How Brexit will affect industry

On 31 January the UK left the European Union and has entered a standstill transition period with the EU until 31 December 2020. The UK and EU are currently negotiating what the future relationship will look like. ADS continues to work on behalf of the aerospace, defence, security and space sectors to identify and clearly explain how a negotiated deal with the EU is the best possible outcome for our sectors. It remains a priority of ADS to ensure any future arrangement with the EU is as close as possible.

On this page, you can find information about how Brexit could affect our sectors.

Key priorities in the Brexit and future relationship negotiations:

  • A stand-alone aviation deal that keeps the UK in EASA & protects Europe’s connectivity
  • Access to and influence in the European Chemicals Agency and the EU REACH regime
  • A customs union with the EU that minimises additional costs for just-in-time supply chains
  • A comprehensive Defence and Security partnership with the EU
  • Inclusion in collaborative European Space and R&D programmes
  • Access to the skilled EU labour required to maintain the UK’s global competitiveness

Staying in the European Aviation Safety Agency

As a member of EASA, the UK benefits from working to one set of safety certifications when exporting aircraft products and services across Europe, and from the ability for EASA to conduct bi-lateral agreements with key global markets. It is also shaping standards for R&D projects, environmental regulations and new markets (e.g. drones).

As the UK leaves the EU, significant time and cost have been put into rebuilding the certification capabilities of the UK CAA, but remaining a member of EASA is the most cost-effective and practical solution to maintain safety and competitiveness.

During the transition period, the UK and its aviation sector will continue to participate in the European Aviation Safety Agency (EASA) systems and comply with its regulations while the longer-term UK-EU relationship on aviation is determined. The UK no longer has voting rights in EASA.
The UK and EU have agreed that, during the transition period, the UK is to be treated as a Member State for the purposes of international agreements for the duration of the transition period. This includes the EU-level Bilateral Air Safety Agreements with the US, Canada and Brazil.
The DfT and CAA have worked with their counterpart national aviation authorities to put in place equivalent agreements for when they are needed.

If a deal is not agreed and ratified by 1 January 2021, aerospace design, production and maintenance organisations might need to take action to ensure they hold the appropriate safety certificates. Any action that would need to be taken would depend on individual circumstances. The link below on working and operating in the European aviation sector from 1 January 2021 will direct you to the CAA guidance relevant for different business and individuals’ circumstances. You may need to apply through EASA for third country approval to allow products to continue to be recognised within the EASA system if a deal is not agreed and ratified by 1 January 2021. Visit the early applications section of the EASA website..

Useful resources:

Staying In REACH

REACH is the chemicals safety programme, governed by ECHA, which is responsible for the registration and authorisation of chemicals for use across the EU/EEA. Through participation in the EU, the UK benefits from the same system of chemicals regulation across the continent, so UK manufacturers, importers and suppliers do not need to comply with additional regulation when trading with the EU.

During the transition period registrations, approvals, authorisations and classifications in place before the UK leaves the EU will continue to be valid during the transition period in the same way that they are now.

REACH will continue to apply to the UK during the transition period and the process for registering new chemicals under REACH during the transition period will remain the same as it is now, which will require UK companies to register with the European Chemicals Agency (ECHA).

The UK and EU will negotiate future arrangements for chemicals regulation during the transition period and ADS will provide updates as and when things develop.

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A Defence and Security Partnership

The UK has left the EU but we remain closely linked to the rest of Europe for our national security. The UK will continue to play a leading role in European defence and security and UK-EU negotiations in 2020 should not only address trade considerations but also the future of UK-EU defence and security cooperation. To cement this the two sides must prioritise a comprehensive Defence and Security Treaty – including a Security of Information – in 2020.

Without such a treaty the UK would lose efficient intelligence sharing between the UK and EU countries, access to EU databases by UK law enforcement and security agencies, and cooperation between policing and judicial bodies, all of which is mutually beneficial for both the UK and the EU’s domestic security.

Similarly, if new restrictions on collaboration, including on intellectual property rights, are introduced the UK will not be able to participate in defence industrial research and development (R&D) collaboration that would otherwise enhance the UK and EU’s collective defence. The UK would also be unable to fully contribute to security-related Horizon Europe programmes.

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Inclusion in Space and R&D Programmes

The UK is a leader and influencer in collaborative EU R&D programmes, often helping to shape the research agenda and set future priorities. The UK is involved in more projects than any other country in the EU programme, leads more programmes than any other nations, and leads half of all the projects it partakes in.

If the UK fails to negotiate access to EU RD programmes in a future trading relationship UK organisations will have no access to Horizon 2020’s successor, Horizon Europe, or to the remainder of Horizon 2020. The EU currently funds almost £100m of UK R&D in the Aerospace, Security and Space sectors every year.

Currently, the UK also participates in a number of European Space Agency (ESA) and EU Space programmes, such as Copernicus and the Mars Rover. While the UK’s membership of the ESA is separate to its membership of the EU, failure to secure access to programmes could lead to an industrial and security capability gap. As it currently stands, the UK government has stated that it will no longer seek access to the Galileo Public Regulated Service, an encrypted satellite system, because the EU have barred the UK from full involvement in its development. Instead, the UK will explore options to build a sovereign Global Navigation Satellite System.

Until 2020-21 UK businesses will be able to engage with the European Defence Industrial Development Programme (EDIDP), a number of capability areas where EU funding can support international collaborative programmes. However, the window for engagement is narrow and UK businesses should move quickly in early 2020 if they want to participate. Currently, UK businesses will be excluded from the European Defence Fund (EDF) and treated as a Third Country, ADS and UK MOD continue to engage on this topic and search for a better outcome.

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Access to Skills

ADS’ sectors are part of integrated pan-European supply chains, have sites in other EU states and move their employees across national borders to provide services, expertise and to professionally develop their staff. These companies rely on freedom of movement to access skilled EU labour, plug chronic skills shortages and quickly respond to business-critical production issues across European facilities.

If a deal is not agreed and ratified by 1 January 2021 with the EU there could be restrictions placed on the movement of skilled employees, which could disadvantage the UK as a location for investment. Currently, being able to work across Europe is attractive to highly-skilled employees and barriers to this will discourage individuals from joining companies in UK.