Sentinel-2 True Colour Image of the south west of the UK, acquired on the 12th July 2025. Image courtesy of Copernicus Data Space Ecosystem.

The House of Lords UK Engagement with Space Committee released its first report last week, bluntly titled ‘The Space Economy: Act Now or Lose Out’. The Committee was appointed at the end of January 2025 to look at the UK policies relating to space, including both opportunities and challenges, and this report reflects their engagement with over 160 stakeholders in terms of written submissions, oral submissions, and on-site discussions.

The overall theme of the report was that the UK could play a bigger role in the global space economy but currently lacks a clear implementation approach for achieving this. While the UK’s National Space Strategy in 2021 was, and still is, a good strategic approach, there has been a failure to turn this ambition into a reality, while there are several reasons for this the report highlights:

• Lack of clear and consistent implementation delivery plans for the sector.
• Successive Governments not recognising that the sector is critical to future economic growth and national resilience of the country.
• The lack of profile and a political champion within Government for the space sector; this is vital as the sector cuts across many governmental departments and so there is frequently a lack of clear leadership.
• Shifting international environment in the space sector, both from governments and commercial organisations, and the UK has not reacted sufficiently to ensure it has the required national capabilities.

While the report looks across the whole sector, as you would expect, we are going to focus on the report’s comments on Earth Observation (EO).

Earth Observation

The report recognises that the UK is lauded for its expertise in EO, and that many of the submissions talked about EO being a key UK competitive advantage and one where there is already a lot of expertise in both the academia and commercial sectors.

The EO market is expected to grow very significantly in the coming years according to the report and while there are lots of estimates of this increase, the report highlights a couple of interesting figures:

• Space estimating that EO data supports underpins £100 billion (4.7%) of UK GDP.
• 2024 EUSPA report estimates EO global revenues will grow from £3 billion to around £5.5 billion over the next decade.

The importance of the UK’s involvement in European programmes such as Copernicus or EUMETSAT was highlighted by many of the submissions to the report, and it was acknowledged that Brexit caused complications by exclusion from the programmes for a period. This means that the UK space sector has still not recovered to it’s pre-Brexit role within these programmes.

The report also highlights some of the challenges for the EO sector outlined by contributors, which link to some of the overall comments in the report, including:

• Concern that the that the scientific and economic strength, impact and practical significance of EO is not well understood and recognised by Government.
• UK lacks a national co-ordination service for EO data, for public and commercial datasets.
• EO has significant dependence on foreign entities from companies like SpaceX to launch satellites, through to the lack of sovereign EO data in the country.

The section on EO concludes with the Report noting that the UK has a strong heritage in the design and manufacture of EO satellites, coupled with a strong capability in the analysis of EO datasets that can positively impact the functioning of government programmes and stimulate downstream economic activity. It is also highlighted that EO data is critical to applications such as monitoring climate change, agriculture, disaster management, maritime sector and national security.

Next Steps

The reported lists a series of recommendations, including:

• Provide a coherent strategic direction with clear delivery plans – this is not about producing a new strategy, instead the Government should focus on improving the implementation and delivery of the current strategy.
• Ensure that structures of government are adequate to deliver cross-governmental space policy, including a dedicated Space Minister – as existing government structures impede the design and delivery of UK space policy.
• The UK’s space strategy must prioritise the national capabilities which meet UK security and defence requirements as well as offering multi-use potential for commercial exploitation and growth.
• Reform the UK’s space funding model away from the current grant-based approach designed to propel research and development, to one in which government procurement is used to crowd in private investment and strengthen national capabilities. The section on EO specifically recommended the creation of Prosperity Partnerships between Universities and UK EO companies as one part of this reform.
• Address skills challenges within the space sector as this is one of biggest barriers to growth for the sector.
• Adopt a strategic approach to international partnerships and where to focus efforts as the space sector shifts, for example, the US is moving away from EO and climate change monitoring.
• Promote space safety and sustainability on the international stage and ensure the UK remains at the forefront of space regulation.

Conclusion

This is wide ranging report, but its message is very clear – the UK must act now if it wishes to be a leader in the growing space economy, and if we don’t, we will be left behind.