boeing 737 airplane

Aerospace giants pressure May for post-Brexit transition deal, while PM promises billions for UK R&D

Image credit: DT

Aerospace companies in the UK have called on Theresa May to finalise a post-Brexit transition deal as soon as possible in order to protect jobs in the sector. Meanwhile, the Prime Minister has promised billions of investment in UK transport infrastructure and R&D funding to help the economy grow after Brexit.

Boeing, which employs 2,200 people in the UK and supports a further 16,500 jobs, said it had already seen airlines exercising Brexit contingency plans.

Airbus, which has more than 15,000 employees across more than 25 sites, also called for a “lengthy transition period”.

“The regulated nature of the aerospace industry means that Brexit contingency plans typically have a 12-month lead time associated with them,” Boeing said in written evidence to the Commons Business, Energy and Industrial Strategy Committee’s Brexit inquiry. It called for more “clarity” by April “at the latest”.

“Boeing has observed some airlines already executing contingency options.

“Boeing would welcome clarity from the UK and the (European) Commission on the future aerospace business environment in the first quarter of next year at the latest; the company feels that this is in the best interests of UK and EU businesses and consumers.”

The firm said it needs the time to invest in customs arrangements like electronic border management systems because it needs to move staff and equipment “urgently (within hours)” around the EU.

“To ensure Airbus is not put at a competitive disadvantage by a trading and regulatory cliff edge, it is vital that the UK and EU agree on the terms of a transitional arrangement as soon as possible,” the company’s evidence added.

It also warned that UK jobs could be put at risk if British workers are burdened with new visa requirements after Brexit, or if Britain does not secure access to certain research programmes in the event of “no deal”.

A no-deal scenario would mean the UK could not apply for EU research funding programmes, which are of “increasing importance” to the industry, Airbus has said.

Meanwhile, May has announced a £1.7bn plan to improve transport links between prosperous city centres and a £2.3bn fund for research and development spending, due in 2021/22 in order to help the economy grow after Brexit.

Amid stiff international competition, Britain is looking to carve out a new global role as a leader in “industries of the future” such as artificial intelligence and driverless cars after it exits the European Union in March 2019.

“This is a new long-term approach to shaping a stronger and fairer economy for decades to come,” May said in a Times newspaper article.

The central challenge of Wednesday’s budget will be to improve Britain’s persistently weak productivity, which lags international rivals and is seen as a major limiting factor on economic growth.

The new funding is linked to Britain’s “Industrial Strategy” - a push to create more skilled, high-paying jobs that was first announced by May after she took office last year to help fortify Britain’s services-reliant economy against Brexit-related shocks.

The £1.7bn ‘Transforming Cities’ fund is designed to address weaknesses in city transport systems to spread prosperity by improving connectivity, reducing congestion and introducing new mobility services and technology.

Chancellor Philip Hammond is expected to announce further details on how the fund will be allocated in the Budget on Wednesday.

Mike Spicer, director of research and economics at the British Chambers of Commerce (BCC) said: “For too long, investment in major intra-city schemes has been below that of our international competitors, and we need to make up the ground.

“The best initiatives succeed when the new connections open up employment and housing opportunities, and drive economic growth.”

He welcomed the commitment on research and development, but added: “businesses will eye the details carefully. Past efforts to increase private-sector R&D have often failed to connect with small companies.

“Government will need to work with business communities across the UK to ensure we don’t make the mistakes of the past, but instead build the innovation economy we all want to see.”

Shadow business secretary Rebecca Long-Bailey said the proposals were “too little, too late”.

“After years of languishing below it, Britain should be aiming to be above the OECD average on R&D spending,” she said. “And to radically transform the transport infrastructure of the UK, we need more than the Conservatives are offering.”

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