Recommendation 3

HM Government Accepted in Part

The Government’s investment in OneWeb is a significant strategic investment, demonstrating our commitment to the UK’s space sector and ambition to put the UK at the forefront of a new commercial space age. The Government notes the Committee’s interest in the need for transparency and scrutiny of the investment but does not agree that it is necessary to provide a separate yearly report on the investment as the value of the Government’s interest in OneWeb is published in the Department’s Annual Report and Accounts, and significant updates on OneWeb’s business and activities are made public through the Government’s and OneWeb’s press releases. The Government agrees that the investment approach should be treated as exceptional but would highlight the strategic importance of the investment and that OneWeb now employs over 500 people, of which approximately 70% are based in the UK, up from around 80 people when exiting bankruptcy. The Government agrees that the merger between OneWeb and Eutelsat should be scrutinised under the National Security and Investment Act. However, Government does not comment on individual cases. Under the terms of the merger, the UK Government will retain the special share rights over OneWeb. The special share rights include a range of national security rights, including over security standards of the OneWeb network and the use of the OneWeb network for national security purposes, the UK being the preferred location for future OneWeb launches on a commercial basis, and OneWeb preferring businesses in the UK for future procurement on a commercial basis. OneWeb will continue to trade under its existing name, remain headquartered in the UK and operate the Low- Earth Orbit business for the combined group. Decisions on the design and development of Gen2 are ultimately matters for OneWeb. The Government’s special share rights of first preference for UK procurement only apply on a commercially competitive basis. This means we could not compel OneWeb to locate all elements of the manufacturing process for its Gen2 constellation in the UK where it does not make commercial sense. The Government’s special share does enable us to continue to champion British manufacturing opportunities as we have done successfully for Gen1. The design and manufacturing stages are where most of the value is added, and the UK space sector designs and manufactures many of the key components for OneWeb’s Gen1 satellites. For example, the Gen1 payloads are manufactured in the UK by Teledyne. 4 Government Response: UK space strategy and UK satellite infrastructure The Government views OneWeb as an important partner and is working with the company to grow their supply chain and manufacturing activity in the UK as they look towards Gen2. We have supported many UK space companies, including OneWeb, through a variety of programmes, such as ESA’s ARTES Programme and will continue to do so to ensure a robust and thriving UK space sector, in line with our National Space Strategy.