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Welcome to the October edition of the ADS Policy and Government Affairs Update, my debut publication as your new Director of Government Relations and Policy. My first week with the ADS team was at FIA and I was delighted to meet many of you, to hear your priorities and to see first-hand the brilliant products your teams are delivering. A special thanks goes to Alex Hamilton for his leadership as Acting Director and to the ADS team for their support as I have settled into my post. I would also like to welcome Lee Bruce, our new Head of Public Affairs, Lewie Haar who joins Lee’s Public Affairs team, and Oscar Widlund who joins us as Defence Policy Advisor. Lee and I have been enjoying meeting many of you and look forward to continuing our engagement with members – please do reach out to us (Lee.Bruce@ADSgroup.org.uk / Paul.Oxley@ADSgroup.org.uk) if you would like to discuss the work of ADS and your organisation.
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In early September, the Conservative Party leadership election concluded with Liz Truss being appointed as the new Prime Minister. ADS Chief Executive Kevin Craven has written to the Prime Minister and her ministerial team to welcome them to post and brief them on the priorities of our sectors. The ADS team have already been out meeting with members of the new administration as we highlight to them the importance of our sectors to the UK economy. With party conferences and a raft of significant announcements from the Government, there are plenty of updates in this bulletin. I would like to give a special thank you to Airbus, BAE, Babcock and Thales for their sponsorship of our party conference season engagement activities, which proved to be a very successful opportunity to promote the issues faced by our members to key political stakeholders.
All of this and more is covered in the stories included below. As this is my first bulletin, I am eager to gather your feedback on which parts you enjoy and areas for improvement, so please do get in touch.
With best wishes,
Paul Oxley,
Director of Government Relations and Policy
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Liz Truss won the Conservative Party leadership election and became Prime Minister on the 6 September 2022. The new government’s stated headline priorities are the following:
- Get the economy working through tax cuts and reform;
- Provide immediate support on energy bills and secure supply;
- Ensure people can access the NHS services they need.
ADS has written to the new Secretaries of State and Ministers, welcoming them to post and explaining through our ministerial briefings how ADS brings together government, industrial investors and innovators to shape and protect new frontiers. Following our successful engagement at party conferences, the team are continuing to work to secure meetings with new Ministers. These meetings will provide an opportunity to highlight the value of industry partnerships and how our sectors can help government deliver economic growth and provide national security. We will continue to work with political advisers in government and civil servants to brief Ministers on their new portfolios and shape the delivery of their priorities. We will also be working with Parliament and the media to proactively shape a positive narrative for industry.
The ADS Public Affairs Team has mapped out the new Cabinet to provide insights into their background and priorities. ADS Members can access the full readout on the membership section of our website and you can listen to our recent webinar with Lee Bruce and Aimie Stone discussing the new government and the mini-budget.
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ADS had a strong presence at this year's party conferences, bringing together industry and political leaders at a collection of roundtables, receptions and one-to-one meetings. The focus of our activity across the conference season was to showcase the value of ADS and industry as custodians of a world-beating advanced engineering and services workforce.
At Labour Party Conference ADS held a roundtable with the Shadow Secretary of State for Defence John Healey MP and his team, where the future of defence policy was discussed. Meanwhile, at the Conservative Party Conference, a similarly themed roundtable was held with the new Minister for Defence Procurement, Alec Shelbrooke MP. These discussions gave an opportunity for industry to raise to key stakeholders the importance of strategic partnerships with government, workforce issues and skills pipelines, defence inflation, exports, banking and finance and the value of SMEs. The Conservative Conference also saw us bring together industry leaders with political stakeholders at a reception where we celebrated our different sectors and creating networking opportunities. We were delighted to be joined by three government ministers, which demonstrates the importance of ADS and our members to government. The speeches began with an opening address by the Minister for Aviation, Baroness Vere whose brief covers ADS’s key sectors, including aerospace, space and SMEs. This was followed by a speech from the Minister for Armed Forces and Veterans, James Heappey MP, who spoke on the importance of the defence industry in supporting the stoic resistance in Ukraine. And finally, industry colleagues heard from the Minister for Industry, Jackie Doyle-Price MP who spoke of our sectors' role in UK prosperity. Three ministers, three key government departments and a fitting way to bring the ADS conference programme to a close.
Our thanks again go out to our sponsors Airbus, Babcock, BAE and Thales for their invaluable support.
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On 21 September the UK Government announced a package of support to help discount the wholesale cost of gas and electricity for businesses and other non-domestic organisations, in addition to the support for households already announced.
The support will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts, applying initially to energy usage from 1 October 2022 to 31 March 2023. A review will be published in three months to inform decisions on future support. There is an expectation that support will be available from November and can be backdated to cover costs incurred in October.
The intervention is welcomed by ADS and anticipated to help members, particularly smaller employers, with some of the immediate cost pressures around energy that they are currently reporting. In response to the announcement ADS Chief Executive Kevin Craven expressed his hope that the government work with ADS to ensure members continue to receive the support they need to compete internationally and deliver for their customers.
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Two days after the energy announcement, on 23 September, the new Chancellor, Kwasi Kwarteng MP set out his plans for growth. The plan contained 19 measures including:
A cut to National Insurance from November 2022, reversing the 1.25pp increase;
- Maintaining the Annual Investment Allowance at £1 million permanently;
- A cut in the basic rate of income tax to 19% from April 2023;
- A cut to National Insurance from November 2022, reversing the 1.25pp increase.
- Scrapping plans to increase corporation tax from 19% to 25%;
- An immediate cut in Stamp Duty.
Measures also included the closure of the Office of Tax Simplification, which is significant as the office was created, in July 2010, to identify areas where complexities in the tax system for both businesses and individual taxpayers can be reduced, and then to publish their findings for the Chancellor to consider ahead of his budget. Significantly, the mini budget was delivered with no Office of Budget Responsibility (OBR) forecast and the package of debt-based tax cuts caused the global markets to react adversely, not helped by the lack of transparency. The week following the budget saw the pound hit an all-time low on Monday and by Wednesday, the Bank of England decided to step in and buy long-term bonds to help stabilise markets.
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At the time of writing this piece, and post-party conference, the excitement caused by the mini-budget has not gone away. Liz Truss has reversed the controversial scrapping of the 45p rate of income tax announced by the Chancellor, emergency talks with the OBR have taken place, and the Chancellor has announced that the next fiscal statement with clear financial forecasts and planning will take place this month, sooner than the originally suggested date of 23 November.
For now, markets seem to have settled and await the promised further details. Many economists are more eagerly awaiting Q3 data, with a first look due this week confirming whether the UK is already in recession. The outlook of the UK economy remains fairly weak, with expectations remaining low until mid-year 2023. The cost-of living crisis and rising costs of inputs, as reported by business, will continue to harm prospects for growth and so supply-side policies from the UK Government would be welcomed alongside the next wave of fiscal activity. If members are interested in hearing more about the economic environment in which the mini-budget was made, a recording of the webinar from 28 September is now available to watch.
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The All-Party Parliamentary Group on Space
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Mark Garnier MP has taken over the Chairmanship of the All-Party Parliamentary Group (APPG) for Space. ADS met with Mr Garnier to discuss priorities for the APPG and how it can help us promote the importance of space in delivering economic growth and public services. The Space APPG is looking to deliver an exciting programme of engagement kicking off with a briefing in December with the new Minister for Science and Investment Security, Nusrat Ghani MP. This briefing will bring attention to the value of the Space Sector among key political stakeholders and be an opportunity for industry to discuss innovations and the challenges ahead.
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The Size & Health of the UK Space Industry survey is the primary source of evidence that the UK government uses to track growth in the sector, identify challenges and to target support. Its significance is highlighted by the UK Space Agency CEO in his 'Call to Action' for the 2022 survey, which we are launching today. Please respond to the survey at: www.smartsurvey.co.uk/s/SizeAndHealth2022.
Whether you build and launch satellites, conduct scientific research or operations in space, or leverage satellite capabilities as part of a commercial solution for users, we would love to hear from you. The survey will remain open until 25 November, but please respond as soon as possible. If not you, then please feel free to pass the survey on to the most relevant person in your organisation. If you wish to decline participation, please reply accordingly. If you have any questions, please do not hesitate to reach out at sizeandhealth@know.space.
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Northern Ireland Council meeting with Minister Gordon Lyons
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Northern Ireland Economy Minister, Gordon Lyons MLA met with members of the ADS NI Council in Belfast recently. The Council is made up of members from the SME community, supply chain companies and primes and discusses current industry challenges. Topics raised by members included the cost of doing business, rising energy prices, inflation, skills shortages and on a more positive note the opportunity for defence sector growth in the region. ADS's Senior Economist Aimie Stone attended the NI Council meeting also, presenting to and discussing with members the current economic conditions and impact of the mini-budget.
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ADS responded to two consultations in the last month:
- People and skills in UK science, technology, engineering and mathematics - Committees - UK Parliament – ADS submitted a response to a House of Lord’s inquiry which argued that the UK could learn from the approaches taken by the US, Germany, Ireland and Switzerland in their integrated approaches to encourage people to pursue careers in STEM. The submission stressed that industry, academia, and government needed to work in partnership to attract more people into manufacturing, to increase investment in training and skills, to increase opportunities for upskilling employees, and to increase the quality of and access to STEM apprenticeships.
- Promoting Scotland internationally - Committees - UK Parliament – ADS submitted a response to the Scottish Affairs Committee’s inquiry which highlighted that opportunities to promote Scottish trade abroad are being missed, despite their significant presence in sectors such as Maintenance, Repair and Overhaul (MRO), which attracts direct foreign investment. The submission argued that airshows and exhibitions are prime opportunities for the Scottish and UK Governments to create a more cohesive platform for Scottish businesses to showcase their industries.
ADS is also responding to the upcoming consultations and inquiries in the next month:
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ADS was pleased to participate in the International Security Expo (ISE) at London Olympia on 27 and 28 September and meet with a wide range of government, industry and international partners to discuss the latest trends in physical and cyber security. ADS’s Director of Security and Resilience Jon Gray had the opportunity to meet directly with the Government’s new Security Minister, Tom Tugendhat MP, along with the Chair of the UK Security and Resilience Industry Suppliers Community (RISC), Dame Julie Kenny. Several ADS Special Interest Groups (SIGs) also exhibited at the show, including DPAC, CBRN-UK, Counter EO and SCEG, and ADS also jointly hosted a pavilion with TechUK in the co-located International Cyber Expo.
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The ICAO General Assembly ran from 27 September to 8 October, with the global aviation community gathering to discuss a wide range of issues, including airworthiness, innovation, security and of course sustainability. ADS have been engaging with the UK’s representatives at ICAO through the DfT and through the manufacturing representatives at ICCAIA. ADS produced a policy paper setting out the UK aerospace industry's positions ahead of the Assembly, including support for the Long-Term Aspirational Goal and CORSIA reforms. As the Assembly outcomes are confirmed and finalised, ADS will keep members informed and look to host a session to understand what this means for UK aerospace going forward.
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BUSINESS FINANCE WEEK
Throughout the week of 7 to 11 November, the British Business Bank, along with well-respected business support partners from across the UK, are working together to host Business Finance Week 2022. During five days of nation-wide and regional in-person events, webinars and more, the British Business Bank are helping smaller businesses learn all about the different finance options available to them to support their individual needs. Each day will be centred round a key theme, giving you the opportunity to hear from experts in their field on a varied range of subjects. For further information please visit the British Business Bank website.
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ADS ANNUAL DINNER 2023
We are delighted to announce that the ADS Annual Dinner will be held on 31 January 2023. This prestigious event brings together companies from across the UK's aerospace, defence, security and space industries. The evening consists of a pre-dinner drinks reception followed by a three-course meal and live entertainment. You can find further information, including how to make a booking, on our website.
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SECURITY AND POLICING 2023
Security & Policing, the official Government global security event returns between 14 to 16 March 2023 in Farnborough. Hosted by the Home Office’s Joint Security & Resilience Centre (JSaRC), Security & Policing offers a worldâclass opportunity to meet, network and discuss the latest advances in delivering national security and resilience with UK suppliers, UK Government officials and senior decision makers across law enforcement and security from the UK and overseas. For further information please visit our website.
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ADS EVENTS PAGE
ADS holds a wide range of events throughout the year. You can stay up to date with our events and make bookings by visiting the portal on our website.
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ADS Commercial Aircraft & Engine Data
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At the end of September, ADS published the commercial aircraft data for August 2022. A total of 30 commercial aircraft orders were placed and 74 aircraft were delivered during the month of August. Demand for single-aisle aircraft continues to outstrip wide-body demand as the single-aisle market recovers from the pandemic faster.
Aerospace sector recovery continues to make steady progress with year-to-date aircraft orders being the largest for the first eight months of the year since 2014. The backlog of aircraft orders is 4 per cent higher than August 2021 at 13,393 aircraft and is worth £207 billion to the United Kingdom.
Manufacturers delivered 74 aircraft during the month, taking the total the number of deliveries this year to 659 aircraft, a 12 per cent increase on August 2021 year to date. Despite supply chain pressures and the rising cost of energy and raw materials, global aircraft deliveries remain on track to make the ADS Forecast of 997 deliveries by calendar year end. An economic briefing is available on the members area.
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