Pre-Budget Report Reaction from Aerospace & Defence Industry

The Society of British Aerospace Companies (SBAC) today (Monday) reacted to the Pre-Budget Report speech from the Chancellor of the Exchequer, Alistair Darling, on behalf of the aerospace and defence industry.>> Ian Godden, SBAC Chief Executive, said:>> It is a disappointment that the Chancellor has neglected to include an injection of much-needed funds for the UK defence industry and our armed forces in his speech announcing a 3 billion investment package on infrastructure projects. This oversight is disappointing given the contribution that this industry will make to the UKs economic recovery, a contribution that could be greater still if the Government had included it in the stimulus package today.>> The Government not only controls the amount of investment in the defence budget but also where it is spent. This makes it the ideal sector for Government spending as a fiscal stimulus. This is more so given the regional diversity and highly-skilled jobs that the industry represents as well as the export potential of many of the projects that would bring a return on the initial investment.>> The Chancellors moves on support for small and medium sized enterprises (SMEs) are very welcome. Keen oversight of the banks along with Government and European Investment Bank funding will assist in dealing with the liquidity problem and further aid from the Export Credits Guarantee Department will also benefit our SME members and the complex global supply chains in which they operate.>> In the aerospace sector in particular, a lack of liquidity is the major issue to be confronted. Just in time and complex supply chains are only as strong as their weakest link. For them to survive, the weak link needs to be supported to avoid a domino effect where other firms in the supply chain and the projects themselves are seriously affected by one firm being unable to get credit. This is why it is essential that liquidity is maintained in the industry through Government action and pressure on lenders.