Business

Brexit would harm aerospace industry, claims Treasury

Among major jobs at Bombardier in Belfast are the manufacturing of wings for its CSeries planes
Among major jobs at Bombardier in Belfast are the manufacturing of wings for its CSeries planes Among major jobs at Bombardier in Belfast are the manufacturing of wings for its CSeries planes

THE British Treasury has claimed a vote to leave the European Union would be detrimental to the UK's aerospace industry.

In its analysis of the long-term economic impact of a so-called Brexit.

The UK has the second largest aerospace industry in the world after the United States including a large supply chain in Northern Ireland supporting Bombardier.

"If the UK was to leave the EU, the aerospace industry would be worse off because of a reduction in access to the single market," the Treasury said.

The analysis was published days after Bombardier's boss in Belfast told workers the firm would be better off in the EU.

In a memo to the company's 5,000 staff Bombardier's Belfast vice-president Michael Ryan said the European debate is "very emotional" but insisted being a member of the single EU market had been good for the company in terms of investment, air travel and free movement of goods.

Paul Everitt, head of aerospace trade body ADS Group said the Treasury analysis "makes clear the valuable link between the UK’s membership of the EU and its significance to the country’s strategically important aerospace sector.

“The UK’s aerospace industry is the world’s second largest, employing 110,000 people and turning over £30bn annually. This success is built on fully integrated, pan-European supply chains that currently operate with unfettered access to the single market.

“This point was echoed in a recent internal communication by Bombardier, which reminded staff that 100 per cent of what is manufactured at their plant in Northern Ireland is exported, 33 per cent of which goes to Europe; and 100 per cent of the raw materials used is imported

"Additionally, Bombardier has seen significant benefit as a result of EU R&D funding and the ability to develop key technologies through the fostering of relationships with other European aerospace companies."

This week marks the official start of the debate over the EU referendum with voters set to go to the polls on June 23.

Several polls have already concluded that the vast majority of businesses in the north are in favour of remaining in the European Union.

And the latest report by financial experts Davy supports the view that a Brexit would have a greater impact on Northern Ireland than any other part of the UK.

The company's latest market watch noted that, "From a purely business and economic view point, the EU generally, and Republic of Ireland specifically, matter more than the internal markets of the UK (to Northern Ireland).

"56 per cent of Northern Ireland’s historically important manufacturing sector exports go to the EU and the majority (37 per cent) to its southern neighbour."

And Davy said the north - and Scotland - would need to be treated as special cases by the British government following a Brexit.

"There is a very strong possibility that, following a vote to leave the EU, the UK would need to seek constitutional settlements with Northern Ireland and Scotland," it said.

"This would most probably involve a much greater devolution of economic powers to Stormont at exactly the time when Northern Ireland would be looking for an even greater helping hand from Westminster to make up for its EU losses."