Space Sector: Government Support

Alistair Carmichael Excerpts

Wednesday 4th September 2024 Westminster Hall

[Peter Dowd (in the Chair)]

I will call Mr Alistair Carmichael to move the motion and I will then call the Minister to respond. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I beg to move,

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

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

[The Minister for Data Protection and Telecoms (Chris Bryant)]

You might have been!

[Mr Carmichael]

I don’t think I ever was, actually.

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

[Jim Shannon (Strangford) (DUP)]

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

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

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

[Mr Carmichael]

The hon. Gentleman anticipates the tack I will take. Of course, we are talking about support from the UK Government for our space sector, but the success story that we have seen thus far has been achieved with remarkably little public money. The support required goes beyond the financial, often to the political and the regulatory. Yes, he is almost certainly correct in saying that some money will be necessary, but there has to be more to ask for than simply financial support.

The space sector is widely recognised as an industry with both economic and strategic importance for the UK. I want to focus mainly on the vertical launch industry, but that is just one part of the sector and it is an industry in which the UK has a genuine advantage. There are currently only two licensed vertical space ports in western Europe: our neighbours in Norway have Andøya and we have SaxaVord spaceport in Shetland. With three ready launch pads in SaxaVord to Norway’s two, for the foreseeable future the United Kingdom, through Shetland, will contain 60% of western Europe’s vertical launch capacity. That is a significant opportunity for our economy and country as a whole, but it is an opportunity on which we must capitalise in the immediate term. With the nation’s finances being as they are, it is worth reflecting—as I have just said to the hon. Member for Strangford (Jim Shannon)—that we have got this far without excessive financial support from the Government, but what there has been is exceptionally welcome. SaxaVord spaceport is privately held, but recently secured a £10-million convertible loan from the Government, allowing the potential of a Government minority stake in the future. That Government investment was designed to attract interest and further investment from the private sector, and in that respect it has been successful. It has been taken as a vote of confidence for those involved.

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

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

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

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

[Mr Carmichael]

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

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

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

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

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

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

It continued:

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

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

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