Space: The ascent of Manx

Forget Houston, the Isle of Man is the location for the world's latest space hub. It's a tiny island with grand ambitions, says Jonathan Brown

The wind from the Irish Sea whips across the former airfield at Jurby on the north-western tip of the Isle of Man. It was from this bracing spot during the Second World War that the RAF flew missions to protect the cities of Liverpool and Belfast from the Luftwaffe bombs. The hangars still stand today, although the armed forces left nearly four decades ago.

The structures provide a startling symbol of this small island's soaring ambition to one day slip the shackles of the Earth and head for the stars. Next month international journalists, potential investors and local schoolchildren will be invited to Jurby to view two Almaz space stations housed here.

The island-based company Excalibur Almaz bought them from the Russian government earlier this year – for what it describes as a "good price". The spacecraft were once part of a top-secret Cold War project for spying on the West. After they have been refurbished, the forbears of the pioneering Salyut and Mir projects will, at some point during the current decade, provide accommodation for space tourists willing to pay up to £20m to realise the dream of civilian space travel.

It may seem puzzling to outsiders, but this small, self-governing outcrop of rock and lush grass perched between the coasts of Cumbria and County Down, has become a major player in the modern space race. Best known for its offshore banks and treacherous motorcycle race, the island was recently ranked the fifth-most-likely "nation" to lead a manned mission back to the Moon after the United States, Russia, China and India. Despite a population measuring just 83,000, the territory is on its way to securing its reputation as the celtic Houston. A recent report by the Economic Policy Centre underlined this by urging the UK Government to learn lessons from its tiny dependent's "conspicuously successful" approach.

The architect of much of this success is Chris Stott, founder of space company ManSat. Although he now lives in Texas with his wife Nicole, an astronaut who recently returned from the space shuttle Discovery's final mission, Stott can trace his ancestors on the island back 2,000 years.

It was in the late 1990s that the former political speechwriter got the call to put his skills as a policy expert into action on behalf of his native land. "I was asked by the chief minister Don Gelling to go off and build an industry," he says. "We had a plan on paper how we would do that, what people we wanted here who could put employment and real assets on the island. His actual words were 'I want Manx children on Mars'. When the chief minister of the country asks you to do something like that, you go and do it."

For inspiration, Stott delved back further than Kennedy-era America and its spirit of idealism, finding common cause with the pragmatism of the 14th-century Italian city states. "We looked to see where in the past policies had really worked well financially in providing work and wealth and we looked at the Venetian republic. They were in the middle of the silk route and they dipped in. By doing that they provided a safe regulatory environment for people to trade," he says.

"We said we always wanted to be the Switzerland of space. Now we have competing companies who are very tough with each other in the marketplace but who can come and work side by side with each other on the island and are all right with that."

At the core of the Manx offer to a collection of 17 companies that is already on the way towards earning its first £1bn here is the extraordinarily generous offshore tax rate. Corporate tax – with the exception of banking, land and property earnings – stands at zero. Income tax is just 20 per cent and total tax bills are capped at £115,000 a year.

The former Nasa commander Leroy Chiao, now director of Excalibur Almaz, says the tax advantages were instrumental in persuading his company to store the two stations on the island. "We are mostly incorporated there for tax reasons," he says.

But the islanders insist that it is not just the prospect of a benevolent exchequer that has lured big hitters such as CVI Technical Optics – which provided the lenses that discovered snow on Mars – and leading satellite operators SES, Telsat, Avanti and Inmarsat. They point to the financial, legal and insurance expertise that has gathered around the capital, Douglas – services that are at the heart of the new private-sector-led space industry, which relies on cash and international agreement to boldly go where few men and women have gone before.

The Manx leaders, who have jealously guarded their autonomy since founding the world's longest continuously serving parliament at the Tynwald in 979, chose their moment to turn to the heavens judiciously. The last decade has witnessed a rapid switch from the military dominance of space to its commercialisation and the island is riding the booming demand for satellites from data, television and internet companies hungry for high definition, 3D and cloud computing. It already boasted an aeronautical tradition first established 60 years back when the Ronaldsway Aircraft Company pioneered production of the ejector seat. Crime is low, unemployment virtually unknown and the island has just notched up its 25th year of successive growth. Compared with other offshore tax havens, it is cheap and uncrowded.

Carla Sharpe moved to Douglas with her teenage son from their home in Cape Town and is now a part of a small, but dedicated, space community numbering about 20 highly qualified people. A graduate of the International Space University's executive MBA programme, she has set up her own consultancy and is currently working on what she describes as a "space debris solution". This entails building a constellation of satellites capable of removing from near space small items of scrap, some as tiny as a fleck of paint, which can cause major damage when they crash into an orbiting object travelling at 17,000 mph.

"I'm a true space cadet. I get excited whenever I see Darth Vader," she says. "These are very exciting times – not just for the Isle of Man but worldwide in making space travel normal for civilians." She says she would go into space "in a flash". She adds: "They have a proactive attitude to developing the industry here. Government officials are readily accessible and receptive to new ideas. I thoroughly enjoy life here. There is a lot of freedom because there is no crime and it is efficient so it gets business done."

Among the future spin-offs she sees coming out of the current projects are Moon bases with remote machines in search of minerals and energy resources and the development of near-space travel to make every part of the globe reachable within two hours. "Everything we use today and take for granted results from space exploration – weather forecasts, cell phones, computing – we would be back in the dark ages without satellites," she says.

But the subject that really gets people excited is the Moon, which has been unvisited by humans since 1972. In 2010 it became even more unreachable with Barack Obama's decision to cancel the $9bn Constellation Lunar Project initiated by his predecessor, George Bush.

"Until now, this has been an industry dominated by governments and the military but private companies are getting involved, such as Virgin. It is a stage development. First you have to get civilians to the edge of space and then into orbit. The next stage is to take them to the Moon," Sharpe says.

The island's celestial ambitions rest with Odyssey Moon. It was the first company to throw its hat in the ring for the $30m (£18m) Google Lunar X Prize and last year the island hosted 14 of the 23 teams competing for the lucrative purse available to a private company capable of putting a space craft on the Moon and relaying pictures back to Earth.

Dr Robert Richards, a founder of the International Space University, which has just opened its first outpost on the Isle of Man (the island beat Los Angeles, Toronto, Paris and New York to host the new institution) created Odyssey Moon. He believes the world is poised for a new era of "Moonrush". Announcing the company's entry into the race, he described the quest as: "A Rosetta Stone of science and knowledge waiting to be unlocked by the explorers of our age."

Bold words, but those expecting to see vapour trails of rockets blasting off from the middle of the Irish Sea will be disappointed. The unpredictable weather and the proximity of busy trans-Atlantic airline routes mean that launches will continue to take place elsewhere. Islanders are looking forward to marking their national day in July with the return of a section of ground taken from Tynwald Hill . It is being brought back to Douglas by the crew of Discovery, which took the sample into space on the craft's final mission. One small step for the might of Nasa, perhaps – but one giant leap for Manx-kind.