UK's Aerospace, Defence, Security and Space sectors see clear benefit in UK remaining part of the EU
- Independent assessment of key export-driven sectors
- Overwhelming support for the UK remaining part of the EU
- Call for the UK to maximise the value of EU membership for the benefit of British businesses
In a detailed analysis carried out on behalf of leading trade body ADS Group, an economic assessment by KPMG has demonstrated that the UK's membership of the EU delivers key benefits for the UK's Aerospace, Defence, Security and Space sectors.
The KPMG economic analysis, supported by in-depth interviews with industry, analyses the benefits to these sectors' global competitiveness in terms of access to EU markets and supply chains; to skilled workers, and to EU funding for investment in the UK.
These findings are supported by a GfK NOP survey of ADS' 900 members on their views of how the UK's membership of the EU impacts their business.
The survey showed that 86 per cent of respondents believe it would be better for their business for the UK to remain part of the EU. Just two per cent indicated that leaving the EU would be better for their business.
ADS Group represents some of the UK’s most economically important sectors: aerospace, defence, security and space. All four have outpaced national productivity levels by a considerable margin; collectively they turnover £56 billion annually, provide over 310,000 high-value, high-skill jobs and support almost 800,000 jobs across the UK.
Paul Everitt, Chief Executive of ADS Group stated: “This ADS/KPMG economic assessment demonstrates the significant benefits the aerospace, defence, space and security industries get from UK membership of the European Union. Our industries are clear that the UK’s continued membership of the EU is good for companies, their employees and the future prosperity of the country.
“Our sectors value the UK Government’s ability to influence the rules of the EU single market, its role in helping to shape important international regulation and market access, as well as the investment in European science, technology and innovation.
“This assessment has clearly shown that our sectors want to see change within the European Union with more focus on promoting growth, investment in skills, innovation and competitiveness. They also want to see UK Government raising its game to maximise UK influence and companies benefit from the support and funding that is available.”
Nearly 60 per cent of those who participated in the survey cited free trade within the EU as delivering core benefits to their business, followed by the simplification of regulations and overall economic growth. Three-quarters of respondents described EU membership as having a positive impact on their business with only one per cent describing it as being negative.
When interviewed, respondents felt that the EU referendum presented an opportunity to prioritise increased funding from the EU for UK companies wishing to invest in R&D. Across all four sectors, there was agreement that the second priority for change should be for greater UK engagement with Brussels, and that proactive working within the EU would make it more efficient.
When asked about current benefits of free trade and freedom of movement, 89 per cent of members confirmed that they export to the EU and around 5 per cent of employees working for ADS companies are currently located in the EU.
Glynn Bellamy, head of aerospace at KPMG UK commented: “Seventy-three per cent of the respondents believed that membership of the EU currently had a positive impact on their business. This is not unexpected given the global nature of the aerospace, defence, space and security industries – EU membership being seen as a positive factor in trade to a major sales region. Based on the survey, there is also a concern that UK companies may miss out on the cream of European engineering talent because of restrictions on labour movement or suffer from a decline in inward investment as Britain potentially becomes a less attractive destination for overseas investors seeking to access the major European market whilst benefiting from the UK’s competitive position.
“While the report outlines the importance of EU membership to the industry, what is clear from respondents is that the UK could do more through its membership of the EU to support the industry, and ensure that the country plays a role in shaping regulation which would not be possible as a standalone nation.”
Nigel Stein, CEO GKN plc commented “Industry in the UK is operating on a global stage and membership of the EU gives it the opportunity to participate in decision making, including the setting of regulation, which will impact the industry, irrespective of our EU membership.”
In addition to working more effectively with the EU in order to achieve more influence over regulation, and increased funding for innovation, skills and infrastructure; the assessment highlights the value of modern industrial strategies in improving productivity across the UK. Going forward, the referendum represents an opportunity to for the EU to develop a positive,
proactive economic agenda that looks at how to work with Member States to enhance the global competitiveness of the Single Market.
The survey of all four sectors was carried out on behalf of ADS by market analysts GfK, with interviews and assessment undertaken by KPMG, resulting in an informed industry picture of the value businesses throughout the supply chain currently place on EU membership.
The full report can be found at the bottom of the page.
An addendum
ADS has never received any regular funding from the EU or any of its institutions or agencies.
This economic assessment is entirely independent and we have presented the evidence on the benefits and challenges of EU membership as we have found it.
In the interests of complete transparency ADS would like to highlight that it has been part of successful competitive bids for four discrete EU-funded R&D projects since 2008.
In three of these projects, ADS acted as the legal entity in the UK to support funding competitions for UK SMEs to bid for, and win R&D grants.
The fourth project is to host Aerodays; a European Commission conference held every four or five years to review aeronautical research progress in the EU’s funding for Aviation R&D. ADS was granted a maximum of €600k by the EU which will help to off-set the total cost of the event which we estimate to be in the region of €900k.
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