House of Commons - Trade and Industry

Select Committee on Trade and Industry Tenth Report

V. SPACE APPLICATIONS AND PROGRAMMES

31. Space programme priorities were subject to some change between the 1996 plan and the 1999 strategy. The 1999 strategy takes more account of the telecommunications and navigation sectors. Lord Sainsbury instructed BNSC in New Frontiers to "give priority to telecoms, navigation and enabling technologies and to support excellence in space astronomy and environmental research".[93] Five principal objectives which space policy should pursue in support of the Government's industrial and scientific goals are set out in the report. These are:

"to help industry maximise profitable business opportunities in the development and exploitation of space systems which improve the quality of life and enhance choice for consumers;

to foster the development of innovative technology, its commercial exploitation and its application in research;

to pursue the highest quality astronomy and space science;

to improve our understanding of the Earth's environment and natural resources;

to communicate the results and their significance to a broad audience."[94]

32. There is inevitably a considerable overlap between the different uses of space and space technology. Telecoms, navigation satellites and Earth observation may all be integrated to provide a tool for, for example, disaster management. However, in this report we have grouped space activities under broad headlines, starting with those areas identified by Lord Sainsbury as priorities.

Telecommunications

HISTORICAL PERSPECTIVE

33. After the launch of Sputnik 1 in 1957 by the then Soviet Union, the national strategic importance of space-based global communication became clear. In response to this, in the early 1960s, the USA developed and launched a number of experimental communications satellites of various types and orbits. In 1962, it also established the first commercial satellite organisation, the Communications Satellite Corporation (COMSAT) which, by 1965, had launched the first commercial telecommunications satellite, Early Bird. In parallel, the International Telecommunications Satellite Organisation (INTELSAT) was founded in 1964. In 1969, the Intelsat 3 satellite system was the first to provide complete global telecommunications. In 1979, the United Nations sponsored the setting of up the International Maritime Satellite Organization (INMARSAT) to provide mobile communications to maritime customers. Over the last twenty years, INMARSAT has expanded its services to cover all mobile users, whether on sea, land or in the air. Over the same period, many other domestic and regional satellite systems have been established, such as the US Galaxy and Spacenet programmes and Europe's Eutelsat and Telecom. These are all a result of very significant technological advances, particularly in the payloads, allowing cost decreases per satellite transponder of around 100 times over the last 40 years.

TECHNOLOGICAL DEVELOPMENTS

34. Over the last four decades, numerous technological developments have improved the overall performance and flexibility of satcom systems to the point where they are changing their focus from providing fixed, high-capacity data links between sizeable ground terminals, to providing multipoint to multipoint communications between small, often mobile, ground terminals providing ever more sophisticated information services. Although still a vital part of the global information infrastructure, geostationary satellites of the sort employed so far are not ideal for delivering all of the required services. As a result, significant interest is being shown in the use of 'constellations' of multiple satellites in low- and medium- Earth orbits (LEO and MEO) to deliver global coverage. Examples of these include:

The (now defunct) Iridium LEO satellite system—global mobile telephony;

Globalstar LEO constellation—global mobile and fixed satellite-based telephony services;[95]

Teledesic LEO constellation—worldwide access to advanced telecommunications services such as computer networking, broadband Internet access and interactive multimedia;[96]

ICO MEO constellation—satellite equivalent of third-generation (3G) wireless services, including wireless Internet and other packet-data services.[97]

35. The rapid growth in the satellite communications market provides new opportunities in the market areas of mobile communications, broadcasting and interactive media. The total annual market is expected to expand from around $20bn to over $100bn during the next decade. Lord Sainsbury told us that he saw the development of satellite technology as "one of the absolutely fundamental roles for BNSC".[98] New Frontiers notes that "European industry has lagged behind the US and Japan in the development and provision of the space segment and it will be difficult to compete, as a whole, against the US satellite manufacturers in the early deployment of complete satellite systems".[99] UK firms face competition with American companies which benefit from a larger home market and a large base-load of defence work from which to build a business in the civil sector.[100] These existing market barriers, and the potential opportunities, have led BNSC to increase the priority afforded to telecommunications in recent years. It is important that the UK remains involved in the field of satellite telecommunications, at both the pure and applied levels of research.

36. On 29 February 2000, Lord Sainsbury announced a £9m programme to help UK companies to exploit opportunities in the satellite communications industry. Under the three year SATCOM programme, UK companies of all sizes are eligible for help in exploring new ideas with significant market potential in a number of areas including satellite communications and navigation, multimedia and broadband technology, and application development and demonstration.[101] The UK has also subscribed _47M to the ESA Advanced Research in Telecommunications (ARTES) programmes to promote multimedia satellite systems.[102] The mission for ARTES 3 is to put Member States' industry in a position to acquire as large a share as possible of the world market in satellite based communications services, and to promote advanced applications and thereby assist with the development of new markets.[103] The Federation of the Electronics Industry told us that they fully supported the increased priority BNSC is giving to telecommunications and, in particular, were supportive of the UK's participation in ARTES.[104]

37. There are a number of UK-led projects funded by ARTES 3.

The UK-led MultiMED project is designed around the concept of providing remote access to the high fidelity medical simulation services at the Bristol Medical Simulation Centre (BMSC). Initially, the principal service components include customised access to on-line reference systems such as MEDLINE and pharmaceutical databases, interactive training courses based around advanced simulation, and virtual reality technology and live broadcasts of simulator-based teaching sessions. Simulation allows students to work through realistic medical scenarios without the need for live patients.

The UK-run Espresso for Schools project, now successfully completed, used satellite delivery for high-bandwidth applications which enhance curriculum delivery in the classroom.

The Advanced Broadcast Architecture for Retail Internet Services (ABARIS) project provides an e-commerce Internet platform to disseminate digital products, such as music, to consumers.[105]

Small Satellites

38. Small satellites are increasingly being utilised as a more cost effective, and quicker, means of realising space missions. Surrey Satellites Technology Ltd (SSTL) told us they have developed a series of highly sophisticated, but inexpensive, 'microsatellites'-built for around US$3m each. Eighteen such microsatellites have been launched by SSTL into low Earth orbit carrying a wide range of satellite communications, space science, remote sensing and in-orbit technology payloads-both civil and military.[106] DERA run a separate STRV small satellite project which has attracted substantial funding from the USA, Canada and ESA. Under DERA leadership and with BNSC funding, new command and data protocols were developed which were adopted as an international standard. Laboratory prototype hardware and software relating to these protocols were developed by DERA and industry within the MoD research programme. This system was demonstrated in space using the DERA STRV satellites and permitted the first satellite control through the Internet.[107]

39. On 13 December 1999 Lord Sainsbury announced a £15m investment over three years in the UK small satellite sector- the MOSAIC programme.[108] The key objective of the MOSAIC programme is to "ensure full commercial and user exploitation of the UK small satellite capability and maintain a competitive manufacturing base in the UK". Eighteen proposals were submitted. Six of those were short-listed and more detailed proposals requested. The successful proposals will be part funded up to 50% under MOSAIC.[109]

40. Views on the Government's small satellite programme were mixed. BARSC welcomed the programme as a useful step "towards starting to redress the balance between satellite and equipment costs and the value of services".[110] Satellite Observing Systems, an SME engaged in Earth observation and involved in one of the short-listed proposals for MOSAIC, believed that this sort of programme directed to a more narrowly defined client structure "constitutes the new Earth observation order".[111] The British Interplanetary Society (BIS) noted that the small satellite programme appeared to be based on a market failure that was not apparent in the sector; indeed "the intervention of the Government in this way risks actually creating a market failure where none currently exists".[112] A similar view was expressed during our visit to Surrey Satellite Technology Ltd. Lord Sainsbury told us that whilst the programme may well be potentially creating competition for an exciting British company in the export market, "this is all about British companies and it is about supporting British companies to take advantage of this market".[113]

41. ASTOS both commended the DTI small satellite initiative as an "excellent programme" and simultaneously cited it as a classic example of "unjoined up planning" with only the MoD able to take advantage of it.[114] PPARC told us that it was a great disappointment that they could not, for financial reasons, support scientists in making bids.[115] They went on to say that "the timing just did not work out for it".[116] Lord Sainsbury, however, told us that the Government had stuck to their timetable and agenda and the programme was on schedule.[117] The Particle Physics and Astronomy Research Council (PPARC) expressed disappointment that they were unable to support bids for one of the DTI's key initiatives, MOSAIC, due to timing problems. Given the low number of space related initiatives, this raises questions over the effectiveness of the lines of communication between the DTI and other BNSC partners. We hope that if, in the future, DTI provides such seedcorn funding the programmes are better managed. We will follow the outcome of the MOSAIC programme with interest and trust that the programme will be fully evaluated.

Navigation

EGNOS

42. There is a rapidly growing market in the use of space navigation information, particularly by maritime, road, rail, and aviation users. The latter in particular have stringent operational requirements. Existing global positioning satellite data provided by the US is not sufficiently reliable to allow safety-critical users to rely solely on its services. The European Geostationary Navigation Overlay Satellite Service (EGNOS) is seen as the first stage in a European contribution to a Global Navigation Satellite System (GNSS-1). It aims to augment navigation signals from the existing American Global Positioning System (GPS) and the Russian GLONASS military satellite constellations to enable their use by civilian users requiring high levels of accuracy and integrity.[118] EGNOS will cost £135m to implement an operational capability which should be capable of sustaining a primary means of navigation for safety-critical transport applications such as civil aviation .[119]

GALILEO

43. Galileo is a proposal for an advanced Global Navigation Satellite System (GNSS-2), intended to provide a free-standing European alternative to the American GPS and the Russian GLONASS. These systems were designed for military use; GPS is run by the US Department of Defense. Civil applications of GPS are increasing rapidly. Until very recently, as a matter of policy the US Government only made available to civil users a degraded signal that is not suitable for safety-critical use. Reliability is also uncertain: users are not informed immediately of errors that occur, and transmission is sometimes unreliable.[120] There is some concern that the US could switch off civil GPS at times of crisis. The Galileo programme is a co-operative venture between the European Commission and ESA to provide a civilian navigation system, currently at the definition study stage. The cost of the definition stage is _80M, shared equally between ESA and the Commission, with the ESA contribution funded by Member States. The UK has contributed _12M to ESA.[121] Four EC contracts, and one ESA contract, have been placed with industrial consortia and constitute the definition phase:

ALCATEL is the prime contractor for GALA (the Galileo overall architecture study) and for INTEG (the Integration of Egnos into Galileo);
GEMINUS (the Galileo European Multimodal Integrated Navigation User Service) is led by RACAL;
SAGA (Standardisation Activities to Galileo) is led by Sextant Avionique (part of Thomson);
the single ESA contract GalileoSat, is led by ALENIA Aerospace.[122]

The final reports from the definition phases are due to be presented to the Transport Council meeting in early December 2000. The current proposal is for Galileo to be a public private partnership (PPP) to be initiated through a "Galileo Vehicle Company" (GVC) to be formed early in 2001.[123]

44. During a debate on Galileo in European Standing Committee A on 9 June 1999, the then Parliamentary Under-Secretary of State for Environment, Transport and the Regions, Ms Glenda Jackson MP, outlined the Government's position and concerns.[124] The Government believed that, as the US Government had encouraged global use of the civil GPS service, the option of relying on European augmentation of GPS should not be rejected too quickly. The Minister also expressed concern at the absence of any analysis of user benefits of Galileo and of a convincing justification for the large amount of public spending envisaged. Other Member States have generally agreed that these are important issues best resolved during the definition phase.[125]

45. It is intended that Galileo would provide three levels of service: the lowest will give free, open access to users (for example for leisure activities); the second level will be a subscription service with superior performance and a guarantee of service; the third level will be a high-level subscription service for applications that must not, for reasons of security, suffer any interruption or disturbance. Enhanced air traffic management and the ability of emergency services and transport companies to monitor more effectively the position of vehicles, are among the potential benefits Galileo will bring.

46. There are a number of serious concerns about the Galileo programme. Mr Norris of UKISC expressed "the industry view of Galileo" that "it is a programme without a clear customer".[126] Furthermore, UKISC identified some lack of convergence between DTI and DETR on the Galileo programme and that "this is par excellence an area where joined-up thinking within and between HMG departments is urgently required".[127] Logica saw Galileo as a "wonderful opportunity" but suggested that there may be a lack of joined-up thinking between the relevant Government departments.[128]The UK SatNav Co-ordination Committee said that they were "concerned that there is not yet a corresponding convergence across Government, particularly between DTI and DETR on this programme. This is an area where joined up thinking within and between HMG departments is urgently required."[129] The Minister told us that "it is going to be very difficult to put together, there are a lot of problems, but it is now being pursued very seriously and I think there are real possibilities of doing it".[130] He went on to agree that the "fundamental difficulty" was how income was to be derived from Galileo, given that there is at least a basic system of GPS which is being provided free.[131] Companies do not seem to be queueing up to participate in the proposed partnership. Given this difficulty, reservations were expressed by the British Interplanetary Society (BIS) over the significant sums required, and said that they "would not wish to see any significant level of expenditure on the project until the longer term finance is secured".[132] We are concerned that there is an apparent lack of leadership of the UK's participation in Galileo. We recommend that a sustained effort is undertaken by BNSC to ensure joined-up thinking across Government, particularly between DTI and DETR, on the Galileo programme. In the absence of any clear indication of how income may be derived from Galileo, we recommend that, once the definition phase is concluded, the Government discuss with industry the commercial potential for raising income from Galileo and make that assessment publicly available before committing further public funds.

Earth observation (EO)

47. Earth observation is the term used to describe the process of monitoring and measuring features of the Earth's surface and its atmosphere from space. This technique, also known as "remote sensing", gathers information from satellites which is then transmitted back to receiving stations on Earth for processing. This data can then be used in, for example, meteorology, agriculture, forestry, and environmental monitoring. In NERC's words, "EO takes forward our ability to understand and predict our environment because of its unique abilities to observe everywhere on the Earth in a consistent and calibrated fashion, and to observe variables, such as the radiation budget of the Earth".[133]

UK POLICY

48. Until the mid 1980s, UK civil space policy was concentrated on those ESA programmes related to telecommunications and space science. Following the decision in 1987 not to participate in the proposed programmes aimed at creating a European manned space capability, the Government announced a shift away from telecommunications, which were considered to have reached commercial maturity, to the next field of potential economic benefit, Earth observation.[134] In May 1989 the then Chancellor of the Duchy of Lancaster, in response to a written question, stated that "Earth observation is now the centre piece of civil space policy".[135]

49. In 1993 a National Audit Office (NAO) study concentrated on the extent to which UK industry had benefitted from DTI expenditure on ESA and national programmes for Earth observation, and on "whether the potential for the economic exploitation of data transmitted from Earth observation satellites had been maximised".[136] In 1989 DTI spent £25 million to establish an Earth Observation Centre at Farnborough as part of the then Royal Aircraft Establishment, now part of DERA. The Centre was let for 5 years to a commercial company owned by Matra Marconi and other companies in the sector. It has now been privatised and is wholly owned by Matra Marconi, with operations overseas as well as in the UK. One of the DTI's main objectives in creating the Centre had been to develop the market for Earth observation data, in the face of some unease expressed by the existing firms in the value added market. Issues over the extent to which unenhanced data should be sold or given out free of charge raised at that time remain in some measure unresolved. The NAO noted that BNSC had made efforts to involve potential users in defining their requirements from future missions. Stating that "users must ... influence the choice of instrumentation if their needs are to be met", it called for greater emphasis in future on the involvement of end users.[137]

50. The NAO report noted that BNSC had concluded that a realistic prediction would be that the world market for the supply of EO data would be £100m per annum by 2000, and £800m for value added products.[138] BNSC told us that the latest national figures from 1997 show UK EO data revenue at £2.75m and £11m for value added products; these are projected to increase to £4.9m and £20m respectively by 2002. The current (2000) figure for the accessible global EO data market is £200m projected to increase to £1,000m by 2010.[139]

51. It is widely agreed that the market for Earth observation data has not increased as rapidly as was initially anticipated.[140] DERA believed that as far as the smaller space companies are concerned, there was continuing modest growth, "the one exception being the remote sensing value-added industry which is still struggling to develop a sustainable long term market".[141] Dr Hicks of BNSC told us that since the market was not growing as rapidly as originally anticipated "we took the decision that we would actually reduce the proportion of our spending that went on Earth observation, and that is a change that we are in the middle of doing".[142] Lord Sainsbury attributed the lack of growth to the fact that the main user is the public sector: "Government is the body that wants to know about the monitoring of the environment, and it expects to get this information, essentially from its own branches of Government, free, not to buy it commercially in the market. It is therefore very difficult to create markets where you can sell this information into a commercial market which will pay you for it".[143] New Frontiers predicts that "over half of revenue will come from Government, with international organisations as the next largest customer group".[144] NERC thought that the fact that the customer for EO derived information may lie in the public sector certainly does not preclude commercial entities acting as service providers in these areas.[145] They went on to say that until recently, neither the DTI nor the ESA approach has been sufficiently user-driven towards those scientific users who will translate the data into information and that potential users had been exposed to unrealistic promises from EO data.[146]

52. Dr Stott of BARSC told us that the market for EO services had been successful in three areas: environmental scientists routinely use EO data to make predictions about climate change; and both the meteorology and the military markets have seen a dramatic take-up. In Finland, we heard the same story in relation to EO data required for forestry interests, and data on Baltic ice used for shipping. In the pure commercial market take-up had been slower both because the space segment "has not been quite right" and the actual data has not always provided the basic information required by customers.[147] However, Mr Press of BARSC made the point that one reason behind the slow take-up is that lack of access to the tools that the military has successfully developed over the last twenty or thirty years.[148] BARSC went on to say that "it would be a shame if the impetus which has been achieved with Earth observation is almost thrown away." In recent years, EO appears to have been unduly technology focussed rather than concentrating on the value-added ground segment. It appears to us that some of the EO missions of the last decade have suffered from insufficient prior discussion with those who may have wished to use the results. As a consequence they did not provide the high quality real-time and continuous information which users demand.

53. In 1999-00, the UK's national budget for EO was £45.28m, and BNSC's contribution to ESA was £44.23m. It therefore represents almost half of total UK civil space expenditure.[149] The UK Government also contributes to the European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT), the European agency involved in providing the space component of the Global Observing System (GOS) maintained by the World Meteorological Organisation.[150] In the UK the Met. Office is the Licensing Authority for the reception and use of EUMETSAT digital data in the UK. They perceive the largest market for EUMETSAT data, beyond the national meteorological services, to be with broadcasters, although they expect the market to remain more or less at current levels. They "have seen the market mature fairly quickly but as a result there is limited prospect for significant growth in the number of users".[151] EUMETSAT is a commercial success, having become completely self-supporting since privatisation.

'LIVING PLANET'

54. The UK has subscribed 14% (£67m over three years) of the cost of ESA's Living Planet programme.[152] Living Planet is a £400m programme of environmental research which aims to help scientists to understand and predict the Earth's environment and humanity's effects on it. There will be two types of EO missions:

"Earth Explorer"—research or demonstration missions designed to advance the understanding of different Earth system processes and prove new observing techniques;
"Earth Watch"—prototype operational missions serving the applications driven needs of the market.

There will be both large core missions addressing primary research objectives and smaller, faster and cheaper 'opportunity' missions.[153] The first such mission will be CRYOSAT, led by University College London, investigating the behaviour of polar ice caps. It aims to determine variations in the thickness of the Arctic sea ice and the ice sheet, ice caps and glaciers that ring the Arctic Ocean. This monitoring of the cryosphere— that is, ice sheet and sea ice— is regarded as important for climate change studies.[154] We welcome the news that the first low cost opportunity mission in the Living Planet programme is to be UK-led, and one of such self-evident practical significance.

GENERAL

55. There is a considerable amount of Earth observation data that is both useful and of public interest, such as monitoring of CO² levels or polar ice caps melting. More recent events such as fires in South East Asia and floods in central Europe have led to an increased public awareness of the need to monitor and understand what is happening to the environment. Despite this, the requirements of the existing market for Earth observation data do not appear to have been fully met, nor new markets stimulated. One of the actions for BNSC in the 1996 strategy paper was to "create the conditions under which a commercial industry in Earth observation, competitive in the world market and fully sustained by income from private and public sector operational users, can be created by 2005".[155] UK space policy appears to have failed to date in this central objective. Despite more than a decade trying to stimulate commercial markets for Earth observation data, provided at public expense, it is universally accepted that the take-up has been unsatisfactory. Expenditure on EO is one of the areas currently being evaluated by the DTI. Further EO expenditure at current levels must be driven by more than an expression of general but unsubstantiated hope that commercial markets will be generated. It must also be accepted that there are good public policy reasons to gather EO data which cannot be expected to generate a commercial return.

Space Science

56. Space science broadly refers to astronomy, planetary exploration, and other fundamental science from space. It is not the primary focus of this Committee, falling as it does to the Science and Technology Committee. PPARC, through BNSC, contributes around 14% to the ESA Space Science Programme; around £30m per year.[156] Countries of similar economic size (France, Germany, Italy) spend on average nearly double the UK spend on support for ESA science, and between 6 and 30 times the UK spend on non-ESA space science activities.[157] In 1999 ESA spent _355.2m or 13.4% of its budget on science.[158] ESA's long-term scientific programme in space, Horizon 2000, was approved in 1985. It defined four 'cornerstone' missions - SOHO/Cluster, XMM, Rosetta and FIRST, along with a number of lower cost smaller projects.[159] Horizon 2000 Plus, added three further potential 'cornerstone' missions: to explore Mercury; an astronomical mission either to detect planets or map stars with precision; and a space mission to detect gravitational waves.[160]

57. In the early 1990s, the UK subscription to the ESA Science Programme was growing but was perceived to be providing less value for money than it ought. PPARC, through BNSC, directed a campaign on the reform of the ESA Science Programme between1994 and 1998. Today the ESA space science programme is seen as relatively efficient. PPARC noted that the rate of Science missions to be delivered from an approximately constant budget is rising from six per decade to one per year.[161] The ESA Science Programme "provides opportunities for the UK to participate in world-class space science that would be completely unaffordable for the UK alone".[162]

58. New Frontiers describes the UK as a "world leader"in space science.[163] PPARC estimate that 80% of its payments to ESA return to UK industry through contracts, for example, detectors for XMM, or software for safety control.[164] Additionally, UK scientists won the right to lead provision of major instrumentation for ESA's Infrared Space Observatory (ISO) and the XMM Observatory, named Newton. Some of the missions the UK through PPARC is committed to are:

£55m to XMM, the largest X-ray space telescope ever built which will view black holes, active galaxies and determine new physics;
£25.7m to the Cassini-Huygens mission that is currently on its way to Saturn and its moon Titan, due to arrive in 2007;
£25.6m to Cluster II, the re-launch of the four-satellite mission to study the terrestrial magnetosphere and fundamental physics of magnetism;
£39.1m to the Gamma ray observatory INTEGRAL;
£70.2m to Rosetta, the spacecraft designed to orbit and land on a comet;
£2.7m to Mars Express.[165]

BEAGLE 2

59. One of the most high profile of ESA's new 'smaller, faster, cheaper' missions is Mars Express that will carry the British-led Beagle 2 Lander to Mars in 2003. It is intended that the instrument package on board the Beagle 2 will analyse samples of rock, soil and atmosphere to seek signs of past or present life on Mars. Beagle 2 is to be a private/public partnership, with around one third of the £25m cost coming from the UK Government and two thirds being raised privately. Professor Pillinger, the lead scientist for Beagle 2, told us that in 1998 the Beagle project had been told there "was virtually zero chance of any Government funding". He had therefore embarked on a campaign to raise both awareness and resources.[166] Lord Sainsbury told us that the reason behind the initial funding problems of Beagle 2 was that it arose rather suddenly as a response to the failure of the 1996 Russian Mars programme. Consequently, PPARC did not have the funds available, having committed to other scientific programmes. Funding was eventually found and the Government are "very supportive of this project within the limited funds" available.[167] Professor Halliday of PPARC told us that the initial idea for Beagle 2 "was not well defined".[168] Dr Murdin went on to say that "when the actual proposal came in from the Open University for the scientific instruments it was of surprisingly good quality".[169]

60. PPARC stressed that the all the funding for Beagle 2 has yet to be found and expressed concern "about the impact its political and financial position should this funding gap not be successfully filled".[170] Dr Murdin told us "what we are worried about is that, in the end, the demand to fill the gap will come to PPARC and it will be much more than we can find by discussion and argument about our budgets".[171] Interest in Mars has been re-awoken recently with the NASA announcement that scientists studying Mars Global Surveyor spacecraft images have observed features which suggest there may be water at or near the surface of Mars.[172] Beagle 2 may be in a position to verify, or otherwise, this finding. Beagle 2 is an example of an innovative approach to funding and of a project which seems to have won funding despite, rather than because of, the system. It now has the full support of PPARC and the space community. It would be a sad comment on the seriousness of the UK contribution to space science if the necessary funding could not be found. The project is entitled to expect Government support in finding ways to fill the funding gap which we understand has yet to be filled.

Launchers and space infrastructure

61. There are certain space applications or areas to which the UK Government has either awarded a low priority to or has decided not to participate at all. Launchers are by far the most contentious, particularly reusable launch vehicles (RLVs). A small but vocal section of the space industry and academia is strongly of the opinion that the UK has made a fundamental error in awarding a low priority to launcher development, and by not participating to any significant degree in ESA programmes such as Arianes 4 and 5, the Future European Space Transportation Investigations Programme (FESTIP), and the Future Launch Technologies Programme (FTLP).

HISTORICAL PERSPECTIVE

62. Historically, the UK has substantial experience in rocketry. In 1962 the UK was involved in the establishment of the European Launcher Development Organisation (ELDO) to develop a satellite launcher partially based on the British Blue Streak rocket. In 1968, following rapidly escalating costs, the UK indicated that it would not support any extension of the ELDO programme. In 1969 it negotiated a limitation on the UK contribution.[173] It is interesting to note that in oral evidence in 1971, the FCO told the Select Committee on Science and Technology that the decision to pull out of ELDO was a case "in which a technical decision ran against the foreign policy consideration".[174] In 1971, the UK's Black Arrow launch vehicle placed the Prospero satellite in orbit, the first and last British satellite launched on a British launcher.[175]Since then, the UK has played a minor role in launcher development.

63. In the late1980s British Aerospace were involved in a project known as HOTOL (Horizontal take off and landing), a study attempting to design a single stage to orbit spaceplane. BNSC decided not to fund the HOTOL project, a decision that sounded the death knell for the development of reusable launchers in the UK. The HOTOL study was subsequently built upon by a company set up for the purpose, Reaction Engines, to create SKYLON.[176] We were told in oral evidence by Mr Bond of Reaction Engines that "the Foreign Office may well be behind this [decision not to be involved in launchers] because we have drawn up a deal with the Americans not to tread on American industry's toes".[177] Mr Bond went on to elaborate that he was visiting the then Chief Executive of British Aerospace "on the afternoon that the Foreign Office informed British Aerospace that they had to cease activity on the multi-role capsule",[178] the implication being that if the FCO had interfered in commercial decisions once, it could have done so again.[179] We followed this up with Sir Raymond Lygo, former Chief Executive, and Mr Ivan Yates, former Director, of British Aerospace. They told us they had no recollection of any intervention by the FCO designed to deter British Aerospace from continuing to support the multi-role programme. We have no evidence to support the allegation that the Foreign and Commonwealth Office were unduly influencing commercial decisions.

ARIANE

64. In the late 1960s European nations came to realise that, without a European launch system, access to space would be dominated by the US and Russia. One result was the Ariane programme that has led to arguably the most successful commercial satellite launch vehicle in the world. The first Ariane rocket was launched in December 1974 from the Guiana Space Centre in South America: in December 1999 Ariane V became the first new-generation heavy lift launcher, placing the XMM S-Ray observatory satellite in elliptical orbit.[180] Ariane is an expendable launch vehicle (ELV). The cost of ELVs led to work towards reusable launch vehicles (RLVs). The UK opted out of launcher programmes in the 1970s and as a consequence does not participate in RLV studies, and contributes only around 1% to the Ariane V programme as part of the mandatory infrastructure support. Mr Ward of UKISC told us that the initial decision not to participate in Ariane V "was probably the right one, because when Ariane V was first conceived it was going to be a man-carrying vehicle" but that the UK should have joined when it was decided that Ariane V was needed as a lift vehicle.[181] He explained his view saying "the difficulty with all these programmes is the fact that by being part of the programme you develop the technologies and the technologies are used outside of the space applications".[182]

FUTURE LAUNCH TECHNOLOGIES PROGRAMME

65. The Future Launch Technologies Programme (FTLP) is an optional ESA programme investigating concepts and technology requirements for future reusable launch vehicles or semi-reusable launch vehicles. Seven ESA national delegations have so far committed themselves to participation in FLTP.[183] In December 1999, Lord Sainsbury announced that the UK would not participate in FLTP, stating that "the high costs of FLTP in the longer term would have an unacceptable effect on other, higher priorities. To enter Phase 1 and then to withdraw later on would have confused our partners in ESA and those firms seeking a consistent approach from Government in the high priority sectors".[184] Phase I is a development programme to identify technologies aimed at a two stage semi-reusable vehicle; Phase II is for a demonstration vehicle leading up to a fully reusable space plane to be introduced between 2015 and 2020 as Ariane V is phased out. Total development costs are estimated to be _50M for 2000-01, _600M for 2002-06 and _5B for 2007-12.[185] BNSC stated that ESA and CNES, the French space agency who play a major role in Ariane, sought a major commitment from the UK on entry into Phase 1 of FTLP before allocating leadership roles, and needed to be convinced that the UK had the resources to continue a successful start to Phase 2. Whilst subsequent entry by the UK to Phase 2 was not mandated by the rules of entry to Phase 1, ESA and CNES could not have convinced other partners to disturb the long established industrial teaming arrangements that have been established under Ariane V without some assurances of UK participation in the longer and more expensive later stages.[186]

CURRENT UK PARTICIPATION IN LAUNCHERS

66. Lord Sainsbury told us that the Government "do not see the launchers market as a commercial activity, and therefore we think it is of far less importance against the other areas where we see real commercial opportunities, which is satellite, global navigation, multimedia and so on".[187] He went on to say that "it was not an industry view that the priorities should be given to the launchers market".[188] The British Interplanetary Society (BIS) stated that they were "disappointed at the lack of any long-term vision in this area" and that "to have a space policy that does not have the space infrastructure at its foundation inevitably leads to profound weaknesses in all other areas of space activities".[189] BIS also stated that there had been a "significant expression of interest in FESTIP and FLTP by the industry".[190] Professor McInnes from the University of Glasgow thought that "since it is generally agreed that low cost access to space is a key requirement for future commercial development and exploitation of space, it is unfortunate that the UK seems destined to play only a minor role in future developments".[191] Mark Hempsell of the University of Bristol pointed out that "the lack of any support for launchers and manned spaceflight is the core of all the substantial differences between Britain's and other industrialised nations' civil space activity".[192] In UKISC's view, "given the increasing convergence between the technologies required for launch vehicles and those required to build military and commercial aircraft, the failure of HMG to support launcher development means that the wider UK aerospace industry, which is a major pillar of the UK economy, faces a real danger of being overtaken by its competitors".[193] Mr Ward of UKISC told us "we argue very strongly that we should be part of the FLTP programme because the FLTP programme at the moment is clearly to develop technologies".[194]

67. Both Reaction Engines and BSL were strident in their criticisms of the way BNSC and the Government have handled the policy decisions taken over launchers. Reaction Engines claim that BNSC is "completely arrogant" in its stance on launchers and that BNSC's claims for industry-wide support for their position is "completely untrue".[195] BSL told us that "applications for grants from various BNSC/DTI innovation schemes have usually met with the response that our proposals are not in line with UK space policy, which does not support launch vehicle development or manned spaceflight".[196] BSL provided us with copies of correspondence over the years with BNSC and DTI over applications for funding (SMART, SPUR and Foresight).[197] The Government's opinion was that, whilst the space plane designed by Mr Ashford of Bristol Spaceplanes Ltd has been shown by both ESA and BNSC studies to be technically sound, the Government does not believe that the business case, based ultimately on a market for space tourism, looks sufficiently strong to demonstrate an adequate return on the investment cost.[198] BSL, however, is concerned that no ROAME (Rationale, Objectives, Appraisal, Monitoring, Evaluation) statement was prepared in the case of launcher policy. BNSC stated in a letter to Mr Bond that DTI prepares a ROAME statement whenever approval is sought for major expenditure.[199] We requested clarification from BNSC, who told us "the relatively low priority of launchers relative to other priority items within the August 1999 UK Space Strategy (New Frontiers) was such that a meaningful participation in the FLTP could not be fitted within available resources, especially in the medium term if concepts were taken through to the development stage. As a result, BNSC did not reach the point at which a convincing rationale for a ROAME statement could be produced".[200] When questioned, Lord Sainsbury told us "we do not have an ideology that says 'we're not in launchers'" and any application concerning RLVs would be looked at with an open mind.[201] The general perception among all those involved is that the Government and BNSC are following a policy of no involvement in launchers. It is our strong impression that in BNSC there is a less than open mind on the case for Government assistance to launcher development. If Ministers do indeed have an open mind on the use of public funds for launcher research and development, they should make this explicit.

FUNDING

68. Lord Sainsbury told us that "the sums involved in the development of launchers, particularly reusable launchers, are very substantial sums of money" and gave the example of NASA looking at $4.4bn for its Venture Star programme over the next five years.[202] Space Future Consulting and Bristol Spaceplanes, however, told us that only "seedcorn" funding was needed.[203] Bristol Spaceplanes Ltd (BSL) predicted that "within a period of about ten years the cost of launching satellites is likely to fall to a hundredth of present values" and went on to say that "only limited HMG funding is needed to boost BSL credibility with the private sector finance community".[204] BSL have developed a prototype sub-orbital space plane, Ascender.[205] WildWings, a specialist trade company have over 200 passengers booked worldwide for a short flight into space.[206] Space Future Consulting are of the opinion that the Government should not participate in any launch vehicle work that is not specifically aimed at developing a passenger-carrying vehicle, stating that the UK's lack of involvement in ELVs leaves the UK uniquely placed to exploit space tourism.[207] Professor Culhane told us that whilst the decision in the 1960s may have been regrettable at the time, "the entry fee to become a major player in launchers...would be very substantial and it could be difficult to find".[208] The concern of the Royal Astronomical Society (RAS) overall is that substantial volumes of money invested in launchers "might well mean hard rations in the science programme in general".[209]

69. Given the limited funding available for civil space projects, elements of the space industry are bound to be unhappy at decisions taken not to participate in particular programmes. We were, however, struck by the strength of feeling over the UK's lack of participation in launcher development. Given that there may be some considerable progress on launcher development in the future, it is important that the UK does not find itself in a position of being unable to respond to any major technological breakthroughs. UK policy must be sufficiently flexible to allow for future participation in launchers if it is in the best interests of UK industry. We recommend that a review is undertaken of the UK's participation in launcher development programmes. Since no partner in BNSC is likely to be fighting for UK involvement in reusable launch vehicles (RLVs), we also recommend that this evaluation be undertaken by a body independent of BNSC. The decision has now been made not to participate in the Future Launch Technologies Programme (FLTP). The UK has, however, technical expertise in the area worthy of maintaining and developing. We recommend that consideration should be given to ways of fostering existing UK expertise in technical space infrastructure in the UK outside the normal avenues of space technology funding.

MANNED SPACE FLIGHT

70. The UK has long opted out of manned space flight. There was limited enthusiasm for UK participation.[210] Dr Haynes of UKISC told us "UK industry certainly supports the fact that we are not involved in manned space".[211] However, there were some voices of dissent. In 1998, ESA Member States decided to create a single astronaut corps by merging the existing astronaut programmes. Integration of astronauts from the national corps into ESA is due to be completed by mid 2000, with a target of 16 active members.[212] Professor McInnes pointed out that the lack of a UK citizen in the ESA astronaut corps may be bad for national prestige and prove a disincentive to encouraging young people to enter science and engineering courses.[213] The Association in Scotland To Research into Astronautics (A.S.T.R.A.) urged the Government to reconsider its policy of not participating as a major player in the development of Ariane V, particularly its policy of not participating in programmes relating to manned spaceflight.[214]

71. An International Space Station is being built and developed by some ESA states (excluding the UK),[215] the US, Russia, Canada and Japan. Due to be completed in 2003, it will be the largest structure in space, stretching over 100 metres. It will comprise several pressurised modules in which a crew of astronauts can live and work. The Space Station will be a research institute and observation platform in space for scientific research and applications are proposed in such disciplines as physics, chemistry, biology, medicine etc. There is some debate over the role of microgravity, the study and application of scientific and industrial processes in a weightless environment. Many countries have now decided that the outcomes from microgravity research are likely to be of limited practical use.

93 New Frontiers, p5 Back

94 New Frontiers, p8 Back

95 www.globalstar.com Back

96 www.teledesic.com Back

97 www.ico.com Back

98 Q317 Back

99 New Frontiers, p24, para 46 Back

100 New Frontiers, p23, para 43 Back

101 BNSC Press Notice P/2000/135 Back

102 New Frontiers, p24, para 47 Back

103 ESTEC webpage Back

104 Ev, p129 Back