Space Industry Bill [HL]

Lord Dunlop Excerpts

2nd reading (Hansard): House of Lords
Wednesday 12th July 2017 Lords Chamber

[Lord Dunlop (Con)]

My Lords, one hazard of speaking later in the debate is that many of the good points have already been made, so I apologise in advance if I indulge in a bit of reiteration. I warmly welcome this Bill; I do not approach it as a space expert but as an amateur enthused by what a recent Goldman Sachs report called “the second space age”, with the space economy forecast to become a multibillion-dollar market within the next two decades. It is a market in which the UK and UK businesses can play a leading role, if we are able to establish early-mover advantage. As has already been mentioned, countries such as Spain, Portugal and Norway are all preparing to bring forward competing legislation and launch sites.

It seems to me that that is what the Bill is all about. A globally competitive and successful space industry cannot be built if we do not first put in place a regulatory framework to make it possible—one which recognises the space industry as it is today, not as it was 20 years ago. Traditionally, space has been dominated by Governments and government agencies with significant reliance on public funding, which is not surprising given the hitherto high costs of space entry. The UK space industry has therefore had to argue its corner for funds in the face of competing demands, and it has not always had a sympathetic hearing. Many felt that it was a “nice-to-have”, associated with exotic inter- planetary exploration, compared with the immediate and pressing needs of funding our schools and hospitals.

A few years ago I worked with the UK’s leading space company—then called Astrium, but now Airbus Defence and Space—on how best to argue for continuing investment in space. Our case had the not very original working title of “Bringing space down to earth”. Our argument was that the space industry is not some esoteric luxury; it is highly relevant, and increasingly essential, to improving everyday lives here on earth. GPS, memory foam, LEDs and artificial limbs all owe something to space innovations. If we are going to feed the world’s population—forecast to be 9 billion in 30 years’ time—food production needs to increase by 70%. More precise weather forecasting can help to improve crop yields and better tracking of food shipments can reduce the number of perishable cargos delayed or damaged in transit. More-effective earth observation, brought about by advances in satellite technology, makes all this possible. As we wrestle here in the UK with how to deliver at an acceptable cost superfast broadband to the final 5% of the hardest-to-reach properties, or effectively to track and enforce fishing rights in our territorial waters post Brexit, better answers are likely to be found in developments in space.

The Government are to be commended for having the foresight to recognise the strategic importance of the UK’s space industry. I pay tribute to my noble friend Lord Willetts, who is not in his place today but who, as Science Minister, was such a great champion of the space industry, overseeing the establishment of the UK Space Agency and an increase in our budgetary contribution to the European Space Agency.

As we look ahead, and as we have already heard today, the space industry is changing fast, driven by falling costs and lower barriers to entry. Satellites are becoming smaller and lighter, and reusable technology and other developments are cutting the cost of launches. A sector hitherto dominated by the public sector is now increasingly seeing an influx of private and commercial players. Private investment in space has been growing rapidly in recent years.

Three-quarters of private investment activity in the space sector since 2000 has taken place in the last five years, with eight space start-ups on average per year, and more than 50 venture capital firms had invested in space enterprises by 2015. As we have heard, private entrepreneurs such as Elon Musk, Jeff Bezos and Richard Branson are pioneering new space launch solutions.

While much attention is rightly paid to satellites and the value-adding applications derived from them, looking to the future, space tourism, mining asteroids for precious minerals and on-orbit manufacturing will no longer be in the realms of science fiction; they will become science fact.

The Bill is, of course, designed to facilitate the development of UK spaceports. As such, it begs one pretty big question: is the demand there to support one or possibly more spaceports in the UK? Structural changes in the industry suggest that demand is there, as we have already heard. Traditionally, large and heavy satellites have been launched into geostationary earth orbit from, for example, the Guiana Space Centre on the equator. A new disruptive technology—the so-called CubeSat—opens up new possibilities. It measures just 10 centimetres squared, weighs less than three pounds and typically is used in low-earth orbit, which does not require equatorial launches to be cost-competitive. Therefore, more miniature satellites will be needed to provide sufficient coverage of the earth, and they have a lifespan of just one to three years rather than the 15 for larger, more conventional satellites. All this means that between 2018 and 2020 alone there is a forecast requirement to launch 1,500 small satellites.

Ground infrastructure is therefore going to become a major constraint for CubeSat operators if they are not to rely on piggybacking on the less-suitable missions to launch larger satellites. Therefore, there can be no question but that the Bill before the House is very timely. The Government abandoned the original competition to select the UK spaceport location in favour of the licensing approach set out in the Bill. I think the Government are right not to restrict the possibility of multiple approaches that may allow different launch solutions to be tried in different places, and to bring fresh economic activity to local communities in need of it. As a former Scotland Office Minister, I am delighted to hear the support of the noble Lord, Lord McNally, and my noble friend Lord Moynihan for Scotland. If the House will indulge me, I would like to bang the drum for Scotland again. Three of the original five shortlisted spaceport sites are in Scotland at Prestwick, Stornoway in the Outer Hebrides and Campbeltown in the Mull of Kintyre, and only yesterday I learned of a fourth proposed site in Sutherland.

If the UK is fully to realise the economic potential of spaceports, linking them to a broader space industry ecosystem will be a real competitive advantage. In this regard Scotland is very well placed. It has a pre-existing and impressive space cluster of 100 private and public organisations and 18% of the jobs in the UK space industry are in Scotland. Scotland is home to the only UK-owned independent satellite manufacturer, Clyde Space. In the last two years, Glasgow has built more satellites than any other city in Europe. Scottish universities have built a strong reputation in space-related disciplines, including Strathclyde University’s Space Institute and Edinburgh University, which, in collaboration with NASA, is developing Valkyrie, a human-sized robot booked on the next unmanned mission to Mars. One of the perks of being Minister is that you not only get to meet Tim Peake, you also get to meet Valkyrie, which I have to say was like something out of a “Star Wars” movie.

I recognise, of course, that Scotland is not the only place with a strong claim as the location for a spaceport. Some involved in the industry believe that the market could sustain more than one spaceport in the UK. Perhaps the Minister could comment on that when he winds up. I also wonder whether he could address two further points in his wind-up which have been touched on. The first is about the availability of insurance and the capping of liabilities, to which he himself referred. The new market potential comes in large part because costs and barriers to entry are falling. What further reassurance can my noble friend give that uncapped liabilities will not hinder commercial developments, particularly from smaller players and new entrants? The second concerns technology transfer. If spaceports are to succeed, the UK will need to attract those developing new launch technologies to come and operate from here. Many are currently based in the US, although, like the noble Lord, Lord McNally, I was pleased to hear about a British company, Orbex, which is developing an indigenous, full-orbital launch capability. Nevertheless, does my noble friend foresee any US regulatory hurdles to be overcome—for example, US ITAR restrictions—before these US launch companies are able to operate from here?

In conclusion, I warmly welcome the Bill. It is clear that we need to make quick progress if we are to secure early-mover advantage, and we need to put in place a regulatory regime that is sufficiently flexible to accommodate innovations in a very fast-moving industry.