UK firms are "being excluded" from European space contracts due to Brexit uncertainty

Rebecca Smith
UK firms have reported being excluded from lucrative contracts
UK firms have reported being excluded from lucrative contracts (Source: Getty)

British firms are being "excluded" from bidding for lucrative space contracts due to concerns over Brexit, aerospace bosses said today.

Simon Henley, the president-elect of the Royal Aeronautical Society, told MPs companies have said they are losing out.

He gave the example of the Galileo programme, Europe's global navigation satellite system, created through the European Space Agency and the European Global Navigation Satellite Systems Agency. UK firms had been "very successful up to date" with regards to work on it, he said.

"But we have had companies now reporting to us that they are being excluded from bidding for contracts on Galileo," he told the Business, Energy and Industrial Strategy Committee for a discussion of Brexit implications for the aerospace industry.

"Although membership of the European Space Agency is not part of the EU discussions, because it's not an EU body, many of the contracts, including Galileo are EU funded," he added.

It's a requirement that the companies that participate and get funding for there and bid for contracts are part of an EU country, and so we're already seeing contracts being turned away from UK industry because of the uncertainty.

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Reallocating work

The space industry is worth around £14bn to the UK, with around 40,000 direct employees.

Paul Everitt, the chief executive of trade body ADS, said there had been fast growth in the sector because demand for satellites is increasing quite significantly.

He said businesses working on space projects, "have to specifically indicate where they would locate their supply chains" post-March 2019 in order to bid for work.

Everitt added UK firms which have done "extremely well" from space programmes, are "having to make decisions, or give indications, of where they're going to reallocate that work in the event that we leave the European Union in March 2019".

Holding pattern

Meanwhile, Airbus UK's senior vice president, Katherine Bennett, said her firm's main concern was ensuring its sites remained productive and competitive.

Bennett said "every single site in Airbus, whether it's in the EU, or outside the EU, has to compete for every single piece of investment, and I have to say Brexit puts an extra burden on us".

Everitt said: "Everyone's in a bit of a holding pattern, because they are trying to sweat their assets for as long as possible before they commit to new investment. They'd like to have an understanding of what the world is going to look like because they'll be making investments that have a 10 to 20 year lifespan."

Research from the UK Space Agency last year found the sector supports £250bn of output across the economy.

The total income of the UK space industry grew to £13.7bn in 2014/15, equivalent to 6.5 per cent of the global space economy in that year.

The government has previously pledged to put Britain at the heart of new space-flight technology.

A spokesperson for the Department of Business, Energy and Industrial Strategy, said:

“The UK space sector is a global success story and the Government is committed to building on this success to further boost the sector and capture 10 per cent of the global space market by 2030.

“We have been clear that, given the unique nature of space programmes, the EU and UK will discuss all options for future cooperation in the negotiations.”

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