Select Committee on Science and Technology Written Evidence

Annex 1


  Without seeing the report by Oxford Economic Forecasting on which the C4S report is based, it is not possible to evaluate it in detail. While sympathising with the authors' desire to increase space funding, it is important to note the report's weaknesses; only by making a fair economic assessment can sound policy decisions be made.

  (a)  Like similar reports prepared for the BNSC (discussed in SFC's October Submission), the C4S report discusses only satellite engineering, on which the DTI and BNSC have spent much of nearly £4 billion over 20 years. It thereby misleads readers into thinking that this is the whole commercial space industry—which is starkly untrue—particularly in view of the rapid growth of activities to realise sub-orbital space tourism in countries other than Britain. This continuing silence about the feasibility, low cost, promising growth prospects and other potential benefits of the development of passenger space travel services keeps the general public in ignorance of this important new field for commercial and industrial growth.

  (b)  The C4S report uses a number of performance measures which are quite different from those used in the commercial world, such as % of staff with university degrees, and "downstream output per employee". Where normal commercial information is provided, it is not emphasised—for the obvious reason that the industry's performance is poor, as seen from the following examples:

  (i)  For 2003, global sales of surveillance satellite services are stated as $100 million, versus $2,400 million investment in surveillance satellite systems themselves—a very poor result from the economic point of view. Further investigation would likely show that much of these sales are to government organisations, and are therefore not commercial demand. It would probably also reveal that this performance is not significantly improved over that which the Trade & Industry Select Committee's 2000 Report described as having "failed" (despite investment of a further 300 million pounds since then). In truth, it is incorrect to describe this as a commercial activity; it is a government activity. As such, heavy investment in surveillance satellite systems may be justified as military or environmental projects, but they are very far from being commercially justified. Consequently, the government's stated policy objective to help British industry to earn profits from space activities requires it to investigate space tourism as a much more promsing option.

  (ii)  For 2004, 75% of the commercial benefits claimed from the DTI's investment in communication satellites appears to be sales revenues of television programming ("downstream turnover"). This is presumably claimed to have the economic benefit of "improving consumer choice"; however it can equally well be argued that supplying hundreds of channels of low-cost television programming has negative economic value due to its well-known anti-educational influence.

  (c)  The C4S report greatly overstates economic benefits through effectively double-counting via "catalytic effects", "spillover benefits", "multiplier effects" and others. For example it is claimed that "direct employment" of 17,560 in 2004-05 "...helps to support almost 70,000 jobs". However, such measures can be seriously misleading unless great care is taken to compare "like with like". For example the "spillover" and "multiplier" benefits of such services as Public Libraries or the Blood Donor Service are also very large; satellite engineering has no monopoly of this type of indirect benefit. Standard measures such as profitability and direct employment, as used in commerce and industry, are easier to evaluate, and are indeed more appropriate for assessing projects which are claimed to be commercial, rather than public services, as the Minister for Science and BNSC claim of surveillance satellites.

  (d)  The C4S report contains ambitious claims about future projected satellite service sales revenues. However these depend on a number of dubious assumptions—such as the truly Orwellian nightmare that "satellite navigation will be part of every mobile phone, every car"!

  (e)  The C4S report appears to contain a number of errors, such as the figure that communications satellites generated $14 billion in launch services in 2003 (which is more than 10 times the whole commercial satellite launch market).

  (f)  The C4S report states that: "Space inspires students to study science subjects" and includes various claims about satellite engineering's contribution to science education. However, it does not mention the fact that British student enrolments in science courses are in free-fall, and approaching crisis-level! (as discussed in SFC's October Submission). Current practice must therefore be judged as very ineffective—and this is easy to understand: satellite engineering is a very specialised, technical field which is of interest to only a small minority of people. HMG's policy of limiting space investment to satellite engineering has therefore surely had the contrary, very undesirable effect of reducing young peoples' spontaneous interest in space. By contrast, surveys of young people show that they are fascinated and enthused by the idea that they themselves could make a short flight to space for the equivalent of a few thousand pounds within five to 10 years; this can be used to stimulate interest in a wide range of related subjects. (The author has direct experience of this as a teacher.) But successive Ministers, the BNSC, and the DTI keep this knowledge hidden from school-children, students and the general public.

  (g)  Finally, the C4S claims that investment in satellites is "disruptive technology" with great innovative potential. However, no evidence is provided that this will be any more profitable than existing satellite-based information services. By comparison, passenger space travel is so genuinely "disruptive" that successive Ministers for Science and Innovation and Ministers for Trade and Industry have refused to even discuss the subject for more than 10 years! They have refused to permit even a single feasibility study, while spending billions of pounds on unprofitable projects which were recognised in 2000 as having "failed"; and they have repeatedly commissioned reports on space policy that specifically ignore this key subject.

  In summary, following the practice of recent Science Ministers and senior BNSC staff, the C4S Report does not mention space tourism at all. Instead, having received the bulk of HMG space funding for decades, amounting to several billion pounds, UKSpace request an additional 50 million pounds/year for even more satellite work. However, without at least comparing the likely results with an equivalent investment in passenger space travel it is not possible to conclude that this would be a good investment of public funds. As a simple comparison, a single year of such funding is enough to develop the "Ascender" spaceplane prototype which would be capable of carrying passengers to space. If the general public was informed of this, there would surely be a large majority supporting investment in developing passenger space travel, instead of the zero level which the government persists in.

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