Space Industry

Sheryll Murray Excerpts

Wednesday 24th April 2024 Westminster Hall

[Mark Garnier]

They are, but it could always be better. Again, I will come to that later, but my hon. Friend is absolutely right that support from Government in this complicated sector is incredibly important.

To get back to the export market opportunities, the team at space consultants Space4Sight has identified 25 nations across the globe that are only now starting to show their space interest, all of which would benefit from a collaboration with UK companies and expertise. Indeed, I am heading to Vietnam in a month in my role as the Prime Minister’s trade envoy to Vietnam, and one of the scheduled meetings is to promote UK space exports to that economy, which is growing incredibly strongly. This is a huge opportunity for the UK to grow space technology exports to newly identified space nations.

Although we are good at this stuff, we must not be complacent. We have a lead in many areas, but without the right environment, we could lose out to other nations. We need to think about what space is. I have always seen it as a thriving economic sector, yet I notice that the Government, in their last restructuring, chose to locate it in the Department for Science, Innovation and Technology, as opposed to the Department for Business and Trade. Space is a business, not a science project. While I have immense respect for those supporting the sector in DSIT, and they have done an incredibly good job, I hope the Minister will reassure me that his Department sees space as a sector that contributes to our economy, with a lot of commercial opportunity.

I would not want the Minister to feel that I do not appreciate what his Department and some other Departments do for the sector. The Government invest directly in space activities and, according to the OECD, our public spending amounts to around 0.025% of our national GDP. It sounds like a small number, but it represents quite a significant amount of money. However, when compared with other countries, it starts to look a bit small. It is half the relative commitment of Germany, India and Belgium. It is a third of the commitment of Italy and Japan, and a quarter of the investment by France and the United States of America. The sector is highly commercial, but because of the challenges of high upfront costs, other countries have discovered that de-risking opportunities for investors through grant funding stimulates private investment. I hope Members of all parties agree that we should get behind stimulating private investment in the sector through grant funding.

We should not necessarily see space as a sector in its own right. We have other assets in the UK that would benefit from a symbiotic relationship with this super high-tech, high-productivity sector of the economy. The City of London has been a global leader of finance and financial markets for a few centuries now. Expertise in trade finance, investment, insurance, currency trading and the wider associated legal service has made the City of London a global financial hub for a long time, but our lead position is always under threat. For the City to remain a leader, it needs to remain relevant.

A few years ago, I prepared a discussion paper on how we can take inspiration from Gordon Brown’s tax interventions in the UK film industry to find a way to stimulate the City as a space finance hub. Gordon Brown created tax breaks for film investment. I suspect a direct line can be drawn from his intervention to the success, for example, of the Harry Potter franchise. That series of films would always have been made but, without that tax incentive, those spells may have been cast with a Hollywood accent.

A selected tax break here, an innovative approach to governance there, and the City could dominate the world as the go-to place to raise money for space-related opportunities. The City would continue its path from being innovative financier of trade across the globe to modern financier of trade beyond the globe. Other ideas are coming out of the City that would be good to get behind. Professor Michael Mainelli, who is now Lord Mayor of London, has been promoting a space protection initiative that looks at the further purchase of space debris retrieval insurance bonds to go on space flights to ensure that any debris could be recovered in the event of a satellite going out of service. Perhaps they could be called space junk bonds.

If we combine that financial expertise with our world-beating universities and wider technical capabilities, the UK will become the destination for all aspiring space entrepreneurs and developers. With imagination for things such as a British space bank, copying the British Business Bank or UK Infrastructure Bank, the funding that the British Government might offer could be leveraged several times. That would reinforce the message that the Government in the UK are not just grant funding but supporting space through innovative strategic partnerships.

Either way, uplifted long-term funding for the space sector to deliver priorities in the national space strategy, such as the space industrial plan; adopting a long-term approach to industrial strategy that includes a policy commitment to grow small and medium-sized enterprises; and an improved wider understanding of the space sector to encourage more people into science, technology, engineering and maths careers, would have an extraordinarily energising effect on this highly productive sector of our economy. That would certainly solve our current productivity conundrum.

There are further ways the Government can help our growing space sector and the many SMEs that participate. SMEs not only act as suppliers to the big primes in programmes and projects, but have their own prime missions and services. That brings world-beating capability to the market. We need to consider how we can further boost the sector. For example, a British space bank might also be an equity investor as well as a debt funder, complementing the UK Space Agency’s grant funding. Government procurement can act as an anchor customer for demonstrator missions. Scaling up the space technology exploitation programme would help, for example, to boost rapid development and implementation of cross-Government space policy programmes, thereby boosting economic activity in the sector.

I want to finish with some thoughts on an area where we are leading the way, and which demonstrates how widespread the application of space technology can be: space-based solar power. I should declare that I serve as the chair of the advisory board of the Space Energy Initiative, a coalition of businesses, academia, Departments and specialists in this burgeoning area of solar energy from space. I also serve as a non-executive director of Space Solar, the UK’s leading company seeking to develop this actually not very new technology. I stress that those are non-financial interests; I give my time on a pro bono basis.

That is an example of how an emerging sector is growing fast right here in the UK. The Department for Energy Security and Net Zero sponsored and set up a three-day conference last week to study this area, at which I spoke on the last day. It was astonishing to be in a room with such an extraordinary collection of highly intelligent people, looking at something they all know is not just a probability but a reality that will provide dispatchable, baseload, cheap green energy at gigawatt scale within the next 15 years.

Although many doubters suggest that that is science fantasy, UK primes, the UK Space Agency, international primes, the European Space Agency, leading universities and the UK Government all know that this is a reality. Space-based solar power will happen, with or without UK involvement. We are fast approaching the time when we need to decide whether we are to be the driver of this innovative approach to net zero or just another passenger.

If we seize the opportunity, space-based solar power will provide cheap, clean energy faster and cheaper than nuclear. It will be an astonishing export asset for the UK, be it through licensing the technology to other nations or selling the power directly from the satellites. It will tackle other issues in the UK, such as grid equalisation. I repeat that the UK is leading in this field. It is leading because the Government have supported not just the ESA’s Solaris programme but UK research for UK businesses.

In the last few weeks, a huge success has been achieved in the field of energy beaming through 360° using phased array antennas—and it was done in Belfast. The Government have stepped up to the plate to make this happen, and have indicated possible further support through match funding.

However, it does not matter whether we are talking about space-based solar power, GPS where the technology not only finds the nearest pub but times financial transactions, internet services via OneWeb, or Earth observation that helps everyone from generals in Ukraine to farmers seeking yield improvement. A massive range of services comes from the UK space industry, and many of us do not even realise that they happen. We must therefore strive to make sure that our space entrepreneurs are a success, and that this British business success supports the whole of our economy and public finances. That means that we need Government support, because we do not want to find ourselves, as we have done in the past, inventing something brilliant but not exploiting it commercially. For example, Frank Whittle was a brilliant engineer who invented the jet engine, only to see, a few years later, an American pilot flying an American aeroplane over America, using British technology to break the sound barrier. We do not want to see that again.

We are really, really good at this stuff and the Government know we are. That is why we can never get enough support in this incredible industry. I am conscious that many other Members are keen to speak, but I am sure that the Minister has heard what I have said and I very much look forward to his speech later.

[Mrs Sheryll Murray (in the Chair)]

I remind Members that they need to bob if they wish to be called in the debate.

--- Later in debate ---

[Steve Double]

I am very grateful to the right hon. Gentleman, who makes the point that I was literally about to make—it is amazing how often that happens in debates. I am convinced that there is room for both. If the UK is really going to play the role that it aims to play, of being a world-leader in the space industry, we need both capabilities in the UK—vertical launch and horizontal launch. I am convinced that horizontal launch will very much be part of the future of space launch. As satellites become smaller, a horizontal launch will be the sustainable and more accessible option for many operators who want to put satellites into space.

Will the Minister ensure that his Department and the UK Space Agency do all they can to continue to support Spaceport Cornwall, and also work with us so that we can secure the partners to enable us to launch satellites from Cornwall once again in the months and years to come? The UK has an absolutely huge opportunity to stay ahead of the rest of Europe. As the right hon. Member for Orkney and Shetland pointed out, we are in a good position in the global space race to ensure that the UK can take advantage of that opportunity.

Spaceport Cornwall is a huge opportunity economically for the UK, and specifically for Cornwall, to attract investment and create the highly skilled and well-paid jobs that we desperately need in the Cornish economy. But for me, this has always been about something more than that. It has been about inspiring young Cornish people to believe that they can go and get the qualifications in science, technology, engineering and maths, and then have a career in the space industry while still living in Cornwall. That is what has driven me throughout this whole process.

With the establishment of the spaceport and the work that the team have done to engage with schools and colleges, we have already seen literally thousands of schoolchildren from the south-west come to see what is going on there and be inspired. That is so important, because one of the challenges we face with our young people in Cornwall is a lack of aspiration. There is no replacement for something on their doorstep that inspires them to say, “Yes, I can go on, get the qualifications and get a good career in this sector.” To that end, we were delighted that Cornwall secured the replica LauncherOne rocket, as a visible and tangible display: the centrepiece of an education centre that will inspire our young people and stimulate their interest in the space industry for generations to come.

There has been a bit of misunderstanding, in that the UK Space Agency seems to think that we are looking to build a tourist centre. We are not. It is an education centre, which will attract visitors and, in particular, inspire young people. Can the Minister look at what support his Department and the UK Space Agency can provide to Cornwall, so that we can create a world-class education centre? It will play a part in inspiring the next generation of scientists and engineers, not just in Cornwall and the south-west but across the whole country. We will need them in the UK if we are going to fulfil our ambition to continue to be a world leader in space.

These are exciting times. Just as Cornwall has always pioneered and led the way in new technology, whether that was the steam engine or Marconi and wireless communication, we again want to play our part in leading the UK into space launch.

[Mrs Sheryll Murray (in the Chair)]

I remind the SNP spokesperson and the shadow Minister that they have five minutes and the Minister has 10 minutes, because this is an hour-long debate. I call Carol Monaghan.

--- Later in debate ---

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

As the Minister knows, work continues apace at the Sutherland spaceport. It is interesting to note the recent announcement about the amount of investment that Orbex has attracted. Part of this is private money; when the markets speak, we listen. Returning to the remarks made by the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), it is about skills. The big challenge for us is how we will get the seedcorn we need to develop these homegrown skills. I suggest to the Minister that the Government should showcase proudly everything they are doing on this front, by holding space industry fairs—

[Mrs Sheryll Murray (in the Chair)]

Order. If this is supposed to be an intervention, it must be short.

[Jamie Stone]

Could I recommend that consideration is given to this in various parts, such as Caithness in my constituency?