This was originally intended to be a single post largely derived from a presentation I gave at a conference on ‘The Impact of the 2016 Referendum on UK Membership of the EU’ at my alma mater, Newcastle University in September 2016. However, as it has now grown to over six pages (and that’s before I’ve had a chance to properly read the recently released ‘Brexit White Paper’) I thought it would be best to partition this into more manageable segments. So here is the first of an as yet unknown number of posts on the subject of Brexit’s impact on the UK space sector (probably 2-3 for now but I’m sure there will be plenty more to say over the coming years.) This first post will help to provide an introduction to things as they stand now (or at least, as they stood on 22 June 2016) as well as looking at Britain’s membership of the European Space Agency (ESA).
European astronaut and British citizen Tim Peake returned to Earth from six months in space on 18 June 2016. A few days later, on 23 June 2016 the UK voted to leave the European Union. On 16 September 2016, at Newcastle University, I outlined some of the potential issues facing the UK space sector as a result of that vote. In September, it was unclear what Brexit was going to look like and therefore difficult to assess what that would mean for the UK space sector. Five months later it is still not all that clear what Brexit is going to look like, however the government (and leave supporters in general) seem to be arguing that the hardest of hard Brexit is and always has been the only real option on the table. However, even with the recent vote in the House of Commons and the release of the above mentioned white paper seven months after the UK’s vote to leave the EU there still doesn’t seem to be a plan nor has there been much action taken to actually withdraw from the European Union.
Like throughout the tech, science and academic sectors the Brexit vote has spawned questions as to the future of the British space sector, particularly given how important European cooperation (and European research funding) is for these sectors. There are a few key issues to address specific to the space sector: ESA membership, EU funding, freedom of movement, the Copernicus and Galileo programmes, UK/EU space policy and the UK’s planned spaceport. I will examine each of these key issues and (try to) shed some light on the ramifications of Brexit for each of these issues.
The biggest challenge will be uncertainty, which has the potential to deter or delay investment, students and funding and do so for many years to come. Indeed, we have already seen a 7% drop in the number of EU students applying to British universities and the spaceport faces potential Brexit related delays. However, the lack of visibility of the space sector is also a concern, the worry being that the issues important to the space sector, specifically, won’t make it onto the Brexit negotiators’ agenda. The spaceport delay highlights another problem, parliament and the government will be distracted, possibly for many years to come.
That said, the UK space sector has been doing very well the last few years, it has been growing consistently even during the darkest years of the recession and the Coalition and Conservative governments have made a conscious effort to support, bolster and grow the UK space sector (indeed committing to approximately doubling the size of the UK space industry by 2030), it is important that this support is maintained.
The UK space industry is one of those world class, ‘punching above our weight’ sectors that the government always likes to brag about. The UK space industry adds over £10 billion to the UK economy and has grown at an average rate of 8.6% since 2010.  The industry directly employs 37,000 highly skilled and highly productive employees, and indirectly employs a further 115,000. It is also an industry intensive research and development focus, with this accounting for 26% of GVA; i.e., exactly the kinds of jobs the government claims to want more of.
The UK currently captures 6.3% to 7.7% of global space economy and is strongest in the fields of space operations and applications; space applications account for 78% of the industry’s value and operations a further 12%. The downstream side of the industry dominates; representing 89% of the industry and that is dominated by broadcasting (BSkyB et al) although navigation is a growing sector.
However, while one of the smallest segments of the space industry, representing 8% of the industry, the UK is strong in satellite manufacturing, particularly small satellites, with one company, Surrey Satellites claiming 40% of the global small satellite market.
The UK government has been increasing its support for the space sector in recent years. This has included an increase of funding for the European Space Agency. The UK has also seen its first ‘official’ astronaut, ESA employee, Tim Peake, who returned to Earth mere days before the Brexit vote. And it has recently been announced that Major Peake is due to return to space soon. More substantially the government has set a target of capturing 10% of the global space market by 2030 (which would amount to a UK space industry worth approximately £40 billion.) This goal has been independently assessed as ambitious yet feasible and is outlined in the Innovation and Growth Strategy.
That ambitious target may now be under threat. The government’s own commissioned study The Case for Space conducted by London Economics was already warning about the threat of comparatively low levels of government space investment to achieving the IGS targets. The UK is in the bottom one third of OECD countries for investment in space. Britain’s withdrawal from the European Union poses yet another danger.
The UK space industry is integrated into the wider European space industry and as the Civil Space Strategy declared “almost everything the UK does in space is cooperative”. However, European engagement is split into two avenues, the European Union, and the European Space Agency. It is important to note that while both have overlapping members and areas of interest and cooperate regularly they are two separate organizations. The European Space Agency is an independent intergovernmental organization and Britain’s membership is not dependent on membership of the European Union and will not be directly affected by Britain’s exit from the European Union.
Furthermore, ESA employees enjoy a form of freedom of movement as enumerated in the ESA Convention and its first annex. This however only applies to ESA employees directly and does not apply to contractors working on ESA’s behalf. Until Brexit this has not been an issue as the two ESA Member States who are not also members of the EU, Switzerland, and Norway, are members of the Schengen Agreement and other pan European agreements which provide effective free movement rights. The ESA Convention also provides for a kind of free movement for goods so long as it is for official ESA purposes which include the relocation of ESA staff.
For now, though, British ESA membership is secure (and perhaps Tim Peake plays a sizeable role in that?) However, damage is already starting to occur and there are increasing signs of further danger ahead (see spaceport and Euratom withdrawal amongst others.) The next post will look at what leaving the European Union itself means for the UK space sector, which is what will cause the greatest damage to the space sector.
Department for Exiting the European Union (2017) The United Kingdom’s Exit from and New Partnership with the European Union (Cm 9417). Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/589191/The_United_Kingdoms_exit_from_and_partnership_with_the_EU_Web.pdf (Accessed: 6/2/17).
Sean Coughlan (2017) ‘University Applications fall with drop in Nursing and EU Students’, BBC News, 2 February, Available at: http://www.bbc.co.uk/news/education-38827189 (Accessed 6 February 2017); Sally Weale and Caelainn Barr (2017) ‘EU Applications for UK University Places Down 7%, MPs Told’, The Guardian, 25 January, Available at: https://www.theguardian.com/education/2017/jan/25/eu-applications-for-uk-university-places-is-down-7-mps-told (Accessed 6 February 2017); Jason Allardyce (2017) ‘Spaceport Plans Grounded by Brexit’, The Times, 29 January, Available at: http://www.thetimes.co.uk/article/spaceport-plans-grounded-by-brexit-zpxcv93mv (Accessed 6 February 2017)
UK Space Agency (2014) The Size and Health of the UK Space Industry: Executive Summary
UK Space Agency, Satellite Applications Catapult, Innovate UK et al (2015) UK Space Innovation and Growth Strategy: 2015 Update Report
UK Space Agency, Satellite Applications Catapult, Innovate UK et al (2015) UK Space Innovation and Growth Strategy: 2015 Update Report, 4; London Economics (2015) The Case for Space 2015: The Impact of Space on the UK Economy, iv; UK Space Agency (2014) The Size and Health of the UK Space Industry: Executive Summary, 3, 7
UK Space Agency, Satellite Applications Catapult, Innovate UK et al (2015) UK Space Innovation and Growth Strategy: 2015 Update Report, 4 The Case for Space 2015: The Impact of Space on the UK Economy, iv; UK Space Agency (2014) The Size and Health of the UK Space Industry: Executive Summary, 6
London Economics (2015) The Case for Space 2015: The Impact of Space on the UK Economy, iv
London Economics (2015) The Case for Space 2015: The Impact of Space on the UK Economy, iv-vii
UK Space Agency (2014) The Size and Health of the UK Space Industry: Executive Summary, 3
London Economics (2015) The Case for Space 2015: The Impact of Space on the UK Economy, vii
UK Space Agency (2014) The Size and Health of the UK Space Industry: Executive Summary, 10
London Economics (2015) The Case for Space 2015: The Impact of Space on the UK Economy, iv, vii
‘Britain’s Spaceman’ (2015) The Economist, 30 May, pg 15, 15
Ian Sample (2017) ‘Time Peake to Return to International Space Station for Second ESA Mission’, The Guardian, 26 January, Available at: https://www.theguardian.com/science/2017/jan/26/tim-peake-to-return-to-international-space-station-for-second-esa-mission (Accessed 6 February 2017)
UK Space Agency, Satellite Applications Catapult, Innovate UK et al (2015) UK Space Innovation and Growth Strategy: 2015 Update Report, 4-5
London Economics (2015) The Case for Space 2015: The Impact of Space on the UK Economy
London Economics (2015) The Case for Space 2015: The Impact of Space on the UK Economy, iv, viii
UK Space Agency (2012) Civil Space Strategy 2012-2016, 5
Art IV, Art XV, Art XIII of Annex I, ESA Convention
Art VI, Annex 1 ESA Convention