The Space Economy (UK Engagement with Space Committee Report)

Thursday 9th July 2026 Lords Chamber

Motion to Take Note

13:03

Moved by

[Baroness Ashton of Upholland]

That this House takes note of the Report from the UK Engagement with Space Committee The Space Economy: Act Now or Lose Out (HL Paper 190, Session 2024–26).

[Baroness Ashton of Upholland (Lab)]

My Lords, it is with great pride that I introduce this debate on the report The Space Economy: Act Now or Lose Out. The title was chosen to capture the urgency with which the committee believes government and others should act. I am sure this overarching message will be reinforced in the course of this debate. At the outset, I thank my noble friend the Minister for her willingness to engage with the report and the debate. I believe she is enthusiastic for what can be done. I look forward to hearing that enthusiasm turned into concrete actions in her response and in the future.

I begin my remarks by paying tribute to the noble Lord, Lord Cromwell, who is not in his place but who was the instigator of this inquiry. I am very grateful to him for proposing and championing that your Lordships needed to consider our relationship to and work in space. The committee was fortunate to have such a brilliant team of clerks and advisers, who made this report come alive. It astonishes me how they were able to guide us through such a challenging subject, keeping us within the framework of a report based on evidence but never curbing our enthusiasm for the subject, and apparently becoming experts on the subjects within days of being given the task of supporting our work. Sabrina, Steph, Scott—you are truly fantastic. Sarah, thank you for your work in communications. Michelle, we could not have asked for a better external adviser. On behalf of the committee, thank you.

Most of all, I pay tribute to the noble Lords who formed themselves into the space committee with a fabulous combination of enthusiasm and curiosity. I have performed many functions in your Lordships’ House but never chaired a committee before, and my colleagues were a joy to work alongside. We even had a space baby during one of our public sessions: my noble friend Lord Stansgate, who brought his wealth of experience in science and will do so again today, was momentarily distracted by the news of his new baby granddaughter’s arrival. It added to the urgency we felt that this subject, with all its potential, could offer her a better future. Perhaps inspired by the new family member, my noble friend made the point that space would be an integral part of the lives of her generation.

The noble Lord, Lord Clement-Jones, chaired in my occasional absence, for which I am extremely grateful, bringing his legal knowledge as well as enthusiasm, especially in tackling some of the environmental questions. On our visit to the Harwell space cluster in Oxfordshire, which has over a 100 space businesses, the European space agency and the UK space agency, before it was folded into the department—I pay tribute to the noble Lord, Lord Willetts, for his role in that—a business leader said to us there that he had many visits where people barely asked a question and feared that we might not have much to say. We were impossible to stop—some of us more impossible than others—barely catching the train back and still with lots to say. My award for enthusiastic questioning goes to my noble friend Lord Shamash, who brought not only his legal prowess but his unstoppability and interest, which delighted the businesses we met. I am only sad that we were unable to hold this debate before the noble Lord, Lord St John of Bletso, left the House. He had hoped to make his farewell speech on this report. On behalf of the committee, I send him all our good wishes.

In our lifetimes, space has moved from the almost science fiction launch of Sputnik and the early pioneers of Mercury and Gemini through to the developments of Saturn V and the heady days of the Apollo missions. Many, though not all of the committee, remembered the anticipation of Apollo 11’s grainy photographs from the surface of the moon and the crisis of Apollo 13—still my favourite film. We have witnessed the building of the International Space Station, the Soyuz missions, the work and the tragedies of the space shuttle, and seen a largely two-country race and collaboration transform to a time when 90 countries have space programmes and China has its own space station in orbit. Indeed, the world has not seriously worked together on how to regulate space since the 1967 outer space treaty.

Ten years ago, there were 2,000 satellites; by 2030, we will have a minimum of 60,000 and a possibility of 100,000. We have seen our relationship with space change our everyday lives in ways that barely seemed possible only a few years ago. Most of the time we are unaware of our reliance on what happens above us. Some 18% of our GDP is reliant on satellites, and were we to lose our PNT—positional, navigation and timing capabilities—for just one week it would cost our economy £7 billion.

We had the benefit, in putting together this report, of an extraordinary group of witnesses and teachers. We held 24 evidence sessions, received 106 written submissions and heard from 62 witnesses. We had masterclasses from astronauts Chris Hadfield and Tim Peake on their experiences past and present. Future astronaut John McFall gave us insights into his ambitions for his time in space. Professor Brian Cox aided us immensely, even interviewing me at the conclusion of our report to give greater publicity to our work. Of the businesses we met, I should single out ClearSpace, which braved the security needs of your Lordships’ House to bring in its robotic arm, which is designed to catch satellites in orbit to service, repair or remove them. Experts in law, regulation and climate issues all gave us the benefit of their knowledge. We heard from many of the over 60 UK universities engaged in space research, discovered that there were 84 observatories engaged in space work and recognised that this sector has grown much faster than the rest of the economy over a number of years. We spend 1% of the global space budget and get a 5% share of the market, in a global space economy anticipated to grow 60% by 2030 and predicted to be worth £1.8 trillion by 2035.

We took the decision to focus primarily on the economic benefits, the challenges of promoting space safety—especially as there are more than 40,000 tracked pieces of space debris in orbit and almost 1 million smaller pieces capable of damaging satellites due to the velocity of their travel—and the partnerships that allow us to scale up our engagement. We were mindful that 50% of expenditure on space comes from the Ministry of Defence, that there are many dual-purpose technologies and that, in the context of resilience, satellite services are critical infrastructure. I am very grateful for the advice of Major General Tedman, head of United Kingdom Space Command.

Had we had longer we would have delved into these areas more, but, with the defence review and the committee currently examining issues of resilience, we are confident that some of these vital issues will be or have been examined. We hope that the Government will put all these reports together in thinking about next steps. The noble Lord, Lord Lansley, paid particular attention to our links with defence. I look forward to his contribution today, which I am sure will feature this.

We were most surprised—I believe colleagues will comment on this—by just how fast work in space has become part of our infrastructure and the landscape for much of our economy. Satellites enable more precision farming, as anyone watching “Clarkson’s Farm” will note. GPS allows autosteer systems to guide tractors with extreme precision, minimising overlaps, saving fuel and reducing crop damage. Weather satellites help farmers to plan, which is vital not just in the UK but especially in areas suffering from the extremes of climate change and disruption. Financial investors can also assess crop health, estimate yields and so on using satellite technology where information is scarce.

Shipping companies use navigation satellites to track on their phones the locations of not just vessels but their contents. Most of us use GPS to work out our travel routes, avoiding traffic jams and disruptions. Online banking uses satellites for internet connectivity and, in remote or rural areas, provides connections to log into a bank. In the medical field, we heard from witnesses such as BioOrbit about the potential to manufacture drugs that work more effectively with fewer side-effects and allowing patients to administer complex drugs safely at home. Others spoke about the advantages of growing skin and organs in microgravity. This Tuesday, a British start-up, Mass Balance, announced that it is sending a miniature autonomous orbital lab to space to help develop new dementia drugs by watching how the complex proteins that cause Alzheimer’s fold and clump in microgravity.

One of the most exciting areas we heard about was how the UK is an early mover in orbital servicing, assembly and manufacturing. Companies such as Astroscale and ClearSpace are developing technologies to clean up space debris and service satellites in orbit. Space Forge is developing fully returnable satellites designed to manufacture the next generation of higher-performance semiconductors, which will make such things as vehicle chargers and 5G networks significantly more efficient. With the cost of launch becoming significantly reduced, largely due to reusable rockets, the potential to do more in space increases.

This brings us on to the geographical advantage that we have in launch capabilities, as an island where rockets can avoid populated land and access polar orbits. SaxaVord spaceport in Shetland has announced a launch window for a possible rocket test flight in August or September, with German firm RFA expected to be the first to carry out tests this year. I am sure that the noble Baroness, Lady Mobarik, will have more to say on this subject, but the committee was mindful of the need to ensure a really good business case for the launch site. We are well aware that we must not miss opportunities and we heard evidence of the need to have our own capacity to launch, but we are keen to hear how the Government see the future for a commercially successful launch capability and whether a spaceport capability offered to international clients has the potential to be useful for this country commercially.

The Royal Society has said:

“Space technologies will become ever more integral and fundamental to … modern economies”.


That requires government departments to build the value and use of space into their forward thinking for all sectors. We have heard the same cri de coeur for decades about how to make government join up its thinking, and I know that the noble Lord, Lord Tarassenko, will offer his insights into higher education and the need to support R&D and thinking across government. We have made proposals for a Space Minister dedicated solely to this work and an envoy to work alongside businesses and universities and feed into government.

It is crucial that we address the needs of start-ups to grow up. It is not confined to this area and often spoken of as a British malaise: great at invention, then bought up by others. We heard how companies are approached all the time to move to the USA, the Gulf or elsewhere. We are lucky that some are firmly committed to this country, but they can stay only if they can access the resources that they need, so I hope the Minister will tell us what more can be done.

Many businesses talked about the importance of moving from grants to contracts and what a difference that would make. Can the Government do this and at speed? Having certainty in contracts, plus the ability to leverage other investment more effectively as a consequence, was a big part of the ask that many felt would make a difference. As the noble Lord, Lord Booth-Smith, who is on the committee, pointed out, private sector investment needs to be improved. A strategy to promote investment and opportunities should be part of the Government’s efforts to boost economic growth in this area.

Businesses spoke too about the challenges of skill shortages—up to 95% in some cases. This is not just about scientific knowledge and innovation. For a successful business, all kinds of skills are needed. As we were reminded by the noble Baroness, Lady Bonham-Carter, who cannot be here today, this is about STEAM, not just STEM. Arts and humanities play their part too. Opportunities and education play a key part, as my noble friend Lady Donaghy, with her long experience in the world of work, reminded us. No doubt she will again today.

At a time when the Milburn report speaks so passionately and alarmingly about our young people—called NEETs for shorthand purposes—surely we can invest in job training in this area. Space sparks the imagination but requires practical skills to make the imagined real. A campaign to engage some of these 1 million young people should surely be considered. How exciting this could be for those who, one way or another, have had few opportunities or not been seized of the possibilities.

There is intense competition in this field. Those who succeed will be those who develop strong national strategies that align government and industry around national advantages and shared goals, and who understand the rapid changes needed to harness this new future. The noble Baroness, Lady Stowell, with her deep understanding of AI and her knowledge of the need to move on these major challenges at speed, will have much to offer our debate. We have the opportunity across the country, with our space clusters, space catapult, primes, small businesses, universities and institutions, to boost our economy significantly. Not everything that we should do we should do alone. Our role in the European Space Agency is key and our partnerships with NASA, Japan, Canada and Australia are all important. I look forward to hearing more about what is being proposed.

Here are real opportunities for economic growth in new industries, offering new products in regulation and legal services, testing and building satellites, engineering in space, new medicines, offering farmers greater crop yields, shipping and shopping, or simply getting safely from one place to another. Every government department should be involved in working out what we should do. This is as important for determining our future as the Industrial Revolution was in the 18th and 19th centuries. We stand on the cusp of something remarkable: space is the enabler for the way we will live. Whether we rise to the challenge, invest in this potential and take the best kind of risks is up to this Government in this moment. Now is the time to seize that moment: in other words, act now or lose out. I beg to move.

13:18

[Lord Willetts (Con)]

My Lords, I congratulate the committee on an excellent report, which is a magisterial review of the issues in space policy that also brings out the opportunities for us. I declare an interest as chair of SaxaVord spaceport, which has already been referred to. Before that, as chair of the UK Space Agency, I gave evidence to the committee about the agency.

My history here is that, when I arrived as a Minister in 2010, space was one of my responsibilities and I inherited plans from the previous Labour Government—from the excellent noble Lord, Lord Drayson—to create a new UK space agency as an arm’s-length body. So the plans were from the previous Labour Government and I implemented them. In my final year as chair of the UK Space Agency, I loyally implemented the new Labour Government’s plans to get rid of it as an arm’s-length body. Those are the ups and downs of politics, of course, as many in this House are aware.

In the interim, a decision happened several years ago to split policy in the department from operations in the agency. That model was not working. It is absolutely right to bring together policy and operations. If that is inside DSIT, with its broader links to other departments, so be it, and I wish all success to the new Space Agency, once again bringing all those roles together. But I hope the Minister will be able to assure the House that real, deep technological expertise within the Space Agency will be preserved, even within the Whitehall department.

A key theme of the report is the excellent opportunities we have, and I certainly regard launch as one of them. SaxaVord is the UK’s great opportunity to have a vertical launch capability, and it has already received support from the Government. One of the themes of this report is the many different ways government can support the space sector, and one of these is procurement. So if, for example, the Government financially back launch and launch companies in the UK, will they also encourage them to launch their rockets from SaxaVord? Similarly, if the MoD is planning the launch of satellites, will it be encouraged to consider SaxaVord as a launch option?

It is striking how at SaxaVord, the main military interest in using us comes from Germany. The Kensington treaty, linking Britain and Germany, means there is now significant interest from the German military in using SaxaVord to launch the large commitments to new satellite constellations that they have made. It would be great if that were matched with some interest from our MoD.

The German interest in SaxaVord has to be looked at against the backdrop of the EU Space Act, which is briefly referred to in the report and presents an increasingly tricky challenge for the UK’s space sector. It is pretty protectionist about EU companies and provision. But the irony when it comes to launch is that mainland EU is “spacelocked”: there is no viable space launch capability within the mainland of the EU. Europe’s two vertical launch options are at SaxaVord in Scotland, and at Andøya in Norway, which is in the European Economic Area. So, I hope the Minister can assure the House that she will do her best to ensure in conversations and negotiations with the EU that the EU Space Act is not a protectionist barrier to British space companies or launch from the UK.

The report rightly brings out the importance of promoting investment in space. That brings us to another important initiative: the rise of the public finance institutions—the so-called PuFins—the National Wealth Fund and the British Business Bank, which are a really important tool for promoting co-investment and bringing together private and public finance. Again, they are referred to in the excellent report. However, the word in the space sector is that the National Wealth Fund has decided that it will not invest in space, despite space being identified as one of the priorities in the industrial strategy. I hope the Minister can assure the House that the National Wealth Fund will consider investing in space, and that space companies with suitable propositions should be able to bring them to the NWF, as well as the British Business Bank.

Finally, having advocated the Government taking their stake in OneWeb, one of my most frustrating experiences has been observing the ways in which, sadly, that opportunity was not taken in the way it could have been. It is now part of Eutelsat. It is striking how, as Eutelsat decides to commission satellites, they are not being built in the UK, and as it decides where to launch them, that is not happening from the UK either. It is not too late to use OneWeb in the way we originally envisaged, as a strategic opportunity for us to advance our interests in space.

I congratulate the committee on its excellent report and look forward to the ministerial response.

13:25

[Lord Tarassenko (CB)]

My Lords, it was a privilege to be a member of the UK Engagement with Space Committee, served so well by its two clerks, Sabrina Asghar and Steph Coulter, and expertly chaired by the noble Baroness, Lady of Ashton of Upholland. I realised that she was going to be a wonderful chair when she persuaded our first witness to join her and some members of the committee to drink champagne immediately after his appearance before our committee. Only later did it become clear that Professor Brian Cox’s appearance before our committee had coincided with his birthday.

Apart from the noble Lord, Lord Booth-Smith—and here, I may be disagreeing with the chair—all members of the committee could recall seeing the moon landing on TV in August 1969. But, despite having witnessed this extraordinary event for humankind, or perhaps because we had done so, we were still not fully aware of the importance of space to the UK economy, nor of the role it plays in the UK’s defence and national security. Those two words, “dual use”, featured regularly in the evidence presented by our witnesses.

It was not possible for us to ascertain how well co-ordination between DSIT and MoD worked to deliver cross-governmental space policy. It is my view that the DSIT Minister responsible for space at the time did not manage to convince the committee that he was fully aware of the detail of the Ministry of Defence’s space plans. Yet, we now know that the long-awaited defence investment plan has allocated £3.2 billion of direct investment in space for the next four years. So, my first question to the Minister is to ask how closely involved she was, as the DSIT Minister responsible for space, in helping to shape the allocation for space in the defence investment plan.

The space sector shares several of the positive characteristics of other deep tech sectors in the UK: a thriving academic base in our universities, a rapidly increasing number of start-ups, and a global economy within its domain growing at about 10% per annum. It delivers £7 billion GVA, with a labour productivity 2.3 times the UK average. Yet, the UK ranks only 16th in space investment as a proportion of GDP, behind the US and most major European countries, as well as Japan, South Korea and Israel.

This low level of investment has been compounded by fragmentation and lack of focus. The Government have attempted to address this issue by first recognising space as a priority frontier sector in the advanced manufacturing sector plan of its 2025 industrial strategy. Secondly, in March this year, the Minister announced that the Government would prioritise funding in four subsectors: satellite communications; assured access to space; in-orbit servicing, assembly and manufacturing—ISAM—and space domain awareness.

Such prioritisation is defensible provided that it remains possible for innovative university labs or start-ups to access funding for research and development outside the chosen subsectors. Here, space weather research provides a salutary tale. As the noble Lord, Lord Willetts, will remember, back in 2007, the newly formed Science and Technology Facilities Council, STFC, decided to stop funding solar-terrestrial physics. Eventually, after parliamentary intervention and other steps, the Natural Environment Research Council, NERC, agreed a rescue package. Fast forward to 2026, and today the UK space weather community, built from that research on solar terrestrial physics, stands as a world leader in the operational forecasting that is crucial to the aviation industry, as solar flares can disrupt the radio communications used by aircraft on polar and remote routes. Yet the underpinning research was initially written off in 2007.

UKRI is at present engaged in a rather fraught dialogue with the physics community about the funding allocation for the STFC. Will DSIT carry out an impact assessment of the flat settlement—in effect, the cuts—proposed by UKRI in physics funding, to include a consideration of the possible impact on space research?

The Minister has recently answered questions in this House about AI sovereignty. The House of Commons Science, Innovation and Technology Committee published a report two days ago, Science Diplomacy: Sovereignty, Strategy, and the Global Race, in which it argues that tech sovereignty should encompass not only AI but space and quantum. So my final question is to ask whether the Minister agrees that a subset of space technologies, beyond assured access to space, should be designed as sovereign capabilities for the UK, and whether any work is going on within DSIT and the MoD to investigate how we might improve resilience in these space capabilities without, in the words of the Prime Minister,

“telegraphing our specific vulnerabilities to hostile actors”.

13:31

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the noble Baroness, Lady Ashton of Upholland, and the whole committee for this extremely enthusiastic report. I suspect I will be taking a different perspective from every other speaker in this debate because I am going to start from down here on solid earth—a planet that we have comprehensively trashed and where we have exceeded seven of our nine planetary boundaries as identified by the Stockholm Resilience Centre. We talk about what is happening up in space, but what we do up there has huge impacts down here on earth. I start from the proposition that Britain’s place in space, both the activity happening from our own land and our global diplomatic and other efforts, needs to keep that in mind.

There are useful things that we can do from space. We can see how fast the Amazon is being destroyed and how fast the peat-lands of the Democratic Republic of the Congo are suffering. We can watch the depletion of water aquifers. All these things are important for us to understand what we are doing, and we need to use space to do that, but we also do not have to do everything we possibly could do in space. We have choices, just as we have choices about whether we use huge amounts of energy and water for data centres for so-called artificial intelligence.

We need to think before we act. Some noble Lords may recall the cautionary tale of the UK’s first military satellite, Skynet 1A. It was launched in 1969 but in the mid-1970s it was deliberately moved because it was no longer in use, and it is now in an inconvenient orbit. No one can find the records of where and how that was done or the whole circumstances. There is one man in his 80s who was probably the person responsible but can no longer remember the details. We need to think about the long-term impacts of what we do, not just throw things up in the short term and think we can forget about them.

As has already been alluded to, we are already crowding space. I note that in 2021 the G7 leaders’ summit in Cornwall was debating the sustainable use of space. Back then—it will have only got worse—85% of the 28,000 routinely tracked objects in earth orbit were debris that no longer served a purpose. Just as the oceans swirl with our junk, so does near space.

The report acknowledges in paragraph 315, on page 95, that one of the foremost challenges of the ongoing space economy is the threat of the so-called Kessler event, the case where one satellite explodes or has an impact and then sends debris into a wide field, which expands and expands. That brings up another important point that we need to consider: relying on things in space means relying on services and operations from that fragile environment. While I was doing the Armed Forces Parliamentary Scheme, I learned that all our traffic lights are timed from space. Just think of that in the context of a Kessler event. That is just one small example of the impact that it could have. Relying on space is something we have to think about when we think about our resilience and security.

There are also the environmental pollution impacts. Every year, 100 to 200 tonnes of hardware that is out of control re-enters the Earth’s atmosphere. The impact, should it land on a major city, would of course be significant, but wherever it lands it has impacts. In June 2025, after an Elon Musk SpaceX rocket exploded after launch, in Mexico there were die-offs of fish, dolphins and sea turtles. Just this week the Australian Space Agency has identified the likely source of mysterious large balls that washed up on a beach north of Townsville. They are thought to be space debris from pressure vessels on a space launch vehicle. Crews in protective suits were placing the spheres in hazmat barrels under police guard. This is a risk and an environmental concern.

There is an important point in the report that I need to stress. In paragraph 251, the report notes that the third pillar of the EU Space Act, announced in June 2025, is sustainability, and that

“operators must reduce the environmental impact of their activities in space”.

This is one element where I have to question what the committee is proposing. There is a suggestion in here that we as a non-EU member—for the moment, anyway—might find a competitive advantage by having lower environmental standards. I hope the Minister will reassure me that that is not the direction we would want to take. I note that the committee notes in paragraph 255 that if we did have lower standards than the EU, that would impose costs on operators in doing those things.

Let us think before we act. We have not done that with so much of what we have done on earth, on this planet. Let us think before we act in space.

13:37

[Lord Lansley (Con)]

My Lords, it is a great pleasure to follow the noble Baroness and to participate in this debate, as indeed it was a pleasure to be part of the committee under the superb chairmanship of the noble Baroness, Lady Ashton. We are able to say that, for a sessional committee, we produced something of great substance in a very short space of time. It is only because of the support, the volumes of evidence that we received and the enthusiasm with which people supplied us with it, and because of our secretariat, that we were able to achieve that, and we did so with great enjoyment. I hope to replicate the enthusiasm and enjoyment I had from being part of the committee with other committees.

I draw attention to my interest, which bears upon my views on the report. Many years ago, in 1981, I was in the space branch of the Department of Trade and Industry, as it then was. We were writing space policy—we did both policy and operations in those days—and we chose not to take part in future space transport systems, such as Ariane, which is one of the major European Space Agency programmes. Instead, we chose to focus on satellite communications and earth observation, and subsequent decades demonstrated that the UK industrial and economic return from that investment was far in excess of what was subsequently able to be achieved by France, for example, through its investment in Ariane.

I say to my noble friend that French Guiana is part of France. The French would be very unhappy at the thought that there was not a launch capability in “Europe”, because it happens in French Guiana.

I am in sympathy with something mentioned by the noble Baroness, Lady Bennett of Manor Castle. Earth observation is not only a vital task but we have terrific advantages in this country that we have built up over decades, not only in the production of satellites and so on, which is important, but in the integration, analysis and use of data. To declare an interest, in 2017 to 2019 my wife’s company helped out with this. The company was contracted by the European Commission to do work on Copernicus data and how SMEs could use Copernicus data for many applications. I wonder, therefore, about the decision not to have earth observation as one of our continuing space objectives. In the committee’s report we raised the need for a business case and an economic rationale for the launch capability. I look forward to hearing from my noble friend Lady Mobarik on this subject. It must be proven, because otherwise we are investing, through ESA, potentially in ways that will not deliver the economic return that earth observation could have done.

I turn to defence matters. The defence investment plan has now been published and we can see the £3.2 billion figure. In my amateur way I can identify only about half of what that will be spent on. What I can see is that we are not going to continue with further investment in the SKYNET 6 programme. Understandably, we are engaging in a process of trying to have not only a system of systems, as it were, on satellite communications but, on narrowband communications for command and control, having space as a service—tapping into Viasat, Eutelsat OneWeb and Starlink, and the whole range of services provided by our own capabilities, but particularly by the capabilities of allies and commercial providers. That can give us more resilience. It would be interesting to hear from the Minister what the rationale is.

Where defence is concerned, we saw many potential dual-use capabilities. As an example of a partnership that I am particularly keen on, Japan has a launch capability and some fantastic technology; it is not producing these things ostensibly for defence purposes. Something such as the active debris removal programme mission—led by Astroscale, a Japanese-UK company—would be vital in dealing with the debris in space, but it also provides a capability to deal with, for example, satellites in space that are a threat to other satellites, and to be able to respond and deal with those.

I am slightly disappointed that although the Government response to the report said that we would expect to see the award of the active debris removal mission in March this year, it is now July and we have not yet seen it. I hope that we see it soon. At several points in the Government’s response, we have also seen the need for a one-government response to space, and that this would be reflected in the “spring space publication”, as it was described. It is no longer spring. I ask the Minister: do we have that one-government publication, which would give, I hope, much substance to what the future defence investment plan looks like, and how we can deliver on our industrial strategy and our space priorities, which is both a foundational and a frontier technology? I hope we see that even as soon as the Farnborough International Airshow. The clue to our report is in the title: “Act Now”. The Government’s response promised some things we have not seen, and I hope that we will see them very soon.

13:44

[Baroness Mobarik (Con)]

My Lords, it is a pleasure to contribute to this debate on the report of the UK Engagement with Space Committee. Before turning to the substance of the report, I pay tribute to our chair, the noble Baroness, Lady Ashton of Upholland, my fellow committee members and our wonderful clerks, Sabrina and Scott.

This was one of those inquiries where the process itself was immensely rewarding. We embarked upon it not as experts in the field but as colleagues united by a desire to learn, a fascination with the opportunities and challenges of space, and a shared commitment to producing a report that could make a meaningful contribution to policy. What we lacked in technical expertise we certainly made up for in curiosity, enthusiasm and a genuine passion for the subject. I thank the many witnesses who gave evidence. Their generosity with their time, knowledge and experience made this a remarkable journey of discovery for us all and greatly enriched our understanding of the issues before us.

The report covers a wide range of important matters, from skills and regulation to investment, innovation and international co-operation. All deserve careful consideration. However, today I will focus on what I believe is one of the most strategically important issues facing the United Kingdom space sector: sovereign launch capability.

Space is no longer the preserve of scientists and explorers but an essential component of our economic prosperity, national security and daily lives. As geopolitical competition intensifies and our reliance on space-based infrastructure grows, assured access to space becomes ever more important. We have world-class expertise in satellite design, engineering and advanced manufacturing, but we remain dependent on others to place our assets into orbit. That dependence creates vulnerabilities and limits our ability to respond rapidly to both commercial opportunities and national security requirements.

If there is one conclusion I have drawn from this inquiry, it is that the United Kingdom must think and act with greater ambition. We cannot afford to be timid in our endeavours. We should not be content with a single launch location or place all our hopes in one facility. Resilience requires redundancy. In every other area of critical national infrastructure, we recognise the importance of back-up systems and alternative capabilities. Access to space should be no different. A nation serious about the ability to launch from its own soil should seek to develop more than one operational spaceport, ensuring flexibility, resilience and continuity in the face of technical, commercial or geopolitical disruption.

I recognise that funding is never straightforward. Public finances are under pressure and competing priorities are many, but transformative national projects are rarely achieved through conventional thinking. If we believe that sovereign access to space is of strategic importance, we should be prepared to explore innovative partnerships between government, industry and private investors. There are creative ways to unlock investment if there is clarity of purpose, confidence in the vision and a determination to succeed.

On joining the National Resilience Select Committee this year, I have become even more convinced that independent access to space should be viewed as an element of our national security architecture. Space is no longer a peripheral concern: it underpins communications, navigation, intelligence gathering, defence capability and the critical services that sustain modern economies. The ability to place assets into orbit from our own soil is not simply an industrial or commercial ambition; it is a matter of national readiness and strategic security.

An example of that ambition would be completing the development of the Sutherland spaceport. Some £7.5 million of public funds had already been invested in that project before being put on hold, and it requires a similar sum and a mere seven months to complete. Failing to finish the project would risk wasting the investment already made and denying the United Kingdom a strategically important capability. I refer Members to my declared interest, as outlined in the report.

Sutherland’s location on the mainland was considered one of its major advantages—both practical and safe. Sutherland should not be judged simply as a regional project, but as a part of the United Kingdom’s strategic infrastructure. We build such infrastructure because it provides capability, resilience and security. The economic benefits to the region and nation follow.

A self-reliant space nation should have complementary capabilities, not competing ones. Different launch sites can serve different missions, payloads and orbital requirements. Multiple operational spaceports can provide the redundancy and flexibility that any serious national infrastructure demands. Through my work on the National Resilience Select Committee, I have become convinced that spaceports, alongside our ports, airports and naval bases, should now be regarded as part of our critical national infrastructure. Will the Minister accept that resilience requires more than one operational spaceport to provide the necessary redundancy and flexibility?

Space capability cannot be created overnight. If we postpone decisions until demand is overwhelming or the next crisis arrives, we will already be too late. If we are serious about our national resilience, we must also be serious about assured access to space. This report sets out the opportunity and the urgency before us. I hope the Government will seize that opportunity and act with the pace that our national security and future prosperity demand.

13:50

[Viscount Stansgate (Lab)]

My Lords, what a pleasure to follow the noble Baroness and to take part in this debate. I thank my noble friend Lady Ashton for the masterful way she introduced the report; she made every single point that I had jotted down to say myself.

I want to thank all my fellow members of the committee, because it was a very happy committee and we were very enthusiastic and conscientious about the work that we did. I reread our report in the run-up to this debate. It is a really good report, and I think it will last the test of time because space is an area for the future.

I also want to thank our excellent staff. We had an extremely interesting visit to the Harwell campus, and we had some very interesting witnesses giving evidence to us, including some that people have heard of, such as Brian Cox and Tim Peake. I also want to mention Professors Edhem, Wheeler, and Dougherty, because they also gave evidence, as did many others.

It is hard to know the first thing to say. I wish there were more Members in the Chamber because it would be very educative for them. The first thing to say about space is that it is anything but empty. Figure 4 in our report shows the exponential growth of satellites in the last few years. People may not realise just how many there are. It brings the problem of space debris, which I will come back to.

There are some 50,000 tracked items of debris and, some have suggested, up to 1 million other items that are small, but big enough to do real damage. The International Space Station had to adjust its orbit to avoid collision. In November last year, Chinese astronauts were stranded in space because the spacecraft that was going to take them back to earth had been hit by space debris. It was a pretty serious situation, but they did manage to get back safely.

My noble friend referred to how this satellite was brought in: with an arm that sort of grabbed it—I can grab my noble friend beside me as an example—and slowed it down, so that it could then be released and burn up in the atmosphere. At the moment, the same thing is going on in reverse. NASA is trying to save a space telescope by taking another object up there to push it into a higher orbit, so it does not fall to earth.

I will say something about the amount of stuff in space which falls to earth and gets burned up. The noble Baroness, Lady Bennett of Manor Castle, made a perfectly good point about the pollution aspects. We live on a very polluted earth, and we must guard against the dangers of being, as was said by one of our witnesses in giving evidence, a pollution sandwich between debris in space and on earth. This brings great challenges.

Another thing to say about space, which has already been said by many people, is how vital it is to us on earth. There is a sentence about people born in 2025—I am grateful to my noble friend for mentioning that they happen to include my own first granddaughter—whose lives are going to be dominated by what happens in space, and our report lists some of these predictions. In the full-colour version of the report, which I recommend, you will see the photographs that we deliberately chose to make it clear to people that space matters. At my granddaughter’s first birthday, I met a farmer who I had an interesting conversation with, and space is just as relevant in farming. It also matters in day-to-day life—where literally would we be without global positioning systems? At the moment, we do not need a satellite to tell us that the weather is hot and is going to stay hot, but all these things are vital. Pharmaceutical things have been mentioned, and we are going to find a lot more of this.

I say to my noble friend the Minister that it is important for the structure of government to do justice to the subject under discussion, and there needs to be more direction from the Government. We are about to have a new Prime Minister, and it would be nice to have a space Minister. Nevertheless, we need to address a lot of the other things, such as the skills challenges—heaven knows, there should be careers advisers in schools pointing out the unbelievable opportunities of the future for people working in the space area.

I want to draw attention not just to this report but to a report from the Science and Technology Committee that has not yet been debated in this House. It is, rather dramatically, called Bleeding to Death: the Science and Technology Growth Emergency, and it tackles the way in which we are unable in this country to scale up businesses, and that applies just as much to space. For all the companies that I hope will prosper in the UK space economy of the future—which will be a very big part of the economy, and the sooner His Majesty’s Treasury understands that, the better—access to scale-up capital is going to be terribly important.

My time has run out, so I end by repeating what has already been said: our subtitle, “Act Now or Lose Out”, is a plea to the Government to grasp the opportunity before us and help make the UK a real leader in the space economy of the future.

13:56

[Lord Shamash (Lab)]

My Lords, by the time you get to your feet and nine people have already spoken, an awful lot of things that you would want to say have already been covered. I repeat again that it was a delight and fun to be on the committee, which was charmingly chaired, and I thank the clerks. Seeing the committee’s members all present together is a bit like getting the band back together. There is a case for reconstituting ourselves—I do not know whether that is remotely possible, but it is something I raise.

As has been said, the subtitle of the committee’s report is “Act Now or Lose Out”, and nothing could be more accurate. It is important that the Government take on board the extremely rapid growth that is happening on the world stage in relation to space development. We have world-leading experience and expertise, along with a commitment across our science sector and our academic sector. However, we must do everything we can to maximise and apply those skills to see that the sector grows.

It is said that the global space sector is currently valued at over $500 billion and is expected to grow significantly, at an average of about 7% to 8% a year. That is an enormous rate of growth. As a nation, we cannot miss out on this opportunity. The Government have made it clear that they are committed to economic growth. Space is an ideal sector to promote, and it provides huge scope for such growth.

However, I am very concerned, as I note from the recent Defence Investment Plan, published last week and touched upon by my noble friend Lord Stansgate, that although space is a critical national infrastructure sector, the figure set out in that defence plan is only £3.2 billion. True, there is a suggestion that this figure may be increased in coming years, but we must act now. If you think of what is happening in the global space financial environment, that is a comparatively small sum.

What steps can be taken for members of the special inquiry committee to meet with my noble friend the Minister, and the relevant Minister in the other place, as soon as possible to further discuss the options for the future and how best to progress this? As has been mentioned, it is a pity that the House is not as full as one would like. I hope that the Minister will give some thought to either reconstituting our committee, or to whether there is something that could be done regarding a meeting across the ministerial complex on how we could take things further.

The US and Elon Musk, via his SpaceX and Starlink, have 7,000 active satellites, while China has 1,200. The UK has 630 to 670 satellites, and these are mainly small and suborbital. The Ministry of Defence has but six. The rest are commercially owned to facilitate our broadband links and our positioning, navigation and timing system, or PNT.

I would like to see the UK take advantage of the fact that we are not space-locked, which is a policy and practical term— mentioned earlier, I think, by the noble Lord, Lord Lansley—to emphasise the strategic importance of having reliable sovereign access to space. As such, we should expand our two main launch sites at SaxaVord in Shetland for vertical launches, and in Cornwall for horizontal launches. We need to be able to launch our own orbital satellites. We have yet to do so. However, this very morning on the “Today” programme—maybe many of your Lordships heard it—the Shetland Space Centre announced a test launch this August. That is the future and must be encouraged. The noble Baroness, Lady Mobarik, and I were rather regretful that we could not find an excuse to persuade the committee to go up to SaxaVord and have a look round. That would have been interesting. I blame the chairman for that, but what can you do?

It is undoubtedly the case that space has an insatiable demand for funding. Money is tight, we all know that—very tight—but I respectfully suggest that a more collaborative approach be adopted by furthering our partnership with the European Space Agency and reaching out to private capital alongside public funds. It must be a sensible way forward to ensure that we as a nation do not miss out on this rapidly expanding area. It will provide huge numbers of jobs and wonderful opportunities for the nation as a whole. I hope that the Minister, having considered what I have said, will agree with me.

14:01

[Baroness Stowell of Beeston (Con)]

My Lords, it was a great pleasure to follow the noble Lord, Lord Shamash, and to serve alongside him and all the other very enthusiastic members of the space committee—and, indeed, to serve under the excellent chairmanship of the noble Baroness, Lady Ashton of Upholland. I congratulate her not just on her excellent introduction to this debate but on leading us to produce our report. I join her and other noble Lords in thanking the committee staff for their hard work and all those who gave evidence to us, both oral and written, throughout our inquiry.

If nothing else, the committee has done the House a considerable service in highlighting both the opportunities presented by the UK’s space economy and the risks of failing to seize them. As has already been mentioned by several noble Lords, the title of our report, Act Now or Lose Out, captures this challenge perfectly.

I welcome the growing recognition across government that space is now a strategic capability. Although our committee did not major on defence in the context of the UK space sector—perhaps to some mild frustration expressed by my noble friend Lord Lansley—it is worth nothing that the strategic defence review makes it clear that satellites are critical national infrastructure. We have already heard from others that satellites underpin our communications, navigation, financial services, energy networks and national defence. In the 21st century, sovereign satellite capability is no less important to our resilience than secure energy infrastructure or telecommunications.

My concern is not that the Government lack ambition when it comes to space but that they still lack focus. Strategy is about making choices. We cannot lead in every part of the space economy, so we must decide where Britain should build sovereign capability, where we should work with trusted allies and where we can rely on the commercial market.

For me—I do not think I am alone, although my noble friend Lady Mobarik may differ with me—one capability stands above all others: sovereign capability in satellites. Recent and ongoing conflicts have demonstrated beyond doubt the importance of satellite communications, positioning, intelligence and earth observation. It is no surprise, therefore, that the strategic defence review speaks of sovereign capability. However, sovereignty is not achieved by simply being an aspiration; it requires sustained investment and clear priorities. The previous Government’s intervention in OneWeb demonstrated that they understood the strategic importance of sovereign satellite capability—I note my noble friend Lord Willetts’ comment about the current Government’s reluctance to take advantage of their golden share—but the challenge remains of ensuring we build globally competitive British space companies here in the UK. That brings me to a subject on which I have spoken before: scaling British technology companies—the noble Viscount, Lord Stansgate, highlighted this.

I hope I have brought several things to the work of the space committee, but I think if there was one thing of value that I did bring it was what I had learned from chairing the Communications and Digital Committee, especially as the chair was so gracious as to acknowledge our work on AI large language models and scaling tech businesses. As she said, Britain is exceptionally good at creating innovative businesses, but we are much less successful at helping them become globally significant companies headquartered here. We celebrate the start-up but too often lose the scale-up. But that is no longer simply an economic weakness; in sectors such as AI, quantum and space, it is becoming a strategic vulnerability. If we cannot build companies of global scale, we will struggle to build sovereign capability.

So I welcome the Government’s greater emphasis on scale-ups in both the industrial strategy and the defence industrial strategy. It is particularly encouraging that defence procurement is increasingly seen as a means of helping innovative British companies grow. But strategies do not build companies; customers do. The Government have one of the most powerful tools available: their procurement power. By becoming an intelligent first customer for British space companies, they can create the demand and confidence that enable promising firms to scale, attract investment and remain British as they grow. If we want genuine sovereign capability in space, we must move beyond funding excellent research to building globally competitive businesses. That means patient capital, smarter procurement and, above all, clear national priorities.

So which space capabilities do the Government believe must be sovereign, which should be delivered through trusted allies, and which can safely be left to the commercial market? Until those choices are made explicit, we have an ambition for sovereignty but not yet a sufficiently prioritised strategy for delivering it. Britain begins this race with world-class science, outstanding engineers and innovative entrepreneurs. Our challenge is no longer to prove that we can innovate; it is to ensure that British innovation becomes British capability and that British capability becomes British industrial strength.

14:07

[Lord Clement-Jones (LD)]

My Lords, as a former member of the committee—all of us, I suppose, could be described as space cadets—I warmly thank the noble Baroness, Lady Ashton of Upholland, for her superb chairing of the committee and for her inspiring introduction today. I join her and other members of the committee in thanking all the staff and advisers to the committee, and all our evidence givers, including the celebrities that the noble Baroness mentioned. I also thank all noble Lords who have contributed so enthusiastically to this extremely illuminating debate.

As the noble Baroness, Lady Stowell of Beeston, said, the title of the report absolutely captures the challenge. It serves as both a stark warning and a brilliant road map for our future. As we have heard today, the UK space sector is an invaluable national asset. It generates nearly £19 billion a year in income, directly employs over 52,000 people in highly skilled jobs and underpins approximately 18% of our entire GDP—some £364 billion. We possess immense comparative strengths that we must champion, from Glasgow, which builds more small satellites than anywhere else outside California, to our pioneering in-orbit servicing, assembly and manufacturing—ISAM—sector. We also boast unique downstream advantages, with the City of London primed to be the pre-eminent global centre for space finance, law and insurance.

As we have heard today, the UK space sector is an invaluable national asset, but we must not be complacent: the hard data shows that the UK’s global market share in space has fallen from 5.1% in 2020 to just 4.2% in 2023. We are sliding backwards because our nearest competitor nations are aggressively ramping up their public investments while the UK relies on short-term, fragmented funding cycles. As we consider these economic opportunities, we must be clear-eyed about the intense international competition that we face, particularly the overwhelming dominance of the United States. The recent record-breaking IPO of SpaceX vividly illustrates the sheer scale of American financial and industrial might in this domain.

The noble Lords, Lord Willetts and Lord Shamash, and the noble Baronesses, Lady Ashton and Lady Mobarik, have talked about the importance of sovereign UK launch capability. The committee’s report was right to warn that the UK and the rest of the world have become dangerously overreliant on a single commercial entity for orbital launch and satellite communications. This is a profound strategic vulnerability. We cannot simply outsource the resilience of our critical national infrastructure to a single overseas monopoly, nor to the unpredictable political and commercial whims of one billionaire. This stark reality underscores exactly why the Government must step up as an anchor customer to help our own domestic firms scale up and why we must urgently pool our sovereign capabilities with our European partners.

To truly grasp the scale of this domestic opportunity, we need only to look at our world-leading capabilities in earth observation, which were focused on in particular by the noble Lord, Lord Lansley. Satellite data is rapidly becoming the new gold of the global economy. Earth observation is vital for monitoring climate change, tracking deforestation, predicting natural disasters and enabling precision agriculture. Yet, as the committee heard, adoption of these services outside the space sector remains far too slow because many organisations still view space as complex or irrelevant.

This is exactly where the Government must step in. By acting as a smart procurer, buying earth observation data to improve our own public services, whether for national flood mapping, monitoring coastal erosion or infrastructure planning, the Government can act as an anchor customer. This would immediately de-risk private investment, help our innovative SMEs to scale up and ensure that the UK captures its rightful share of this market. I very much appreciated what the noble Baroness, Lady Stowell, said on the whole scale-up aspect.

But space is no longer just an economic frontier. It is, as many noble Lords said, a critical national infrastructure. It is increasingly congested, contested and competitive. Our national security and resilience rely heavily on the space domain, from tracking climate change to the vital encrypted communications provided by our Skynet military satellites. To secure these economic and security benefits, the committee’s message is unequivocal: the UK Government must provide a coherent, funded strategic direction. Industry is crying out for the Government to pivot from being a small-scale grant funder to acting as a reliable, smart anchor customer. Procurement contracts, rather than just R&D grants, as noted by the noble Baroness, Lady Ashton, are essential to de-risk projects, crowd in private capital and help our brilliant SMEs to scale up into globally competitive businesses.

Yet the Government’s official response to this excellent report is frankly lacking in the urgency required. Instead of publishing the detailed national space capability development plan that the sector needed and which the committee demanded by the end of 2025, the Government deferred the hard details to a spring space publication, as described by the noble Lord, Lord Lansley. Now it seems that they have promised a plan for space for later this year. Can the Minister confirm exactly what is intended? This deferral of decisions is simply not good enough. As Professor Sylvester Kaczmarek powerfully highlighted in his recent briefing to Peers, deep tech firms cannot scale their businesses on what are described as future documents. The Government’s response offers process when industry desperately needs delivery.

I therefore press the Minister on three specific matters. First, given the Government’s insistence on absorbing the UK Space Agency into DSIT, will they urgently publish a clear accountability map so that industry knows exactly who owns strategy, procurement and regulation across Whitehall? Secondly, when will the Government publish a concrete procurement route that includes specific targets for SME participation? Thirdly, how do the Government plan to create an open assurance pathway for the complex AI-driven autonomous missions of the future? If we want to lead the world in active debris removal, so positively mentioned by the noble Viscount, Lord Stansgate, and the noble Baroness, Lady Bennett, and secure space operations, we must have the regulatory frameworks to prove that these AI systems are trustworthy and secure.

I am afraid that the Government’s response to this committee is characterised by a failure to grasp the nettle. They have not only absorbed the UK Space Agency into a Whitehall department but explicitly rejected the committee’s sensible recommendation to appoint a dedicated Minister for Space to drive cross-government co-ordination.

We on these Benches align very closely with the committee’s recommendations. On European co-operation, the committee rightly called for urgent decisions on our participation in flagship EU programmes such as Galileo and IRIS² to provide industry with certainty. The Government have stated that they cannot make decisions yet. We are clear that we must pool our sovereign satellite navigation capacity by fully rejoining the Galileo system and confirming our participation in IRIS². We cannot rely solely on foreign-owned systems for our critical position, navigation and timing needs.

On governance and strategic focus, the committee explicitly warned against the fragmentation of space policy across Whitehall and expressed deep concern over the absorption of the UK Space Agency into DSIT. We on these Benches believe that this merger is a strategic error. Why are the Government dismantling the autonomy of our national space agency at the very moment that it is proving its commercial worth? An independent UKSA is crucial to present a unified interface with the European Space Agency, maintain specialised technical focus, and champion UK interests internationally. We continue to call on the Government to reverse that decision.

We must tackle the skills gap mentioned by a number of noble Lords with genuine ambition, which includes implementing broader reforms to the apprenticeship levy to allow space firms the flexibility they need for responsive training and microcredentials. We cannot maintain our leadership on deferred decisions and structural dilution, so I urge the Minister to take the bold decisions identified by the committee, deliver a clear and actionable space strategy and, in the words of the report, act now before we lose out.

14:18

[Viscount Camrose (Con)]

My Lords, I too begin by thanking the noble Baroness, Lady Ashton of Upholland, and every member of the committee for this powerful and timely report, although I must say that my principal reaction is one of envy—I rather wish I had been on the committee. The report makes the genuinely compelling case that space policy is central both to our national security and to our future prosperity. The space economy does not get the attention it deserves, either in this House, as the noble Viscount, Lord Stansgate, has pointed out, or with the public more generally, so I am delighted that, through this report and in this excellent debate, we have some small chance to address that.

The report reminds us that much of modern life depends on space technologies. Many of us enjoy these technologies without even realising this. From satellite navigation, banking systems and weather forecasting to logistics, these capabilities underpin a significant portion of our economy. I was really struck by the estimate that some 18% of UK GDP relies on satellite services alone. The committee is right to argue that Britain possesses many strengths and great potential in this area. We boast world-class universities, innovative companies, growing launch capability, and internationally respected scientific expertise.

But the question before us today is whether we have the strategic focus needed to realise and unleash our collective vast potential. We on these Benches welcome the Government’s recognition that space forms part of our critical national infrastructure and represents an important opportunity for economic growth. We also acknowledge the steps that have been taken to support skills development and improve strategic co-ordination across government. However, as the committee concluded, ambition alone is not enough. Businesses require certainty, investors require confidence and researchers require long-term support. Without clear priorities and more consistent delivery, there is a risk, as many noble Lords have pointed out, that innovative British companies may simply choose to scale elsewhere.

Many of the committee’s recommendations deserve serious consideration. The call for clearer strategic direction, better cross-government co-ordination, a funding model that helps firms scale beyond the research stage, greater support for skills and an agile regulatory framework all speak to the practical steps needed if we are to compete in an increasingly crowded global marketplace. Let us make no mistake—it really is increasingly crowded, as many noble Lords have pointed out.

There is also a critical national security dimension. As the committee and noble Lords have recognised, civil and defence capabilities are becoming ever more closely intertwined, and I was unsurprised to note the increasing use of “dual-use” terminology throughout the report and in our debate today. Investing in technologies with commercial and strategic applications both strengthens our resilience and creates opportunities for economic growth. The previous Government recognised this through the publication of the National Space Strategy in 2021, providing for the first time a comprehensive framework bringing together civil, commercial, defence and security objectives. That is an important foundation, but it has been some time since its publication and this Government have now been in power for two years. The challenge now is ensuring that that strategy continues to be translated into delivery.

With those thoughts in mind, I would be very grateful if the Minister could address the following questions. First, combined with some of the sums in the defence investment plan that the noble Lord, Lord Lansley, brought up, how much government spending will be dedicated to R&D and manufacturing in the space economy? Secondly, what further steps are being taken to help innovative UK space companies access the capital they need to grow and remain headquartered in this country? Thirdly—I recognise this is a huge question that stretches far beyond space, but it is critical here—how can we improve government procurement to support our space industry participants of all sizes? I was particularly concerned by the remarks of my noble friend Lord Willetts that the National Wealth Fund is giving out that it does not want to invest in space. I urge the Minister to get to the bottom of that as soon as possible, because clearly that would be a very serious error. Fourthly, how do the Government intend to ensure that the UK remains internationally competitive in the space sector, particularly as we have heard other nations increase investment and develop their own capabilities?

Finally, while the Government have, as we have heard, rejected the committee’s recommendation for a dedicated Space Minister, how will they ensure that effective cross-government leadership and accountability are maintained across departments? Will we see a change of mind on that as the new Prime Minister steps in? Like other noble Lords, I echo the sentiment that the title Act Now or Lose Out is entirely appropriate. We have the talent in this country, the science, the potential and the industrial capability to succeed. The opportunity is there. The task now is to ensure that government policy matches that ambition. In that spirit, I look forward to the Minister’s response.

14:25

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

My Lords, I am pleased to respond for the Government. I thank my noble friend Lady Ashton of Upholland for securing this debate and for her committee’s important report on this matter. I also thank the chair for her expert leadership on the very thorough and seemingly enjoyable work that the committee undertook. It is a particular pleasure to have heard the appreciation across your Lordships’ House for the importance of the space sector today and the enormous potential it holds for the future.

As we have heard, the space dimension of our economy is coming to the fore. The UK has a strong space sector, with over twice the UK’s average productivity and global satellite services underpinning nearly 18% of the UK’s GDP. Beyond our financial services and well-known uses in telecommunications, space technology is helping farmers increase crop yields and enabling faster, more effective responses to natural disasters such as floods. As we have heard, it is a sector that contributes over £18 billion to the UK economy and employs over 55,000 highly qualified people. Over the past year, I have had the pleasure of meeting many of the industrial and scientific partners who make up this sector.

The sector relies on a strong partnership with government. Every pound invested by the Government through the European Space Agency sees a £7.49 return into the UK economy. In 2024-25 alone, UK Space Agency activity is estimated to have catalysed £2.2 billion in investment and revenue across the UK space sector. As was recognised by noble Lords today, space is also critical for national security and defence, providing the intelligence, communication and navigation required to keep the UK and its citizens safe. Reflecting many of the recommendations of the committee, we have recently taken further action to support our space sector. One of our strengths is the “one government” co-ordinated approach.

Noble Lords asked about the governance of space. Over the last year, Ministers from across government have met together four times to discuss critical issues for the space sector, our capabilities and support. Our teams work together, particularly across defence, national security, all parts of DSIT and transport, to align our approach. A clear example is the UK’s National Space Operations Centre, a joint civil-military command that brings together the UK Space Agency, UK Space Command and the Met Office Space Weather Operations Centre. Together, they help protect the critical space assets we rely on every day and provide the central hub for the UK’s space domain awareness. In response to my noble friend Lord Shamash, I am very happy to meet him and other members of the committee to talk further about how we work together on that front.

Noble Lords asked about the UK Space Agency’s move into the department. It is an important step towards closer collaboration, reducing duplication and gaining greater consistency across strategy, policy and delivery, while retaining the world-leading expertise and technical advantage to which the noble Lord, Lord Willetts, referred.

Our upcoming space strategy will set out how space remains a government priority, in a funded way, and how the co-ordinated vision will ensure the very best outcome for the UK. I reassure noble Lords that we have taken action in the interim. I set out the strategic direction, alongside £500 million in funding, in my speech at Space-Comm Expo earlier this year. I am sure the committee will be looking forward to reading the strategy when it is published, which unfortunately will now not be before Summer Recess.

Noble Lords commented on prioritisation. As I set out earlier this year, we are moving further and faster in the areas that matter most to the UK’s future in space. One of those areas is satellite communications, which are critical for national security and resilience. In response to the questions from the noble Baroness, Lady Stowell of Beeston, and the noble Lord, Lord Tarassenko, sovereign capability is an important consideration as we look at satellite communications. The Skynet programme run by the MoD provides that sovereign capability in satcoms, and we have increasing sovereign capability in space domain awareness.

In response to the questions posed by the noble Lords, Lord Willetts and Lord Clement-Jones, and others, DSIT is leading cross-governmental work to develop our proactive relationship with Eutelsat, which will include working with defence colleagues on requirements following the publication of the defence investment plan. UK launch is not yet operational, but we are encouraging the company to take advantage of the UK’s capability as this becomes available. We are also encouraging the company to take more advantage of the UK’s world-leading satellite manufacturing and supply chain capabilities.

In response to the questions from my noble friend Lord Shamash and the noble Baroness, Lady Mobarik, who I had the opportunity to discuss the opportunities of Sutherland with earlier this year, assured access to space is critical to our national security and economic growth. To the point made by the noble Lord, Lord Lansley, both those objectives, national security and economic growth, have caused this to be a priority for the Government. We are making significant progress towards that ambition. SaxaVord was Europe’s first licensed vertical launch site and expects to see its first launch this summer. We have established a world-leading regulatory regime and secured a comprehensive set of international agreements to enable launch operations from the UK.

The third area that we set out as a priority is in-orbit servicing, assembly and manufacturing, and the fourth is space domain awareness. These are the capabilities that will drive growth, strengthen resilience and protect our ability to operate in space, so we are pivoting our support to those, where it will have the greatest impact.

Prioritisation is challenging and requires the Government to intervene assertively if we are to succeed. We know that space industries thrive with clear priorities, the right funding, a clear public procurement approach, the right regulation and strong international partnerships.

We are increasing the financing for space in recognition of many of the long-term projects, which, of course, include areas such as earth observation. The Government increased the UKSA budget in 2025-26 by 8%. That funding for space is inclusive of our subscription to Copernicus and is carried forward to over £3.3 billion over 2026-27 to 2029-30. Wider civil funding for space from other departments and organisations, from science funded by UKRI to critical meteorology services provided through the Met Office’s membership of EUMETSAT to planned procurements of satellite services from other departments, will further bolster this by over £900 million.

To the questions posed by the noble Lord, Lord Tarassenko, and others about research, the STFC has spent considerable time engaging with the particle physics, astronomy and nuclear physics community, its advisory bodies, scientific board and council to understand the implications of different options and gather feedback from across the sector. Given the significance of that decision, it was right to test options, understand the impacts and ensure that expert advice was fully reflected in the final outcome. That engagement has now concluded, and UKRI will set out the outcome of the prioritisation extremely shortly, if not now.

My noble friend Lady Ashton and the noble Viscount, Lord Camrose, highlighted skills, an incredibly important point. Some areas of targeted education and future workforce programming are supported by the department in UKSA, alongside other government programmes such as TechFirst and the advanced manufacturing skills package. As noble Lords have mentioned, the defence investment plan published on 30 June sets out future spending priorities, demonstrating clearly the importance of further developing capability in satcoms, ISR and SDA. The capability of defence funding to 2029-30 is £2.3 billion for satcoms and £880 million for space-based ISR and space control. Together with UK Space Agency funding, Ministry of Defence funding and planned activities across the rest of government and arm’s-length bodies, we anticipate that funding for space over the spending review will exceed £7.4 billion—a substantial increase over previous spending review periods.

My noble friend Lord Stansgate, the noble Baroness, Lady Stowell, and the noble Viscount, Lord Camrose, raised the importance of supporting companies to commercialise and grow. The point was very well made and is well taken. We are moving away from serial grants to more structured contracts for services. We are also supporting companies as they grow. Some of this relates to wider changes; for example, the announcements by the Chancellor under the Mansion House agreement, visas for talent and the support for the British Business Bank. Some of this is space-specific, such as the Unlocking Space for Investment programme. We are committed to supporting British companies to develop next-generation space technologies. At London Tech Week I announced new investment of more than £9 million to support early-stage UK companies through the UK innovation and science seed fund and a £10 million investment in the Welsh company SpaceForge, which is pioneering in-space manufacturing technology. That action is happening now.

Important points were raised by my noble friend Lady Ashton, the noble Lord, Lord Willetts, and the noble Baroness, Lady Stowell of Beeston. Procurement is indeed extremely important, as is the balance around contracts and small-scale grant funding. Our upcoming space strategy will set out how we will refocus grant programmes and use contracts to support innovation. We are also making greater use of contracts for innovation, which enable public sector organisations to work with businesses to test innovative solutions and build the evidence that is needed for wider adoption. I agree with the noble Lord, Lord Clement-Jones, that this can bring real benefits. We have awarded contracts for innovation through our partnership with the Department of Agriculture, Environment and Rural Affairs in Northern Ireland to improve water quality monitoring in Lough Neagh, support for an earth observation-enabled flood forecasting service at the University Hospitals Coventry & Warwickshire NHS Trust, and with the Home Office. This procurement for innovation is very important. We will continue to innovate in many different areas.

On regulation, all cutting-edge applications of technology need agile regulation and space is no exception. From the changes in the liability and indemnity regime for satellites to regulatory sandboxes for rendezvous and proximity operations, we have acted and will continue to do so; for example, with space multi-mission licensing and re-entry.

International partnerships and collaboration have always been a feature of advances in space. Given the global uncertainty, they are more important than ever. We are strengthening our international partnerships. In 2025, the UK committed £1.7 billion to ESA programmes over the next five years, which deliver against our objectives and leverage international collaboration to drive economic growth in the UK and bolster national security here. To the point made by the noble Lord, Lord Lansley, we also collaborate, for example, with Japan and France, with bilateral funding, including on LiteBIRD, where UK universities are helping to explore the universe’s earliest moments.

To the points on Europe made by the noble Lords, Lord Clement-Jones and Lord Willetts, we are clear-eyed about the changing regulatory environment in Europe. The proposed EU space Act will have implications for UK companies and for our wider co-operation with European partners. We are engaging actively with the EU to shape that discussion where we can, but we will also act where necessary to ensure that UK industry remains competitive, our access to markets is protected and our regulatory framework continues to support innovation and growth. We have unique capabilities and assets in the UK with locations such as Shetland for launch. Europe will be stronger with the UK as a trusted partner.

It is also important to recognise that the US partnership is critical in both the civil and national security domains. Within the civil domain, our collaboration through missions such as NASA’s James Webb Space Telescope, through which UK-led instrumentation is transforming our understanding of the universe, continues to open new scientific frontiers. On national security, we rely on deep transatlantic co-operation.

Important points were made by the noble Baroness, Lady Bennett of Manor Castle, and my noble friend Lord Stansgate, about space sustainability and debris. Space sustainability is evolving with the increased use of space. We are clear that no one country alone can do this. Our aim is to ensure that growth in space does not come at the expense of its long-term safe and sustainable use by shaping international norms and standards, investing more in space domain awareness and debris removal technologies, and working with partners to build global tech capability. Our licensing regime already expects operators to minimise debris creation through robust mitigation measures, and we will strengthen that further through clearer guidance and incentives for more sustainable missions.

As we know, space underpins the systems we rely on every day—from finance, energy and transport to emergency services—enabling the secure communications, navigation and timing to keep the country running. That is why strengthening our space capability is not simply an ambition for the future; it continues to be a strategic priority, and one we will build on further in our upcoming space strategy.

[Lord Lansley (Con)]

Before the Minister sits down, at several points in the Government’s response to the Select Committee’s report, they say that more detail will come forward in the “spring space publication”—not my language, the Government’s. The Minister has not said when we might expect to see that important spring space publication.

[Baroness Lloyd of Effra (Lab)]

I set out earlier this year, in a speech to the Space-Comm Expo, a number of elements that are important for taking forward the measures envisaged in the space strategy, which include the £500 million of funding. We have taken action in many other areas set out in that report, since it was published and since our response to it. The noble Lord is right: we wish to bring it all together, and we are working to do so. Unfortunately, we will not be able to publish it before the Summer Recess. We hope to do so as soon as possible after that.

[Baroness Ashton of Upholland (Lab)]

My Lords, I thank all noble Lords who participated in this debate and my noble friend the Minister for her response. It is clear from everything that has been said that we have real opportunities in economic growth, world leadership and resolving problems, both in space and on earth. It is also clear that we need to get on with it.

Motion agreed.