Lord Callanan

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That the Bill be now read a second time.

The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)

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My Lords, the UK space industry is a British success story—a story of invention and innovation, of enterprising spirit and global ambition: from our close collaboration with the European Space Agency, which continues to yield ground-breaking science and discovery, to our globally respected satellite companies leading the small satellite revolution. I know that many noble Lords share my admiration for the UK’s achievements in space and will be keen to contribute to its continued success, which is why I welcome their input into and scrutiny of the Space Industry Bill, a Bill that will boldly go where no Bill has gone before.

Very few people realise how important space is to our everyday lives. Satellites in particular provide many critical services that we all take for granted. Navigation satellites, for example, provide the precision timing needed to enable global financial transactions. They support the safe and efficient use of our seas and skies, and help us all to find our way in unfamiliar surroundings. Weather satellites equip farmers, health workers and the emergency services with the foresight to protect people, property and produce from extreme weather, and provide unique insights into our changing climate. Communication and imaging satellites let us monitor disasters and threats to our national interests, and allow us to watch live news events unfolding anywhere on earth. Indeed, satellites, a specialty of the British space industry, play a crucial role in our economy, supporting more than £250 billion of our GDP, and provide the data to power the future of our digital economy. Noble Lords can see why space has been made part of our critical national infrastructure.

This is how we use space today. Looking to the future, ambitious new plans could require tens of thousands of new small satellites to be launched and serviced. This surge in demand is the result of the declining costs of satellite manufacturing and launch services. What was once possible only at huge public expense is now being pursued commercially by companies such as SpaceX and Rocket Lab, spurred on by the global market for small satellite launch that could be worth £25 billion over the next 20 years. This is not the only opportunity. Sub-orbital flights to the edge of space offer another emerging commercial prospect. Such flights would not only be thrilling for paying customers but could expand the boundaries of human knowledge by giving our world-leading science sector access to the unique environment of microgravity, enabling exciting opportunities for discovery in many branches of science. Empowering our aerospace sector to pursue this opportunity will ensure that future aircraft technology comes by way of British innovation, keeping us at the forefront of aviation as we move into an exciting future of long-distance, high-speed air travel.

We have in front of us opportunities of significant strategic and economic consequence. The UK is well equipped to pursue commercial markets in both small satellite launch and sub-orbital flight. Our northern latitude, abundant coastline, aviation heritage, great engineering capability, thriving space sector and business-friendly environment are all factors which make the UK an attractive destination for these services. In line with our modern industrial strategy, we will strengthen our economy by allowing UK companies to benefit from access to new opportunities and supply chains. The sky will no longer be the limit for our talented scientists, engineers and entrepreneurs, and we will attract the capability, infrastructure and investment needed to prepare for the next 50 years of spaceflight.

For example, British companies like Reaction Engines are developing engine technology which could revolutionise the way we get to and from space, making it easier and cheaper to escape the earth’s atmosphere. If we fail to prepare for these opportunities, the UK risks losing out to early adopters overseas and would not receive the benefits of this British innovation. However, we must move quickly. Experts are forecasting a sharp rise in demand for launch services from 2020 and we are not alone in pursuing this market. The first movers in Europe are likely to gain a significant commercial advantage over those who arrive later.

A number of operators from the UK and further afield have expressed an interest in launching from UK spaceports. They recognise the benefits of setting up shop here, but until now have not had a sufficient legal framework to enable safe and secure operations. This is why we are here today. For several years we have been laying the groundwork for commercial small satellite launches and sub-orbital flight in the UK by understanding what regulation needs to be put in place to enable safe commercial spaceflight in this country; identifying the key characteristics of any potential locations from which commercial spaceflight operations could be safely launched, and the infrastructure and facilities that would be required; and developing an understanding of the complex array of technologies in this emerging market and exploring options and approaches to attract commercial spaceflight operators and investment to deliver Launch UK.

Our thanks must go to all those who have helped to inform, challenge and shape this policy, which has resulted in the Bill before us, which aims to boost the economy, British business, engineering and science by making the UK the most attractive place in Europe for commercial spaceflight. It provides for the creation of a regulatory framework to enable commercial spaceflight activities—both launch to orbit and sub-orbital spaceflight—to be carried out from spaceports in the United Kingdom. It will work alongside the existing Outer Space Act, which was enacted primarily to implement UK obligations under UN space treaties. To date, this has involved licensing of satellites launched from overseas.

The Bill has to be sensitive to the context of the emerging market, which is full of innovation, disruptive technology and rapidly evolving business models. In this context it would be inappropriate and self-defeating to set down in the Bill language that would inflexibly bind the UK’s ability to respond to this market as it emerges. Instead, we seek to be a global exemplar of good regulation by balancing flexibility and foresight with an absolute commitment to safety and best practice. As such, the Bill provides a framework for the development of more detailed rules in secondary legislation, supplemented by guidance and supported by a licensing regime.

I place on record my express and immense appreciation for the pre-legislative scrutiny already carried out on the draft Bill by the Delegated Powers and Regulatory Reform Committee and by the Science and Technology Committee in the other place to strengthen this framework. I know noble Lords will further build on this process with the benefit of their work, for which I am also grateful. Our collegiate approach will continue as we develop secondary legislation, consulting on key issues and providing confidence to investors and insurers that the UK will develop safe, business-friendly regulation in the public interest.

Our space industry extends to and benefits all territories in the United Kingdom, and potential spaceport sites have come forward from all across our union. The Bill extends to all those territories, except for certain provisions not extending to Northern Ireland and Scotland as described in individual clauses.

As I am sure noble Lords will see, the Bill is comprehensive in the measures it puts forward. These include the duties of the regulator, the intention being that space activities will be regulated by the Secretary of State acting through the UK Space Agency, and sub-orbital activities by the Civil Aviation Authority. It also provides for range and range control and the licensing of the range control service provider, operator and spaceport operator, setting out the circumstances in which regulators may grant such licences and where such licences are needed. It refers to informed consent, training, qualifications and medical fitness to ensure safe and effective regulation of persons taking part in spaceflight and associated activities.

The Bill also provides for safety regulations, investigation of accidents and security. In addition, we have offences against the safety of spacecraft, which draw on offences against aircraft and aerodromes in the Aviation Security Act 1982 and the Aviation and Maritime Security Act 1990 respectively. The Bill covers monitoring and enforcement, allowing the regulator to investigate and prosecute offences contained in or made under the Bill.

The Bill regulates liabilities, indemnities and insurance. We have chosen not to bind any operational policy decisions by specifying any cap on liability. The existing Outer Space Act permits only the capping of the operator’s indemnity to the Government and contains no provision concerning the operator’s liability to third parties. We consider that the liability provisions in the Bill are therefore more comprehensive. However, liability capping will be subject to further consultation to ensure that our policy and regulation on capping, and many more measures besides, are in the public interest.

The Space Industry Bill is necessarily broad in scope, but it benefits from the experience and best practice of international launch and our own world-class aviation regulators, resulting in a safe, proportionate and comprehensive enabling framework in one piece of legislation.

In turn, the activities defined in the Bill and its subsequent regulatory framework will benefit many in the UK. Entrepreneurs will benefit from new opportunities to build innovative commercial enterprises off the back of launch services and small satellite data. Local economies will benefit from the creation of spaceport sites, with related jobs and opportunities in construction and hospitality. Our small satellite industry will have direct access to domestic launch capacity, reducing dependence on foreign launch services and enabling growth across the industry. British-based scientists will benefit from increased access to microgravity and investment in institutional capability in launch, spaceflight and related sciences, attracting world-class scientists to the UK. Young people seeking careers in science, technology, engineering and maths will gain new opportunities and greater inspiration from an expanding UK spaceflight industry. The UK as a whole will benefit from access to a strategic small satellite launch capability, contributing to our understanding of the world, the provision of public and commercial services, the delivery of national security and new opportunities for investment and export. 

Half a century ago, the British rocket programme was considered unviable, but as the last rocket had already been built it was given permission to launch. Prospero, the small satellite that it successfully transported into space, was the first and, currently, only satellite to reach orbit on a British launch. Today, we stand at the dawn of a new commercial space age—an age in which we can once more reach for the stars, not at vast public expense or with our being dependent on the hospitality of others, but in the best spirit of British innovation by enabling, attracting and empowering commercial markets for small satellite launch and sub-orbital flight from UK spaceports.

So let us end Prospero’s lonely record. Let us empower our best and brightest to reach higher than they ever have before, inspire the next generation to reach higher still and, in so doing, deliver the benefits that low-cost access to space will bring us all. In this spirit, I welcome scrutiny of and debate on the Bill. I beg to move.

Lord Callanan

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My Lords, I thank all noble Lords who have taken part in today’s Second Reading for their, as ever, very informed questions, which they were quite right to ask. The challenge and the debate are welcomed by the Government and will help us strengthen the Bill. I appreciate the broad support that has been shown for the Bill’s ambition. I reiterate the point that I have made to a number of noble Lords, both publicly and privately, that we are looking to co-operate on all sides of the House on this matter with Members from all parties and none. I am always available to discuss aspects of it and I have written to a number of Members to make that point. I thank my right honourable friend the Minister of State at the Department for Transport, who was sitting on the steps of the Throne earlier. I was delighted to see him paying such close attention to our proceedings.

I will try to address many of the points that have been made. I thank the noble Baroness, Lady Bloomfield, for her astute analysis of the UK space industry and her support for the Bill. On the issue that she raised concerning the comparable provisions to those in Section 1 of the Civil Aviation Act 1982 to promote the development of the space industry in the UK, I agree that the Government should recognise the need to promote growth in this sector. The Deregulation Act 2015 provides for a growth study to apply to functions specified by order. Statutory Instrument 2017/267 already lists functions under the Outer Space Act 1986, and we propose to amend this SI to also list functions under the Bill. My noble friend also shares the concerns of a number of other noble Lords—my noble friend Lord Moynihan also mentioned this—about over- regulation of this emerging market. This is a concern we are very alive to, and the Bill establishes a proportionate framework to support growth in this emerging sector while adequately balancing government and operator rights, the safety provisions and other factors dedicated to it. In exercising the powers in the Bill, the Government will ensure proportionality, and we intend to consult fully on all the secondary legislation required to implement these measures.

Engaging with agencies such as ICAO was raised by the noble Lord, Lord Hunt. Through the DfT and the Civil Aviation Authority, the UK has been working as part of a joint ICAO/UNOOSA space learning group better to understand how commercial spaceflight fits in with the global air navigation structure and how regulation will need to adapt to the new industry. ICAO has not yet developed detailed rules on spaceflight.

The noble Lord, Lord Hunt, also raised the issue of the carriage of nuclear materials. We do not intend to permit the carriage of any nuclear materials. Paragraph 3 of Schedule 3 allows for prohibitions and restrictions on this. There may be exceptions regarding everyday appliances such as smoke detectors, which routinely use small quantities of technically radioactive material.

We do not believe that the Bill engages obligations to produce an environmental impact assessment. Environmental impacts are heavily correlated with the type, frequency and location of spaceflight activities. At this stage, it is very difficult to ascertain specific environmental issues. For example, the sensitivities of a site cannot be known until we know the location of the spaceport.

My noble friend Lord Moynihan and the noble Lord, Lord Hunt, raised international agreements, and they were right to do so. We have put in place a number of agreements to enable commercial spaceflight in the UK. The type and nature of these agreements depends largely on the technology used, how and where it is operated and what it is used for. The UK complies with all existing space treaty obligations, and we are working to secure the agreements necessary to enable commercial spaceflight to take place from the UK.

On a point made by the noble Lord, Lord Hunt, I should say that the UK Space Agency’s international partnership programme uses UK R&D to support international development. This supports developing countries to use satellite solutions for problems such as deforestation and disaster relief. My noble friend Lord Moynihan asked about the Government’s support for the development of this emerging market in the UK, and a number of other Members raised a similar point. The UK Space Agency published details of the grant process in February, including our processes for assessing proposals and the criteria we would apply. We have engaged extensively with the parties who submitted funding proposals, to ensure that our process is transparent. The proposals were naturally submitted to the Government in commercial confidence and noble Lords will understand that I cannot disclose details now. However, I can confirm that in line with the process set out in February, the UK Space Agency is currently considering these proposals with independent expert advice, and I expect it will announce the outcome of the process later in the year.

A number of noble Lords, including the noble Lord, Lord McNally, raised questions around the European Space Agency. The Government’s policy to exit the EU does not affect the UK’s membership of the European Space Agency. The UK has a strong and healthy space economy with an international outlook. We have a long history of collaboration and participation in European space programmes and missions through the European Space Agency. The Government will continue to take an active role in European space programmes, supporting UK industry in its bids to win contracts overseas and developing our national capability to keep the UK competitive in the global market.

The issue of affirmative regulations was also raised by my noble friend Lord Moynihan. We need a proportionate approach for aviation. Section 60 of the Civil Aviation Act enables all aviation safety rules to be made by negative procedure. These safety rules are likely to be amended frequently. We aim to lay statutory instruments in summer 2019, and licences can be issued once these are in force.

The noble Lord, Lord Hunt, raised the issue of range ownership. Our intention is for these to be privately owned. Foreign ownership is not prohibited. A licence cannot be granted of course unless the applicant is a fit and proper person.

My noble friend Lord Dunlop asked me about the number of spaceports. The Bill does not restrict the number of licences that could be issued for spaceports. However, the decisions on licensing would be based on eligibility, alternative criteria requirements and safety standards. I noted his strong advocacy of Scotland, along with that of my noble friend Lord Moynihan—we have a lot of interest from Scotland, particularly given the rural nature of many of its locations. We are working closely with the devolved Administrations, but I hope that my noble friends would not expect an Englishman with Irish roots to adjudicate on this process. My noble friend Lord Dunlop also asked me about ITAR and knowledge transfer. The Bill includes provisions for entering into agreements with other countries, including the provision for knowledge transfer and to ensure that we can meet the ITAR constraints that may be imposed on us by the United States.

The issue of liabilities was raised by a number of noble Lords. We have taken the power in the Bill to cap liabilities. However, we can assure industry of our intention to cap liabilities only in circumstances for which analysis has already been carried out to determine the current liability cap policy under the Outer Space Act 1986, as amended by the Deregulation Act 2015. For other circumstances, we hope to carry out the analysis as quickly as possible to further promulgate our policy decision.

My noble friend Lord Balfe and the noble Lord, Lord Rosser, raised the issue of drones. Your Lordships will be aware that the department completed a consultation on the safe use of drones in the UK in March. We are considering the responses received and developing outcomes on this, and I hope the Government’s position will be released very soon.

My noble friend Lord Suri asked me about consultation. We will discuss the proposed structure of the statutory instruments and how this fits with industry views. We intend to publish a database containing more detail on regulatory functions including spaceflights, on existing international best practice under each of those functions, and on initial assessments of risks associated with each of these functions before and after regulatory activity has taken place. We expect that this will start the conversation on the licensing framework and can inform discussions with insurers about the level of residual risk, and therefore start to gauge the potential appetite for insurers to enter the market.

The noble Lord, Lord Fox, asked me about timetables for launch. I am slightly hesitant on this, but we intend to lay statutory instruments in summer 2019. Once these have entered into force, regulators will be in a position to accept licence applications, which we expect will be processed in roughly 12 to 18 months. Please take that with a slight pinch of salt—these things can change and there are lots of considerations still to go through—but it might help as a rough timetable.

I take the point made by the noble Lord, Lord Rosser, about the policy scoping notes. Please accept my apologies that they came out late, but I wanted to get them issued before we sat down today. I appreciate it is very difficult to read a 94-page document in advance of this debate, but the policy scoping notes are not provided for discussion: they are our initial statement of intention with regard to the use of delegated powers and the need to consult on the use of powers given their importance and impact and the need to carry out analysis and assessment of criteria for determining safe levels of risk, for example. I confirm that it is not currently our intention to take Committee immediately after the holiday break in September. It will be a few weeks after that, subject to the vagaries of the Whips, and not immediately we return after recess.

Lord Callanan

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I am not in a position to confirm that yet. As soon as I get further information from those who deal with these matters, I will let the noble Lord know. I intend to work as closely as possible with all noble Lords on this; when I have further information, I will share it with him.

On the question of licensing and insurance for mega constellations, space activities are risky in nature and the Government may be required to pay compensation for damage caused as a result of spaceflight and related activities carried out by UK entities or launched from the UK. The insurance requirement is one of the provisions in the Bill to protect the Government and the public by ensuring that there is a resource to meet such claims. We do not believe that small satellites pose the same risks to the space environment. Further work will be undertaken on the insurance requirement for the different activities licensed.

The UK has played a major part in developing the main EU space programmes—Galileo and Copernicus—and space surveillance and tracking, which have supported the rapid growth of the UK space sector and contributed directly to our prosperity and security. It is a global success story, leveraging our best talent to deliver highly innovative products and services every year, and we want that to continue if at all possible.

The noble Lords, Lord Fox and Lord Rosser, asked me about delegated powers. The Bill contains 71 clauses, 12 schedules and 100 delegated powers. This large number of delegated powers—I accept that it is a lot—is required because the commercial spaceflight environment is innovative, highly technical and fast changing. It is important that we have the flexibility given by secondary legislation to adapt to keep pace with this emerging market, as both UK regulators and the space industry develop expertise in this area. The Bill sets out the regulatory framework for a novel, dynamic and diverse industry, accommodating a wide range of different technologies. It aims to provide sufficient certainty and assurance to Parliament, regulators, industry and the general public while simultaneously having the flexibility to allow industry to grow. Early feedback so far from industry is that this flexibility is seen as vital. A rigid approach that offered limited opportunity to keep pace with either the development of spaceflight or the enhanced experience of the regulators would be restrictive for the sector.

The noble Lord, Lord Rosser, asked me about horizontal and vertical launch. He is correct: currently, we expect existing aerodromes to be most interested in conducting horizontal launch activities. I would expect vertical launch activities to be from a mixture of existing aerodromes and new facilities, subject to the strict licensing conditions that we have put in place. The noble Lord, Lord Hunt, asked me about flags of convenience. Responsible operators may be attracted to launch from the UK, but our vigorous approach to safety should deter less responsible persons.

Lord Callanan

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I can confirm that we are in extensive consultation with industry players. My honourable friend was visiting Surrey Satellites this morning for discussion on various aspects of the Bill and its commercial operations.

I think it was the noble Lord, Lord Rosser, who asked me about international environmental obligations under the Bill. They are covered by duties of the regulator in Clause 2 and under numerous other clauses, including Clause 8. We would not grant a licence if it were inconsistent with our international obligations. We have reviewed the relevant international, environmental treaties and obligations and the national requirements that may apply to spaceflight activities, and have concluded that we do not need any specific new provisions in the Space Industry Bill, but spaceflight activities and spaceports will, of course, have to fully comply with all existing planning and environmental requirements.

In relation to cyber interference, for conventional aviation we keep transport security under constant review, and we will do the same for spaceflight activities. We already work closely with partners across government and industry on restrictions between horizontal and vertical spaceports. I hope that I have responded to most points put by noble Lords, but if not there will perhaps be an opportunity to explore these issues further.

We have covered lots of vital areas and extremely important issues in this debate. Noble Lords were right to focus on issues of safety, environment and growth of the industry. I am sure that we will return to many of these issues in Committee. Once again, I thank all noble Lords for their general warm welcome for the Bill, notwithstanding some of the concerns expressed. As I said earlier, I look forward to working with noble Lords both in and outside the Chamber to ensure that we strengthen the Bill’s provisions as it makes its passage through the House

Lord Callanan

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Of course. We have a meeting planned for next week anyway, when we can perhaps discuss these issues further. I will be very happy to clarify and give more detail on any of the points we have spoken about. With that, I conclude by asking the House to give the Bill a Second Reading.

The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)

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My Lords, first, I thank the noble Lord, Lord McNally, very much for his initial comments and his general support. I understand that he will want to probe further and question us on the purposes and intent of the Bill, which of course I welcome—but I also thank him for his initial supportive comments.

The UK space industry is a global success story, leveraging our best talent to deliver highly innovative products and services every year. This Government want a UK space industry that captures 10% of the global market by 2030, creating 100,000 new jobs in the process. The Government are pursuing a range of measures to support this fast-growing sector. This Bill is one of those measures, and aims to put British businesses at the forefront of new space services. Another measure of our support to the UK space sector will be through our negotiations with the EU on future collaboration on the EU space programmes.

The UK has played a major part in developing the main EU space programmes, Galileo and Copernicus, which have supported the rapid growth of the UK space sector and contributed directly to our prosperity and security. We will work to ensure that we get the best deal with the EU to help support strong growth in the sector. I understand the link that noble Lords and the noble Baronesses have drawn between these two measures of support through this proposed amendment, but I do not consider that including provisions related to the EU negotiations will improve the purpose of the Bill or the support that the legislation will provide to our sector. This Bill is about regulation of UK space activities and sub-orbital activities and connected purposes.

As the noble Lord, Lord McNally, acknowledged, the European Space Agency is an international organisation, rather than an institution of the European Union. As I said at Second Reading, the UK’s membership of the European Space Agency will not be affected by the UK leaving the EU.

I was asked about the release of the studies on the impact that Brexit will have on the sector. Since the referendum, the Government have been undertaking rigorous and extensive analysis work to support our exit negotiations, define our future partnership with the EU and inform our understanding of how the EU exit will affect the UK’s domestic policies and frameworks. However, Parliament has voted repeatedly not to disclose material that could damage the UK’s position in the negotiations with the EU. I am sure that the Committee will agree with me that, in any negotiation, information on potential economic considerations was very important to the negotiating capital and to the negotiation position of all parties.

The noble Lord, Lord McNally, and the noble Baroness, Lady Randerson, asked about the effect of freedom of movement on the space sector. Of course, they are correct that when we leave the EU freedom of movement, as we know it, will end. However, we have been clear that there will be an implementation period after we leave the EU to avoid a cliff edge for businesses, and after we leave the EU we will have an immigration system that works in the best interests of the UK. Crucial to the development of this will be the views from a range of businesses, including from high-tech sectors, such as the space industry.

In the light of that information, I ask the noble Lord to withdraw his amendment.

Lord Callanan

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I shall take that last point first and thank my noble friend Lord Moynihan for his support. It is unusual for someone who lives near an airport to want to see an expansion of opportunities for it. He will understand that, as aviation Minister, my postbag is normally filled with correspondence from people living near airports who seek to halt whatever goes on at those airports, so I welcome his support.

This amendment raises the impact of the Bill on the UK economy and seeks to provide some degree of assurance through the annual laying in Parliament of an assessment of the monetary benefits. Noble Lords are right to draw attention to the economic opportunity the Bill represents, the need to evaluate the market effectively and how we measure the benefits it will enable. As noble Lords know, the UK space sector is a British success story, a growing sector which continues to pioneer new technologies from satellites and instruments to new applications and services. The one area where our space sector cannot prosper is launch. The Bill will allow us to do just that. This legislation will create a safe and supportive regulatory environment for small satellite launch and suborbital flight in the UK. I am confident that the UK will attract companies and investment. Only last Friday, I met stakeholders to discuss the Bill and the wider space sector. I heard an awful lot of positivity about the Bill and the future demand for launch activities.

Earlier this year, the Government announced a call for industry proposals to establish a launch capability in the UK. This resulted in 26 proposals for grant funding from bidders wanting to establish spaceports around the UK, along with operators from the UK, Europe and the US. Through this approach we have demonstrated a strong interest in spaceflight activities in the UK from right across the country.

On evaluating the importance of the sector to the UK, the UK Space Agency and its partners conduct regular economic evaluation. The majority of these assessments are publicly available and published online. This includes a biannual size and health survey of the UK space industry. The emerging market for spaceflight in the UK will be included in future versions of this industry-wide evaluation and will be made publicly available, as it is now.

The amendment would require a report to include details of companies that have expressed an interest in carrying out spaceflight activities. Details of the companies that have approached government are largely commercial and in confidence. I am sure noble Lords will agree that it would not be appropriate for government to report on these engagements or on these companies’ plans.

With regard to the economic opportunity for the UK, global small satellite launch and servicing could exceed £25 billion in revenue over 20 years, with an untapped European regional market potentially worth around one-third of this £25 billion. Nowhere in the world is this market fully exploited by a sustainable commercial offering. In addition, suborbital launch creates new opportunities for UK science by giving British scientists access to the unique environment of microgravity, as well as training, tourism and supply chain opportunities.

I understand the intention behind the amendment. However, I hope noble Lords will agree that we already engage extensively with industry to develop our plans and continue to conduct assessments to ensure we are making effective decisions. It would not be appropriate to duplicate information already collated and published in the public domain or to disclose information provided in commercial confidence to public bodies. I therefore hope the noble Lord will withdraw Amendment 2.

Lord Callanan

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My Lords, under this Bill the number one priority for the regulator will be, quite rightly, to ensure the health and safety of the public and the safety of their property. There is clearly a moral case for ensuring public safety but also a compelling business case. Safe operations will be critical to the long-term sustainability of the UK spaceflight industry. There are, of course, other interests and requirements which the regulator must take into account in the exercise of its functions.

On Amendment 3, I thank the noble Lords for raising the issues of the impact on the environment and the interests of local communities in particular. These are important matters which the Government have considered in drafting the Bill. Under Clause 2(2)(e), the regulator is already required to take account of environmental objectives set by the Government when exercising its functions. Environmental objectives here mean both the policy objectives of the Government and the legislation and other forms of regulation which are used to realise those objectives. This places a wide-ranging duty on the regulator and ensures that proper consideration of environmental matters informs the carrying out of its functions.

Under Clause 2(2)(c), the regulator likewise must take account of the interests of persons not involved in spaceflight activities in relation to the use of land, sea and airspace. This will include the interests of local communities affected by spaceport and spaceflight activities. A further protection both to local communities and the environment will be afforded by local planning processes. I stress that the Bill does not impinge upon or override local planning decisions. This will take account of the concerns raised by the noble Baroness, Lady Randerson, about emergency access to a campsite, which we discussed in one of our previous meetings. I hope she is reassured by that.

As part of the planning application process for any spaceport, whether a new site or an existing aerodrome which undergoes development, an environmental impact assessment will be needed if it is required by the EIA directive. The local planning authority will therefore already be obliged to scrutinise the environmental impact under existing planning legislation where the EIA directive applies. An EIA would also be required as part of any airspace change.

On Amendment 13, for the reasons already set out, we can be assured that this matter is sufficiently addressed. However, should we require further environmental legislation as new technologies emerge, the regulation-making powers in Clauses 10(b) and 67 give us the flexibility necessary to develop appropriately detailed measures which would supplement existing legislation.

Lord Callanan

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That is true, but it does not exempt operators from the relevant planning provisions.

Lord Callanan

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I pay tribute to my noble friend’s enthusiastic promotion of his local airfield. I am sure his comments have not gone unnoticed. I have certainly taken them on board.

The fundamental purpose of Clause 3 is to prohibit the carrying out of spaceflight activities or the operation of a spaceport in the UK without a licence. Launch from the UK is a new activity and we envisage that launch vehicles will be licensed on a per-launch basis, but the Bill allows for the licensing of a launch vehicle for a number of launches if that is deemed appropriate.

The amendment tabled by my noble friend raises an interesting issue pertinent to the future growth of the space sector—namely, the challenge of licensing classes of satellite together, as opposed to licensing each satellite separately. This is particularly relevant for so-called mega-constellations, comprising a great number of satellites working in concert.

The current licensing regime under the Outer Space Act already allows us to license a constellation of satellites that can be described broadly as multiple satellites of similar or identical design under the control of a single operator and which work together to deliver a single service. The definition of “operator licence” in the Bill is also wide enough to allow for the licensing of a constellation of satellites. Of course, while the Bill is designed to cover all types and classes of mission, a licence will be granted only if the regulator is satisfied that a licensee has met all necessary requirements, most notably those relating to safety.

Lord Callanan

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I thought I had responded to it but I will reflect on the point that he has made.

Lord Callanan

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I shall first address the noble Lord’s question. It is considered that the activity of operating a spaceport will not qualify for an exemption as the activities that will take place from the spaceport will have safety implications, for example, the storage of hazardous materials, the launching of spacecraft et cetera.

I shall give the noble Lord a few more details on the kind of exemptions that we are considering under these clauses. These exemptions are based on similar exemptions contained in Section 3(2) of the Outer Space Act 1986. The first exemption in Clause 4(1) is for situations under the UN space treaties where the UK and another state are jointly liable for a space activity. This provision allows the UK and the other state to allocate responsibility for regulation, supervision and monitoring activities between themselves. This exemption would be made by way of an Order in Council. The second exemption provides that activities or persons can be exempt from the requirement to hold an operator licence if the activity does not give rise to safety concerns or invoke the international obligations of the UK. There is also an exemption in Clause 7(4) that regulations may exempt persons or services from the requirement to hold a range control licence if the activity does not give rise to safety concerns or invoke the international obligations of the UK.

The terms “operating a space object” and “operating a spacecraft” in the Bill are drafted to be intentionally wide. Although this is useful and necessary to capture all activities for which a UK liability might arise under the UN liability convention, certain activities could be captured where there are no safety or security implications and the state liability is already indemnified by someone else. In such a case, a licence might not be necessary and could be overburdensome on industry. Clause 4 therefore provides for exemptions in these circumstances.

I shall give some examples of activities that could be exempted from licence requirements. The Bill provides that persons engaging spaceflight activities and range control services can qualify to be exempt from the requirement to hold a licence. Some aspects of manned suborbital activities could qualify for an exemption. However, the exemption under Clauses 4(2) and 7(4) will apply only in cases where the activity does not give rise to concerns for public safety or the safety of those involved in the activity. If there were any concerns that the activity would put people’s safety at risk, then it would not qualify for an exemption. To qualify for an exemption under Clause 4(1), another country would be required to take on all the international obligations of the UK. I hope that my response satisfies the noble Lord’s concerns.

Lord Callanan

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My Lords, I thank the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Randerson, for their important interventions on the vital topic of safety, which we take extremely seriously.

Clauses 9 and 10 require that applicants for spaceflight operator and spaceport licences take all reasonable steps to ensure that risks to health and safety of the general public—as the noble Lord, Lord Tunnicliffe, observed—are as low as reasonably practicable. Furthermore, Clause 9(4)(b) means that even after all steps have been taken to reduce risk to as low as is reasonably practicable, the regulator will not issue a licence if the risk to public health and safety remains unacceptably high.

The noble Lord raised through these amendments the question of the role that we expect the Health and Safety Executive to have regarding spaceflight in the UK. The Health and Safety Executive has undoubted expertise and a long track record in a breadth of issues and across a range of sectors. Clause 20 ensures that the regulator is able to draw on this expertise to inform decision-making in connection with safety of spaceflight activities. This is consistent with the role the Health and Safety Executive plays in other sectors. The Health and Safety Executive does not normally regulate by licensing or certifying safety. Instead, it imposes a duty on those that may create risk to manage those risks to be as low as reasonably practicable.

Lord Callanan

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I will come on to that point shortly.

I am confident that the approach we are taking is appropriate. In line with agreed health and safety practice, the Bill places the onus on the regulator to be satisfied that risks are as low as reasonably practicable and that they are acceptable. But equally, the Bill ensures that the regulator will have access to the expertise possessed by the Health and Safety Executive, where this is required. I stress that this is expertise we have already benefited from. I thank the Health and Safety Executive for the integral role it has played in developing this legislation with my department and the UK Space Agency.

I will share some detail on how we believe regulators will determine whether risk to public safety is acceptable. The approach will be aligned with best practices for managing risk across all sectors in the UK. We expect to use an individual risk per annum approach—in other words, in a given location, the risk of death arising from the activity to an individual across a reference period of one year. The regulator will publish a methodology for assessing risk which operators may choose to use. The Government are currently working with HSE’s Science Division—its research arm—to develop a comprehensive methodology for the assessment of risk to third parties.

How can we be assured that the regulator will have the appropriate personnel and skills to assess the safety cases presented by operators? The Civil Aviation Authority, the UK Space Agency and the Health and Safety Executive are respected regulators in their fields, with proven track records in regulating risky activities. That is why we are drawing on their relevant regulatory expertise for this new sector. I assure the Committee that these organisations are building on their existing heritage to develop their technical and analytical capability to assess the specific risks posed by spaceflight.

Although regulating and managing the risk of spaceflight is new to the UK, other countries have many years’ experience of it. We are learning from existing spaceflight regulators in other countries and intend to enter into agreements that will include provision for the training of our personnel and the sharing of information on those activities. I hope that the noble Lord will feel that I have answered his questions and will agree to withdraw Amendment 7.

Lord Callanan

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We have seen in the speeches the different approaches that noble Lords wish the Government to take to cap liabilities. In the case of the noble Lord, Lord Tunnicliffe, it is to remove the provision.

Lord Callanan

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I take the noble Lord’s point and that of the noble Lord, Lord Fox. The noble Lord, Lord Willetts, who spoke from a position of great knowledge on the subject because of his past work as a Minister, referred to the importance of capping and summed up the dilemma well. This is an important issue which has been raised with me constantly both by noble Lords and by those who are interested in carrying out spaceflight activities. I hope noble Lords will bear with me as I explain the provisions in great detail and go through what we propose. I somewhat doubt that I will satisfy everyone at the end but I will do my best.

The liability provisions of the Bill are vital but necessarily complex and I will take a little time to explain the Government’s position and why these amendments would not be appropriate. Clause 11 concerns the terms which may or must be included in a licence issued under the Bill authorising space flight activities, the operation of a spaceport or the provision of range control services. Subsection (2) provides a power to specify in an operator’s licence a limit on a licensee’s liability to indemnify the Government and other listed bodies under Clause 35 against claims brought against them for damage or loss caused by space flight activities. Amendment 15 relates to this subsection and seeks to remove it altogether. Amendment 36 is linked to Amendment 15, as it removes reference to the subsection from Clause 35. These amendments would therefore remove the regulator’s power to cap this liability to indemnify under Clause 35.

I should be clear that the position under the Bill is exactly the same as that in the aviation industry—that operators have an unlimited liability to indemnify government. However, satellite operators have previously raised concerns that such a liability is a barrier to operating in the space industry. Operators have found that the unlimited liability has made it difficult to raise finance or insure against the point made by the noble Lord, Lord Fox. This is not the case in the more mature aviation market. The Government have responded to these concerns.

The Outer Space Act 1986 was amended by the deregulation Act in 2012 and, since then, licences issued under that Act for the procurement of an overseas launch and the in-orbit operation of a satellite benefit from a cap, which is set out in the licence conditions. The UK Space Agency publishes the usual level of cap in its guidance, which currently sets it at €60 million for standard missions. Since the level is not set by statute, the cap can be increased for riskier missions. It should be noted that some activities currently regulated under the Outer Space Act, notably procuring the launch of a space object and the operation of a satellite in orbit taking place from the UK, will in the future be regulated under this Bill. Therefore, following Royal Assent, the amendment would reverse the current policy under the Outer Space Act—that the indemnity to government for these activities is capped. However, the current cap under the Outer Space Act would remain in place for such overseas activities regulated under that Act. As a result, there is a very real risk that UK operators may decide to procure overseas launches and conduct their satellite operations overseas under the Outer Space Act or a different regime altogether to avoid an unlimited liability to indemnify government. This would go against the Bill’s aim, which I hope all noble Lords support, to grow the UK space industry.

The cap on the indemnity to government under the Outer Space Act was based on many years of licensing those activities and it was well received. The costs and benefits of capping liabilities for those activities have already been considered and were subject to a full consultation with industry at the time. There was an amendment to primary legislation that was also subject to parliamentary scrutiny. Evidence provided by industry during the Science and Technology Committee inquiry into the Bill reiterated that an unlimited indemnity to government was a barrier to entry into the industry. The discretionary power in Clause 11 therefore allows the Government to remain committed to their current policy position under the Outer Space Act. However, it also allows the Government a discretion on whether to cap the indemnity to government for other activities licensed under the Bill, such as a UK launch.

I shall move on to Amendment 35 which would remove subsections (5) and (6) from Clause 33. The power in these subsections to make regulations provides for the capping of an operator’s liability to prescribed persons or in prescribed circumstances in an operator licence. The Bill therefore goes further than the Outer Space Act and provides a power to cap all of an operator’s liability to prescribed persons. This is intended to cover third parties or the uninvolved general public who suffer injury or damage caused by regulated space flight activity. Removing these subsections would mean that a regulator would be unable to cap this liability. As a consequence, the operator would bear unlimited liability, and as previously highlighted, operators have already raised concerns about managing unlimited liabilities. Most of the main space launch nations, including France and the United States, do cap an operator’s liability in some form. Having this power enables the UK to compete on a level playing field by allowing the Government the power to share the burden of liabilities with operators. There is a real concern that we risk being uncompetitive internationally if we do not have the powers to cap operator liabilities both to the Government and to third parties. Without the powers to cap, we may be unable to attract operators in the UK. The reason for conferring a power to cap rather than simply providing for a cap in the Bill is to ensure that careful consideration can be given to whether and when it is appropriate to exercise the power, as there may be missions where capping is not appropriate.

While we have assessed the cap on the operator’s indemnity to government for activities currently licensed under the Outer Space Act, a more general liability cap for space flight activities taking place from the UK has not been fully analysed. Launches are a new activity for the UK and we believe that we should cap the operator’s liabilities for this activity only if there is clear evidence that it is necessary to do so. That is why we have taken powers to cap liabilities for space flight activities on a discretionary basis under the Bill. We are already undertaking work on assessing the availability and cost of insurance to cover the liabilities. That work will inform any policy on limiting the level of any cap on the liability both to indemnify government and to prescribed persons.

The flexibility provided by the powers in the Bill means that the right balance can be created for each mission, based on the risks involved. The Bill is designed to ensure that space flight activity is as safe as possible in the first place, which will minimise any liability arising. Under Clause 33, an operator is strictly liable where injury or damage is caused, meaning claimants can bring a claim without having to prove fault. Regulations requiring operators to be insured can be made under Clause 37; that would provide a resource to meet any of those claims. Furthermore, it should be noted that Clause 33(5)(b) provides a power to constrain the circumstances in which a liability cap applies. For instance, we envisage that a cap would be disapplied in cases of operator wilful misconduct.

On Clause 34—the power of the Secretary of State to indemnify—we have previously considered clauses that allow for an operator’s liability to third parties to be capped. Clause 34 provides a power for the Secretary of State to indemnify a claimant or an operator for injury or damage arising because of space flight activities; that includes situations where an operator’s third-party liabilities have been capped under Clause 33. In order for the Government to provide such an indemnity, the injury or damage must be sustained as a result of space flight activities. To qualify for an indemnity, the person suffering the injury or damage must not have taken part in, or be connected to, the activities. Those people will be identified in regulations; however, it is likely that they will be the same people to whom the informed consent provisions apply, under Clause 16, and who are excluded from the right to bring a strict liability claim against an operator under Clause 33. That is because they will have engaged in space flight activities in full knowledge of the risks involved. As part of the informed consent process, such people will be made aware that this indemnity does not apply to them. The Government may only indemnify an operator where a claim for injury or damage exceeds any insurance held by it. The Government may only indemnify a claimant where the amount of liability has been limited by regulations under Clause 33(5) and the claimant would otherwise have been entitled to more money.

In most cases, we envisage that an operator’s liability, if capped, will equal the amount of third-party liability insurance that they are expected to hold. Therefore, an operator’s insurance should cover their liability. However, there may be situations where an operator has taken out more insurance; Clause 34 ensures that the insurance is exhausted before the Government step in. The purpose of the clause is to ensure that the uninvolved general public can be compensated in the event of injury or damage, particularly where an operator’s liability to third parties has been capped. However, the intention is that the provisions in the Bill and subsequent regulations will work together to reduce the likelihood of injury or damage occurring in the first place. That will be achieved by implementing a robust safety regime and ensuring operations take place with appropriate provisions for range control and safety to minimise damage in the event of failure.

Lord Callanan

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My noble friend makes an important point. I emphasise that we are in listening mode on this issue.

Furthermore, there is also a power to make regulations to provide an upper limit to the amount of money the Government may pay out under these provisions. For example, in the US there is a limit in legislation of $3.1 billion. There is also a power to prescribe cases or circumstances where the power to indemnify either an operator or a claimant will not arise or is restricted. Examples would include operator wilful misconduct or where several parties are at fault that might have adequate insurance or assets.

In making any regulations under this clause, we will consult on how we strike the right balance in ensuring that the public are compensated while limiting the Government’s indemnity. For example, the regulations may set out what the Government will not indemnify in the case of operator wilful misconduct, but an exception may be made where an operator becomes insolvent and the general public would not be fully compensated as a result.

The Government will use their powers under this clause to indemnify claimants and operators in a balanced way. We propose to ensure that government money is used appropriately by exercising the powers in this clause as necessary to limit the situations where the Government will indemnify and limit the amount they will pay, as well as playing a role in the legal proceedings surrounding payment of such an indemnity.

I apologise for going into so much detail and speaking at such length on this.

Lord Callanan

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I am aware that this is a matter of great concern, which is why I went into so much detail about it. As I said in response to the previous intervention, we are in listening mode.

Lord Callanan

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There is no simple answer to that question. It would depend on the conditions of the licence issued for the particular activity and whether any cap was imposed on that activity at the time. We are looking at every launch activity, and every application will be considered on an individual basis.

To go back to the comment made by my noble friend Lord Willetts, as I said, we are in listening mode. I am aware that this is a controversial subject. He will understand the discussions taking place between different government departments on this issue. I will say more on it as soon as I can, but I take on board the concerns raised by many people and those of industry, which have been expressed to me personally and by many noble Lords this afternoon. If it is helpful, let me say that the Government intend to exercise their power under Clause 11 to cap an operator’s indemnity to the UK Government in licence conditions for the activities of procuring the launch of a space object and the operation of a satellite in orbit, as this is currently the policy for activities licensed under the Outer Space Act.

As I said, I am listening to people on this. I will say more as soon as I am able to. I am aware of the concerns. We are in listening mode and we will reflect on the comments made. In the light of that, I ask noble Lords not to press their amendments.

Lord Callanan

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If I possibly can, I will.

Lord Callanan

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Perhaps there could be a box at the bottom he could tick to say he has fully understood the debate.

Lord Callanan

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My Lords, I can answer the noble Lord, Lord Willetts, directly: a constellation can be launched with one licence.

Amendment 16 is a further amendment to Clause 11(2). It requires the Secretary of State to hold a consultation within 12 months of Royal Assent on whether an operator licence should specify a limit on a licensee’s liability to indemnify government, and what an appropriate limit would be. By imposing that a mandatory consultation takes place within a set period, the amendment prioritises the consideration of the power to limit the operator’s liability to indemnify the Government, thereby eroding the discretion to introduce a limit only if this is considered necessary and appropriate.

I accept that consultation is a critical part of policy-making. It allows stakeholders to contribute their views on new policy that affects them. We have in fact already listened to industry views extensively—I did it only on Friday, in the latest round—and an unlimited liability to indemnify government could make it difficult to raise finance and obtain insurance. We have already had an extensive debate on that with the previous amendment, and that is why we have taken the power in this subsection. However, we need to ensure that we take a balanced approach between attracting operators to the UK by making it commercially attractive to carry out space flight activities and limiting the Government’s exposure to claims arising from such space flight activities. Our policy is for space flight activities to be conducted on a commercial basis but we have taken a power to intervene and cap the liability to indemnify government if this becomes necessary.

As I set out in the previous debate, we are already assessing the availability and cost of insurance to cover the liabilities under the Bill. This work will inform any policy on limiting the level of the liability to indemnify government. If a limit is deemed appropriate, the Government need to consider the level of such a limit and the consequences of bearing the contingent liability. We may conclude that a limit on this indemnity for UK launch activities is not appropriate in all circumstances. The Government have an obligation to use public funds appropriately. It is therefore not right that they should be bound to consult on setting such limits before the need to do so is established and accepted.

Furthermore, the current power also allows the Government to deal with each licence application on a case-by-case basis. The regulator will need the flexibility to decide whether a limit is appropriate, as well as what that limit should be, depending on the risks associated with each mission. Because of the variety of spaceflight activities that may be conducted from the UK and the individual circumstances of each operator, it may not be possible to have a specific limit or a methodology that works in every case for all missions. A flexible approach to setting a limit is good for both government and industry and, in our view, a legal requirement to consult on what an appropriate limit might be may restrict this. I assure noble Lords that we will consult on this matter once we have conducted our detailed analysis and have established the need to set a limit, and assessed the consequences of so doing. I therefore ask the noble Lord to withdraw his amendment.

Lord Callanan

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My Lords, in his introduction the noble Lord, Lord McNally, said that he was taking the Liberal Democrats into outer space. I am tempted to observe that many of us believe that the Liberal Democrats have been in outer space for a considerable time. I look forward to my next Local Focus newspaper dedicated to the recycling of space junk alongside plastic bottles and glass jars.

To be serious, this is an important subject, and I thank the noble Baroness and the noble Lord for raising the issue of space debris and the proper disposal of satellites and other payloads at the end of their operational life. These amendments illustrate the crucial role of licence conditions in ensuring the effective regulation of spaceflight activity, and highlight the importance of drawing on advice from all the relevant expert bodies. The UK Space Agency already considers matters related to spacecraft disposal—passivation, which is the removal of a spacecraft’s internal energy at the end of its useful life; and deorbiting, a brilliant word I discovered yesterday—and regulates this through existing licensing regimes under the Outer Space Act. Clause 12 enables regulators to set conditions on a licence tailored to the particular activity. Schedule 1 provides a non-exhaustive list of the types of conditions that regulators may attach to licences, which includes conditions governing disposal of a payload when it is no longer operational and requiring notification to the regulator when disposal has been effected. In addition, conditions may require compliance with any guidelines on space debris mitigation issued by international organisations.

The UK Space Agency is an active member of the United Nations Inter-Agency Space Debris Coordination Committee—a marvellously august body—and takes minimising space debris extremely seriously. Through this body, the UK Space Agency works with international partners, including bilaterally on specific issues, to develop and implement measures to safeguard the space environment and minimise the risk of space debris. As a number of noble Lords have pointed out, space debris is a global problem that requires jointly agreed global solutions. This is why the Government remain fully committed to working with and drawing on the expertise of these specialist bodies. Through this engagement, the regulator will continue to shape thinking on the vital issue of space debris mitigation.

The noble Baroness, Lady Randerson, referred to the UN Inter-Agency Space Debris Coordination Committee. Outer space is a global resource shared by everyone but owned by nobody. The UN has a unique role in developing best practice measures to protect the space environment for future generations. The Inter-Agency Space Debris Coordination Committee plays a critical role in helping to formulate technical policy free of the political influence in the UN. The committee, as a grouping of space agencies, is able to develop scientific consensus on debris issues and present them to the UN for endorsement and application by member states. I assure the Committee that it is the Government’s intention to continue to require appropriate disposal of obsolete payloads in accordance with international guidelines. I hope that in the light of those assurances the noble Lord will withdraw the amendment.

Lord Callanan

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I thank my noble friend for making an important point and for tabling this amendment on what is an interesting subject. I start by assuring him that the Government have had a very constructive discussion with the European Aviation Safety Agency on our proposals to regulate suborbital spaceplanes in the UK.

The outcome of this dialogue has resulted in mutual agreement that suborbital spaceplanes are considered to be aircraft and therefore EU aviation legislation should apply to them. EU Regulation 216/2008, known as the EASA basic regulation, exempts from its scope those,

“aircraft specifically designed or modified for research, experimental or scientific purposes, and likely to be produced in very limited numbers”.

In discussions about revising the text of the EASA basic regulation, the European Commission agreed that, while spaceplanes are in the developmental stage, spaceplane operations would continue to fall under this exemption. The context of the assurance was that member states should be able to legislate for commercial suborbital spaceplane operations that launch and return to the same spaceport now, before the EASA has had time to make EU-wide rules. The Commission has also confirmed that neither commercial use nor having paying passengers in itself precludes a spaceplane from falling within the exemption.

The UK recognises—we are in agreement with the EASA on this point—that as soon as the suborbital operation starts and finishes in two separate locations, it may be considered to be public transport and subject to the full weight of European aviation rules. Although the Government’s intention is to continue to work closely with the EASA whatever the outcome of EU negotiations, we need to ensure that in doing so the UK retains a degree of flexibility to develop its own regulatory framework, drawing on the best practice from those states that already conduct commercial launches, such as the US and India, as well as from other European states.

Currently there are no European-wide regulations for spaceplanes and spaceports. We are leading by example by creating this comprehensive regulatory framework in the UK. This should have considerable business benefit for the UK. But this will also benefit the EU, and the EASA recognises that this will help inform the development of any future European regulatory framework. The Government have agreed with the EASA to work with other European states to develop common principles for regulation for suborbital operations. However, in doing so, the Government will ensure that the UK is not put in a position, as a result of any change in our future relationship with the EASA, where the EASA is handed too much control, or worse a veto, over the development of the UK space sector.

I hope I have provided the reassurance that my noble friend is looking for and that in the light of that he feels able to withdraw his amendment.

Lord Callanan

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My Lords, Clause 14 enables a licensee to transfer their licence to another party, provided that the regulator has given written consent. This provision enables a new body or company to take over the licence without starting a licence application afresh. In addition, the Bill requires that a licence holder has the necessary financial and technical resources, and that they are fit and proper persons, to do the things authorised by the licence.

Amendment 22 would ensure that the regulator would need to be satisfied that the new licensee met the requirements under Clause 8(3) before consenting to a transfer. I can confirm that it is our intention that the regulator will need to do this. Where the regulator is appointed under Clause 15, Clause 14(5)(c) requires them to consult the Secretary of State before consenting to a transfer. Thus the Secretary of State can ensure that they are satisfied that the new licensee meets the requirements under Clause 8(3).

The noble Lord, Lord Rosser, asked why the power to transfer a licence is necessary. The power avoids the need for wasteful bureaucracy that could affect businesses and local communities. For example, where a spaceport licence has been issued, it should not be necessary to demonstrate the suitability of the site again just because of a change of operator. However, the regulator would need to be content that the new operator met the eligibility criteria under Clause 8. Both the regulator and the Secretary of State would need to be satisfied that the transfer of a licence was appropriate, ensuring that there were the proper checks and balances in the system if that occurred.

I am confident that the amendment is not necessary but I will reflect on whether it is appropriate to make our intentions explicit in the Bill. On those grounds, I hope the noble Lord will feel able to withdraw his amendment.

Lord Callanan

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I will reflect on that and come back to the noble Lord on it.

Lord Callanan

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I thank the noble Baroness for her amendment. It is quite right to seek clarity on who will regulate this new spaceflight market and their capacity and resources to do so. Commercial spaceflight from the UK is in its very early stages and we want to be able to draw on relevant regulatory expertise across the UK for this new burgeoning sector. The Secretary of State is the default regulatory authority under the Bill. It is our intention that the UK Space Agency perform regulatory functions on behalf of the Secretary of State. The UK Space Agency already licenses the procurement of satellite launches from other countries as well as satellite operations from the UK. We intend that the UK Space Agency will regulate all the vertically launched rockets covered by the Bill and other space activities, including the launch and operation of satellites into space orbit. The UK Space Agency will also license and regulate associated vertical-launch spaceports and range-control services for launch to orbit.

In answer to the noble Baroness, Lady Randerson, it is our intention to use Clause 15 to appoint the Civil Aviation Authority to regulate suborbital activities and horizontal-launch spaceports. These are likely to take place from specially adapted existing airports, and that will enable us to draw on the CAA’s rich heritage and expertise. The CAA and the UK Space Agency are proven regulators in their respective fields. I assure the House that both organisations are building on this heritage and developing their spaceflight expertise, including learning from existing spaceflight regulators in other countries. Clause 61 enables both organisations to put in place charging regimes to cover their regulatory costs—for example, for assessing and issuing licences, ongoing monitoring and providing advice and assistance. I hope that answers the noble Baroness’s question about the appropriate resources.

I am confident in our planned assignment of regulatory functions to the UK Space Agency and the CAA, and that both will have the resources to fulfil their regulatory functions following the enactment of the Bill and regulations made under it. I am confident in our planned assignment of UK regulatory functions to the UK Space Agency and the Civil Aviation Authority and that both will have resources to fulfil their regulatory functions following enactment of the Bill and regulations made under it.

Lord Callanan

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We are confident that the expertise in and knowledge of regulating aviation in the CAA is sufficient for this purpose. The CAA has a worldwide reputation for the comprehensiveness of its approach and expertise, so it will be able to fulfil these functions very well and there is no need to go elsewhere.

I shall directly answer the noble Baroness’s question: if we know that we are going to appoint the CAA to do this, why do we not specify it in the Bill? We believe that it is more appropriate to set out functions of appointed persons in delegated legislation, as the necessary limitations and conditions would be too lengthy to include in primary legislation. Further, as the industry evolves, the Government may choose to adapt the regulatory approach. The current approach allows this flexibility while ensuring that the appropriate level of oversight is maintained by the Secretary of State. With those assurances, I hope that the noble Baroness will feel able to withdraw her amendment.

Lord Callanan

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My Lords, as we discussed, the Government intend to use the regulatory expertise in the UK Space Agency and the Civil Aviation Authority to regulate this new sector. For all spaceflights and associated activities, there will be a single regulator responsible for issuing a licence. Whether this is the UK Space Agency or the CAA will depend on the type of activity. Let me give more detail.

In general, the CAA will license suborbital spaceplane activities and the UK Space Agency will regulate space activities and rockets licensed under the Bill. Where both the CAA and the Secretary of State have regulatory responsibilities—for example, where an aircraft has been adapted for mid-air launch of a satellite into orbit—these will be set out clearly in regulations. There will be only one licensing authority, however. In the case of mid-air launch, this will be the UK Space Agency. This approach provides clarity and accountability while making the best use of the proven expertise of existing regulators.

The noble Lord asked for clarification of the difference between the OSA and the Bill. As he said, the OSA covers launch from outside the UK of British-registered equipment, and the Bill will cover launches from the UK. In the light of those clarifications, I hope that he will feel able to withdraw his amendment.

Lord Callanan

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I thank all noble Lords who have contributed to the debate, which allows me to explain at length another aspect of my ministerial responsibilities—the thorny issue of drones. I accept that raising it in the passage of this Bill is a way in which to put it on the record, which we intend to do, and I hope that I shall be able to satisfy my noble friends Lord Moynihan and Lord Balfe, at least in part. I realise that their concerns go further than the Bill, as the noble Lord, Lord Balfe, mentioned in his intervention.

The safe use of drones in the UK is vital if we are to realise the full potential that they can deliver. I assure noble Lords from the outset that that is exactly what the Government want, and exactly why we recently responded to our consultation setting out a number of measures that we intend to implement. The UK is at the forefront of an exciting and growing global drones market. We are seeing drones used across many sectors, improving services, increasing efficiency, creating high-tech jobs and boosting our economy. But while aiming to make the UK a global market leader in the drone economy, we must ensure that drones are used safely and in accordance with security and privacy rules. I am well aware of the July Airprox incident at Gatwick reported in the press over the weekend. No one wants to see incidents such as those occurring, which is why we intend to bring forward legislation to strengthen regulation and enforcement for drones.

To reply to my noble friends directly, we are exploring both primary and secondary legislation options and hope to bring legislation forward as soon as possible next year, including an amendment to the Air Navigation Order 2016. My noble friend Lord Balfe asked what measures we were introducing. As set out in our July consultation response, all users of drones that weigh 250 grams or more will be required to register themselves, which will encourage drone users to be more responsible and make it easier to identify drones that are breaking the law. Users will then be required to pass at minimum a short knowledge test to prove their awareness of UK law to ensure that they understand safety, security and privacy regulations. We are also looking to mandate the use of a safety app, an example of which is the NATS app Drone Assist, to notify plans to fly a drone and make users aware of local flight restrictions and ground hazards.

Lord Callanan

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We did extensive safety tests in conjunction with BALPA, and released a detailed report on the size of drones and damage that they could cause to aircraft—both fixed-wing aircraft and helicopters. We considered that 250 grams was a reasonable threshold to impose at the time.

We are considering a possible restriction on all drones flying within a certain distance of airports and above 400 feet, and whether to increase penalties for breaking the rules. That includes whether and how spaceports could be included in any restrictions that we may implement. Furthermore, we are working towards implementing a product standard for electronic identification of drones at EU and international level. We strongly support EASA’s principal electronic identification, but want to see the proposals simplified to all drones above 250 grams to require electronic identification rather than a complex set of conditions.

Lord Callanan

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As far as I am aware, it is the Department for Transport, my department, which is doing it, but I shall come back to the noble Lord on that issue.

We strongly support EASA’s principle of using geo-fencing to enforce compliance with airspace restrictions and electronic identification, but we want to see the proposals simplified to all drones over 250 grams requiring geo-fencing and electronic identification, rather than a complex set of conditions.

The amendment intends specifically to make malicious use of drones an offence. Of course, I recognise that that may be a desired outcome, but Schedule 4 is drafted in such a way that, no matter what device is used unlawfully, it will be deemed an offence. On that point, and with the assurance that the Government intend to bring forward legislation specifically for drones in the timescale that I outlined, I hope that my noble friend will feel able to withdraw Amendment 29.

Lord Callanan

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I apologise for forgetting to address the point made by the noble Lord, Lord Tunnicliffe, about laser pens. It is not part of the Bill, but I want to give him an answer. I understand where he is coming from: as he correctly said it was included in the Vehicle Technology and Aviation Bill, before Parliament was prorogued, to provide further certainty to pilots and the general public. We are continuing to look at other legislative vehicles. It is our intention to strengthen existing legislation. Safety is our top priority. Shining a laser at an aircraft in flight could pose a serious risk and anyone found guilty could currently be liable to a fine of up to £2,500, but it is our intention to strengthen existing legislation. I cannot give a timescale at the moment but will do so as soon as I am able.

Lord Callanan

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I thank noble Lords for their consideration of the significant powers in this clause, which we recognise are significant. I hope noble Lords will allow me to take this opportunity to provide assurance that this important power, which will be used only when immediate action is necessary, is both proportionate and subject to sufficient safeguards.

Clause 32 confers on the Secretary of State the power to grant an enforcement authorisation in the most urgent cases, where there is a serious risk to national security, compliance with our international obligations or health and safety. In such emergency situations there may not be sufficient time to obtain authorisation from a justice of the peace under Clause 31. I assure the House that there are adequate safeguards in place. Such an authorisation can be granted only to a named person who the Secretary of State is satisfied is suitably qualified to carry out the necessary action. Each time this power is used the authorisation must be in writing, must specify the action required and will remain in force for only 48 hours from the time it is granted. As an additional safeguard, improper use of this power by the appointed person could be challenged by judicial review. It is worth noting that this power is more conservative and requires more stringent authorisation than other comparable powers of entry: for example, those for nuclear inspectors or health and safety inspectors who are provided with a standing authorisation and may act at their discretion. It is anticipated that this power would be used only in the most serious and urgent of cases where there can be no delay in taking action.

I turn to the amendments specifically. The need to find a justice of the peace to review an enforcement authorisation during the period of validity would impose unhelpful bureaucracy on the person authorised at a time when they are trying to take urgent action to protect people from serious risks. A review of an enforcement authorisation by a justice of the peace after the authorisation had expired would not serve any purpose since the power granted would have already been exercised. In addition, a review by a justice of the peace, whether while in force or afterwards, would place an unnecessary and disproportionate burden and cost on the judicial system, given the other safeguards in place. Moreover, appeal by the Secretary of State, which Amendment 33 provides for, may not realistically take place in time to enable the emergency action needed to address the serious risk in question.

I assure noble Lords that the Government are listening. We have taken on board comments from the House of Commons Science and Technology Committee and have reduced the time for which an enforcement authorisation remains in order from one month to 48 hours. The noble Lord, Lord Fox, asked why we have used the wording “to do anything necessary”. It would not be possible or appropriate to list possible actions that may be taken under an enforcement authorisation as this would restrict the scope of the authorisation. The action must, however, be necessary to protect the national security of the UK, secure compliance with the international obligations of the UK or protect the health or safety of persons. An enforcement authorisation will not be issued unless the Secretary of State is satisfied that the risk will be eliminated or mitigated as a consequence. Improper use of this power by the appointed person could be challenged by judicial review.

I understand the concerns of many noble Lords that this power is excessive. However, it is more restricted than other comparable powers of entry: for example, as I said, those for inspectors in the Energy Act 2013 or the Health and Safety at Work etc Act 1974. It is similar to those powers approved by Parliament in that there is no independent judicial authorisation before or after exercise of the power. The power in Clause 32 requires authorisation for each and every use, is in place only for a 48-hour window and cannot be used routinely at the discretion of the person who is authorised to enter. I am confident that our approach is proportionate and contains sufficient safeguards to address the concerns raised while retaining the flexibility necessary to deal with the very serious risks that this clause is designed to address. With the assurances that I have provided, I hope that the noble Lord feels able to withdraw Amendment 32.

The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)

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My Lords, I thank the noble Lord, Lord Tunnicliffe, for moving his amendment—I shall say a few words about noise shortly. We have already had a helpful debate on Clause 33(5) and (6) and the power to cap an operator’s liability, but Amendment 34 would remove subsection (1). Under the amendment, an operator could be susceptible to claims for trespass or nuisance even where they had carried out their spaceflight activities in compliance with all the requirements placed on them.

I appreciate the concerns that noble Lords have raised about this clause and the possibility of spaceflight activities having an adverse impact on people in the locality. The clause is designed to balance the right to quiet enjoyment of one’s land against the right to carry out a commercial activity, and to ensure the minimal encroachment of rights where the operator is acting in accordance with the law. As the noble Lord acknowledged, it is replicated from Section 76(1) of the Civil Aviation Act 1982, which provides a similar protection for aircraft operators. We believe that this provision is necessary to prevent an operator who was acting lawfully from being sued by a third party who considers that his or her right to quiet enjoyment of land is being affected or interfered with.

I should highlight that given the nature of spaceflight activities, it is likely that spaceports will be set up in remote locations, very possibly in Scotland, where any noise or nuisance is likely to affect very few people. In comparison to aviation—where operators, I should remind the Committee, already have this protection—the number of spaceports and the frequency of spaceflight activities will be much fewer. The similar provision in the Civil Aviation Act protects aircraft against claims of trespass and nuisance. Therefore, where aircraft are used in spaceflight activities they already have protection against those claims, and for spaceports at aerodromes, the amendment would have little practical effect.

Our view is that subsection (1) is appropriate to enable spaceflight operators to carry out activities from the UK. It should also be stressed that such a protection does not apply if an operator does not comply substantially with all the requirements imposed upon them. This protection from claims of nuisance and trespass does not prevent anyone who has suffered injury or damage bringing a claim against an operator under the strict liability cause of action provided for in Clause 33(2) or under any other cause of action, such as negligence.

Let me give a little more detail on how frequently we envisage these operations being carried out and their noise impact. As the noble Lord, Lord Tunnicliffe, acknowledged, noise is undoubtedly a prime concern. My main ministerial responsibility is aviation, and I know all too well from my postbag of the difficulties caused to many communities where people live near or around airports. There will be a concern about launch operations; we need to acknowledge that spaceplanes and rockets create significant noise as they take off. Spaceplanes will also create significant noise as they pass overhead. Feedback from operators suggests that vertical launch operations could occur up to 12 times per year. These are indicative figures and would apply across the whole country. It is of course envisaged that in the early years of operations, launches will not even be as frequent as that.

It is difficult to provide an estimate of the launch frequency for suborbital spaceplane operations. Although precise noise levels have yet to be fully determined, initial indications based on published characteristics are that noise from spaceplanes should not create a more significant impact than noise from military fast jets. It is anticipated that in the immediate term, spaceports with horizontal launch operations will be able to comply with existing noise regulations, given that they will take place from a licensed aerodrome. Further analysis of the potential impact of noise will be carried out when a spaceport location is identified and the type of operations to be carried out from it decided. A spaceport operator would be expected to have planning permission for the use of the spaceport to carry out spaceflight activities, and the impact of noise will have been assessed as part of this planning permission.

Nevertheless, I accept the concerns about noise that have been raised by Members on both sides of the House. If your Lordships will allow me, I will therefore reflect further on the points made but in the light of those assurances, I ask the noble Lord to withdraw Amendment 34.

Lord Callanan

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My Lords, I thank the noble Lord, Lord McNally, for raising this important issue. This clause sets out that a regulator and persons listed in subsection (2) are not to be held liable for their actions or omissions in relation to spaceflight activities or associated activities.

The primary concern of the Bill is to secure safety. As regulators of spaceflight activities, we will take all steps possible to ensure that the risks to the public are as low as reasonably practicable and that all spaceflight activities are carried out as safely as possible. However, given the nature of the activities, the regulator cannot guarantee that all the risks can be eliminated. I highlight that without such a clause, a regulator may be reluctant to take any action in relation to spaceflight activities—for example, licensing that activity—because of concerns that they will be subject to claims, in negligence or breach of statutory duty, in the event of loss or damage arising from regulated spaceflight and associated activities. This would inevitably affect the growth of the sector.

Lord Callanan

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Oh!

Lord Callanan

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My Lords, I thank your Lordships for this short but sharp debate, which was so excellently introduced, as always, by the noble Lord, Lord Tunnicliffe. I shall endeavour for my response to be as splendid as he intimates some of my letters to him are.

I also thank my noble friend Lord Deben for his contribution. I would never accuse him of being a “pinko”—despite the pocket handkerchief that he is wearing today. We of course have some fairly profound policy differences, but I hope that I will be able to answer his concerns on the matter of land provisions in the Bill.

A number of noble Lords expressed concerns about these provisions, but I reassure them that the Government are taking a responsible and balanced approach. Powers are restricted to what we believe is strictly necessary and proportionate for securing safe spaceflight operations. Clause 38 allows for the creation of orders granting rights over land. Such orders may be necessary to ensure that utilities and other supporting infrastructure can be installed and maintained—for example, for radar or surveillance.

Spaceflight from the UK will be conducted on a commercial basis, and as such we expect operators to negotiate access in the vast majority of cases. Such an order would be created only as a last resort where negotiation with the landowner has failed to produce a mutually agreeable outcome. Schedule 6 sets out further provisions for such circumstances, including how notice for such orders should be given and how proposed orders can be objected to. Spaceflight is a new opportunity for the UK, and as technologies develop we want to ensure that any equipment necessary for safe spaceflight activity can be installed, maintained and removed as necessary.

I will say a few words about Clause 40 and then come back to some of the points that were made. Clause 40 continues the approach that the Government have taken of ensuring that safety is at the heart of the Bill. The clause allows the Secretary of State to restrict or prohibit the use of land or water around the times of launch and landing to protect the public. Any order made under the clause would be temporary. It is not our intention to unnecessarily restrict the actions of people who use these areas of land or water.

This power would be used only as a last resort in circumstances where operators had been unable to negotiate restriction arrangements with local landowners or users of affected land or water. Contravention of any order under this clause would be an offence. The safety of the general public is critical and therefore it is vital that the Secretary of State has sufficient power to enforce this vital safety measure.

I will now say a few words about the points that were made and answer some of the questions. I believe that it was the noble Baroness, Lady Randerson, who asked about a definition of “vicinity” and about what size area would be affected. Launch from the anticipated vertical-launch spaceport sites of course will be towards the sea. We therefore expect that only small areas of land will be affected by these orders. The regulator can also use licence conditions to ensure that spaceflight activities do not have a disproportionate impact on populated areas. Schedule 1 lists indicative licence conditions. These include conditions relating to trajectories and mission profiles as well as conditions imposing restrictions on areas where, and times when, spaceflight activities can take place. The exact type of launch and mission—

Lord Callanan

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I will come on to explain that—but, of course, if the noble Baroness is not satisfied I will be very happy to write her another letter, splendid or otherwise.

Horizontal-launch sites will be aerodromes and therefore subject to provisions similar to those in the Civil Aviation Act 1982 that apply to aerodromes. We therefore expect that the main use of this power, if it is needed at all, will be for vertical-launch spaceports. On vertical launch we will continue to learn from countries that have extensive experience of launch. One such example is the United States, where the Federal Aviation Administration has implemented a launch-site boundary with a radius of 2.2 kilometres from the launch point for small vertical-launch vehicles that are likely to be similar to those that will be launched from the UK. This is an area to which access is restricted during a launch window. The proposed sites are much further away from local towns than the area that is likely to be restricted under a Clause 40 order.

I turn to some of the points made by my noble friend Lord Deben. Interestingly, the power is based on similar powers in the Civil Aviation Act 1982. I do not know whether my noble friend was a Minister in another place when this Act was passed or a Member of Parliament during the debates, but the powers do not go as far as those in the Civil Aviation Act.

My noble friend Lord Deben also asked why we are doing it, if there will not be many launches. We believe that these powers are necessary in case a licence holder cannot, despite their best efforts, secure a deal for access to land or restriction of the use of land during launch and landing. Invoking the Secretary of State’s power would very much be a last resort.

Lord Callanan

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There is a right to object to any order made and we hope these matters could be the subject of negotiations. I hope my noble friend will accept that it is important that we do not allow a provision where a person perhaps not as reasonable as he might be in the circumstances could hold the whole operation to ransom. These things are always a matter of balance and there is a right to object to an order.

Lord Callanan

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As I said, there is a provision for an interested party to object to the order if it has been proposed, and if the order has already been made then Schedule 7 provides for the quashing of the order. However, I take my noble friend’s point. We believe that the power remains necessary because of the limited number of sites suitable for spaceflight operations in the UK and the need to ensure that operators are not held to ransom and the UK is able to benefit from this growing industry. When we come back to this matter in the next debate, I will address the operation of orders and how they may be challenged. I hope my noble friend will allow me to address this further during the debate on Clause 42.

The noble Lord, Lord Tunnicliffe, asked about the appropriate mechanism for challenge. Schedule 7 provides a process to apply for orders made under Clauses 38 and 40 to be quashed.

On the matter of compensation for people who lose out because of these powers, in Schedules 8 and 9 there are provisions for compensation in connection with the diminution of value of land interests, damage to land, interference with the use of land and general disputes.

The noble Baroness, Lady Randerson, asked how long these orders will last. We expect orders restricting the use of land or water to be in place for only a short amount of time around the window of launch—typically a few hours—but the exact period will depend on the type of launch. I can give an assurance that they will be in place for the minimum necessary time to ensure the safety of the public. I hope I have addressed her comments about the size of the area affected. As I mentioned, “vicinity” is not defined in the Bill and if there were a dispute it would be given its ordinary English meaning by a court. The power may be exercised for only the limited purposes in the clauses.

I believe I have addressed the points. However, I take on board the strong feelings in the Committee on this issue. If noble Lords will allow me to go away and reflect further on the powers in this clause, I will come back to the subject. I ask the noble Lord, Lord Tunnicliffe, to withdraw his objection to the clause standing part of the Bill. With those assurances, I shall reflect on the issue and come back to it at a future time.

Lord Callanan

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My Lords, before addressing the noble Baroness’s amendment, if the Committee will allow me, I will go into a little more detail about the operation of orders that can be made under Clauses 38 and 40.

Clause 42 sets out that orders made under these clauses will become operative after six weeks, and how they may be challenged. It provides that the making of such orders may be challenged through applications to quash orders under Schedule 7. Persons who receive notice of a proposed order are also able to object to an order which has been proposed under the provision for objections set out in Schedule 6. The noble Lord, Lord Deben, is not in his place any more, but I point out that these order-making powers are equivalent to powers in the Civil Aviation Act 1982. A six-week time limit also applies to challenges to those.

Turning to Amendment 39, the noble Baroness, Lady Randerson, asked how such orders are made when they relate to land in Scotland, Wales or Northern Ireland. In this context, I feel a bit sorry for England, Wales and Northern Ireland, which do not seem to be receiving the same degree of attention as certain sites in Scotland, but I want to remain strictly neutral—my job is to try to get the Bill through, and I am sure there will be fair competition between the different sites regarding where spaceports should operate.

I want to assure the Committee that throughout the development of the Bill, we have consulted extensively with colleagues in the devolved Administrations. The Bill has the opportunity to benefit the whole of the UK. Scotland and Wales are actively supporting the development of spaceports in their regions, as we heard in the case of Scotland, while Northern Ireland is benefiting from direct industry investment in research and development. We have worked with them to ensure that they are content with all provisions in the Bill, and we have agreed an approach to land powers which our partners in the devolved Administrations are fully content with.

Schedule 6 requires that notice of a proposal to make an order under Clause 38 or Clause 40 must be published in local newspapers and also served on the local authority in question. This gives an opportunity for the devolved Administrations to raise any concerns about a specific order. After an order is made, notice must be published and served. Anyone aggrieved may then apply to quash the order, as set out in Schedule 7.

The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)

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My Lords, I thank all those who have contributed to the debate so far. I have carefully noted all views.

I know there is considerable concern about the granting of Henry VIII powers—I would be worried if noble Lords did not express such concerns—because of the wide scope of such powers to amend primary legislation that underwent parliamentary scrutiny and debate. However, I assure the Committee that we have given very careful consideration to the need to include such a power. The noble Lord, Lord Moynihan, acknowledged that we have already acted on many of the concerns expressed, and we have modified the Bill considerably as a result of many of the points put to us by committees in this House and the other place.

Lord Callanan

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I thank all noble Lords who have spoken in this debate, particularly the noble Lord, Lord McNally, who made a powerful contribution. I hope he will agree that many of his points did not relate to the detail of the Bill. I am sure he will accept that the issues of the scrutiny of secondary legislation and the powers of both Houses are way above my pay grade, and probably his too. He made some powerful points and I am sure that the authorities in both places will want to look at them. We will return to those arguments when the withdrawal Bill arrives here. We will have many of the same discussions, loudly and at length, late into the evening.

As we have just discussed, the Government are committed to ensuring robust scrutiny of regulations made under the Bill through proportionate use of the affirmative procedure. This amendment goes further in seeking to impose the so-called super-affirmative procedure for some regulations. This would require the Government to publish a draft order with a detailed explanation of its contents and have due regard to any representations made within a 40-day period. Although I understand the strong desire to have detailed scrutiny of secondary legislation, this is a duplication of effort.

I can assure noble Lords that the first regulations referred to in this clause will be published in draft for consultation prior to being laid before Parliament, providing a transparent, proportionate opportunity for scrutiny. We propose that such draft regulations be accompanied by a full explanation of their intent. This builds on the open approach the Government have taken through the life of this legislation. That includes publishing a draft Bill for consultation and, following the introduction of this Bill, publishing policy scoping notes setting out how we intend to use the powers we are taking.

The amendment would also mean that a committee of either House could make a binding recommendation that no further proceedings with secondary legislation take place, unless that recommendation was rejected by resolution of the House. In a case where a revised draft order is brought back to Parliament for approval, a committee of either House could again make a recommendation that no further proceedings be made in relation to the revised order unless that recommendation is rejected by the House. This would cause huge uncertainty for government, the regulators and, most unfortunately of all, our nascent space industries.

My noble friend Lord Willetts spoke on the first day of Committee about the “lively race” to gain the first mover advantage in small satellite launch from Europe. The introduction of this Bill to Parliament was an important first step to enabling spaceflight activities in the UK and a concrete indication to the industries, investors and the international community that the UK is serious about promoting growth in the space sector. We have then allowed for a period of collaborative and transparent policy development to ensure that we create a regulatory framework that is fit for purpose in what is still an emerging market. However, we cannot wait for ever. Following the consultation I set out above, we will need to be clear when we will bring forward legislation, so that industry can have confidence that UK launch is viable and make appropriate investment decisions. This will not come at the expense of parliamentary scrutiny. The regulations covering the central provisions of suborbital activities, space activities, spaceports and range will all be subject to the affirmative procedure.

It may be helpful if I give more details about the timescale. We currently intend to make delegated legislation through three main statutory instruments: on suborbital activities, space activities, and spaceports and range. It is intended that each of these SIs will set out the licensing requirements and any oversight of operations required to ensure these functions are conducted safely and securely, and to ensure the proper functioning of the regulators in overseeing those functions. These SIs would be subject to the affirmative procedure and therefore allow full parliamentary scrutiny and debate. They would be supplemented with three—

Lord Callanan

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Under the current procedure, as I understand it, SIs are not amendable. However, if I am incorrect on that, I will come back to the noble Lord.

As I said, these measures will be supplemented with three statutory instruments subject to the negative procedure on exercise of regulatory functions, appeals and charging. By grouping powers in this way we hope to provide clarity for parliamentarians and potential operators on the regulatory requirements for each type of activity while minimising the amount of duplication between the various instruments.

The noble Lord, Lord Rosser, referred to the timescales. I confirm that we currently intend to lay these SIs from summer 2019—subject, as he said, to government priorities and parliamentary time. This will allow time for more detailed policy development and consultation as well as the drafting of the extensive range of legislation and guidance considered necessary. We envisage holding formal consultations on the draft regulations and the guidance starting in late 2018. We will continue to invite the views of all interested parties—including trade unions, my noble friend Lord Balfe will be pleased to know—throughout the development of the secondary legislation.

Lord Callanan

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I will ensure that all noble Lords who participated in these discussions are made aware of the consultations. I will even try to make sure that they reach some parts of Scotland—in which my noble friend seems to have an interest at the moment. With those assurances, I hope that the noble Lord will agree to withdraw the amendment.

Lord Callanan

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May I correct something I said earlier? I am told that, apparently, it is possible to amend an SI.

The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)

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My Lords, the UK space industry is a global success story. I am grateful for the productive debate we had in Committee, which will ensure the Bill puts this country at the forefront of new space services.

The Government continue to invest in the success of the UK space sector—for example, we recently invested more than £100 million in new satellite test facilities at Harwell, and manufacture and test facilities for rocket engines at Westcott in Buckinghamshire. As we discussed, another measure of our support to the UK space sector will be through our negotiations with the EU on future collaboration on the EU space programmes. The UK has played a major part in developing the main EU space programmes, Galileo and Copernicus, which have supported the rapid growth of the UK space sector and contributed directly to our prosperity and security. We are working to ensure we get the best deal with the EU to support strong growth in the sector. Last month, the Government published a science and innovation discussion paper and an external security discussion paper. Both set out the Government’s wish to discuss options for future arrangements in the EU space programmes.

My noble friend Lord Moynihan asked about continued support for the space industry. The European Space Agency programmes will continue to play an important role in delivering the UK national space objectives and, in December last year, the UK negotiated an investment of more than €1.4 billion over the next five years in ESA space initiatives. This sustained investment, alongside our industrial strategy, will ensure that we build on the strengths of the UK’s growing space industry. The UK’s membership of the European Space Agency will not be affected by the UK leaving the EU.

The Government hold a mix of qualitative and quantitative analysis of the impact of leaving the EU on sectors of the UK economy, including the UK’s space industry. This is contained in a range of documents developed at different times since the referendum. The analysis in this area is constantly evolving and being updated based on our regular discussions with industry and our negotiations with the EU. As the Secretary of State for Exiting the EU said in his Written Statement on 7 November, the intention is to provide this information to the Exiting the EU Select Committee as soon as possible, and within three weeks of the date of that Statement.

My noble friend Lord Callanan has confirmed to the House that we anticipate sharing the same information on the same basis with the Lords EU Committee as with the House of Commons Select Committee, subject to our being able to agree the terms of that disclosure. Given that this evidence will be published in the coming weeks, I ask the noble Lord to withdraw Amendment 1.

Baroness Sugg

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My Lords, I recognise noble Lords’ concerns that there are currently no specific provisions in the Bill regarding the environmental impacts of spaceports and spaceflight activities on local communities, particularly in relation to noise and emissions. However, Clause 2 requires the regulator to take into account the environmental objectives set by the Government. I know that some noble Lords have raised concerns that future objectives cannot be predicted—indeed, the noble Lord, Lord Rosser, raised that again today—but the inclusion of that requirement was intended to promote environmental protection, as the regulator will have to take account of existing guidance, such as Defra’s air quality plan.

As noble Lords will be aware, there already exists a comprehensive body of environmental and planning legislation that spaceports and spaceflight operators will need to comply with independently of the requirements under the Bill. For example, an environmental impact assessment may be required for airport-related development under Schedule 2 to the environmental impact assessment regulations where it is,

“likely to have significant effects on the environment by virtue of factors such as its nature, size or location”.

In such cases, the local planning authority will be obliged to scrutinise the environmental impact, taking into account the concerns of local communities such as the noble Baroness, Lady Randerson, has just raised. An environmental assessment will be required as part of any airspace changes.

However, there might be circumstances where a particular activity could be carried out without the need for an environmental impact assessment under planning and airspace rules. The purpose of Amendment 9 is to put on the face of the Bill a licence condition that the regulator could impose—for example, where an environmental impact or other assessment has not already been undertaken.

I appreciate that this amendment does not impose a mandatory requirement for the spaceport or spaceflight operator to make an environmental assessment; nor does it require the regulator to take into account environmental and local impacts, as Amendment 2 seeks to do. However, it makes very clear the Government’s intention that some form of assessment of noise and emissions should take place, and it does this without creating requirements in the Bill that may duplicate existing requirements to carry out environmental assessments under other enactments.

I hope that I have reassured noble Lords of the Government’s intention of ensuring that environmental impacts are assessed, either as part of the planning process or as a condition of a licence under the Bill. However, I am aware that your Lordships do not think that this goes far enough, as they have made clear today—the noble Baroness, Lady Randerson, made a very fair point about roads and road access. Therefore, I assure the House that the Government are considering introducing in the other place a further amendment that will require spaceport and spaceflight applicants to submit a noise and emissions assessment, and that regulators take this into account when deciding the licence application. I therefore ask the noble Lord to withdraw his amendment.

Baroness Sugg

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The amendment we are considering taking forward is requiring spaceports and applicants to carry out the environmental assessment, which will of course take into account the effect on the local community, and requiring regulators to take that into account.

Baroness Sugg

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My Lords, Clause 2 sets out the overarching duties of the regulator in carrying out its functions under the Bill. Subsection (1) establishes the duty of securing public safety as the regulator’s priority, while subsection (2) lists the other factors that the regulator must take into account while carrying out its functions. There is no hierarchy in the matters listed in subsection (2).

Amendments 3 and 8 to subsection (2) and Schedule 1 are in response to the helpful debate on space debris on the first day of Committee. In relation to an amendment tabled to Clause 12, the noble Lord, Lord McNally, highlighted the very real risks and challenges posed by space debris. The noble Baroness, Lady Randerson, recognised the work of the Inter-Agency Space Debris Coordination Committee—the IADC—of which the UK is a member, which has issued guidelines in this area. My noble friend Lord Willetts acknowledged the UK’s expertise in this area.

I would like to take this opportunity to reiterate the points made by my noble friend Lord Callanan during this debate. The UK Space Agency already considers matters relating to space debris and the guidelines issued by the IADC, and is an active member in carrying out its regulatory function under the Outer Space Act 1986. Through the IADC, the UK Government remain fully committed to implementing and influencing best practice to protect the space environment. Furthermore, the Bill enables regulators to include conditions within licences that relate to the disposal of a satellite at the end of its operational life and compliance with debris mitigation guidelines.

In the light of the Government’s commitment to the IADC and following further reflection on the points raised in Committee, we are tabling this amendment, which would place a requirement in the Bill for a regulator to consider space debris mitigation guidelines when exercising its functions. These guidelines are issued by an international organisation to which the UK is represented. This wording will cover international bodies, including the IADC, and the International Organisation for Standardization’s orbital debris co-ordination working group, as mentioned by the noble Baroness, Lady Randerson, in Committee. I beg to move Amendment 3.

Baroness Sugg

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I thank noble Lords for their support for the amendment, particularly the noble Lord, Lord McNally, who raised this issue in Committee and has put his name to the amendment.

Baroness Sugg

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I thank noble Lords for their comments on Clauses 9 and 10, given their central importance to the Bill. In consultation with the Health and Safety Executive, I wrote to the noble Lord, Lord Tunnicliffe, to address the points he raised on the first day in Committee. Following that letter, I would like to take the opportunity to explain further the role of the Health and Safety Executive in regulating space flight activities under the Space Industry Bill.

Clause 9 imposes one of the key requirements of the Bill that a regulator cannot grant a licence for spaceflight activities unless satisfied that the operator has carried out an assessment of the risks to the health and safety of persons taking part in spaceflight activities and that the operator has taken steps to ensure that risks to all other persons is as low as reasonably practicable. Furthermore, Clause 9(4)(b) means that even after all steps have been taken to reduce risk to as low as is reasonably practicable, spaceflight will not be allowed where the risk to public health and safety is unacceptable. The Bill places the onus on the regulator to be satisfied that risks are as low as reasonably practicable and that they are acceptable, but the operator must assess the risks and manage them.

The provisions in the Bill have been developed in full collaboration with the Health and Safety Executive to ensure that they align with existing UK health and safety principles on the management of risks. I should like to recap that under this Bill, the Secretary of State is the default spaceflight regulatory authority. The UK Space Agency will perform regulatory functions on the Secretary of State’s behalf, including regulating the procurement of satellite launches from other countries as well as satellite operations from the UK. The UK Space Agency will also regulate all vertically launched rockets covered under this Bill and all space activities. Finally, the UK Space Agency will license and regulate spaceports capable of vertical launch and range control services for launch to orbit.

It is our intention to use Clause 15 to appoint the Civil Aviation Authority as a spaceflight regulator for suborbital spaceplanes and spaceports capable of horizontal launch. The Government’s approach will enable us to build on the existing experience and expertise of the two organisations. I am confident that these bodies will have the capability to evaluate risk assessments and assess whether the risks have been reduced to as low as is reasonably practicable and whether they are acceptable. In this, the bodies will be assisted by the Health and Safety Executive.

I should clarify that we do not intend to appoint the Health and Safety Executive as a regulator under the Bill. This is because it is not a specialist transport, aviation or space regulator and has no experience or expertise in flight safety, space launches or air navigation. However, it is already a regulator for health and safety at work under current health and safety legislation. Accordingly, it is designated as a qualifying health and safety authority under Clause 20 and may be called upon to provide specified advice or assistance in connection with the regulator’s functions relating to safety.

Independently of the Bill, the Health and Safety at Work, etc Act 1974 and associated legislation will apply to spaceports and spaceflight activities as they would to any other workplace, while the Health and Safety Executive would retain lead responsibility for the regulation of safety on the ground. New major hazard sites such as spaceports would also require planning consent from the appropriate planning authority, and the Health and Safety Executive would act as a statutory consultee to the appropriate planning authorities.

However, the UK Space Agency or Civil Aviation Authority will retain responsibility for licensing the spaceport. This aligns with the approach under the Civil Aviation Act 1982 and the Air Navigation Order 2016. Under these provisions, the Civil Aviation Authority has overall responsibility for aviation safety. The divisions of responsibility between the CAA and the Health and Safety Executive are set out in a memorandum of understanding. We anticipate that the spaceflight regulators and the Health and Safety Executive will similarly set out the division of responsibilities.

I emphasise that although it is our intention that there be two spaceflight regulators, it is vital for accountability and safety that for any particular licence application under the Bill, there should be a single regulator responsible for deciding that application. Noble Lords raised that issue today and in Committee. In making its licensing decision, the UK Space Agency may consult the CAA—and vice versa—but that decision will rest with one body in each case.

Giving the Health and Safety Executive an additional specific role—certifying the adequacy of the safety arrangements relating to persons not taking part in spaceflight activities or for public safety in spaceports—would confuse roles and responsibilities for licensing spaceflight and associated activities. The Health and Safety Executive does not carry out this function of certification under any other legislation and does not wish to do so under this one.

I hope I have reassured noble Lords that our proposed approach is consistent with existing health and safety practice and reflects the view of the Health and Safety Executive. I acknowledge the sad history of space activity, as highlighted by the noble Lord, Lord Tunnicliffe; I assure him that safety is at the heart of the Bill. I ask the noble Lord to withdraw his amendment.

Baroness Sugg

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My Lords, Clause 14 enables a licensee to transfer their licence to another party, provided the regulator has given written consent. The provision enables a new body or company to take over the licence without starting a licence application completely afresh. In Committee the noble Lords, Lord Rosser and Lord Tunnicliffe, tabled an amendment seeking to clarify that the eligibility provisions in Clause 8(3) would also apply to the person to whom a licence is being transferred under Clause 14.

It is helpful to briefly recap what Clause 8 requires before a licence can be granted. Under subsection (2), the regulator must be satisfied that granting a licence will not impair national security, is consistent with the UK’s international obligations and would not be contrary to our national interest. Subsection (3) then sets certain eligibility criteria for licence holders, with which the regulator must be satisfied before granting a licence. The criteria ensure that a licence holder has the necessary financial and technical resources to do the things authorised by the licence and that both the licence holder and employees and agents acting on the licence holder’s behalf are fit and proper persons to do the things authorised by the licence.

It has always been the Government’s intention that the regulator will need to be satisfied that the tests set out in Clauses 8(2) and 8(3) would apply to the transfer of a licence under Clause 14, as it does to the initial grant of a licence. The amendment makes the Government’s intentions clear in the Bill and puts this beyond any doubt.

I thank noble Lords for their original amendment. I hope they will welcome the fact that we have reflected and that the amendment goes further than previously proposed. I beg to move.

Baroness Sugg

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Both the regulator and the Secretary of State would need to be satisfied that the transfer of a licence was appropriate.

Baroness Sugg

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My Lords, I thank the noble Baroness, Lady Randerson, for her comments on Clause 15 and the role of the CAA. As we know, the aviation sector is facing many challenges at the moment, particularly with the introduction of new technologies such as drones and spaceflight, but I can reassure noble Lords that the CAA is in strong position to deal with those challenges.

As the noble Baroness has told us, the chief executive of the CAA has written to her confirming this and, as he explained in the letter, the CAA already has already established a dedicated space team. That team started in 2012 and since then has grown in size and experience, and has worked closely to develop the Space Industry Bill. The team is building on its aviation expertise in areas such as airports and airspace to develop the capability to regulate spaceports and suborbital activities.

The noble Baroness asked what international conversations the CAA might have had. It has established good working relationships with other countries. The UK Space Agency has been building on its relationship with the United States Federal Aviation Administration, drawing on the United States’ vast experience in overseeing flight operations.

The department provides sufficient resource to ensure sufficient delivery in this area. The moneys will vary depending on the nature of the work at different times— for example, on air space consideration or international comparisons—so I am not able to give a figure today. The noble Baroness asked about funding. The Civil Aviation Authority will eventually be able to recover its costs directly from industry. Until that point, the Department for Transport will continue to provide funding.

We are confident that the CAA will have the necessary resources and the appropriate expertise to regulate the new sector. I hope that the letter and my words give the noble Baroness the necessary reassurance regarding the capacity of the CAA to regulate the activities alongside its existing aviation functions. I ask the noble Baroness to withdraw Amendment 11.

Baroness Sugg

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My Lords, the amendments in this group are minor and technical amendments which are required to address drafting issues in the Bill.

First, I turn to Amendments 12, 13, 29, 30 and 38. Currently, the definition of “enactment” in Clause 68 provides that it includes an enactment contained in Northern Ireland legislation. The Interpretation Act 1978 provides in Section 5 and Schedule 1 that unless the contrary intention appears, the term “enactment” used in legislation does not include Acts of the Scottish Parliament or legislation made under those Acts. As it is the policy intention that references to “enactment” in the Bill should cover legislation made throughout the United Kingdom, we propose to amend the clause so that the term “enactment”, where used, refers to secondary legislation and Scottish and Welsh legislation, as well as retaining the reference to Northern Ireland. I reassure noble Lords that official conversations have taken place with Scotland, Wales and Northern Ireland and all are content with the amendments the Government are tabling on Report. There are a number of consequential amendments to Clause 51 and Schedule 5 to replace uses of “enactment”. Those references are to particular Acts of the UK Parliament rather than to legislation in general, so it is not appropriate for the definition of “enactment” to apply in those cases.

Amendment 39 ensures that English, Welsh and Northern Ireland partnerships can be prosecuted in Scotland. Currently, Clause 57, which deals with offences by partnerships, only extends to England, Wales and Northern Ireland. This is set out in the full heading of Clause 57, and Scotland is explicitly excluded from the extent of the clause in Clause 70(2). The Government initially considered that Clause 57 did not need to extend to Scotland because partnerships are treated differently in Scots law. Existing legislation already makes similar provision for Scotland to that in Clause 57; Clause 70 was drafted accordingly. However, it has since come to light that while there is no need for the Bill to make provision for Scottish partnerships, the current draft presents the risk that there would be no power to prosecute an English, Welsh or Northern Ireland partnership in Scotland. Since it is the policy intention that these prosecutions should be within the power of the Scottish courts, we propose to delete Clause 70(2).

Finally, Amendment 40 includes an additional provision in the Bill to allow this legislation to be extended to Crown dependencies and overseas territories, as modified, by way of an Order in Council. The Bill has the potential to bring new business opportunities in an expanding space market, bringing in new revenue, jobs, training opportunities and other benefits to local areas. It is an important principle that the potential benefits of the Bill are accessible across not just across the United Kingdom but in our Crown dependencies and overseas territories. Amendment 40 will allow the Government of a Crown dependency or overseas territory to utilise the regulatory framework the Bill creates for spaceflight activities and to develop a spaceport if they would like to do so. I beg to move Amendment 12.

Baroness Sugg

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I will try to answer as many of those questions as I can. Yes, this is a standard clause. It was not included originally because we wanted to conduct a consultation with Crown dependencies and overseas territories, which we completed over the summer. That is now done and we are including it as a government amendment.

On who can enact this, it would be done at the request of the Crown dependency or overseas territory, which would then be subject to all the legislation in the Act. But ultimately the creation of a spaceport is going to be a commercial decision, so the UK Government would not take an active role in deciding where it would be. Currently we are not aware of any Crown dependencies or overseas territories that wish to undertake this activity.

Baroness Sugg

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Please could the noble Lord repeat that question?

Baroness Sugg

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That money is available to people who are currently putting together a case to create a spaceport. As I said, there is currently no interest from overseas territories or Crown dependencies, so that money would not be used by them.

On the tax regime, I am afraid that I do not have the full answer. I will have to get back to the noble Lord.

Baroness Sugg

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Any international company could request spaceflight activity within any of the ports but, as I say, it will ultimately be a commercial decision as to whether these activities take place. We would not play an active role in that.

Baroness Sugg

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The Bill is designed to promote the industry in this country and that is what we are focusing on. The addition of this provision just allows that in the future, should there be any interest, the Crown dependencies and overseas territories could take on the legislation framework and develop the activity.

Baroness Sugg

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I thank noble Lords for raising the question of emergency powers again. Since their interventions in Committee, we have been reflecting on this provision. I will do my best not to make all the same arguments that we made in Committee.

This amendment seeks to require that an enforcement authorisation issued by the Secretary of State is evaluated by a justice of the peace within 48 hours after the 48 hours that the authorisation has been in force. The enforcement authorisation issued under Clause 32 may be issued only under certain circumstances, which do not include a commercial emergency. They are: when there is an urgent case to act to protect national security; to ensure compliance with international obligations; or to protect people’s health and safety. The authorisation must be issued in writing to a named person and specify the action authorised to be taken. The authorisation itself will remain in force for 48 hours only. This reflects the urgent nature of the action considered necessary and requires it to be taken within a short period.

We referred to similar powers of other regulators in Committee, and we have tried to look across other legislation to ensure that we have the right balance here. Some of these powers are not subject to any review once they have been exercised. There is a precedent for this approach in the Consumer Rights Act 2015, which allows officers to enter premises without a warrant where it is suspected that there has been a breach of legislation, where giving notice would defeat the purpose of the entry, and where it is not practicable to give notice or where the entry is for the purpose of surveillance. The reasons for which an authorisation under Clause 32 may be issued are strictly related to emergency situations, and therefore are more restricted than the circumstances in the Consumer Rights Act. I should also clarify that improper use of the power by an appointed person under Clause 32 would be subject to judicial review, so it can be challenged if necessary.

The noble Lord, Lord Fox, brought to noble Lords’ attention the fact that warrants issued under the Investigatory Powers Act 2016 are subject to approval by a judicial commissioner within three working days of the warrant being issued. This is appropriate because these warrants remain in place for five days and relate to the sensitive practices of targeted interception, examination of the contents of communications and international assistance in such matters. This is not comparable to either the power under Clause 32 or the approach proposed by this amendment. Our advice from cross-Whitehall consultations is that there is no known precedent of a justice of the peace conducting an evaluation of an emergency power once it has been exercised.

We are also not clear what purpose evaluation by a justice of the peace would serve, as the order would be spent and the specified action taken by the time of the evaluation. It is also not clear what, if any, follow-up action would be available. I am afraid I cannot address the noble Lord’s concerns directly but we are continuing to reflect and will keep working with colleagues across Whitehall to ensure that we get a proportionate set of enforcement powers in the Bill, so that we can undertake spaceflight activities safely but also with regard to our national security and international obligations. I ask the noble Lord to withdraw his amendment.

Baroness Sugg

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As I say, we are still looking at some type of post hoc review. We are developing the options for that and trying to understand what the implications would be. That work is ongoing.

Baroness Sugg

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My Lords, Amendment 15 relates to the liability provisions in the Bill. As my noble friend Lord Callanan outlined in Committee, these provisions are vital but complex.

I would just like to clarify a point my noble friend Lord Callanan made in Committee. He said that,

“the position under the Bill is exactly the same as that in the aviation industry—that operators have an unlimited liability to indemnify government”.—[Official Report, 16/10/17; col. 434.]

While it is correct that under aviation law an operator holds an unlimited liability, an operator is not required to indemnify the Government for third-party claims brought against it.

The requirement to indemnify the Government arises in this Bill and in the Outer Space Act 1986 only because under UN space treaties the UK Government are ultimately liable for the space activities of their nationals. Operators are therefore required to indemnify the Government for any claims brought against them as a consequence of their licensed activities. I hope that the House finds this clarification helpful.

With this complexity in mind, I should like to provide further background before turning to the amendment. Clause 33(5) provides a power to make regulations that enable a regulator to specify in a licence a cap on an operator’s liability arising out of its spaceflight activities to prescribed persons or in prescribed circumstances. These persons and circumstances would be set out in regulations, but we envisage that a cap, if imposed, would be on an operator’s liability to the uninvolved general public who suffer injury or damage as a result of spaceflight activities. The uninvolved general public will have a strict liability claim against the operator.

Further work needs to be done to check the appropriateness of capping an operator’s third-party liability. We plan to issue a call for evidence on issues relating to insurance and liabilities in early 2018, following Royal Assent to the Bill.

As this liability can be capped, Clause 34(3) provides the Secretary of State with a power to indemnify a claimant in the event of injury or damage caused by spaceflight activities. This means that the Government can pay compensation to the uninvolved general public in situations where injury or damage exceeds the operator’s capped liability amount.

As we have already emphasised, we are trying to put safety at the heart of the Bill. It is designed to ensure that spaceflight activity is as safe as possible in the first place, which will minimise liability arising. But, as noble Lords have pointed out, injury or damage could arise, and if it does, it is the Government’s policy that the uninvolved general public should have easy recourse to compensation. This policy does not and should not change if an operator has a capped liability or, for example, becomes insolvent and cannot meet all its claims.

I therefore understand the concerns that have led to this amendment which seeks to ensure that the Secretary of State has to pay compensation above the capped amount to the uninvolved general public. The liability provisions in the Bill are complex and we need to ensure that amendments in this area are appropriate and achieve what they are set out to do. We are working on this and look forward to tabling an amendment similar to this one in the other place, which I hope will allay the concerns shared by noble Lords that have led to this amendment. With that in mind, I ask the noble Lord to withdraw his amendment.

Baroness Sugg

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I thank the noble Lord, Lord McNally, for tabling this amendment, following a similar amendment that he tabled in Committee. We discussed Clause 36 in relation to the protection it affords a regulator. Having considered the persuasive points made by the noble Lord, and others, after reflecting on the wording of this new amendment, we agree that to achieve the right balance in this clause the regulator protection should not apply in cases of gross negligence, and we accept the amendment as tabled.

Baroness Sugg

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I thank my noble friend for his kind comments. I hope to continue in my role as a transport Minister in an unacrimonious way. I am afraid that is as far as I can go: that is my brief.

During Committee, I was given the chance to talk about the work that the UK Space Agency is doing to improve the current licensing regime. I apologise again if this is a case of Groundhog Day: I need to reiterate that as I am afraid we still do not believe that the noble Lord’s amendment is necessary. We outlined the “traffic light system” that the agency is working on and work that was being undertaken on a policy model for insurance for constellations of satellites following feedback that insuring each satellite for a set level of insurance is prohibitively expensive. We think that the traffic light system and the insurance requirements for small satellites and constellations will do the job and that the industry will welcome them. We are holding a workshop in December this year. Very shortly after that, the UKSA will plan the implementation of the policy framework around that. That work will obviously be relevant to the Bill as, when it comes into force, it will regulate the operation of all the satellites in orbit.

Amendment 18 seeks to make it a requirement that a report is laid before Parliament on any consultations, and to include within that report an indication of the regulations proposed. We still believe that the amendment is not necessary. Laying a report before Parliament would be a duplication. It is our intention, in line with the Government’s consultation principles document, to issue a government response to the formal consultations to take place in relation to this Bill. This will, of course, be accessible to everyone.

We expect that the approach to the insurance and licensing of nano satellites under this Bill will mostly be set out within the guidelines and not within regulations, as is the case under the Outer Space Act. This is to enable the development of the policy in line with changing circumstances. I would like to take a moment to explain how we envisage those regulations and guidance working. In Clause 37, the Bill provides the power to make regulations setting out that insurance may be required to cover certain risks and liabilities. The regulations can also set out what the insurance should cover, what may or may not be excluded from the cover and the amounts of cover required. Licences for spaceflight activities are bespoke in nature. Requiring a fixed amount of insurance for the operation of a satellite in orbit within regulations may remove the flexibility necessary to increase or reduce the insurance required, depending on the risks of each mission. It is therefore envisaged that the regulations may set out the methodology for calculating the amounts of insurance without containing specific figures. The regulations will set out those situations where insurance is required, what type of insurance is required and what should be covered within the policy.

Clause 12 and Schedule 1 allow the regulator to include a condition within each licence that sets out the minimum amount of insurance that is required for that licensed activity. We intend to include such conditions in licences for the operation of small satellites. The published guidance will set out the amount of insurance required in line with the regulations. Such guidance could include the insurance requirements for small satellites under the traffic light regime if the policy intention is to treat those in a certain way.

As I set out during the first day in Committee, the purpose of the guidance is to aid policy implementation by supplementing the legal framework. The main benefit of the guidance is the flexibility to amend quickly and take into account changing events. These are areas where guidance may need to be amended regularly and in a timely manner. In the meantime, the UKSA will continue to engage with industry and interested stakeholders. We are confident that we will publish the regulations in due course. I therefore ask the noble Lord to withdraw Amendment 18.

Baroness Sugg

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It will be the regulator of the launch, dependent on whether it is suborbital or orbital, therefore either the CAA or the UKSA. However, they will use the same framework.

Baroness Sugg

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My Lords, this group of amendments relates to land powers, a subject which attracted much debate in Committee. I have reflected on the concerns raised by the Committee, and I thank the noble Lords, Lord Tunnicliffe and Lord Rosser, the noble Baronesses, Lady Randerson and Lady Ford, and my noble friend Lord Deben for their close scrutiny of these powers. I will set out the amendments that we have tabled in response to their contributions.

The Government want to make it clear that the Bill will not give compulsory purchase powers to operators. We have sought to establish a proportionate set of land powers that are intended to be used only where appropriate. For this reason we have tabled Amendment 19, which replaces the word “expedient” with “appropriate” in Clause 38, as the former term was much criticised in Committee. This is intended to clarify the limited circumstances in which a Clause 38 order could be made. There is precedent for the use of the word “appropriate” in relation to the exercise of powers under other legislation. A few examples are the Airports Act 1986, the Armed Forces Act 2006 and the Civil Aviation Act 1982. I hope this amendment reassures noble Lords that the Government are serious about developing a balanced land powers regime that does not disproportionately impact landowners.

On Clause 40, noble Lords—including the noble Lord, Lord Tunnicliffe, and my noble friend Lord Deben—raised concerns in Committee about the lack of clarity regarding the temporary nature of the restriction on the use of land by orders under this clause in the current draft of the Bill. It is our intention that orders made under Clause 40 should be in force for only the shortest amount of time possible, and should be used only where no alternative arrangement can be negotiated with the rights holders and other interested parties.

Amendment 20 would remove Clause 40 and replace it with text that more clearly sets out the temporary restriction of use by such orders. This amendment, which is similar to the amendment to Clause 38, seeks to revise the language of the clause to reassure noble Lords that such orders will be made only where the Secretary of State considers it appropriate to do so. Further, subsection (1) of the proposed new clause explicitly sets out that orders would only temporarily restrict or prohibit the use of land or water for launch or landing.

We have also gone further. Orders made under this revised clause must specify the launch or landing that is proposed to be carried out and the period or periods for which the restriction or prohibition will apply. Orders must specify the relevant spaceport used and specify the area of land or water subject to the restriction or prohibition. This means that those affected will have greater clarity on the impact of the orders. They are able to challenge these restrictions using the objection process in Schedule 6, or can apply to quash orders under the process outlined in Schedule 7.

To reflect the temporary nature of restrictions or prohibitions under Clause 40 orders, we have consequentially tabled Amendments 23, 24 and 25 to Clause 44, which is headed “Registration of orders”. Temporary land orders made under Clause 40 would not be land charges and would not require registration in the land register in England and Wales or the equivalents in Scotland and Northern Ireland.

We have also tabled Amendments 26, 27 and 28 to Clause 48, which is headed “Amendment and revocation of orders”. The provision on orders under Clause 38, which is about powers to obtain rights over land, and paragraphs 4 and 5 of Schedule 9, which relate to statutory undertakers, remain the same as before. The amendments to this clause allow for amending orders made under Clause 40(1) to shorten or remove a specified period of restriction or prohibition on the use of land or water. An amending order made under proposed new Clause 48(2)(a), or an order revoking this order, becomes operative immediately after it is made and the Secretary of State must notify relevant persons about the order.

Baroness Sugg

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My Lords, I am pleased that noble Lords have welcomed the amendments tabled on land powers. As a relative newcomer to your Lordships’ House and certainly to this ministerial position, it has been a pleasure to take on board the sensible suggestions which have been made and to include them in the Bill. I am afraid that I am not going to be able to satisfy the noble Baroness today on including the devolved Administrations in the Bill, but I would like to take the opportunity to spell out a bit more of our engagement with them.

We began the engagement process in early 2014 when we first met the Welsh and Scottish Governments to discuss our ambitions to promote the UK space industry. We have been engaged with them on an official level ever since to ensure that they are content with all the provisions of the Bill. Specifically on land powers, we have agreed an approach which they have confirmed they are happy with. Before the introduction of the Bill, we discussed the land provisions with the Scottish Government, the lands tribunals for Scotland and Northern Ireland, and the Registers of Scotland, and have since consulted the Scottish Civil Justice Council on the practical implications of orders under Clauses 38 and 40. They have all confirmed that they are content with the implications for their processes.

Orders made on Welsh land would be subject to the same registration process as those in England, and any tribunals that were to be involved would be the same ones as for England. The Minister of State for Transport, John Hayes, spoke last week to the Scottish Government Minister for Transport to update him on the progress of the Bill and the proposed amendments. In addition, my officials continue to engage the devolved Administrations of Wales, Scotland and Northern Ireland as the Bill makes its way through the parliamentary process. This includes sharing information on the proposed amendments tabled last week, with which the devolved Administrations have expressed that they are content. An opportunity for the devolved Administrations to raise any concerns about a specific order is, as I said earlier, provided in Schedule 6.

We expect that spaceport or launch operators or range control service providers will have already worked closely with local landowners and local authorities as they develop their plans for sites and launches. We also expect that, rather than orders under Clauses 38 and 40 being necessary, operators will negotiate with landowners for access to land.

I hope that this greater detail, combined with the amendments tabled by the Government to Clauses 38, 40 and 42, give reassurance to noble Lords. I hope also that the amendments demonstrate that the Government recognise the importance of land and ownership rights, as well as the importance of protecting the public during periods of spaceflight activities.

In response to the invaluable scrutiny of this House, we have sought to fine-tune our proposals to prevent unnecessary restrictions on land users and landowners. In addition, we have clarified the availability of a robust challenge process which provides those who wish to challenge with very similar grounds and remedies to those available through judicial review. The Bill also includes provision for just compensation where appropriate. I therefore ask the noble Baroness not to press Amendment 21.

Baroness Sugg

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My Lords, in Committee last month, a number of noble Lords urged my noble friend Lord Callanan to reconsider the Henry VIII powers contained in Clause 66. The noble Lord, Lord McNally, highlighted the powerful arguments made by several speakers on this issue and recommended that the Government give thought to that between Committee and Report. I am pleased to say that we have followed his advice and have considered the arguments made by noble Lords. As a result, I have tabled these amendments, which will remove the Henry VIII powers from the Bill. I hope noble Lords will appreciate the considerable ground the Government have given. We have not taken this decision lightly; we recognise that there may be situations in the future that leave some legal uncertainty. However, we will continue to examine related legislation and address any omissions as necessary.

Amendments 34, 36 and 37 ensure that the power to make consequential amendments in Clause 67 is now limited to changes to secondary legislation made under the negative resolution procedure. Turning to Amendment 33A, we had an interesting debate on this same issue in Committee. I take it that my arguments then failed to convince noble Lords of the necessity of the subsection. However, the Government remain convinced that the subsection is needed to ensure that all aspects of the Bill can be fully implemented effectively.

As noble Lords are aware, the Bill provides powers to make regulations for specific purposes such as safety and security. However, there remains the possibility that due to the complex and evolving nature of spaceflight technology, we may need to supplement such regulations with regulations on other aspects of spaceflight and associated activities. The power in Clause 67(1) would only be used in such cases. I hope noble Lords are reassured by my explanation and feel able not to press the amendment. I beg to move Amendment 31.

Baroness Sugg

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I will attempt again to explain our opposition to the amendment. It would result in primary legislation being needed for such cases, including, for example, to make provisions for any developments in technology. This could lead to delayed launches from the UK and harm a burgeoning industry, so we are keen to maintain flexibility.

It is worth noting that the power’s scope is limited. Only regulations that relate to the regulation of spaceflight activities and associated activities can be made, as set out in Clause 1(1). I provided assurances in Committee on the limited scope of these associated activities. If regulations were to go wide of those and cover other areas, the Secretary of State would have exceeded his or her delegated authority and the decision would be subject to judicial review.

The Government have reflected on the concerns expressed about the powers contained in the Bill. We have gone a significant way towards addressing them by removing the Henry VIII power. The removal of Clause 67(1) would adversely impact on the Government’s ability to ensure that legislation relating to spaceflight was kept up to date. I can assure the noble Lord, Lord Rosser, that this Bill was brought forward to supply certainty to the industry, but I understand that concerns remain about the definition of “associated activities” and would be happy to meet noble Lords ahead of Third Reading. I ask noble Lords not to press their amendment.

Baroness Sugg

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Noble Lords will recall the wide-ranging debate on parliamentary oversight of secondary legislation that took place in Committee. The Government have reflected on the concerns expressed by noble Lords. As a result, this amendment will impose a statutory duty to carry out a public consultation before any regulations are made under the affirmative resolution procedure.

I hope that the amendment alleviates noble Lords’ concerns and reassures them of the Government’s intention to undertake full and wide-ranging consultation. This will also include a report by the Secretary of State on the consultation. As my noble friend Lord Callanan said in Committee, the Government’s intention is to carry out a public consultation that will invite a response from all interested parties, including noble Lords and trade unions.

Any subsequent regulations that materially changed the substance of the original instruments would also be subject to consultation. All noble Lords who have spoken on the subject will be notified of any public consultation. I beg to move.

The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)

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My Lords, we debated this issue extensively in Committee and on Report, and I regret that I have been unable to convince noble Lords of the necessity of this provision as drafted.

The wording of the clause—which is why we are keen to include it rather than the amendment put forward by the noble Lord, Lord McNally—is consistent with that contained in Section 60(2) of the Civil Aviation Act 1982, the latter being a power to do anything,

“generally for regulating air navigation”.

A similar power arises under Section 11(1) of the Outer Space Act 1986 to enable the making of regulations generally for carrying that Act into effect. That is why we put forward the wording that we did in the Bill.

As noble Lords are well aware, there are a number of other regulation-making powers in the Bill, notably around security and safety. However, we need to ensure that we can regulate those wider matters relating to spaceflight and associated activities carried out in the UK that are not covered by the other powers. For example, this may include implementation of our international obligations relating to spaceflight arising from bilateral or multilateral treaties. We know from our experience in other sectors, such as aviation, that despite our best efforts there needs to be the flexibility to deal with any unexpected circumstances. The Government therefore remain convinced that this provision, as currently drafted, is needed to ensure that all aspects of the Bill can be fully implemented effectively.

Baroness Sugg

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That the Bill do now pass.

Baroness Sugg

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My Lords, I thank all those involved for their interest in, engagement with and scrutiny of the Bill over the past few months. The UK space industry is a British success story—a story of invention, innovation and global ambition. The Bill will take us further, enabling new satellite launch services and low-gravity spaceflight from UK spaceports, and supporting our industrial strategy to deliver a stronger economy that works for everyone.

I thank my predecessor, my noble friend Lord Callanan, who took the Bill through its early stages, and I thank the noble Lords, Lord Rosser, Lord Tunnicliffe, Lord McNally, and Lord Fox, and the noble Baroness, Lady Randerson, who provided rigorous scrutiny throughout this process. I am grateful for the contributions of my noble friend Lord Moynihan; I, for one, will miss the strong advocacy for a certain location in Scotland. Finally, I thank policy officials and lawyers from the UK Space Agency, the Department for Transport and the Department for Business, Energy and Industrial Strategy for their work on the Bill.

It has been a privilege to debate the Bill with noble Lords, whose knowledge and expertise I have found incredibly helpful. We have taken on many of the recommendations of the DPRRC and the Constitution Committee, and I thank them for their work. The constructive engagement, conversations and debates we have had together have led to significant improvements to the Bill. This is an example of this House at its best, where proper scrutiny and challenge can—put simply—lead to a better Bill. Today, therefore, we stand one step closer to a new commercial space age, and I beg to move.