The UK Government has pledged to outline its plans to support Scotland’s space launch sector in 2026, promising the ‘clarity and direction’ needed for the industry to realise its potential and transform Scotland into a major European launch nation.

Responding to a Scottish Affairs Committee warning that Scotland was at risk of losing its ‘first‑mover advantage’ in orbital launch, the government conceded that only sustained, strategic public investment will keep UK space firms in the European race.

In the wake of the most recent Spending Review, the government said it planned to boost UK space funding by 8% for 2025/26, with costed plans due next year to set out its space plans centred on Industrial Strategy, national security, and defence priorities.

The government reiterated its support for Scotland’s orbital launch industry, pointing out that it has already invested £98 million into the sector and promised to continue pushing for deeper international partnerships with a view to pursuing co-operation agreements and jointly delivered programmes.

“The Government recognises the scale of the opportunity for Scottish launch,” wrote Liz Lloyd, parliamentary under secretary of state for DSIT, in a foreword to the response.

“Scotland’s unique geography, innovative launch startups, combined with a strong satellite manufacturing heritage, gives us the opportunity to develop a highly attractive end-to-end offer for customers to design, build, launch and operate satellites all from Scottish soil. 

“In addition, a Scottish launch capability will enhance our national security and resilience, as well as provide an opportunity to strengthen our relationships with international partners and allies.” 

Despite applauding the success of the Scottish launch sector and touting its potential, the government sidestepped the Committee’s call for concrete steps toward progress.

For example, while MPs had urged prioritised investment in Scottish launch sites to reduce reliance on foreign providers, the administration’s response pointed only to past spending, highlighting £10 million for SaxaVord last year and £26 million for Orbex’s Prime launch vehicle.

Likewise, the government rejected for the moment the Committee’s recommendation to designate all spaceports as freeports to drive growth and stated it has no plans to create a dedicated Cabinet appointment for space, another central recommendation.

Instead, the government seems to be pursuing a hands-off approach, other than a vague promise to ‘work closely’ with Orbex as it progresses through the European Launcher Challenge and to promote UK launch services to overseas customers.

Arguing that the public sector is “unlikely to provide sufficient demand” to sustain the launch industry, the government signalled a preference for a commercial‑led approach. Mirroring the SpaceX model, the government instead wants private firms to shoulder the cost and risk of early, failure‑prone launches.

That approach is necessary, the government said, because space launch is a high‑risk industry, meaning public investment carries significant risk, and it cannot “guarantee success in building a Scottish launch at any cost.”

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The government’s 8% investment hike doesn’t compare favourably with Europe’s plans. Last week, the European Space Agency saw the largest contributions in its history from member states, totalling €22.3 billion, a 17% increase when corrected for inflation on its 2022 commitments, with the UK stepping in to contribute £1.7 billion.

However, while the UK is pouring billions into the European Space Agency, Scotland’s space sector is seeing only a fraction of similar funding, a gap the government must reconcile in its promised strategy.

“With five out of the UK’s seven developing spaceports located in Scotland, we have real potential to become [a] leader in satellite space launch,” said Patricia Ferguson, Chair of the Scottish Affairs Committee.

“However, it was clear to the committee that unless the UK Government moves further and faster to support the sector, Scotland will lose out on this generational opportunity.

“I welcome the government’s commitment to set out its strategic priorities and costed plans for the sector in 2026. The Committee will examine this publication to see whether it can provide Scotland’s space launch industry with the confidence and clarity it needs to scale up and realise the UK’s potential as a serious contender on the global launch stage.”