Prime Ministers speech at opening of Farnborough Airshow.

Tuesday 10 July 2012 "In a hugely difficult time in the global economy, when were tackling a massive budget deficit at home, UK aerospace is flying high" It gives me great pleasure to be here today to open the Farnborough Air Show and the first thing I want to say is a very big thank you. You are a vitally important industry for the United Kingdom and for the future of our country and our economy. In a hugely difficult time in the global economy, when were tackling a massive budget deficit at home, UK aerospace is flying high:

employing more than 100,000 people; turning over more than 20 billion a year; and winning contracts for more than a decade in advance.

Every two and a half seconds a plane powered by a Rolls Royce engine takes off. Our Hawk aircraft are used by 25 air-forces around the world. British firms are developing new technologies to send tourists into space and inventing telescopes that can see the oldest parts of the universe. Across civil aviation, defence, security and space research, this is a real success story and I want to thank everyone here for helping make it happen. I also want to welcome guests who have come from overseas today and to say here how much we welcome firms like Lockheed Martin, Boeing, GE, Finmeccanica, Thales and Airbus who come and create good jobs here. Those collaborations are crucial to the success of the UK industry. But my biggest message today is that there can be no complacency. Yes, weve got a 17 per cent share of the global market, but as everyone here knows, the rest of the world is breathing down our necks. Weve got to be constantly alive to this competition constantly looking to get ahead and that includes government just as much as industry. I dont want anyone here to be in any doubt that this is a massive industrial priority for me, for this whole government. Some might say youre talking like some 1970s-style central planner arent you meant to be a free-market Conservative? Frankly, I am a do-what-works Conservative. I dont believe in picking winners but I absolutely believe in backing them. Im not going to just sit back while China and India invest in more high-tech engineers; while countries across the world snap at Britains heels. We are determined

to do everything we can to back UK aerospace and I hear three big things that you want from us: Number one you want stability and certainty about the future. Weve heard this loud and clear. When it takes fifteen years from the start of a programme to getting that aircraft in the sky, fifteen years more to break even and fifteen years more to make a profit, you cannot have governments that think short-term. But that has been the story. There was a great surge of investment in the 70s and 80s and since then its gone a bit stop-start, with government scraping around, getting some cash and saying can you start a new programme tomorrow? You cant do business like that and we get that. Thats why weve launched the Aerospace Growth Partnership. This is about us working together, thinking really long-term about how to make the UK the best place to design, manufacture and export. Crucially, its not someone in Whitehall working out how many bolts should be in the next AgustaWestland helicopter; its a long-term industrial partnership that is being led by you; bringing more predictability to how youre funded, how you research and how you plot your moves into new markets. And speaking of AgustaWestland, the new AW189 which is going to fly here at Farnborough for the first time is a really good example of how government can work with you. We announced a 32million support package last year, already its bearing fruit, and that bodes well both for the diversification into civil aircraft and a closer partnership between government and business. The second thing we hear from you is about skills. You want more vision, more investment and with this government youre getting it. Were delivering a quarter of a million extra apprenticeships, rolling out 25,000 new Higher apprenticeships in sectors like aviation and establishing 24 new University Technical Colleges in the next couple of years. Our universities are the finest in the world and were building on that reputation; investing 4.6 billion a year in science and research. And today we announce something else: a partnership with industry to have 500 new Masters level graduates in aerospace engineering over the next three years. We are only as good as the people weve got and the skills they have got and this just shows we are determined to be the best. Third, we hear you want more support on exports particularly defence exports. Now I personally have loaded up plane after plane with executives so we can get signatures on British contracts and however much flak I got for that, I will do it all over again. But theres more that we as a government should do. We recognise there is a clear relationship between what the Ministry of Defence buys and the export orders you secure, because those overseas buyers want products that are mature and battleproven. Over the past two years we have come in and taken a defence budget that was falling apart at the seams and weve sorted it out.

This isnt some exercise in accounting for its own sake its allowed us to turn the unfunded wish-lists we inherited into real commitments: new Chinooks; new work on the Warrior programme; an upgrade to our reconnaissance and intelligence-gathering capabilities. And because of the work weve done, we can say that not only are we still going to have the fourth-largest defence budget in the world but its going to be sustainable. Now when it comes to future decisions, weve made clear the priority has got to be getting maximum defence capability for every pound thats spent. Our armed forces deserve nothing less. But I dont see this as an either/or situation buying for value or buying British. Theres more we can do to join the dots; to think in a more careful way about how to back this industry while getting the best deal for the Ministry of Defence as a customer. To that end I can tell you that just as we have started up the Aerospace Growth Partnership for the civil sector, so we want to start a similar dialogue with the defence and security industry building on the White Paper published this year so we can help you grow and thrive and create new jobs. And as just a taster of that new, more collaborative approach I can make another announcement today. Typhoon and Tornado, equipped with outstanding lowcollateral, high-precision munitions, were the battle winners in Libya. As Prime Minister I can tell you that it means an enormous amount to know that we have highly capable crews on highly capable aircraft. You know they are going to do exactly the job you have asked them to do and the precision is absolutely brilliant. Building on that success, we have agreed with our partners to exploit the growth potential of Typhoon; boosting its already world-beating capabilities with integration of new weapons including the METEOR missile, an Electronically Scanned Radar and enhanced ground attack capability. Thats good for the RAF which needs these capabilities, good for our export customers who want these capabilities and it is very good for the British manufacturers and British workers who are going to benefit. It is now for industry to come forward with innovative and affordable proposals so we can move ahead together. And this is what our approach is all about: reconciling whats best for UK security and the UK economy and above all, thinking long-term. So this, in short, is what youre going to get from us: an unstinting, unrelenting, unflagging commitment to making Britain the best place in the world for aerospace. Our driving vision is to build an economy that is built on hi-tech manufacturing, that is fuelled by exports, that is making and selling the products the world wants to buy. I look forward to working with everyone here to achieve that and now it gives me real pleasure to announce that the Farnborough Air Show 2012 is officially open for business.