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Leaving the EU: Defence and Military Aerospace Industry

Volume 644: debated on Monday 9 July 2018

7. What assessment he has made of the effect on the UK defence and military aerospace industry of the UK leaving the EU. (906319)

11. What assessment he has made of the effect on the UK defence and military aerospace industry of the UK leaving the EU. (906323)

24. What assessment he has made of the effect on the UK defence and military aerospace industry of the UK leaving the EU. (906336)

The Ministry of Defence is working closely with the defence industry to understand the implications and opportunities presented by our departure from the EU. We will continue to work with our allies and partners on the development of the capability that we need to keep us safe, and much of this already takes place outside an EU framework. The UK defence industry is globally competitive and I am confident it will continue to thrive in the future.

The EU Galileo satellite navigation system is vital for Britain’s future defence capacity. What discussions has the Secretary of State had with the Chancellor of the Exchequer on the finances required for an independent system in the event of a post-Brexit exclusion from this EU project?

I am glad to say to the hon. Gentleman that a cross-governmental group is looking into this issue to ensure that we are prepared for the possibility of having to build an independent system for the United Kingdom, but I repeat from the Dispatch Box what I have said previously: our preference is to remain involved in the Galileo project. To exclude the United Kingdom from the project would harm the project and do nothing to enhance the defence of Europe or the United Kingdom.

People in Bristol working in the defence and aerospace industry and its supply chain are worried sick about their future if Airbus leaves because of Brexit. The industry supports thousands of jobs across the country, so why can the Government not reassure trade unions and the employers that there is a clear plan for this sector? What have they got against people in the aerospace and defence industry?

I do not think that this Government have anything against the aerospace industry. Indeed, the combat air strategy, which was announced by this Department recently, is a sign of our confidence in a world-beating aerospace sector. I will be very pleased when the completion of that work on our new combat air strategy is announced, as it will highlight what this country has to offer. I can assure the hon. Lady that other countries in Europe are very keen to work with us on that combat air strategy.

Given the importance of future co-operation with the EU on a multitude of defence and security issues, will the Minister confirm when the Secretary of State intends to hold a bilateral meeting with Federica Mogherini, the EU High Representative?

I will write to the hon. Gentleman about the meeting between the Secretary of State and the individual from the Commission whom he named. I have to say that I have also been in Brussels recently with regard to this issue. It is clear from our perspective that we want to be involved with European defence firms. We would also like to be involved with the European Defence Agency, but the way in which this has been put together by the Commission makes that very difficult, because the third-country offer being made to the United Kingdom would not be beneficial to our position at this point, so there is still a lot of negotiation to be done. None the less, we are very, very clear that we would like to be involved in these projects.

Does my hon. Friend agree that the £20 billion Australian frigate order is yet another example of the confidence that there is in the UK defence industry as we leave the European Union?

It is, undoubtedly, a fantastic good news story for the United Kingdom. As I have said, it is the first time that we have exported a warship design in more than 40 years, and great credit should be offered to the teams at BAE and across Government who have worked so hard to ensure that that happens. It is a great success story for our industry and for the United Kingdom.

Major defence companies are clearly deeply concerned about the effect of this Government’s Brexit policy on their operations in the UK. Rolls-Royce has started to move some functions to Germany while the chief executive of Airbus has said that the Government have

“no clue on how to execute Brexit without severe harm.”

Given that the man who was meant to be leading the UK’s approach to Brexit has now resigned because he has no confidence in his own Government’s approach, how on earth can business trust that this divided Government will deliver a Brexit deal that protects jobs and the economy?

The chief executive of Airbus made very similar comments back in January, but he would also be very pleased with the plans that were announced by the Prime Minister at the Chequers meeting. The key thing is that defence industries in the United Kingdom are confident—they have larger order books and they are winning contracts for the first time in generations in some countries. On top of that, I am also in regular discussions with defence companies in other parts of the world, which are very keen to invest in the United Kingdom.