Westminster Hall debate on Space Sector: Government Support - Sep 4

Mr Alistair Carmichael (Orkney and Shetland) (LD)

I beg to move,

That this House has considered Government support for the space sector.

It is a pleasure to serve with you in the Chair, Mr Dowd. I welcome the Minister to his place and to his new role, and I wish him every success in it. When we talk about the UK space sector, it is worth reflecting that, when the Minister and I first arrived here as fresh-faced and enthusiastic newbies in 2001—

The Minister for Data Protection and Telecoms (Chris Bryant)

You might have been!

Mr Carmichael

I don't think I ever was, actually.

Back in 2001, there was no such thing; the sector has emerged at a quite remarkable pace and has its roots in the early days of the coalition Government. Competitions were set up looking for opportunities to develop infrastructure in a UK space sector. That has led to a UK-wide space strategy, with interests in the north of Scotland, Cornwall, the Western Isles and other parts of the country. It is worth reflecting that the legacy of that competitive start-up has been a sense of competition between the different players in the sector. Now, as we approach maturity—we are perhaps months from the first vertical launch in the United Kingdom—a different picture is emerging. The success of any one of the different parts of the UK space industry can be only good for all parts.

Jim Shannon (Strangford) (DUP)

I congratulate the right hon. Gentleman on introducing this debate. I wholeheartedly agree with the point that he made and I will explain why. The space technology exploitation programme was introduced in Northern Ireland in 2023 through a pilot scheme

“to enhance UK space capability by developing new technologies…to overcome technology challenges and unlock new potential market opportunities.”

That pilot scheme concluded last year. Does he agree that additional funding is necessary for all the devolved nations, including his own and mine, to support them in contributing towards the roll-out of a potential national STEP programme that can help everybody in this great United Kingdom of Great Britain and Northern Ireland?

Mr Carmichael

The hon. Gentleman anticipates the tack I will take. Of course, we are talking about support from the UK Government for our space sector, but the success story that we have seen thus far has been achieved with remarkably little public money. The support required goes beyond the financial, often to the political and the regulatory. Yes, he is almost certainly correct in saying that some money will be necessary, but there has to be more to ask for than simply financial support.
The space sector is widely recognised as an industry with both economic and strategic importance for the UK. I want to focus mainly on the vertical launch industry, but that is just one part of the sector and it is an industry in which the UK has a genuine advantage. There are currently only two licensed vertical space ports in western Europe: our neighbours in Norway have Andøya and we have SaxaVord spaceport in Shetland. With three ready launch pads in SaxaVord to Norway's two, for the foreseeable future the United Kingdom, through Shetland, will contain 60% of western Europe's vertical launch capacity. That is a significant opportunity for our economy and country as a whole, but it is an opportunity on which we must capitalise in the immediate term. With the nation's finances being as they are, it is worth reflecting—as I have just said to the hon. Member for Strangford (Jim Shannon)—that we have got this far without excessive financial support from the Government, but what there has been is exceptionally welcome. SaxaVord spaceport is privately held, but recently secured a £10-million convertible loan from the Government, allowing the potential of a Government minority stake in the future. That Government investment was designed to attract interest and further investment from the private sector, and in that respect it has been successful. It has been taken as a vote of confidence for those involved.

SaxaVord is working closely with the Department for Science, Innovation and Technology and the UK Space Agency, and I am told it is in daily dialogue with the Civil Aviation Authority as the industry regulator. We are looking forward to seeing the Secretary of State for Scotland visiting the site in the not-too-distant future. Parenthetically, at this stage, I hope we might see better co-operation between the Scottish Government and the UK Government as we go ahead. There was, at least in the early days, a bit of a sour feeling as a consequence of people in Shetland feeling that other projects were being given a more favourable ride by the Scottish Government. The expression put to me was, “The thumb was being put on the scales to their favour.” However, I think we have passed that point and, again in the spirit of a positive and forward-looking joint strategy, we need to put those differences behind us, although we do not forget them.

There is no shortage of potential clients for SaxaVord; the demand for a UK site of this sort is clear, but the infrastructure needs to be completed in order to maximise the opportunity. I hope that the Minister will be alive to the potential cost-benefit of getting this one across the line. More Government engagement and assistance is welcome in order to speed up the process and ensure that SaxaVord continues to lead the way in Europe, in what is a highly competitive and fast-moving global industry.

Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)

My constituency has close links to Shetland when it comes to space, with the SaxaVord spaceport company headquartered in Grantown-on-Spey. I also have Orbex, with 130-plus employees in Forres, which is manufacturing rockets and will soon conduct launches in Sutherland. We know that for those companies, developing launch and manufacturing capability there is a significant capital expenditure in research and development. Does the right hon. Gentleman agree that it is vital that private investment is underpinned by easily accessible and, importantly, repayable state support, which needs to be reasonably substantial to get the venture to the point of commercial viability?
Mr Carmichael

In essence, yes, I do, and I acknowledge what the hon. Gentleman says about the siting of SaxaVord in Grantown-on-Spey. I pay tribute to Frank Strang, who has driven the project from day one. It has not always been straightforward—progress is never linear—but I am fairly confident that without somebody like Frank Strang driving it, we would not have got to this point. Having developed SaxaVord to where it is today, the team are now more or less at the point of readiness in terms of the site itself. All that is needed is a ready launch client that has passed the necessary tests and acquired its own launch licence. It would be remiss if I did not mention the state of play regarding the tests and potential launches. SaxaVord has hosted several successful engine tests over the last few years, including by HyImpulse, Latitude and Rocket Factory Augsburg. I witnessed one of the HyImpulse tests that did not work; it did not work in a way that nothing ignited.

More recently we saw a more spectacular test difficulty. I think the term that RFA used in relation to the nine-engine test on site was an apparent “anomaly”. There was thereafter a fairly widely circulated video, circulated not least by RFA, which makes the fair and necessary point that this is the purpose of having a test. We do not expect every test to be successful, but from the point of view of RFA, and of SaxaVord as the host location, it is significant that they faced that difficulty and that everything—all the procedures and safeguards in place—worked. As a consequence, there was no injury to human life. There was a spectacular flare for a few seconds, it has to be said, but the testbed itself remains viable and has not been taken out of commission despite that event.

That was a test, but that is why we have tests: to find out what can go wrong. All the procedures and the necessary infrastructure substance that was put in place worked. That is something that, rather than diminishing confidence in the future of SaxaVord, should actually increase it. RFA is the most advanced of the clients working at SaxaVord, but it is not the only one. I understand that what happened was fully expected at some stage and prepared for. The schedule to which RFA was working has naturally had to be revised, but it expects to resume testing in Shetland soon.

At the point at which I anticipated securing this debate, I hoped that we would be looking at a launch early next month. We are probably a little bit further away than that. One expression I keep hearing from people in the sector is “space is hard”, even though there is a strong feeling that the final pieces are almost in place for launches soon to begin in earnest. That is why the UK Government must play their role and be a still more active supporter of the sector as we come into this critical period.

I give credit to the previous Government, for all their flaws. They identified the opportunities and engaged with stakeholders regularly. There is plenty of scope for improvement in both the UK's big-picture space strategy and the granular element of helping to bring SaxaVord to its full potential in the months and years to come. On the big-picture level, can the Minister share his plans to improve the national strategy and its implementation? He will doubtless be aware of the tempered criticisms from the National Audit Office in July of the previous approach to the space sector:

“The government did well to draw its many different interests and activities in this very diverse sector into a single vision in its 2021 national Strategy, which set high ambitions…However, it did not produce the implementation plan that it had originally planned to, and three years later DSIT and UKSA are still in the early stages of identifying and developing the plans and capabilities needed to deliver the Strategy's ambitions.”

It continued:

“If UKSA is able to address these issues and DSIT provides the required clarity on the aims and outcomes of the Strategy, then they will be much better placed to secure value for money from the government's multi-billion pound investments in the sector and achieve the government's ambitions for the UK in space.”

Focusing on the UK vertical launch sector and SaxaVord itself, will the Minister reaffirm the Government's commitment to supporting the Shetland launch site as further tests and launches go on? With the advantage the UK holds, there is a clear opportunity to make progress and capitalise on that. The only risk is that we may spread ourselves too thinly. I would appreciate whatever engagement the Minister and officials can make in partnership with the Scottish Government so that we are all singing from the same hymn sheet. It is in all our interests to ensure that this gets off the ground—pun intended—so that we can start to witness and leverage the benefits to the national economy.

We have made remarkable progress in a short period of time and in an area that is of enormous strategic significance to the United Kingdom as a whole. It is embraced by the people of my constituency. It has been made possible because we have held thus far the strong political consensus between Government and Opposition and between Governments. Can the Minister confirm, as part of the new Government, that that consensus remains and that that is the way in which we will continue to develop support for the UK space sector as we go ahead?

11.13am
The Minister for Creative Industries, Arts and Tourism (Chris Bryant)

It is a great delight to see you in your seat, Mr Dowd, not least because, as I have commented before, you are one of the snappiest dressers in Parliament and London fashion week is fast approaching. That is not part of my space portfolio, but it is part of my culture portfolio. I very much hope we will see you on the catwalk.

What goes around comes around. It is a funny old world, isn't it? I think the last debate I addressed in Westminster Hall from this side of the Chamber was also led by the right hon. Member for Orkney and Shetland (Mr Carmichael). It was about the global abolition of the death penalty. We completely agreed with one another on 28 October 2009 and, funnily enough, we completely agree with one another today.

I am slightly nervous about the right hon. Member saying that we should sing from the same hymn sheet, only because I am an Anglican—not a particularly good one—and I have a particular loathing of paraphrases sung to dirges, so I am not sure we can sing exactly from the same hymn sheet, but he makes an extremely good point. The Government are very keen to work with the Scottish Government, with local authorities and obviously the commercial players in the field to make sure that we gain all the possible benefits from space to the UK economy and to the way we run our society, our business and our Government.

It is a particular delight also to see the hon. Member for Wyre Forest (Mark Garnier), because I know he has been interested in the subject and led the last debate on it in Westminster Hall. I know that a series of Members are interested in the matter, and I hope to ensure that by the end of this Parliament even more Members are cognisant of the issues and able to drive the agenda forward with the Government. There are many things that we need to change in this country, but we are absolutely committed—as committed as the previous Government—to ensuring that we harness and garner the benefits and opportunities of space.

I do not think of space as the final frontier; I think of it as the biggest opportunity in my portfolio when it comes to economic growth and our economic advantage in relation to other countries. There are other aspects, some of which the right hon. Member referred to, and I will of course come on to the specifics of Shetland—though my family is rather more Stornoway.

Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)

There is of course room for more than one space launch site in the UK, and we wish SaxaVord well in its future endeavours. The Minister has talked about the economic benefits to the country, but for Sutherland a space launch represents a social benefit to young people and jobs for the future in a fragile and remote part of the UK. My request is simply this: Ministers have a good relationship with the company Orbex, referred to by the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter), and I would be grateful if that relationship could be built on.

Chris Bryant

I have every intention of building on all these relationships as fast as I possibly can. There are others—indeed, I am going to see Airbus in the next couple of weeks. Hundreds of companies in the UK are engaged in the various aspects of the value chain that lead to sending something up into space, keeping something up in space or taking something down from space, or that use the data that comes from space, or that provide the software, the mission control or whatever. There is a wide range of companies, and I want to engage with as many of them as fast as I can. Obviously, the two that we have referred to are already high on that list, and I would like to make a visit to Shetland soon if possible.

I know Grantown-on-Spey very well because I spent a lot of my childhood in Aviemore. I had a very constructive conversation with Mr Strang last week, and we are keen to work with his organisation. I suspect I will be visiting Grantown, as well as Shetland, in the not-too-distant future. Incidentally, there are some issues in relation to telecoms on mountains in Scotland that I would also like to address.

As has been said, space is a strategic priority for this Government, as it was for the previous one. It is also a competitive advantage for the UK. The point has been made about vertical take-off; we have more than half the capacity across Europe. The right hon. Member referred to Norway as a neighbour. It does not feel so much like a neighbour in the south Wales valleys, but I understand his point. None the less, because of our geography, our time zones and so on, the UK has a unique opportunity to steal a march on the rest of Europe, and we are determined do so if we possibly can.

The right hon. Member also made a point about skills and young people coming into the industry. We have spent quite a lot of time and DSIT money trying to ensure that we have the skills in the UK. We are well served, and we need to ensure that there is an ongoing build-up of people available to work in the industry, that they are able to get the training and support they need, and that people from a variety of backgrounds can conceive of a future career in those industries, even if it is not necessarily on their doorstep. We intend to work on that.

Of course, this is a commercial domain in large measure, but it is not necessarily a cheap or easy one. As has been said, space is hard; long-term investment is obviously far more important than short-term gain. We want to ensure that all commercial operators working in the field have an opportunity to seize investment opportunities, and we are aware that there will have to be Government involvement in that process.

Mark Garnier (Wyre Forest) (Con)

Will the Minister give way?

Chris Bryant

I thought I might have stimulated the hon. Member.

Mark Garnier

Before I start, I refer hon. Members to my entry in the Register of Members' Financial Interests. Everything the Minister has said so far is music to my ears. I hope to carry on as chair of the all-party parliamentary group for space, as I was in the last Parliament. One criticism that the all-party group had of the Government then was although the space strategy was a very good manifesto, it did not stack up to being a strategy. Everything the Minister has talked about in relation to the commercialisation of space is really important, but the strategy needs detail. He will not be able to answer this question immediately, but could he consider, as he gets more involved in his portfolio, looking into more details on the strategy in order to make it more than just a manifesto, so that businesses can really get their teeth into the industry?

Chris Bryant

That is a very fair point. All the new Ministers arriving in DSIT have been very keen to provide as much strategic clarity as possible about our direction of travel. Perhaps one could say that the advantage of having a decent majority in Parliament is that one can lay out a strategy for a period of time, rather than just running to catch up with one's tail. Likewise, I take the point made by the right hon. Member for Orkney and Shetland that it is that clarity of strategic objectives that shows, “Yes, this is what we are doing; that is not our priority.” That makes it much easier for inward investment into the UK to make secure investments for the long term.

Some of the things that my right hon. Friend the Chancellor has said about business taxation are important as well. The aim is to create an environment in which people can invest securely, knowing where they are going, that the Government will have their back and that the strategy will not change every six months. I note the points made by the National Audit Office. I think the previous Government were very much trying to point in this direction, but perhaps they did not quite land it; maybe there was an anomaly at some point in the process of developing the long-term strategy.

Some hon. Members might not initially think of space as significant to the daily lives of their constituents, but I think it is worth pointing out something that is part of our lives: sat-nav. We all used to have rows in the car, trying to work out where we were going. Sat-nav now does the work for us—although I note that none of the sat-nav operators seems to understand how to say the name of my street in Wales or, frankly, any of the roads or towns in Wales—but this is not just about sat-nav for personal life; it is also about Earth observation, which makes it much easier to predict weather patterns. I had an interesting conversation the other day with a wine operator from the south-east, who was saying that that is really important for them to work out when they should harvest to ensure that there is the right amount of sugar in the grapes and so on. Similarly, data coming from satellites will enable the Government and many operators to provide services more effectively, efficiently and cheaply, and in a way that is more intuitive for ordinary consumers.

In all those fields, space is a really important part of how Government do their business, and how we better facilitate a strong economy and better society. Of course, it is not just the Department for Science, Innovation and Technology that has a very significant interest in space. I pay tribute to the Ministry of Defence, which has been a major player in the field; obviously, it is a NATO operational domain, apart from anything else. The MOD is investing £6.5 billion over a decade, including £5 billion for satellite communications through Skynet and £1.5 billion through the defence space portfolio. Many other Departments—the Department for Business and Trade, the Foreign, Commonwealth and Development Office, the Department for Transport, the Department for Environment, Food and Rural Affairs and so on—are also engaged in this work.

Skills were mentioned earlier. The UK Space Agency has been funding £19.6 million since 2022 in this skills field, because if people want to invest, they are going to do so on the basis that we have a skilled workforce in the UK that is available not just today but in five, 10, 15 and 20 years' time.

I will say a few things about the launch sector, which is obviously of primary interest to the right hon. Member for Orkney and Shetland. Roughly 200 companies are engaged in the launch sector in the UK. As I said, some are involved in rockets; we have also referred to subsystems, spaceports, mission control, apps and all the technology that goes into making all of this possible. Roughly 1,500 people in the UK are involved, and they are fairly well paid, so that is a significant part of our economy with significant opportunity for growth. It brought in something like £336 million last year and had a GVA of £153 million. Over the past six years, the Government have invested something like £91 million in our launch capabilities—the right hon. Gentleman referred to the £10 million loan to SaxaVord.

We are ongoing in our commitment, and that commitment has not been shaken by any anomalies that might have been seen on launch. I did feel a bit worried that my first engagement with space was something going not entirely to plan, but I do not think that there is a causal relationship between that and my arriving in post.

In relation to Shetland, the right hon. Gentleman is absolutely right that we need to work with the devolved Administration. I am very keen to have conversations with our colleagues in Scotland, my counterparts in Scotland, and of course with the Scotland Office. We need to work as a united Government to achieve what we want in the field.

As I say, I have spoken to Frank Strang and I am very keen, at the earliest opportunity, to visit both Grantown-on-Spey and Shetland. I cannot say when the next attempted launch may be, but Members are absolutely right: it is not a failure to have an event that does not go entirely to plan, when all of the contingency plans do click in correctly and properly so that there is no harm or danger to life. We see it as a blip, not as a final problem, and it does not undermine our long-term commitment.

There are a couple of points to be made about value for money, which goes to the point about clarity of strategy. We are going to have a very tough spending review—I think everybody might have sussed that by now; the messaging has been strong enough on the subject—and that will undoubtedly be true in this field too. We need to be absolutely clear about what we are seeking to achieve, and about what the whole consortium of businesses and players in the space field want to achieve, so that we get really good value for money for the UK economy. It would be a terrible dereliction of a significant economic and strategic opportunity for the UK if we were somehow or other to abandon this field or diminish our commitment.

I hope that I have reassured the right hon. Member—just as I reassured him on 28 October 2009, when we were both in favour of the abolition of the death penalty everywhere in the world—that the UK Government are not stinting in our commitment to space and to the strategic and economic opportunities that it affords us.

Peter Dowd (in the Chair)

Thank you. On the subject of space, Minister, can I say that your tie is stellar?

Question put and agreed to.