Government admits UK space program contracts without legal basis after Brexit
The UK space sector has gone from strength to strength in recent years. Having trebled in size over the past two decades, generating a £14.2bn turnover in 2018, the UK officially aims to corner 10% of the global market (projected to be worth £400bn) by 2030. The Space Industry Act 2018, introduced in March last year, laid the legislative groundwork for the first commercial space launches within the UK, and the government’s recent decision to allot further funding toward the continued development of a UK spaceport and national satellite testing facility was met with welcome from leading researchers. The Harwell Space Cluster in Oxfordshire, which employs around 80 companies and 800 people, continues to attract venture capital investments and in Scotland, small tech start-ups building smaller and more inexpensive satellites have been upsetting incumbents in the earth-observation market. However, with some of the most lucrative contracts coming out of Europe, the prospect of a no-deal Brexit looms drearily overhead – a rain cloud in an otherwise clear sky, threatening to delay take-off.
Professor Colin McInnes is a space science researcher at the University of Glasgow. Sharing his insight into the situation, he said: “Probably the most important thing to note is that the European Space Agency is a different organisation from the EU itself. Whatever happens with Brexit, it’s no reason for Britain not to be a participant within the ESA.”
While this sounds promising, it’s important to note that the ESA runs two kinds of programmes: mandatory and optional. While mandatory programs are dealt with internally, optional programmes are delivered in partnership with the EU Commission, which retains wide discretionary powers to exclude non-member states. Some of the larger optional programmes also happen to involve earth observation and satellite navigation – commercial markets upon which the UK sector heavily relies.
One such program is Galileo, the EU’s new global satellite navigation system. A main distinguishing feature of Galileo is the Public Regulated Service (PRS), intended to provide robust, encrypted positioning to authorised government officials for sensitive applications such as security and critical infrastructure. From the beginning, the UK has been heavily involved with the development of Galileo, with UK-Based company Surrey Satellite Technology having built the first 22 satellite payloads since 2003. It’s estimated that the UK has invested a total of £1.2bn into Galileo, with fears that Britain will never fully recoup this investment. While British armed forces had planned to make use of the service by 2026, it was announced by the government in December last year that this was no longer the case, after the ESA declared that that the UK would not have a say in the design process after its withdrawal from the EU. Instead, the UK Space Agency received £92m from the government to develop a feasibility study into the UK developing its own system. The Financial Times reports that the system itself could cost as much as £5bn, plus lifetime costs.
Some companies have already borne the brunt of the uncertainty. In one instance Airbus, which runs Galileo’s ground control operations from Portsmouth (which incidentally voted by majority to leave), failed to secure a follow-up contract after being frozen out by the EU, resulting in the loss of around 100 jobs in the city (though most of these were temporary). This comes after continued threats from Airbus that the company would relocate its UK sites to France and Germany in the event of a no-deal Brexit, which could affect the jobs of 14,000 people employed across 25 sites nationally.
In a report published by the House of Commons in late December of last year, the EU scrutiny committee addressed a possible shift in balance from the ESA to the EU in governing space research. As part of its proposals for its next long term-budget, the EU Commission has proposed draft regulation which would establish an overarching “EU Space Programme” from 2021-2027, which would integrate Galileo as one of three components with a proposed budget increase of 25%.
Significantly, the report (which was published before the defeat of Theresa May’s withdrawal agreement proposal) notes:
“In the alternative scenario of a non-negotiated exit, the legal basis for the involvement of UK businesses, academics and researchers in EU space programme-related activity would cease to exist on 29 March 2019. UK stakeholders would cease to be eligible to bid for new EU space program contracts and there would no longer be a legal basis for UK stakeholders with existing space programme contracts to continue to provide these contracts in the UK.
“The Government’s No Deal notice does not offer such contract-holders any assurances and simply advises them to contact the relevant contracting authorities in the EU GSA/ESA.”
When asked for comment on Brexit’s effects on the sector, a spokesperson for the UK Space Agency said:
“The UK space sector is fundamentally strong and employs around 40,000 people. The UK Government has invested £150m through the modern Industrial Strategy to improve our space infrastructure and enable small satellite launches from British soil for the first time, as well as £92m to develop options for a British satellite navigation system. We will continue to be a leading member of the European Space Agency which is independent of the EU.”