My right hon. Friend the Secretary of State for Defence (The Rt Hon Gavin Williamson) has made the following Written Ministerial Statement.
The British Aerospace industry has underpinned the Operational Advantage and Freedom of Action of the British military since the birth of airpower. It has long been an engine of national and local prosperity: made up of close to 2,500 companies, it generates more than £33.5 billion in turnover, and employs more than 128,000 people, some 26,000 of them in highly skilled research, design and engineering jobs. The Defence elements of that industry are particularly valuable: of the £73 billion brought into this country through Defence-related exports over ten years, around 85% was generated by aerospace, much of it specifically by the combat air sector.
The Government is committed to supporting growth and prosperity across British Industry, and Defence has a critical role to play in that commitment. My colleague the Secretary of State for Business, Energy and Industry Strategy recently published an Industrial Strategy which reinforces our comprehensive support to the UK economy and our vision for a modern, internationally competitive UK industrial base. Following on from that my own Department published the Defence Industrial Policy refresh in December 2017 which made it clear that in a very few cases, a deeper analysis may be needed to establish whether our national security objectives would be served by specific sector approaches which help deliver long term value for money, Operational Advantage or Freedom of Action. Combat Air is one of these sectors.
Delivery of battle-winning capability to the UK’s Armed Forces is dependent on a number of vital national technologies and skills. This goes to the heart of our Operational Advantage and Freedom of Action and the Strategy will seek to ensure the UK maintains the ability to operate both independently and as part of international coalitions.
Recognising the importance of the Combat Air sector to UK military capability, Freedom of Action, prosperity and our industrial base, the MOD has decided to develop a Combat Air Strategy as part of the Modernising Defence Programme. Working closely with other Government Departments, industry and international partners, this work will define the UK’s future Combat Air aspirations, building on extant Government and Defence policies to identify the industrial capacity and capabilities necessary to deliver that ambition. In doing so, we will consider operational capability, technological advantage, economic benefits, industrial capability, capacity and skills, as well as international partnering, wider prosperity and export potential. The aim is to set the framework and timeline to assess options for the UK’s future Combat Air requirements and associated decision making. This should create a strong foundation for industry self-funded Research and Development and investment in skills, capacity and capability, whilst also testing UK industry’s ability to deliver our future requirements, remain sustainable and internationally competitive.
It will set out in practical terms how the MOD can deliver this critical military capability in an affordable way by establishing a more strategic relationship with UK industry, working with international partners and securing a competitive and sustainable industrial base to maximise prosperity.
 UK Defence and Security export statistics for 2016 released July 2017.