KEEPING THE UK CONNECTED, COMPETITIVE AND SECURE Parliament 2017–2022: Priorities for Aerospace and Aviation

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The Royal Aeronautical Society (‘the Society’) is the world’s only professional body and learned society dedicated to the entire aerospace community. Established in 1866 to further the art, science and engineering of aeronautics, the Society has been at the forefront of developments in aerospace ever since.

The Society seeks to (i) promote the highest possible standards in aerospace disciplines; (ii) provide specialist information and act as a central forum for the exchange of ideas; and (iii) play a leading role in influencing opinion on aerospace matters.

The Society is one member of the Engineering the Future (EtF) alliance of 38 professional engineering bodies in the UK with a combined membership of 450,000 engineers. The Society has recently contributed to major EtF reports, including Engineering a future outside the EU: securing the best outcome for the UK and Engineering an economy that works for all: Industrial Strategy ‘Green Paper’ response.

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For further information or to discuss the contents of this briefing, please contact: Simon Whalley Head of External Affairs +44 (0)20 7670 4362 [email protected] www.aerosociety.com/policy www.aerosociety.com

Image credits: Front Page(top to bottom): MoD, Rolls Royce, Gatwick; Pg 5: NATS; Pg 6: London City Airport, NATS; Pg: 7: NATS; Pgs 8 and 9: Airbus, MoD; Pg 10: Astrium, Airlander, MoD, RAeS, Reaction Engines; Pg 11: Heathrow, ESA, British Airways; Pg 12: British Airways, Airbus, British Airways, RAeS; Pg 13: British Airways; Pg 14: Airbus, MoD; Pg 15 BAE Systems, MoD.

2 Royal Aeronautical Society www.aerosociety.com KEEPING THE UK CONNECTED, COMPETITIVE AND SECURE

Parliament 2017 – 2022: Priorities for Aerospace and Aviation

Contents

Foreword 4 Priority 1: Support global connectivity 6 Priority 2: Provide flexible air power capability 8 Priority 3: Harness the potential of new technology 10 Priority 4: Nurture future talent 12 Priority 5: Maximise national economic value 14

Parliament 2017– 2022: Keeping the UK Connected, Competitive and Secure 3 FOREWORD

The aerospace (civil and defence, including space) links and trading partnerships, providing every-day and aviation sectors are and should remain at the services and enabling new export opportunities core of a productive, advanced and growing UK for UK goods and services. As the aerospace and economy with global reach. Both sectors enable the aviation sectors have become tightly integrated timely and direct movement of people and goods across Europe, disentanglement from the EU could around the globe, connecting people, businesses undermine the health of the UK (and European) and whole countries, generating revenue for the sectors in the short to medium term and hinder nation, creating high-value jobs across the whole their potential to support the UK in a new global country and contributing to the protection and environment into the future. security of its citizens. UK aerospace production is the largest in Europe and remains only second Negotiations for the UK’s exit from the EU will to the US in the world. While the UK has one of the obviously be the biggest policy challenge of the largest demand-led international order-books fierce 2017 to 2022 Parliament. By actively supporting competition from global rivals threatens its position the aerospace and aviation sectors and creating the and success. strongest practicable domestic and international policy frameworks, the Government and Parliament UK aerospace and aviation are largely self-reliant can help secure these key economic sectors and their private sectors able to operate successfully with vital industrial, research and development, production minimum, but critical support from the Government and high-value skills capabilities for the benefit of and Parliament. The considerable safety and the whole country, thus helping the largest possible international regulatory dimensions of these sectors range of businesses to success in a post-Brexit and their associated commercial and physical environment. operating environments, as well as research funding assistance, mean that the Government While Brexit will undoubtedly be the primary focus, and Parliament have a vital role to play in providing the Government and Parliament must continue to a stable, predictable policy basis on which UK prioritise the delivery of initiatives and programmes aerospace and aviation can thrive. that will not only help strengthen the economy in the short term but also future-proof the performance A well defended and secure nation depends on and role of the country in the longer term. Measures the on the maintenance of operational sovereignty outlined in this briefing will enable the aerospace and in specific areas and the retention of indigenous aviation sectors to contribute fully to the achievement capability relies on a strong UK defence aerospace of both goals. industrial base. Once lost, such a capability can take years to recover, if at all. A reappraisal of the current By working in partnership, listening to concerns, open-market approach to defence procurement helping to overcome barriers to success, creating would achieve a better balance of safeguarding the legislative and regulatory conditions needed for operational sovereignty whilst delivering better value them to thrive, as well as actively championing their for money for the national economy. value domestically and globally, the Government and Parliament can assist the UK aerospace and aviation The prospect of a UK withdrawal from the European sectors to keep the UK connected, competitive and Union has the potential to undermine the solid secure well into the future. foundations and very predictability needed for these sectors to continue to succeed; indeed, it is essential Air Chief Marshal Sir Stephen Dalton GCB LLD(Hon) they do succeed and continue to grow within Europe DSc(Hon) BSc FRAeS CCMI and outside of the EU, establishing new global RAeS President

4 Royal Aeronautical Society www.aerosociety.com Parliament 2017– 2022: Keeping the UK Connected, Competitive and Secure 5 PRIORITY 1: SUPPORT GLOBAL CONNECTIVITY

An internationally competitive economy and transport users alike, including lower fares, new outward-facing society must be globally connected. business models, unrestricted access to markets Air links across the country that serve both and competition and choice. The Government and developed and emerging markets will ensure that Parliament is strongly encouraged to maintain UK the whole nation benefits from aviation growth, access to the Single Aviation Market for the good of and that the UK can benefit from trade with new the national economy. countries following the UK’s withdrawal from the EU. Brexit also threatens the UK’s membership of EU/ Key to supporting the growth in aviation connectivity US Open Skies. Given the importance of the UK/US over the coming decades is the provision of aviation market and transatlantic connections, and long-required additional runway capacity in the to avoid having to fall back on or create new bilateral South East of England and the modernisation of the agreements, the UK should seek to resolve this UK’s airspace system. New runway capacity will help issue as soon as possible, with a view to maintaining reduce delays, increase connections and improve our membership of Open Skies or negotiate access resilience in the aviation system. A redesign of UK to the US on the same terms. airspace will provide the extra invisible capacity needed in the skies to match the physical capacity The new Government and Parliament must: on the ground to allow the aviation sector to grow. ● Deliver at least one additional runway in the south Both new runway and airspace capacity will help the east of England by 2030 as recommended by the UK open new air links and provide new economic independent Airports Commission opportunity. In the short term, and through an updated aviation strategy, the Government and ● Prioritise a redesign and publicly champion the Parliament must find ways of making better use of importance of modernisation of UK airspace existing capacity, especially providing links to and ● Identify ways of making better use of existing capacity in from London and the rest of the country. the short term through an updated UK aviation strategy

Despite the importance of growing links to new, ● Ensure that the Airports National Policy Statement unserved markets, Europe remains by far the UK’s (NPS) supports the delivery of additional airport capacity biggest destination market, accounting for 49% across the whole country and not just a third runway at of passengers and 54% of scheduled commercial Heathrow flights1; indeed, as a member of the EU, UK airlines ● Commit to preserving UK membership of or access to may currently fly on any route to and from any the European Single Aviation Market and EU/US Open country, and any route between two separate Skies routes within any country, in the Single Aviation Market. This arrangement has generated substantial socio-economic benefit for UK and European air

1 The Impact of ‘Brexit’ on UK Air Transport. IATA Economics, International Air Transport Association (2016).

6 Royal Aeronautical Society www.aerosociety.com Parliament 2017– 2022: Keeping the UK Connected, Competitive and Secure 7 PRIORITY 2: PROVIDE FLEXIBLE AIR POWER CAPABILITY

The maintenance of a strong national defence Procurement reform and the improvement of defence and security capability must be a top priority acquisition remains essential to national security. for the new Government and Parliament due to Cost over-run, delay and inadequate performance the unpredictable nature of the international undermine not only UK defence preparedness, but environment and global threats, including a threaten to deprive the UK defence industrial base of resurgent Russia, Islamic extremism, instability future resources. in the Middle East as well as escalating risks on

PROCUREMENT REFORM AND THE IMPROVEMENT OF DEFENCE ACQUISITION REMAINS ESSENTIAL TO NATIONAL SECURITY.

the Korean peninsula – grave challenges that have The new Government and Parliament must: drawn and will continue to attract UK attention and, in some cases, a military response. ● Continue to honour the NATO 2% minimum of GDP spending on defence and security For the UK to maintain a strong global role with the ● Prioritise progression of delivery of capability ability to project power around the world, but above commitments set out in the 2015 Strategic Defence all keep its people safe, continued investment – and Security Review (SDSR), particularly: 2% of GDP at the very least – in sufficient and appropriate military (human and equipment) ⚫ Maintain the commitment to fill the gap in maritime capability will be necessary. The Government and surveillance through the provision of multi-mission Parliament must continue to fill gaps in capability aircraft to sustain and enhance UK intelligence, – including maritime reconnaissance and limited surveillance, target acquisition and reconnaissance number of combat aircraft – and invest in the (ISTAR) capability creation over the medium term, of a more flexible, ⚫ Fix the severely depleted fast-jet capability by agile and technologically-advanced air force better increasing the number of combat air squadrons, in balance with the rest of the UK’s forces. particularly through the acquisition of planned numbers of F-35 Joint Strike Fighters In the short term, the Government and Parliament must continue with the delivery of capability ● Continue with defence acquisition and procurement commitments set out in the Strategic Defence and reform to avoid cost over-run, delay and ensure good Security Review 2015. value capability delivery

8 Royal Aeronautical Society www.aerosociety.com Parliament 2017– 2022: Keeping the UK Connected, Competitive and Secure 9 PRIORITY 3: HARNESS THE POTENTIAL OF NEW TECHNOLOGY

Aerospace and aviation are forward-thinking, society. Regulatory considerations are a key factor innovative and adaptable sectors that aim to exploit in the success of a civil drone industry and the the UK’s well-regarded reputation for world-class Government must ensure that the Civil Aviation knowledge, skills and investment in research for Authority is adequately funded and resourced. product development. This will ensure that regulatory development in the UK facilitates one of the highest-growth areas in Unmanned Aircraft Systems (or Drones) aviation, with direct benefit to key UK industries.

The market in civil drones is growing rapidly, Spaceflight and Satellites driven largely by small, cost-effective and versatile systems with a variety of uses – emergency Space and satellites impact on the whole country, response, policy surveillance, agricultural and enable the population to enjoy the benefits of infrastructure management, environmental communication, entertainment and mapping. Our conservation and journalism/newsgathering to armed forces also depend on first-class, reliable name a few. Private firms are also keen to exploit satellite navigation and communications. the commercial opportunities available through unmanned technology – logistics and leisure The UK space sector is already worth over £5 billion activities, for example. a year to the national economy2, punching well above its weight in the international marketplace with The rate of increase in new market entrants for more than six per cent global space market share. small systems reflects their accessibility and low Economic activity such as telecommunications, costs. The challenge for the new Government and navigation, earth observation and meteorology, Parliament will be to further enable this industrial supported by and dependent on satellite services base, whilst also creating a regulatory framework are worth more than £250 billion to the UK that can enable widespread public acceptance economy. of drone operations, in order to capture the substantial benefits from drones to the national An important means of increasing global space economy. market share, and supporting the growth of a UK space tourism market, is a spaceport on UK soil The new Government and Parliament is encouraged that offers satellite launch capability. A spaceport to complete a civil drones strategy that addresses would have the effect of strengthening the UK all challenges facing the industry as well as position in small satellite manufacture, and the enabling their safe integration into business and capacity to launch sub-orbital flights would not

2 Summary Report: The Size and Health of the UK Space Industry, UK Space Agency (2016). London, London Economics.

10 Royal Aeronautical Society www.aerosociety.com only attract part of the burgeoning space tourism and civil aerospace research and technology (R&T) market, but also support leading-edge scientific funding, for both industrial and academic research, research, development and innovation. is an important part of the UK aerospace R&T mix. The new Government and Parliament is strongly The new Government and Parliament must encouraged to negotiate continued access to EU prioritise the progression of the Draft Spaceflight funding and research networks, through bilateral Bill through Parliament to create as soon as arrangements if necessary, to maintain the benefits possible the legal and regulatory framework to civil and general aeronautical research, and the required for the UK space sector to flourish. future health of the aerospace and aviation sectors.

One of the reasons the UK space sector has The new Government and Parliament must: been so successful is that UK industry has been ● Complete a drones strategy and regulatory framework eligible for, and able to win major contracts in that enables the safe integration of drones use into major EU space programmes (which successive business and society and which must be seamlessly UK Governments have invested significant integrated with wider government industrial strategies amounts), such as Galileo and Copernicus. The new Government and Parliament is encouraged to ● Prioritise the progression of the Draft Spaceflight Bill not only bolster the UK position in the European through Parliament to create as soon as possible the Space Agency (ESA) – currently a non-EU European legal and regulatory framework required for the UK organisation that implements most EU space space sector to flourish programmes and procures space and satellite ● Bolster the UK position in the European Space Agency systems – but also to preserve through new bilateral arrangements if necessary for the UK ● Preserve, through new bilateral arrangements if required, space sector to be allowed to bid for future work. access for the UK space industry to access EU space programme contracts

Research, Development and Innovation ● Negotiate continued access to EU research funding and networks or provide equivalent funding and integration The UK’s success in developing new, ground-breaking with world-wide research and technology development aerospace technologies, such as unmanned programmes aircraft and space systems, that improve sector performance, and cost and environmental efficiency, as well as export value, is underpinned by access to EU research networks and funding. EU defence

Parliament 2017– 2022: Keeping the UK Connected, Competitive and Secure 11 PRIORITY 4: NURTURE FUTURE TALENT

The success of the aerospace and aviation sectors will preserve the steady flow of people, especially is dependent on people – the best and brightest at engineers and pilots, into industry. all levels – from those with engineering degrees to those with the hand skills to build new and maintain Aerospace and aviation currently benefits from existing aircraft, as well as those capable of piloting being able to attract talent from across the EU. civil and military aircraft. The curtailment of freedom of movement is likely to have a material effect on the functioning and As the current generation approaches retirement, performance of the civil and defence aerospace it is more important than ever that there is a sector. The introduction of visas, permits and steady stream of talent to avoid the creation of protected jobs might even limit access for UK skills shortages. As well as continuing to attract employees to work in other countries and progress the best and the brightest from around the world, their careers in European-wide companies. The new it is important that we harness our home-grown Government and Parliament is encouraged to adhere talent, in particular, young people that may not have to the principle of international labour mobility, considered, or have been discouraged, from entering including maintaining current ease of intra-company these sectors. The situation is exacerbated by a lack transfers. of specialist careers advice and support in schools. The new Government and Parliament must: Rapid technological change and innovation means companies and organisations are seeking more ● Ensure that vocational education and training needs are generic competences, increasingly digital skills fully funded and as much a priority as higher education (robotics, internet, cyber) and this applies to equally ● A greater emphasis is placed on promoting STEM aerospace and aviation as other sectors. subject and careers to people from under-represented communities For these sectors to maximise their national socio-economic contributions, the new Government ● Improve the quality of specialist careers advice and and Parliament must ensure that vocational support in schools education and training needs are fully funded and ● Support UK General Aviation as an important supply of as much a priority as higher education. A much future industry labour greater, targeted focus is needed on promoting ● Adhere to the principle of international labour mobility STEM subjects and careers to people from under during Brexit negotiations and beyond represented communities. Support for UK General Aviation, as an important supply of future labour,

12 Royal Aeronautical Society www.aerosociety.com Parliament 2017– 2022: Keeping the UK Connected, Competitive and Secure 13 PRIORITY 5: MAXIMISE NATIONAL ECONOMIC VALUE

A globally well-connected, well-defended and secure, As for UK aviation, the sector contributes over competitive nation is dependent on a healthy civil £50 billion each year of economic output to the UK and defence aerospace (including space) and aviation economy and supports over 900,000 employees5. sector to meet these challenges. The business and general aviation (GA) also makes a vital contribution to the UK economy – estimated to 6 Civil be over £1 billion .

The UK has a vibrant and successful aerospace As a key enabler of national economic success – of sector, the largest in Europe and the second largest increased productivity, growth, market access and in the world after the US, exporting over 90% of connectivity, and international trade, the value and production, which was worth £27 billion to the role of civil aviation should be reappraised, including a economy in 20153. The sector also directly employs consideration of the role of Government in maximising over 128,000 people across the country and the potential of the sector and to help unlock barriers supports and additional 154,000 jobs4. The UK is a to growth. The new Government and Parliament world leader and custodian of critical technologies in should prioritise progression of an Aviation Strategy – areas such as power and propulsion sectors. updating the Aviation Policy Framework (2013) – but ensuring that any update is seamlessly coordinated Sales of greener, quieter and more economic aircraft with other Government industrial strategies. worth over $5.5 trillion are predicted over the next 20 years, providing an excellent opportunity for the Civil aerospace and aviation alike are now global, UK to exploit its capability in complex high-value interconnected industries, with worldwide reach, components and emerging technologies. Despite supply chains and with mobile workforces; especially being a world leader in a highly-competitive across Europe. UK aviation and aerospace have international market, the national economic benefits benefitted from free trade with and easy access to of UK aerospace should not be taken for granted as customers and suppliers across Europe; indeed, new market entrants threaten the UK’s pre-eminence. pan-European supply chains and cooperation with Member States to liberalise the market have helped The Aerospace Growth Partnership (AGP) – a the sectors maximise their national socio-economic strategic partnership between Government and contributions. industry – is successfully securing the UK’s current share of the global market and is targeted at Efforts to harmonise market regulation for safety exploiting the significant opportunities for growth. and aircraft parts across the EU benefit UK aviation

3 Means of Ascent, Aerospace Growth Partnership (2016) . London, AGP. 4 Ibid. 5 Economic Benefits from Air Transport in the UK, Oxford Economics (2014) . Oxford, Oxford Economics. 6 The Economic Value of General Aviation in the UK, Department for Transport (2015). London, York Aviation.

14 Royal Aeronautical Society www.aerosociety.com and aerospace by reducing costs, time and creating a responsibility for the health and success of the economies of scale. The harmonisation of safety UK defence industry, in part due to the significant standards has ensured that aircraft are built, economic and social gains a strong industrial base operated and maintained to the same set of rules, provides. Once lost, such a capability can take years enhancing protection of UK customers, aircraft to regain if, indeed, recovery is possible. operators and other users. The EU is also developing a regulatory framework for drone operations to The new Government and Parliament should support the growth of the sector across Europe. The re-evaluate the UK’s defence industrial place in the Society therefore calls on the new Government and world – ideally through a new Defence Industrial Parliament to preserve the UK’s membership of and Strategy – and its open market approach to participation in the European Aviation Safety Agency the global defence market, which is not shared (EASA) when it comes to negotiations with the EU on internationally, resulting in UK firms competing on exit terms. an uneven competitive playing field. Ultimately, this review should aim to achieve a better balance of Defence safeguarding operational sovereignty whilst also delivering value for money. A well-defended and safe nation depends on, to a large extent, the maintenance of operational The new Government and Parliament must: sovereignty in specific areas. Indigenous capability ● Continue the partnership approach to civil and defence provides strategic resilience in the ability to recognise aerospace and anticipate emerging threats and to respond in an appropriate timescale. Sovereignty is essential ● Prioritise the completion of an Aviation Strategy – for military assessments of combat risk, affording updating the 2013 Aviation Policy Framework priority access to industrial capability, better ● Preserve the UK’s membership of EASA value-for-money over defence equipment life-cycles and operational control over classified aspects of ● Review the UK’s defence industrial place in the world science and technology. through a new Defence Industrial Strategy ● Use new industrial strategies and sector deals to inform The retention of indigenous capability and Brexit positions to support the long-term needs of development of new critical technologies is core manufacturing and service industries like civil and dependent on the UK having a strong defence defence aerospace and aviation, as well as engineering aerospace industrial base and the Government has

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