Space Industry Bill [Lords]

Jim Cunningham Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 6th February 2018 Commons Chamber

[Layla Moran]

I rise to speak to new clause 1, which is in my name and those of my right hon. and hon. Friends and would require the publication of an assessment of the impacts of leaving the EU on the space industry. I do not wish to take up too much of the House’s time rehashing the arguments about the impact of Brexit on the space industry, as many such arguments were made on Second Reading, in Committee and in the other place, but I briefly want to place on the record the industry’s continuing concerns, which should require the Government to publish an assessment of the sort set out in new clause 1. I will take each of the areas that I would like to see in such a report in turn, starting with research and development and Horizon 2020.

The Minister is a former Science Minister, so I do not need to explain to him the importance of certainty for scientists in the space industry. Sadly, however, we still do not have that certainty so many months later. The UK is a net beneficiary of EU space funding, contributing 12.5% of the total budget but winning contracts worth 14% of total spend. The British space industry needs a guarantee of continued access to research and development funding, expertise and facilities currently provided at EU level after the UK leaves the EU. Of course, the European Commission also provides space-related research funding through Horizon 2020, and the Government have said they will guarantee successful bids made by UK participants before exit. However, beyond that the sector has had only warm words, and it needs certainly beyond the next few years. The Government’s science and innovation discussion paper states that the UK would “welcome discussion” on remaining a participant in certain EU science and innovation programmes.

[Mr Jim Cunningham (Coventry South) (Lab)]

If the guarantee is only for another two years, there will be a profound effect on research and development, particularly in universities. If there is no guarantee beyond that, there will be a great deal of uncertainty for both universities and the industry.

[Layla Moran]

The hon. Gentleman is right, and my constituency is affected by such uncertainty.

I repeat a point that I made during the passage of the Nuclear Safeguards Bill: we must remember that this is not just about funding. At a recent hearing of the Public Accounts Committee, of which I am a member, witnesses were clear that the most valuable asset we have as a nation is our ability to attract human capital. To put it bluntly, the funding follows the brains. There is real consternation across the entire science industry that European scientists are actively looking to move, if they have not already, to more welcoming countries. Their lives are more than just their jobs; this is about where they live, love and participate in the community, so the tone of this debate matters hugely. It is therefore critical that we maintain freedom of movement for the world-class scientists, specialists and technicians who contribute to the space industry, so that we keep those brains and the funding here.

Patrick Wood, CEO of Surrey Satellite Technology Ltd, an existing supplier to Galileo, has said that

“there are still a lot of unknowns”

about whether UK space companies will be able to access high-quality staff post-Brexit, noting that UK space infrastructure companies

“have a high percentage of staff that come from across Europe”

partly due to a lack of UK applicants. Aerospace companies are heavily reliant on the rapid movement of workers between different sites. A favourite fact of mine is that Airbus moved employees 80,000 times between the EU and the UK in 2016. It even has its own jet shuttle between Toulouse and Broughton. Any additional border checks between the UK and the EU could therefore prove a significant burden.

On Galileo, the European Commission is demanding the right to cancel existing contracts with UK companies that are constructing the £10 billion Galileo satellite navigation system unless the UK negotiates a new security relationship with the EU. If no long-term agreement can be found, UK companies may only be able to retain their contracts by setting up EU subsidiaries. With them will go the tax take, the brains and the supporting jobs.

Finally, I turn to the crucial effect of leaving the single market on supply chains within the UK space industry. Last year, I asked the Minister, in his former role, a series of parliamentary questions about the impact on the UK space sector supply chain of leaving the single market, but sadly there was not much in the answers to give heart to the industry. It has just not received the answers that it needs. Stuart Martin, CEO of the Satellite Applications Catapult said that

“Brexit represents a risk to the United Kingdom in sustaining its leadership position”

among sectors such as satellite manufacturing and navigation services. He also stated that the UK needs to sustain its leadership role within the European Space Agency and maintain access to the single market. Before anyone says, “But we will stay in the European Space Agency,” yes we will, but we must not forget that a quarter of its funding comes from the EU.

It is clear that the industry needs certainty on all those issues. We have had warm words, but not enough action. The Government’s shambolic handling of impact assessments and sectoral analyses, as well as this week’s uncertainty over future customs arrangements, is not inspiring confidence among the space industry. There are few specific commitments or guarantees in the Bill, so it is not unreasonable for the Government to publish an assessment of the sort that new clause 1 would require, and I hope that the Minister will consider doing so.