilst all the people and all the processes are the same, if there is no mechanism for recognition of it, effectively it has no value or validity.
We cannot [sell anything]… there is a broader range of issues around the… people doing the maintenance of those aircraft.
If they are not recognised as being appropriate people to do that work, then even if they have done the work, the aircraft will not be regarded as fit to fly.
It is chaotic because we do not know exactly what arrangements may or may not be put in place in order to try to bridge that gap.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The reports says it is in the UK’s national interest to remain a member of EASA, and the Committee welcomes the Government’s indication that it will seek to do so. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The committee also says ‘The Government should also seek a deal on immigration that enables the sector to access the full range of skills it requires, and ensure that the arrangements for intra-company transfers and posted workers are flexible, rapid and unbureaucratic.’ ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee, said:

“The aerospace sector is one of the most productive and fastest growing in the UK but this success is highly dependent on participation in European and global supply chains. The health of the industry relies on components moving quickly across borders with delays of even a few hours having a significant impact on costs. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Given this, the Government must ensure custom procedures are kept to an absolute minimum after we leave the EU. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

In a truly global industry, membership of EASA gives the UK access to markets across the world through internationally recognised safety standards. Leaving would be completely counter-productive and leave the aerospace industry facing total chaos. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The Government should now rule out leaving EASA to ensure the UK aerospace industry has the best possible chance of success post-Brexit. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The Committee has now examined the impact of Brexit on three key sectors of the UK economy, the automotive and civil nuclear sector and now aerospace, and the lessons are similar each time: the best way forward for jobs and businesses lies in alignment, harmonisation and participation in EU supply chains and regulatory bodies.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

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