A report from the Commons Science, Innovation and Technology Committee claims that bolstering domestic launch capabilities would also help to strengthen Britain's position in the design and manufacture of small satellites.
However, the first attempt at a rocket launch from British soil by Virgin Orbit in January this year failed catastrophically, with the firm discovering that a dislodged fuel filter caused an engine to overheat.
Virgin Orbit, which has since been shuttered in the wake of the disastrous launch, were highly critical of the UK regulatory process which preceded the attempt.
This process was led by the Civil Aviation Authority (CAA), who were accused by Virgin Orbit of operating a process that was slow, excessively bureaucratic, and risk averse. The CAA defended the licencing process, pointing out that the UK's first launch involved necessary complexity including overflying residential populations and different countries' airspace.
The body also said it had an overriding duty to maintain public safety and that the launch, whilst not successful, failed for reasons unrelated to the licencing process.
Despite recent efforts to simplify the process, the report found that there is still "insufficient coordination" between the large number of regulatory bodies involved in the licensing. This places undue administrative burdens on firms – many of whom are small start-ups – in the launch sector, it added.
The government was recommended to improve the "regulatory interfaces" between the multiple regulatory bodies which includes the CAA, the Health & Safety Executive and the Environment Agency. It was also urged to establish framework agreements with neighbouring states over the use of airspace.
"Given the fast-moving and internationally competitive character of the space and satellite industry, these matters must be carried out urgently, and conclude by the end of this year, to avoid the UK losing its head start in launch," the report concluded.
"Time is running out in this Parliament for the government to translate high-level ambitions into practical plans. There is now not a moment to lose if the UK is to realise the full potential of this extraordinary sector, which is booming worldwide, and in which we have a world class capability and reputation."
Tim Johnson, director of space regulation at the CAA, said: "The UK is on the cusp of home-grown space launches and this report is both timely and welcome.
"The next 12 months will be a very exciting time for the UK space sector and the Civil Aviation Authority is playing a central and vital role making space activity safe.
"We welcome the recommendations to further streamline and simplify the space licensing process and have made significant improvements already, with many more to come."
