“There is no trade-off between close harmonisation with the EU and access to markets beyond the EU. Instead, the two goals are complementary,” the report states. 

While MPs welcomed the prime minister’s statement that the UK hoped to remain in EASA, even as a non-voting member, they stressed that the government should push for as much influence as possible. 

That call was backed up by Rolls-Royce, the world’s second largest aero-engine maker. A non-voting “associate membership” would be “better than nothing”, a spokesman said. But he added: “We strongly believe it is in the UK’s interest to retain its ability to shape future regulation where it will impact British businesses, and we are working with the government towards that aim.” 

Given the just-in-time supply chains operated by the industry, even border delays of a few hours could materially undermine UK competitiveness

Cross-party report
MPs also sounded alarm bells over the lack of clarity on transition arrangements, noting that several companies were preparing to take “costly and disruptive” contingency measures, such as stockpiling inventory, which could affect the sector’s competitiveness. 

“It is in the interests of the UK and the EU27 that both sides . . . reach a firm agreement in the coming weeks on the arrangements for a transition,” they say. 

They reiterate the industry’s own estimate that increased checks at the customs and immigration alone could add an extra £1.5bn in cost to a sector that depends on people and components being able to cross borders several times and at short notice. 

Airbus, for example, has a two-hour turnround for its Beluga jet that flies wings from its factory in Wales for integration on aircraft in Toulouse or Hamburg. 

“Given the just-in-time supply chains operated by the industry, even border delays of a few hours could materially undermine UK competitiveness,” the report states. 

The analysis is the third in the select committee’s investigation into the impact of leaving the EU on specific sectors of the economy. MPs point out that aerospace employs 114,000 people at global companies such as Airbus, Rolls-Royce, Bombardier and GKN.

The report stresses that the sector, which accounts for 0.7 per cent of total UK output and 7 per cent of manufacturing, is one of the UK’s most productive. Output per employee is 18 per cent higher than the average in manufacturing — and 49 per cent higher than the economy as a whole. Just under half of the annual £32bn revenue is exported. 

“UK aerospace exports are highly dependent on participation in the European and global supply chain,” the report states. 

Maintaining the sector’s competitiveness would also depend on the UK’s continued participation in EU research and development projects, which would also help to ensure access to European funding and cross-border collaboration.

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The UK is a net beneficiary from EU research and innovation funding, with the aerospace sector receiving some £100m a year from the Horizon 2020 programme, MPs say. 

Industry welcomed the MPs’ conclusions. Paul Everitt, chief executive of ADS, the industry trade body, said time was running out to give the industry clarity before investment would begin to be affected.

“It is vital that the UK and EU27 agree a comprehensive transition agreement as soon as possible, to give industry the breathing space it needs to adjust to the new long-term partnership arrangements,” he said. 

The Aerospace Technology Institute also stressed that if the UK wanted to win new work on the next wave of aircraft programmes it was important to maintain participation in the so-called “demonstrator” projects that would determine future technology choices. “Continued engagement with Europe in science and technology, both at academic and industrial level, is essential to maintaining the UK’s competitiveness,” said Gary Elliott chief executive.