The UK risks falling behind in the global space race, unless the UK Government takes immediate action on leadership, strategy, and funding, a parliamentary committee has warned.

Publishing a new report on the UK’s burgeoning space economy, the House of Lords’ cross-party UK Engagement with Space Committee cautioned that the country is losing out to international competitors, and is on track to lose half of its global market share in space.

The space sector is a vital economic engine, underpinning 18% of UK GDP through satellite services, and, despite a dip in GVA over 2022/23, productivity per employee remains more than double the national average, according to official figures.

Space is perhaps even more critical to Scotland, with the Scottish Government aiming to make the country Europe’s ‘leading space nation’. Figures show the sector already has a huge impact north of the border, generating £381 million in income and contributing £880 million to the Scottish economy last year.

But while there is much to lose, the committee said that the Government is not doing enough to maintain and grow the UK’s space ambitions.

Collecting evidence from experts and industry, peers found that UK space firms are starved of growth capital, forcing many to scale abroad. Universities (described as the bedrock of the space economy) face their own funding pressures, threatening the country’s leadership in space science.

Capital isn’t the only constraint, though, with 95% of UK space firms reporting critical skills shortages as talent exits the sector for greener pastures. This brain drain, coupled with rising geopolitical tensions, is putting long-standing space sector partnerships, especially with the US, at risk.

However, the biggest problem by far, according to the Lord’s report, is the Government’s chronic lack of leadership, with peers slamming the Government’s failure to provide strategic direction, consistent funding, and coherent structures, warning these gaps are crippling UK space policy.

Put together, these issues are stalling one of the UK’s most forward-looking industries, with one expert bluntly telling the committee: “We haven’t seen a breakout UK space business in a long time.” 

The fix, says the report, will require bold Government action, reviving the unrealised ambition of the Conservatives’ 2021 National Space Strategy.

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The Lords recommend that Labour appoint a dedicated Space Minister and Space Champion to lead government engagement with industry, reform the UK’s space funding model, and develop agile, forward-looking space-centred regulation.

The current strategy should also be changed to focus on the development of multi-use technologies, especially to meet security and defence needs, and a Space Skills Taskforce should be set up with the authority to drive skills development to maintain UK competitiveness.

“Only the most strategic and forward-looking nations will capture the economic and scientific rewards of this new space age,” said Baroness Ashton, Chair of the UK Engagement with Space Committee.

“With the right leadership, coordination, and investment, the UK can be there. Space is transforming the world, and our report found much to be positive about. Britain should play a role in leading this transformation. If not, it risks being left behind.”