Select Committee on Science and Technology Written Evidence

Memorandum 82

Submission from Virgin Galactic

  Virgin Galactic is pleased to provide a response to the subject inquiry. We welcome the opportunity to communicate our experience from developing a business model for safe, frequent and affordable access to space for the general public. I hope that this evidence will convey properly the strategic importance to the UK of fostering a commercial space sector through appropriate policy. Recent applications of science and technology to communication and sensing satellites have influenced world economy globalisation and identified threats to the world's ecosystem. We believe that an effective policy which ensures access to space for UK industry and government is essential.


  1.1  The following testimony is provided in support of the Science and Technology Committee inquiry into aspects of UK space policy. I am Will Whitehorn, President of Virgin Galactic (VG) and senior investment advisor to the Virgin Group. I can provide your inquiry with evidence from the perspective of a commercial enterprise engaged actively in the international space sector.

  1.2  The economic and public benefits of a profitable, sustainable and diverse UK space sector are tremendously promising. The realisation of these benefits is dependent on UK space policy and its openness and willingness to foster commercial development.

  1.3  VG is excited to be leading the way in developing safe, frequent and affordable human space access services. VG believes this has the potential to complement UK space policy and benefit the UK economically and socially. By the end of this decade VG intends to provide sub-orbital space tourism services to the general public, initially operating from the US. Unfortunately, VG's ability to operate in the UK is currently hindered by a lack of:

    —    an appropriate domestic regulatory framework;

    —    emphasis of public funding toward human spaceflight activities;

    —    financial incentives; and

    —    flexibility imposed by US export control regimes.

  1.4  To maximise the commercial benefits and wealth creation from UK space-based technologies, I recommend the Committee addresses the following in its inquiry:

  The UK should

    —    encourage private sector investment in space activities through commercial incentives, possibly through monetary and fiscal policy;

    —    develop a more favourable policy and regulatory regime for the emerging space markets. Reference should be made to the US which has been forward thinking on this matter;

    —    ensure that export control regimes do not unnecessarily hinder the private sector, whilst protecting the UK's national interests and those of its allies;

    —    invest in Public-Private-Partnership type arrangements for basic infrastructures, such as space ports, that can be shared with the private sector for commercial activities; and

    —    leverage and foster commercially available technologies for affordable access to space. Market forces dictate that the private sector will deliver the most competitive products, for which the government can be a major consumer. Commercial launch systems have the potential to alleviate any pressure on the UK government to develop its own human spaceflight programme, but can provide avenues for involvement, which we would be pleased to elaborate on.

  1.5  Delivery of public benefits from space-related activities could be realised not only through the UK's various government departments, but also its industrial partners and world-renowned research facilities. VG acknowledges the UK's leading position in areas such as Astronomy and Earth Observation. The UK could expand on this by:

    —    developing renewable, benign fuels that will reduce the environmental impact of space access and transportation here on Earth. The Virgin Group is proud to be leading in this area with the establishment of Virgin Fuels, which will invest up to $400 million in renewable energy initiatives over the next three years, and

    —    considering state funding and/or research into enabling technologies such as those required for high-speed aerospace transportation.

  1.6  Encouragement of the commercial space industry and associated technology development in the UK could raise funds for the Exchequer through Intellectual Property (IP) rights and tax revenue.

  1.7  Support for space-related research and the UK skills base will be enhanced by the involvement of the commercial sector. For example:

    —    VG has already engaged several UK companies as possible contributors to the experience VG offers to its customers.

    —    The UK's insurance market could build on its success and expertise by offering services to the commercial space sector.

    —    Establishment of a robust commercial space sector will limit:

    —  the "brain drain" to the wider EU and US of the UK's brightest individuals who are interested in this fascinating industry, by providing career incentives and opportunities; and

    —  the decline in the uptake of science and engineering courses at secondary and tertiary levels. As evidenced by the Apollo era, spaceflight can increase national pride and inspire our young to pursue studies in technical disciplines. VG is proud to have tremendous support from the UK public, with some 16.3% of our customers based in the UK.


  1.8  By the end of this decade VG intends to provide sub-orbital space tourism services to the general public. Initially operating in the US, VG's customers will experience the thrill of a rocket ride to an altitude of approximately 110 km followed by zero-gravity "floating" and a spectacular view of the Earth below. Providing the service on the SpaceShipTwo craft at the highest achievable level of safety is of primary importance to VG, our pilots and our partners.

  1.9  In the next few decades, VG forecasts that the industry will progress beyond sub-orbital space tourism to high-speed civil transportation outside the atmosphere and private orbital facilities. As well as human spaceflight, both science and payload deployment will be possible.

  1.10  VG wishes to be a global leader in future space transportation services. VG therefore encourages further involvement by the UK government in technology development and policy initiatives aimed at increasing domestic incentives and decreasing regulatory barriers.


  2.1  Below is a discussion of general observations based on our experience to date in establishing a business model for VG. As with all new private ventures seeking to be successful, there must be:

    —    sufficiently mature technology in the product or service being offered;

    —    an inviting or non-intrusive regulatory environment;

    —    government policy that is open to and allows commercial innovation;

    —    a stable and predicable legal framework; and

    —    an identifiable customer demand that results in a commercially viable return on investment.

2.2  Technology

  2.2.1  Demonstrating the innovation and cost efficiency of the commercial space sector, the technology now licensed by VG was developed with private investment. Private enterprise can also extract the most commercial potential from technology developed by government-sponsored civil and military efforts.

  2.2.2  In order to widen the opportunities for safe and commercially viable spaceflight for the general public, advances will need to be made in key technical areas. For example, high-speed trans-oceanic/continental civil transport will likely require at a minimum:

    —    reliable, air-breathing rocket engines;

    —    light-weight, reusable thermal protection systems;

    —    advanced avionics and flight software;

    —    renewable, benign fuels that minimise environmental impact;

    —    low-cost operations including ground systems and support infrastructure; and

    —    a significantly higher level of safety performance than has been achieved on spaceflight missions to date.

  2.2.3  It is our belief that these technologies could be developed independently in the UK at its various government departments, industrial partners and world-renowned research facilities. Fostering technological development in the private and public sectors should be a principal objective of UK space policy.

2.3  Regulatory

  2.3.1  It is imperative that the UK develop a supportive and stable regulatory framework for the emerging commercial space industries, such as space tourism, that will appreciate and account for the early risks and challenges associated with development of this new industry. For example, the formation of the Office of Commercial Space Transportation (AST) under the auspices of the US Federal Aviation Administration, assists the industry in specifying requirements for the emerging suborbital tourism and private space launch market.

  2.3.2  VG's operations will commence in the US for two main reasons:

    —    VG has the ability to operate in the US through policy such as the Commercial Space Launch Amendments Act (CSLAA) of 2004; and

    —    the proprietary technology being US-based and governed by export control regulations, specifically the International Traffic in Arms Regulations (ITAR).

  2.3.3  Similar regulatory representation in the UK would be beneficial in accelerating the development of commercial space launch systems in the UK for both manned and unmanned payloads. Commercial systems have the potential to alleviate any pressure on the UK government to develop its own human spaceflight programme.

  2.3.4  VG's ability to operate in the UK is currently hindered by a lack of an appropriate domestic regulatory framework and inflexibility imposed by US export control regimes.

  2.3.5  It is vital that the UK government works across borders with its allies to ensure a workable and equitable export control regime. Whilst VG agrees that it is paramount to protect the national interests of the UK and its allies, export control regulations must not present an unnecessary and/or insurmountable barrier to commercial progress in the space sector. It is VG's desire to have operations running in the UK in the near future. A barrier to realising this objective could be an overly-restrictive export control regime.

2.4  Commercial

  2.4.1  Commercial incentives, possibly through monetary and fiscal policy, would assist greatly in the development of space-related industries in the UK. Overseas governments are offering financial incentives to emerging space companies through public funding of infrastructure such as spaceports. In the US, the state of New Mexico's assistance in the development of Spaceport America assisted greatly in confirming the commercial viability of VG. The state has been visionary in understanding the medium and long term economic and social benefits from supporting commercial launch systems.

  2.4.2  Incentive schemes such as the Ansari X-Prize have also accelerated development and funding for the commercial space sector. Historically, financial prizes for the demonstration of technological advancement are a British invention—in the early years of the last century, the Daily Mail newspaper offered a series of aviation prizes including $50,000 for the first non-stop crossing of the Atlantic; that first crossing was made by Captain John Alcock and Lt Arthur Whitten Brown in 1919. More recently, the Kremer prize is an example of financial incentives spurring technological advances in lightweight materials for aircraft. Speaking for private industry, VG encourages the provision of such prizes in the future.

  2.4.3  The potential revenue generation from UK space policy fostering a commercial space sector is significant. For example, affordable access to space, such as that provided by VG, enables previously uneconomic research in fields such as pharmaceuticals, earth sciences and life sciences, thus increasing the pace of technological development. If UK companies can partake in this research, IP opportunities can be realised increasing future wealth creation.


  3.1  VG is excited to be leading the way in developing safe, frequent and affordable human space access services. VG believes that this venture represents a watershed moment in human spaceflight from that of a government-led and dominated realm to a robust, self-sustaining private industry. A combination of public and private technology development, government incentives, reduced regulatory barriers, a stable legal environment and the spirit of entrepreneurship of our company's founder are enabling this natural progression.

  3.2  VG regards the Committee's wide-ranging inquiry into UK space policy as a positive step forward in realising a more profitable and sustainable UK space sector. In summary, VG encourages the Committee to investigate the benefits of:

    —    introducing incentives for private sector investment in space activities;

    —    reducing regulatory barriers for the emerging space markets; and

    —    fostering public and private technological development.

November 2006

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