Space Industry (Indemnities) Bill
Friday 7th March 2025
(3 months, 4 weeks ago)
Commons ChamberSpace Industry (Indemnities) Bill 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
John Grady (Glasgow East) (Lab)
I beg to move, That the Bill be now read a Second time.
It may be of interest to you, Madam Deputy Speaker, that Bradford, part of which you represent, contains a centre of space expertise, namely the University of Bradford. I will return to that later.
I am privileged to introduce a Bill that will help to push forward investment in the UK’s critical space sector. It will amend two sections of the Space Industry Act 2018 to provide legal certainty that all space flight operator licences must include a limit on the amount of the operator’s liability to the Government under section 36 of the Act. What are space flight activities, one may ask? They cover launching spacecraft, such as satellites, into space, operating spacecraft in space—for example, allowing a spacecraft to orbit Earth—and bringing spacecraft back down to Earth.
Under the international law applicable to space, Governments, including ours in the UK, are liable for damage to property, death or personal injury caused by their space activities or by their nationals. That is a key reason why section 36 of the 2018 Act requires people carrying out spaceflight activities to indemnify the Government against such claims. The Bill provides legal certainty over the need to limit liability because that will encourage desperately needed investment in the sector.
The space sector and satellites are central to almost everyone’s day-to-day life. Let us take something simple like a trip to a football match. Middlesbrough fans—I’m afraid I am not among them—have a famous fanzine called “Fly Me To The Moon”. That is not a reference to Sinatra, but they might buy it using contactless. People will make their way to the match with the use of maps and travel updates on their phones and use Google Pay or Apple Wallet to store tickets and get into the stadium. All this depends on satellite technology. One may ask why the Boro fanzine is called “Fly Me To The Moon”. It is because Bruce Rioch, a great Scottish manager, then manager of Middlesbrough, said of his captain:
“If I had to fly to the moon I’d take Tony Mowbray, my captain, with me. He’s a magnificent man.”
Both men played a significant role in saving that magnificent football club.
Suppose, Madam Deputy Speaker, you wanted to read on your device “The First Men in the Moon” by H.G. Wells. That requires satellites. The protagonist in that novel is a Mr Bedford. I was brought up in Bedford, a wonderful town in Bedfordshire, and my hon. Friend the Member for Bedford (Mohammad Yasin) is a fine friend. Suppose you wanted to stream “Breakfast at Tiffany’s”, famous for Audrey Hepburn singing “Moon River”. Streaming music depends on satellites. I confess that “Moon River” was one of my lullabies of choice when my children were younger and I was desperately trying to get them to sleep. I did not think that “Subterranean Homesick Alien” by Radiohead would be an apposite choice or, for that matter, Lou Reed’s great song “Satellite of Love”, so I stuck with “Moon River”. The House will be pleased to know that I do not propose to sing “Moon River”, because I am appalling at singing.
The critical point is that satellites and related technology are critical to modern life, and they will become even more so. There is a significant economic opportunity for the United Kingdom here. European demand for satellites up to 2033 is forecast to be worth $50 billion. Even 2% of that would bring around $1 billion in revenues for the UK economy alone. This provides a serious economic opportunity to the United Kingdom, and we must seize it with both hands, because we must get growth back into the British economy, and that is what our Government are determined to do.
Space is an industry of the future—a future of hundreds of years—and it is critical that we invest in and support industries that can bring our family of nations prosperity for decades to come. As President John F. Kennedy said,
“man and his quest for knowledge and progress is determined and cannot be deterred. The exploration of space will go ahead, whether we join in it or not. And it is one of the great adventures of all time.”
President Kennedy said that in 1961, and in 2025 I say it is high time that the United Kingdom got stuck into this adventure and seized the opportunities it will provide.
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank my hon. Friend for introducing this Bill—he is reaching for the stars with it, quite literally. I am proud to have a company in my constituency called Alpha Data, which is just 50 metres from my constituency office, but the products it designs are 250 miles above us. It has a sensor outside the International Space Station that measures atmospheric heating and cooling. Alpha Data employs 30 people in its office, but its supply chain stretches from inside the city to Kilsyth, the Scottish Borders and nearby Livingston. Does my hon. Friend agree that this company is evidence that the space sector is thriving in Scotland, and that this Bill should help it to go “To infinity and beyond”?
John Grady
I could not agree with my hon. Friend more. Edinburgh has a thriving space sector, as does Scotland. My hon. Friend has for many years been heavily involved in work to grow the economy in Edinburgh and the Borders, and I pay tribute to him for that.
I must, however, take this opportunity to pick a minor bone with my hon. Friend. He mentioned that Glasgow does not have a castle, and I wish to correct the record. We have a fine ruined castle called Crookston castle. It is the second-oldest building in Glasgow. The first-oldest building in Glasgow is the beautiful cathedral. I will not indulge in a dispute about whether Edinburgh or Glasgow is the better city. They are both beautiful, great cities. Glasgow is slightly better, but there you are. I am obliged to my hon. Friend for his intervention, and I am also glad to be able to correct that point.
There is another reason why it is important that we have a thriving space and satellite industry. Space is critical to defence, and we must have a thriving space sector to protect our country. The United Kingdom works with allies to ensure that our interests are defended in space. However, the world is becoming more unstable, and it is essential that we have our own capabilities to launch and operate satellites from the United Kingdom, and this Bill is important in that regard, too. It will help to secure a vibrant end-to-end space industry in the United Kingdom, and that is important for defence. To take one example, having our own domestic launch capability is important, and a vibrant civilian sector will help to cover the costs of that launch capability. This Bill also has a national security theme.
Owing to much hard work, including by the last Government, the UK Space Agency and many others, the United Kingdom also has a firm foundation for a thriving space industry. In the time available, I cannot provide a complete survey of the vibrant and growing space industry, but here are some key points. One key task we have had is to develop our own launch capability to put satellites up in space, and then to get them back down. That is why there is so much chat about spaceports—in my life, at least.
SaxaVord, the UK spaceport in the Shetland Islands, is one of only two licensed vertical launch spaceports in Europe. That is at the far end of the north of the map of our family of nations. Down in the far south-west, we also have an operational spaceport in Cornwall. That illustrates that space is an opportunity for our family of nations from the very top to the very bottom—I mean that only in a cartographic sense; I am not looking to offend any Members from Cornwall.
There are also spaceports under construction and planned in: Sutherland, on the far north of the coast of Scotland, to the west of Thurso; North Uist, a wonderful place, which I commend as I spent much of my honeymoon there; Glasgow Prestwick; Spaceport Machrihanish, on the southern tip of the Argyll peninsula, which I would also recommend for a visit to Scotland; and, Snowdonia. Some may wonder where those places are. They are all wonderful places, and they illustrate that space is an opportunity across the United Kingdom.
Let us turn to the satellite or, as Lou Reed sang, “Satellite of Love”. The UK has incredible talents in manufacturing satellites and satellite technology. As a Scottish MP, I focus on Scotland, and as a Glasgow MP, I focus on Glasgow, but let us start in the Moray firth, where my mother came from. It has a fine tradition of engineering. For those who follow highland league football—I suspect I am in a minority of one in the House today—the fact that Forres Mechanics is one of the oldest football clubs in the north of Scotland points to a tradition of engineering there. The Jones shipyard in Buckie is another great engineering industry in the north of Scotland.
Of significantly more relevance to this debate is that Forres is home to Orbex, which is developing a rocket called Prime. It will be the first UK-manufactured and UK-launched orbital rocket. Prime is set to take off from SaxaVord in 2025. Prime is set to take off from SaxaVord in 2025. The UK Government have recently announced a £20 million investment in Orbex—an important investment that demonstrates the opportunities being brought to the north of Scotland, for which we need to redouble our efforts to secure economic growth and prosperity.
My home city of Glasgow has a rich history of innovation and an incredibly promising cluster of space expertise. As a Glasgow MP, I am determined that it should have a bright future in space. Glasgow is building more satellites than any other city in Europe. There are fantastic companies in the area including, Alba Orbital, which specialises in PocketQube satellites, AAC Clyde Space, which has expertise in small satellite technology, and Spire Global, which is a leading provider of space-based data analytics and space services. This year is Glasgow’s 850th birthday. The Bill will help secure the prosperity of Glasgow for the next 850 years, creating jobs and economic growth in my great city of hard work, innovation and enterprise.
There is clear economic analysis that shows that the space industry is an important opportunity area for growth and jobs. The latest “Size and Health of the UK Space Industry” report estimates that 228 organisations in Scotland generated a combined income of £298 million in 2021-22—almost double that of 2018-19 in real terms. About 6,500 people work in space in Scotland, and the figure for the UK is between 48,000 and 52,000. Income amounts to between £17.5 billion and £20 billion. There are more than 100,000 jobs in the supply chain as well.
Let us pause for a moment on that: we have only just got going on this and we have 48,000 or more jobs. There is much potential here for many more good, high-paid jobs of the future, which is what Britain needs.
Kanishka Narayan (Vale of Glamorgan) (Lab)
My hon. Friend has given detailed and eloquent descriptions of the UK space sector, and Glasgow’s contribution in particular, but what will the provisions of the Bill do for the rest of us—including those in south Wales and across Wales—so that space is also felt in our communities?
John Grady
The Bill applies across the United Kingdom, and obviously there is a space industry in south Wales, too. It will encourage investment in south Wales by protecting investors against unlimited liability. I see this as critical for the space industry in south Wales as well as in Scotland. Naturally, I focus on Scotland because I am obsessed with the place, but, I would add, Madam Deputy Speaker, that it is very important for Bradford, too.
It is important to note that the space industry is a source of good jobs, and not just for people with PhDs in astrophysics. Last year, the Scottish Affairs Committee heard that there were great opportunities for many different people in the space industry. It will provide jobs for school leavers, graduates and PhDs across the spectrum. That is something that is brilliant about space.
Alex Ballinger (Halesowen) (Lab)
Does my hon. Friend recognise that the Ministry of Defence is a massive investor in the space sector, having invested £6.5 billion over the last decade? Does he welcome that investment as we are strengthening European security?
John Grady
I am obliged to my hon. Friend for his intervention. That is a very important point. Every week, we can pick up the paper and look at the discussion about where we need to invest in defence. We must invest in space, and we must have our own capability here in the United Kingdom—that is critical.
Over my lifetime, the domain of warfare has, sadly, expanded from ground, sea and air to space as well as online. It is critical that we invest in our capabilities here. The Bill is important for that. It is critical that we continue to pursue investment by the Ministry of Defence and the UK Government, which I believe has cross-party support. It creates economic opportunities for the United Kingdom, too. The lesson of history and technological development is that investment in defence has significant civilian spin-outs, so it is quite right and proper for us to invest in it.
In summary, we have a huge opportunity and it is one that we must seize. The Bill has one, sole objective: to help get investment into the space sector so that we seize this opportunity. With that in mind, I now turn to provide more detail about the legal and commercial background to the proposed Bill. I must admit that, given my previous career as a lawyer, I find this bit the most interesting. However, I quite accept that for others it may have a more treacle-esque quality to it. I beg forgiveness, but I am afraid I must proceed!
As I have explained, the Bill seeks to limit space operators’ liability. I start by emphasising that there is a very, very strong safety regime in operation here. Spaceflight activities are very heavily regulated by an independent regulator, the Civil Aviation Authority, to ensure that they are safe. In order to carry out spaceflight activities, one must obtain an operator licence granted by the CAA, which is independent of Government. It has a clear legal duty to secure the health and safety of the public and the safety of their property. That trumps all the CAA’s other duties. It must put safety first.
A range of tests applies to the granting of licences. The applicant must be able to demonstrate that it has taken all reasonable steps to ensure that the risks to people and property are as low as possible, and that the level of those risks is acceptable. More generally, there is a detailed and robust safety regime governing spaceflight activities operated by the CAA. So, here we are concerned with small risks that are reduced to the minimum extent possible by a strong regulatory regime.
Under international space law, the UK Government have a long-standing legal liability for damage caused by spaceflight operations. There is, despite the safety regime, a residual risk that things can go wrong and that the Government can face claims. The UK Government can make claims against operators under section 36 of the 2018 Act. Again, that is quite proper. Under the regime, operators have to assume risk and under the Bill, although it limits liability, operators continue to bear risk. Of course, the Government need to ensure that operators can pay out on claims made against them, which is why the 2018 Act regime and the licences make provision for compulsory insurance to be put in place by the operators. And, of course, it is usual for businesses to insure against foreseeable risks.
Under the regulatory regime, the risks must be properly assessed and appropriate levels of insurance put in place. The policy for that is set out in a detailed guidance document published by the Department for Transport, the Department for Business, Energy and Industrial Strategy—as it was then—the UK Space Agency and the Civil Aviation Authority. I think everyone will be relieved to hear that I do not propose to give a detailed exposition of the regime or take them through the documents, but the critical point is that the regime requires appropriate levels of insurance to be in place that protects the taxpayer and is supervised by a strong independent regulator.
The risk for spaceflight operators is that claims from the Government under section 36 exceed the carefully assessed insurance. The current legislation does not require the CAA and the Government to cap operators’ liability. The relevant section makes it entirely optional. Section 12(2) of the 2018 Act provides that
“An operator licence may specify a limit on the amount of the licensee’s liability under section 36 in respect of the activities authorised by the licence.”
The key word here is “may”. My proposal is that “may” is changed to “must”, and that an “any” in section 36 is changed to “the” as a consequence. The Bill simply swaps two words with two other words.
The Government have a long-standing policy, as did the preceding Government, that liability should be limited. However, the issue for investors is that that is not set out in statute. This means that a future Government and regulators could change the policy with comparative ease, and that could damage existing investments and could lead to investors finding that they are exposed to unlimited liabilities. This is deterring, and will continue to deter, investment in the United Kingdom. The issue is causing real concern to investors.
This is a point that the space industry has made to the Government. In 2020, a cross-departmental consultation took place on the insurance and liability regime under the 2018 Act. In summary, many respondents raised concerns with the lack of a legally firm guarantee in the policy to limit liability. That caused concerns that operators would be exposed to unlimited liability in future. The then Government accepted the point but explained that introducing a provision to require a cap on liability would require primary legislation—and that is what I am proposing today. The Government also made it clear that, in the meantime, all operator licences would include a limit of liability. I agree with that decision.
The issue was also discussed in the 2021 report prepared by the taskforce on innovation, growth and regulatory reform, which proposed the introduction of a mandatory cap on the liability of licence holders, to encourage investment in the sector. Respondents to a UK Space Agency consultation in 2021-22 reiterated calls to make the limit of liability in section 12(2) of the 2018 Act mandatory. This is a long-standing unresolved issue.
The space industry and potential investors are right to be concerned. As some hon. Members know, I am a recovering lawyer. In my past career, I had to deal with complex liability issues—I reassure Members that none of them was of my own making. I learned that investors are happy to accept risk, but if they are investing millions or billions in a high-risk industry, they want to know that they are not exposed to unlimited losses beyond what they can reasonably insure.
The investors are correct to state that a Government policy can be withdrawn with much greater ease than a statute. Indeed, the plain fact, in my experience, is that the scope for legal challenge when Government policies are withdrawn is often quite limited. In such a situation, many investors simply will not invest. They want to know that risks are clearly and fairly allocated, manageable and covered by insurance, and they want to understand that the liability regime is legally solid. In contrast to a guidance document, a statute will provide much greater protection. Investors accept that it will not provide absolute protection, but a statutory protection will give much more comfort. That is a reasonable position for potential investors to adopt.
It is important to understand that investors have a choice of places in which to invest. Many countries want this space investment, and the United Kingdom has to be attractive to investors. These investments are long term and investors need to be sure that they are covered on a firm legislative basis—they need some security. My understanding is that all other launching nations—that is, nations with launch capability—limit liabilities or provide a state guarantee for the type of activities that currently take place from their territory.
At present, faced with this massive economic opportunity, we are at a disadvantage. There is a clear risk to the competitiveness of our space industry and, as a result, to its growth. The unlimited liability of the indemnity to Government is damaging investor confidence and makes the United Kingdom a less attractive place from which to launch. That will undermine our ambition for growth in the sector, and our ambitions to ensure that we can keep our country safe and to grow our defence in this area. The Bill confronts the problem and will make the UK a much more attractive place to invest.
To sum up, Madam Deputy Speaker—I suspect some people will be glad, given the dry topic, although I am happy to keep going—the space sector is central to almost everyone’s life. How could we check our emails in this Chamber without it? There is a significant economic opportunity for the UK here. The space sector is critical to our defence. The United Kingdom has a firm foundation for a thriving space industry, and we must build on it, including in Scotland, south Wales, Cornwall and the south-east of England. There are even people on the Isle of Wight who work in space.
There is a robust safety regime governing space operated by an incredibly highly experienced independent regulator. Operators have to put in place compulsory insurance, but there is a concern for investors that above that insurance, they will have unlimited exposure. That has been repeatedly explained to Government. The investors’ position is reasonable. The proposed change would limit liability and make the UK a more effective place to invest.
The Bill will help create economic growth, jobs and prosperity for decades to come from Cornwall to Shetland. It is good news for the great cities of Glasgow and Edinburgh and for great south Wales, and for growth and jobs across the United Kingdom. It is time to resolve this issue; jobs and investment depend on it—including in Bradford, Madam Deputy Speaker, which is a real centre of excellence for space.
The Bill changes two words: “may” to “must”, and “any” to “the”. It may be one of the smallest Bills in recent memory. I have not done the research into the smallest Bill in Parliament’s history—I guess we are looking for a one-word Bill—but this Bill has one big objective: to ensure further investment in the UK space industry. I could say that this is one small step for Parliament, but a big step for the space industry, if I was any good at puns and humour. But, as I suspect some of the hon. Members from Scotland could tell us, I am no good at puns and I am humourless. Nevertheless, I commend the Bill to the House.
Martin Rhodes (Glasgow North) (Lab)
I declare an interest as a member of the all-party parliamentary group for space. It is perhaps fitting that a week after the planets aligned in the night sky for the first time in 360 years, this House is considering legislation that could help the UK’s thriving space industry.
Almost a fifth of UK jobs in the space sector are based in Scotland. Scotland’s space sector leads in small satellite manufacturing. Glasgow builds more small satellites than any other place in Europe. Scotland is also the data-driven capital of Europe, hosting more than 170 data science companies. I commend the efforts of my hon. Friend the Member for Glasgow East (John Grady) in his Bill, which would remove barriers to spaceflight activities in Scotland and the UK as a whole, growing the space launch sector.
The Bill helps to demonstrate how specific measures supported by the UK Government in reserved matters can help developing industries in Scotland and the UK to grow and prosper. Just as engineers need certainty in their calculations for successful space launches, companies need certainty to be comfortable when investing in an industry. This Bill, by providing an operating liability cap for spaceflight operators, would deliver the legal certainty for the space sector to know the up-front maximum amount they could be liable for. That would reduce uncertainty and make it easier for them to secure insurance coverage.
I am aware that talk of insurance and liability is not as interesting as spaceflight itself, but they are, none the less, important for the development of the sector. The Bill signals that it is a growth sector that we are willing to support and to be in dialogue with. It was informed by a consultation on spaceflight liability, insurance and charging by the previous Government. My hon. Friend’s Bill would help reduce the financial risk for those businesses and would align the UK with international standards, thus making it a more attractive location for space companies to invest and operate in.
Overall, the Bill would mean more space flights out of Scotland and the rest of the UK, more innovation, and more well-paid jobs. Supporting growth in the space sector would also see a network effect across my city of Glasgow and further afield. My constituency of Glasgow North is home to the University of Glasgow, which houses the expertise, skills and talent that not only benefit the sector already, but serve as a vital pipeline for its future growth.
Glasgow has long been a hub for small satellite design and manufacturing, with Scotland holding the title of the second largest producer of satellites after the United States of America. In the Glasgow North constituency, the West of Scotland science park and the Skypark in Finnieston further strengthen that ecosystem, hosting manufacturers and research and development sites that support everything from rocket launchers to small satellite spacecraft. Those facilities play a crucial role in driving innovation and providing high-quality skilled jobs, reinforcing Glasgow’s position at the forefront of the global space industry.
I urge colleagues to support the Bill to help the space industry achieve the legal certainty around liabilities that it needs to continue to thrive and source investment. With that growth, we can help deliver jobs and prosperity for Glasgow, Scotland and the rest of the UK. I congratulate my hon. Friend on bringing the Bill to the House, and I am pleased to support it.
Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)
I am proud to speak in support of the Bill promoted by my hon. Friend the Member for Glasgow East (John Grady) on the space industry. Like large parts of Scotland, my constituency has a burgeoning footprint in the aerospace industry—indeed, not just the industry, but the supply chain, because as my hon. Friend the Member for Edinburgh South West (Dr Arthur) pointed out, Kirkintilloch and Kilsyth are very much part of my area and it is becoming one of our largest industrial sectors.
To be honest, my interest in space, like that of many in my generation, comes from a combination of sci-fi and being made to watch the launch of the space shuttle. As the opening statements of “Star Trek” told us, space is “the final frontier” and we should “boldly go where no man has gone before”. Given that what separates the constituency of my hon. Friend the Member for Glasgow East from mine is the M73, a major part of Scotland’s motorway and logistics infrastructure, it is probably fair to say that people do not boldly go on that journey every day, although having once spent the night on the motorway during a snowstorm, it does feel a bit like the final frontier at times.
The Bill is exceptionally technical, and the need for it is immense. The Prime Minister rightly reminded us this week of the need for Europe to be united and not rely on the United States when conflict comes to our continent. While that is true in Ukraine, it is also immediately true in space. There may be competition within the sector in Europe, and we have even heard about competition within the sector in Scotland, but that is healthy. However, we must break up the dominance of the US private sector in this space. To develop the sector at warp speed is vital.
Constituencies such as mine are crying out for advanced engineering jobs—jobs that are highly skilled and naturally well paid. Our local economies benefit from people coming from all over the country to work in those factories and warehouse units. People visit those units, as I have had the privilege to do, and they meet the range of people who work there. No longer is this the engineering I knew in my childhood—it is no longer pale, male and stale. The role of women in the industry is obvious, which takes us right back to the original series of “Star Trek” in the ’70s, where the inspirational and transformative effect that Nichelle Nichols had as Lieutenant Uhura cannot be overstated. The fact that she was hired by NASA to recruit women and people of colour for the space shuttle programme between 1997 and 2015 showed the impact that she had. Many astronauts have credited Nichols and Uhura with inspiring them to want to work in that industry. Mae Jemison was the first African-American woman in space in 1992, and a year later she appeared on the decks of the USS Enterprise as part of “Star Trek: The Next Generation”.
All the devices that we love to watch on “Star Trek” are what we are using today—look at our iPads. It had the first handheld mobile devices and personal access display screens. In the “Star Trek” world, Jean-Luc Picard would say to his replicator, “Tea, Earl Grey, hot,” and it would then appear from the ship’s reserves. We are not quite at that level of sophistication yet, although the work of 3D printers and computer-aided design, and the effect of that on the advanced engineering sector, cannot be overestimated. Indeed, we are now seeing food products being printed, so maybe in the not-too-distant future Patrick Stewart himself will be able to order up a “Tea, Yorkshire, hot.”
NASA has said that, although not yet developed, the warp drive is something that could be possible in the future. Investment in our sector makes it happen—or, again in the words of Jean-Luc Picard, it makes it so.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
It is a pleasure to speak in this debate in support of my hon. Friend the Member for Glasgow East (John Grady) and his mission to make positive change in this industry. I profess that I have little knowledge about space, but he and others have made their points so well about how this slight change to the licensing of spaceflight—the launch, flight and return of spacecraft satellites, which is something I can just about envisage—would encourage greater investment in businesses. That growth and investment is so important for all of us and for our economy. So much of our day-to-day life is reliant on satellites. We had an important debate earlier about the use of smartphones—but hey, we all need them, and they are reliant on satellites in space.
I reflected on spaceflight and activities in outer space. Like some others in the Chamber, I remember “Flash Gordon” and “Star Wars” coming out. It was so surreal and fantastical; it was, indeed,
“A long time ago in a galaxy far, far away….”
Okay, I got it in Hansard.
Encouraging investment in space is really important, and I speak as the granddaughter of an eminent physicist. Again, it is the combination of science and the evolution of engineering and computing—all of this—that is so important for the future of business in the space sector.
As we are talking about investment in businesses, I want to encourage young people to search out a career in the future space industry. Others have spoken about careers in space science and technology, particularly in Scotland, which is great to hear. Although my hon. Friend represents Glasgow East, he is originally from Bedfordshire, which is another reason why I wanted to speak in this debate, which gives me a brilliant opportunity to talk about the University of Bedfordshire. The main campus is in my constituency of Luton South and South Bedfordshire, but the other campus is in Bedford itself. There are some brilliant opportunities to study on courses in artificial intelligence, robotics, computer science, software engineering and applications, electronic engineering and mechanical engineering, all of which would lead to brilliant careers in the space industry, so I strongly encourage young people who are looking to forge a career to consider them, as well as career changers—I wholeheartedly believe in lifelong learning, so maybe I could yet become someone involved in space.
The space industry is an important growth area for jobs across the UK. There are some in my constituency, and it is fantastic that we are looking to grow our economy up and down the United Kingdom, so I absolutely welcome this change. Small it may be, but it will have a big impact. I wanted to get on record my support for this measure and its importance for people in my constituency who may want to seek out a future career in the space industry.
Mr Richard Quigley (Isle of Wight West) (Lab)
I challenge anyone who has listened to the speech given by my hon. Friend the Member for Glasgow East (John Grady) not to think, “What a time to be alive.” We also have three castles on the Isle of Wight, one of which imprisoned Charles I, and it also has a donkey that powers a wheel to draw water from its well. I have no idea what use that is to this debate, but I felt very much left out.
I thank my hon. Friend for introducing this important Bill, which not only reaffirms the UK’s commitment to advancing space travel and exploration but ensures that that progress is built on a foundation of safety, accessibility and innovation. At a time when the global space sector is increasingly dominated by billionaire-led ventures, the Bill sends a clear message that the UK remains dedicated to a space industry that is both pioneering and responsible—one that prioritises safety, fosters innovation and creates opportunity for all.
I am proud to say that the Isle of Wight has a fantastic history of supporting and growing the UK’s space industry—it gives colleagues a break from hearing me talk about ferries. As in many other areas, we punch above our weight in this regard. In 1955, Saunders-Roe, based in East Cowes, began developing the Black Knight research ballistic missile. Over the course of its programme, Black Knight achieved 22 successful launches without a single major failure, a remarkable feat that showcased British engineering excellence. That legacy highlights the Isle of Wight’s pivotal role in the history of British space exploration and technological innovation, demonstrating its potential to contribute to the UK’s modern space ambitions.
However, we want to be not just a part of space history, but a part of space future. One of the biggest barriers to growth in the UK space industry has been the issue of liability. At present, the Government risk unlimited liability when launching satellites or conducting spaceflight operations. That uncertainty discourages investment, as insurers and financial backers are unwilling to support projects with unpredictable risks. The Bill before us is a simple, but crucial, fix: it will ensure that all spaceflight licences set a clear limit on operator liability, bringing us in line with international standards. That change is particularly important for smaller, emerging space companies, many of which could see the Isle of Wight as a viable location for future space-related ventures.
Rachel Hopkins
I am really pleased to hear my hon. Friend mention small businesses. Does he agree that start-up and scale-up small businesses are vital for our economies up and down the country?
Mr Quigley
I do indeed agree that small businesses are going to be the way forward when it comes to space technology. The Isle of Wight is a viable location for future space-related ventures, whether in satellite manufacturing, research or launch support services.
Alex Ballinger
My hon. Friend mentioned satellites. Does he recognise the massive benefits that satellites bring to the UK—everything from contactless transactions to supporting our defence and national security?
Mr Quigley
Bearing in mind the last Bill we were debating, I am not sure how much we can say about the benefits that satellites have brought, but yes, I do appreciate that.
We on the Isle of Wight already have the infrastructure to build on, with our skilled workforce, proximity to the south coast’s aerospace sector, and strategic location for maritime and aerospace testing. We are well placed to benefit from the fairer, clearer regulatory framework that we will create by passing this Bill. Not only are we strengthening the UK’s position in the global space industry, but we are opening up new opportunities for regions such as the Isle of Wight. Let us ensure that our island and the UK as a whole remains at the forefront of space innovation. I urge colleagues to support the change of two words that this Bill would effect, for the sake of not only our commitment to the growth agenda, but this country’s commitment to the future.
Alex Ballinger (Halesowen) (Lab)
I congratulate my hon. Friend the Member for Glasgow East (John Grady) on introducing this important debate. The two-word change might be the most consequential change ever made in Parliament. I am pleased to support the Bill.
Today marks the commencement of British Science Week, a celebration of science, technology, engineering and mathematics. This year’s theme, “Change and adapt”, is particularly fitting—it feels almost as if the stars have aligned—because we are debating the space industry today, which is built on technology, engineering and mathematics. The Bill perfectly aligns with the theme of British Science Week, as it seeks to implement small but significant changes to adapt the space industry in the UK and make it fit for the future.
As many other Members have explained, the space sector is an incredibly valuable industry for the UK economy, and one that we should all take pride in. The UK has long been committed to boosting commercial industry, with over 1,500 space companies on our shores. The UK leads in start-up and scale-up investment, second globally only to the United States. That is a huge achievement and a real opportunity that we must continue to nurture.
A consultation undertaken by the previous Government showed that operators holding unlimited liabilities often viewed that as a barrier to conducting spaceflight activities from the UK. The same consultation confirmed that other launching nations limit liabilities or provide a state guarantee for spaceflight activities conducted from their territory. This reality does not give investors a firm footing when looking towards the UK as a place to invest. If we are truly serious about fostering growth across the length and breadth of our country, the space sector must play an incredibly important role. The Bill ensures that companies and investors are confident about the UK as a space in which to invest.
People in Halesowen may question what this means for them, as our small part of the west midlands does not have the largest space industry, but we all benefit from the services born of the space sector. Satellite technology, which I mentioned just now, is made possible by the space industry and enables us to buy our morning coffees with contactless payments. Satellites assist with navigation and, importantly, many of them support our defence and national security, keeping us all safe.
The Ministry of Defence has been a major player in this field for some time, investing £6.5 billion over the past decade, including £5 billion for satellite communications through Skynet, and £1.5 billion through the defence space portfolio. The defence space strategy sets out our focus on intelligence, surveillance and satellite communications. I know that colleagues from across the Chamber will welcome that approach, as do industry and allies alike. The additional £1.5 billion of investment through the defence space portfolio brings significant investment to space research and development, and the jobs, skills and expertise that go with it. Through that investment, we are ensuring not only that we meet the threats of the future, but that we help to build the capability, expertise, skills and jobs that will serve defence and the wider civil space programme. Any efforts to expand on that are therefore wholly welcome.
Investment in space is much more than that, however. I know that for many of the Members in the Chamber, particularly those of us with a keen interest in “Star Trek”, the prospect of sending rockets into the sky is an exciting one. At its core, investment in the space industry is about so much more: unlocking the economy and allowing significant economic growth.
James Naish (Rushcliffe) (Lab)
My hon. Friend talked about how Halesowen might not benefit hugely from the space industry, but the Government are developing our industrial strategy right now, and space should be right at the heart of it because of what it could bring Halesowen and similar towns and cities across the country. Does he agree?
Alex Ballinger
I welcome the UK’s industrial strategy, particularly the defence industrial strategy. Many businesses in Halesowen, such as Somers Forge, work in the UK defence sector—primarily the Navy—given our engineering expertise in a heavily industrial part of the country, but there are opportunities for lots of businesses across the country to get involved in the space sector. This small change will unlock a lot of investment that could be used in many different places.
There are other reasons to support the sector. If our goal is to eliminate the obstacles that hinder new businesses from establishing themselves in the UK, these two small words will help to make that change. In doing so, we aim to create an environment in which companies are encouraged to set up operations here, rather than relocating to other countries. We must focus on retaining jobs and ensuring that the employment opportunities of the future are available right here in the UK. Additionally, fostering a thriving business ecosystem will not only boost our economy but drive innovation and technological advancements. By supporting the sector, we can create a sustainable and prosperous future for our nation, attract global talent and investment across science, technology, and research and development, and contribute to the Government’s core mission of growth.
Once again, I congratulate my hon. Friend the Member for Glasgow East on his Bill. It is a significant step towards ensuring that the UK remains at the forefront of the space industry, driving economic growth and innovation for years to come, and a clear signal to the world that the UK is open for business, ready to lead in the space industry and dedicated to creating a thriving environment for growth and development. By supporting the Bill, we are investing in not only the space industry, but the future of our country, ensuring that we remain competitive on the global stage and continue to attract the best and brightest minds to our shores.
James Naish (Rushcliffe) (Lab)
It is an honour to rise today to speak on the Space Industry (Indemnities) Bill and to champion the vital opportunities the space sector provides, especially to constituencies in Scotland, but also across the whole of our country, and to my area of Nottinghamshire in particular. I congratulate my hon. Friend the Member for Glasgow East (John Grady) on introducing the Bill and commend him for talking for 30 minutes, given that he is changing only two words of legislation.
I begin by echoing my colleagues’ sentiments about the transformative potential of our country’s space industry. The industry is already worth £17.5 billion to our economy, employing 50,000 people across the nation. It is quite literally a sector with no limits, and the Bill represents a crucial step in ensuring that we remain a global leader in space exploration, satellite technology and aerospace innovation. I have already mentioned the UK’s modern industrial strategy, which this Government are developing, and I genuinely hope that space sits at the heart of it.
In Rushcliffe and across Nottinghamshire we are witnessing the profound impact of this growing sector, and I am immensely proud to highlight some of the exciting developments that are taking place in our region. Just a short journey from my constituency is the Sherwood observatory, in Sutton-in-Ashfield, which is currently undergoing a £6.8 million transformation, and will soon open a state-of-the-art planetarium and science discovery centre, providing an unparalleled gateway to the stars for local students and visitors alike. What makes this project particularly remarkable is its innovative use of a Victorian water reservoir, blending historical preservation with cutting-edge science education.
Funded by the national lottery, the towns funds and private donations, the planetarium will inspire countless young minds, encouraging the next generation of scientists, engineers and, hopefully, some astronauts. The planetarium is set to generate a host of economic opportunities for Nottinghamshire, attracting visitors from across the UK, bolstering local tourism and supporting businesses in the area. Of course, it also underscores a commitment to making science accessible to all, regardless of background or geography.
Closer to Rushcliffe, we have the University of Nottingham’s Institute for Aerospace Technology, a shining example of our region’s commitment to excellence in research and innovation. The IAT is at the forefront of aerospace and space research, working with leading global companies to develop technologies that will define the future of space exploration. I am also proud to note that the university ranks among the top institutions in the UK for aeronautical and aerospace engineering, securing seventh place in the UK “Complete University Guide” for 2025. This ranking is a testament to the exceptional work being done to prepare students for careers in the aerospace sector and develop groundbreaking technologies that will propel our nation to new heights, both figuratively and literally.
The Nottinghamshire space sector is about not just innovation, but inclusion and opportunity. The industry offers young people in our region the chance to pursue exciting, well-paid careers without needing to leave their communities.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
The space sector offers opportunities to all our constituents. The defence industrial strategy is an opportunity to create and support activities based in STEM—science, technology, engineering and mathematics—particularly in relation to space. Does my hon. Friend agree that my industrial strategy submission would be a worthy read for all Members today, as it highlights just that?
James Naish
I obviously have not read my hon. Friend’s submission, but if he wants to send it to me I would very much welcome reading it.
The supply chain of the space sector is vast and diverse, as my hon. Friend has just alluded to, with almost 2,900 suppliers nationwide, half of which are small and medium-sized enterprises. By supporting this Bill and ensuring that the space industry can flourish in the UK, we are supporting businesses in Nottinghamshire and beyond that employ local people, contribute to the local economy and strengthen our communities. By virtue of even discussing the space industry here today, we are sending a clear message that the UK is a competitive and supportive environment for space businesses. This is about not just fostering innovation, but ensuring jobs and investment today and ensuring that expertise remains here in the UK, benefiting constituencies such as mine. Nottinghamshire is proudly playing its part; from Sherwood observatory’s planetarium to the University of Nottingham’s aerospace research, our region is a shining example of the transformative power of the space sector.
This Bill is an essential piece of legislation, as it addresses the current requirement for unlimited liability in cases of damages involving UK-owned satellites, which has inadvertently driven operators away from the UK to other countries with more favourable terms. By supporting the industry today, we are not just enabling launches into orbit, but launching a brighter future for young people, our economy and the UK as a whole. Collectively as a House, I hope that we will seize this opportunity to lead the world in space innovation while ensuring that the benefits of this industry are felt in every corner of the country.
Jerome Mayhew (Broadland and Fakenham) (Con)
What fun we have had. We could have proper jobs, but instead we are talking about space industries and debating their importance. I recognise the ambition of the last Government; when deciding which Department should monitor space industries, one might have thought it would be the Department for Science, Innovation and Technology, but no—we thought it should be the Department for Transport.
I am delighted to stand in front of you, Madam Deputy Speaker, to support this hidden jewel in our high-value industry. In the latest data that I could find, from 2023, the industry has revenues in the United Kingdom of £18.9 billion. It is supported by about 1,800 businesses, the vast majority of which are SMEs, right across the country in all our constituencies, developing the small satellites that are the particular expertise of Glasgow. This is the first time that I have had a Glasgow mafia of MPs in the Chamber all underselling their own constituency or city, because while they said that Glasgow produces more satellites than any other city in Europe, I believe the Department for Transport said in the previous debate in February 2024 that it is the largest manufacturer of satellites in the world outside of California.
There are 52,000 full-time equivalent workers employed directly in the sector. If we add in a supply chain of about 130,000 people across the country, we can see that this is already a very significant sector. It is growing in terms of employment, at 6.7% per year, and in terms of investment. Again, in 2023, the last year for which figures were available, there was investment of £8.85 billion into the space industry in the UK, and there is huge opportunity for more growth.
Applications for small satellites are going through the roof—on their way to orbit—and the geography of the UK is almost uniquely suitable for low Earth orbit satellites. Whereas the large satellites that we used to send up into space need to be sent up near the equator, being closer to the north pole makes launches into low Earth orbits more suitable. The other thing we have is lots of sea around us in case it all goes wrong. Additionally, the increase in the geopolitical uncertainty of the world makes it more important than ever that we develop our domestic capabilities in this area.
For all those reasons, the last Conservative Government backed commercial spaceflight from the UK and created the founding instrument for the industry, the Space Industry Act 2018. It created the legal framework for commercial spaceflight, and it was followed up in 2021 by the creation of a spaceflight regulator—the Civil Aviation Authority. I am proud to say that we took advantage of the genuine Brexit benefit of being able to create a regulatory environment far faster, and in a more comprehensive fashion, than our EU friends over the water have been able to do. It gives us a genuine commercial opportunity for rapid growth, which we have already seen.
Although the Space Industry Act 2018 is good, it is not perfect. As we have seen from yesterday’s news in Florida, when we occasionally have what is described as a “rapid unscheduled disassembly”, what goes up can come down. When it does so, it can cause loss and damage. UN space treaties make nation states responsible for loss and damage caused by space activity launched from their territorial areas, and it is for this reason that section 36(3)(a) of the 2018 Act passed financial responsibility from the state to the operator, requiring that the person carrying out spaceflight activities must indemnify His Majesty’s Government for loss, subject to any limit set out in section 12(2), which gives the regulator—the Civil Aviation Authority—the power to set an upper limit for that indemnity.
The rationale for a limit on indemnity is clear: without it, it would be impossible for insurers to assess the quantum of risk associated with an unforeseen event. In actuarial terms, if we cannot assess the quantum, the risk can no longer be insurable, yet we have already imposed through legislation a legal duty on any space operator to have sufficient insurance, which prompts the question of what insurance is sufficient. This issue has been identified and is the genesis of the two-clause Bill that we have before us today. The problem with the wording is that the cap on the indemnity is not mandatory; the Bill simply allows for a cap.
Before taking an investment decision that could involve many hundreds of millions of pounds, big investors need reassurance beyond a Government policy statement to give them the confidence to commit large sums for investment, and this Bill fixes the problem. Section 12 turns the power to cap an indemnity into a requirement to do so. The last Government supported a private Member’s Bill introduced by the former Member for Woking, Jonathan Lord, which had suspiciously similar drafting terms. The Second Reading of that Bill was held on 23 February last year and, to my great disappointment, the legislation was lost in the election wash-up as we approached July.
His Majesty’s loyal Opposition wholeheartedly welcome the reintroduction of the Bill today. If nothing else, it has given us an opportunity to rehash some rather painful space puns—Hansard is still reeling from last time. I have read Hansard from February last year, and there is a noticeable difference in the kinds of space puns used. From Labour Members, I am sorry to say that we have had references to Trekkies, “Flash Gordon” and “Star Wars”. From the Conservatives, we have had references to “The Clangers” and the Soup Dragon, which are much more patriotic.
Other contributions to today’s debate are worthy of mention. I have already referred to the over-representation from Glasgow—the city’s MPs spoke for about half the debate—but some very serious points have been made. The hon. Member for Glasgow East (John Grady), who I think is the first space lawyer in Parliament, spoke about the geopolitical risks and the need for a satellite launch capability in the United Kingdom. The hon. Member for Glasgow North (Martin Rhodes) noted that about 20% of all space jobs are in Scotland, and the hon. Member for Cumbernauld and Kirkintilloch (Katrina Murray) highlighted the increased role for women in the sector and the potential to break down stereotypical barriers, for which I commend her.
Moving south of the border, the hon. Member for Luton South and South Bedfordshire (Rachel Hopkins) made unfortunate references to both “Flash Gordon” and “Star Wars”, but she also made a serious point about the opportunities for young people in her constituency and beyond. Moving further south still, the hon. Member for Isle of Wight West (Mr Quigley) commented on what a time it is to be alive—I agree with him. He will have noted that the previous career of the hon. Member for Glasgow East was chargeable by the hour, which might explain the position in which we have found ourselves.
All those contributions recognise the hugely important role that space already plays in our economy and the incredible opportunity that the sector has to drive growth for all of us. The Bill gives the Minister the opportunity to confirm that His Majesty’s Government, despite the change in party, remain fully supportive of space industries and that he is wholly behind the Government’s target for the UK to be the leading provider of commercial small satellite launches in Europe by 2030.
I congratulate the hon. Member for Glasgow East on proposing this legislation. It changes two pesky words—just six letters if we add them up—but is six years in the making, which begs the question about the speed at which our legislative processes are able to operate. After the first Bill’s rapid unscheduled disassembly in the general election, I hope this Bill has a smooth lift-off and takes its place in the firmament of British legislation.
The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)
I thank my hon. Friend the Member for Glasgow East (John Grady) for bringing this short but crucial Bill before the House. I commend him for delivering such a brilliant and informative speech and for managing to cling on for as long as he did; some would call him the “Rocket Man” of Parliament. I thank all other Members who have spoken in the debate. Speaking of stars, I wish my hon. Friend the Member for Beckenham and Penge (Liam Conlon) a very happy birthday for yesterday; I hope he had a stellar time.
I am pleased to confirm that the Bill has the full support of the Government. Before I begin, let me outline some general observations about the UK and spaceflight. The UK’s approach to launch positions the UK as a leading international partner in the space sector, ensuring Europe’s independent access to space. The Department for Science, Innovation and Technology has responsibility for co-ordinating civil space policy, working closely with Departments across Government to ensure that space services can support their needs and that space science and research can act as an enabler across the economy, while building strong links with the wider science ecosystem. To achieve our ambition, Government have invested more than £57 million through the LaunchUK programme to grow new UK markets for small satellite launch and sub-orbital spaceflight.
The UK has one of the most advanced and trusted modern space regulatory frameworks in the world. On 8 October, the Secretary of State for DSIT announced the new Regulatory Innovation Office, to reduce the burden of red tape and speed up access to new technologies that improve our daily lives. The RIO has made space one of its top priorities, and we look forward to working with it on our wider regulatory reforms to enable innovation.
This Government are implementing a series of space regulatory reforms stemming from the recommendations published in the space regulatory review in May 2024. The Government have worked with the sector to determine a prioritised approach to the reforms, to maximise the growth and innovation potential for the sector.
One recommendation involves the implementation of a regulatory sandbox to stress-test the regulatory framework for enabling rendezvous proximity operations. The sandbox commenced in October 2024, with stage 1 due to be complete in March 2025, providing vital recommendations to enable the growth of these novel missions and to strengthen the UK’s capabilities.
We are also exploring financial tools, incentives and market access schemes that promote sustainable activities and encourage self-investment, inward investment and support a level playing field for UK companies. Alongside the regulatory reform package, work is under way to develop a range of new innovative regulatory measures to support the growth of the UK sector, new mission types and to incentivise the uptake of space sustainability measures.
As my hon. Friend the Member for Glasgow East said, the Bill will amend two sections of the Space Industry Act 2018 to provide legal certainty that all spaceflight operator licences must include a limit on the amount of the operator’s liability to the Government under section 36 of the 2018 Act. This short, but crucial Bill will go “far, far away” to encourage much-needed investment into the sector.
Before I outline why the Government fully support the Bill, and boldly going where no man has gone before, I will briefly outline some of the UK’s achievements in spaceflight. On 9 January, the UK made history by conducting the first ever orbital launch attempt from UK soil through Virgin Orbit at Spaceport Cornwall, demonstrating the UK’s growing launch capability and position as a leading spacefaring nation. In December 2023, SaxaVord spaceport on the Shetland Islands became the UK’s first vertical launch site to receive a spaceport licence. In January 2025, Rocket Factory Augsburg became the UK’s first licensed vertical launch operator. The UK’s approach to launch positions the UK as a leading international partner in the space sector.
As my hon. Friend will be aware, Scotland makes a vital contribution to the wider UK space ecosystem. Scotland’s space sector is home to advanced satellite manufacturing capabilities, and has a fast-growing satellite launch market. In fact, Glasgow builds more small satellites than anywhere outside of California. The UK is now the second-most attractive destination for commercial space investment after the United States.
This Government have made clear that unlocking growth is vital to rebuilding the UK and supporting high-tech jobs, which unlocks investment and improves living standards across the country. We are capitalising on the UK’s excellence in science and innovation to ensure our world-class research translates to commercial success, rebalancing the system and setting up the financial services sector to innovate, grow and seize the opportunities for investment in business, infrastructure and clean energy across Britain.
The space sector is hugely valuable to the UK’s economy. It is worth more than £18.9 billion and directly employs more than 52,000 people. It supports more than 126,000 jobs across the supply chain and at least £346 billion of the UK’s GDP is supported by satellite services, such as navigation, metrology, communications and Earth observation. It is now possible to launch satellites from UK spaceports, rather than relying solely on overseas sites to launch UK-built satellites into orbit.
As I previously mentioned, in January 2023, Virgin Orbit conducted an historic first launch from the UK at Spaceport Cornwall. In December 2023, SaxaVord spaceport in the Shetland Islands became the first licensed vertical launch spaceport. This year, we hope to witness the UK’s first vertical launch by German company Rocket Factory Augsburg, with more to follow. Growing our launch capability is already creating high-skilled jobs and opportunities in communities right across the UK, as well as catalysing investment across the supply chain.
The Government are investing in new launch companies such as Orbex, which has built factories in Scotland, creating hundreds of new jobs, ready to take advantage of the new opportunities that the Government have created. SaxaVord spaceport anticipates that by 2025, the spaceport site could support a total of 650 jobs in Scotland, including 140 locally and 210 across the wider Shetland region. Other launch operators, such as Skyrora, a UK company based in Glasgow, are thriving. It has indicated that it will conduct its first sub-orbital launch from the UK in the near future.
The UK’s space industry already supports an industrial base of over 1,500 space companies. It provides high-skilled, high-quality jobs across the UK, with over 77% of employees holding at least a primary degree. Building on the success of the UK’s space sector, the Government will continue to support business through a stable policy environment, strengthening our economic institutions and giving investors the certainty they need to fuel growth. The Government recognise the important contribution that the space sector makes to ordinary people’s lives. Growth is the Government’s No. 1 mission, and the Bill has the potential to drive growth within the sector by encouraging further investment.
It is important that the UK builds on the successes of an already thriving and dynamic space sector. The Government are delivering our plan for change with investment and reform to deliver growth. We will ensure, through the measures that we are taking to deliver growth, that the UK becomes a leading provider of commercial small satellite launchers in Europe by 2030.
To achieve our ambition, the Government will continue to support spaceports and launch operators to grow new UK markets for small satellite launch and sub-orbital spaceflight. The Government are committed to making improvements to both the Space Industry Act 2018 and the space industry regulations to ensure that our legal framework and regulations remain effective and internationally competitive. The UK has one of the most advanced and trusted modern space regulatory frameworks in the world.
Let us explore for a moment what liabilities are covered by the 2018 Act. There are two types of liability covered. Section 34 places a strict liability for injury or damage caused to persons or property on land or water in the UK or in the territorial sea to the UK—or on an aircraft in flight over such land, water or sea—by a craft or space object being used by an operator carrying out spaceflight activities in the UK. The uninvolved general public suffering injury or damage can bring a claim against the operator without having to prove fault. Section 36 places a liability on the operator carrying out spaceflight activities to indemnify the UK Government, or a person or body listed in section 36(2), for any claims brought against them for loss or damage caused by those activities. Therefore, UK nationals have the same easy recourse to compensation and protections as foreign nationals have under the UN liability convention.
The Government recognise that the question of liability and insurance is of utmost concern to the space sector. In response to a consultation on the then draft space industry regulations in 2020 and a call for evidence to inform orbital liability and insurance policy in October 2021, the industry made it clear that holding unlimited liabilities will have an adverse effect on the UK’s spaceflight industry. The industry has advised that it is impossible to obtain insurance for an unlimited amount, and therefore impossible to obtain insurance that will provide full coverage of an operator’s liability to indemnify the Government and their liability to uninvolved third parties. Furthermore, potential liabilities for spaceflight are not easily quantifiable. If the Government did not limit a spaceflight operator’s liability, spaceflight companies and investors would instead look to more favourable regulatory regimes in other countries where Governments share the risks involved by limiting an operator’s liability or by offering state guarantees, such as in the United States or in France.
As my hon. Friend the Member for Glasgow East explained, there are powers in the 2018 Act to limit a spaceflight operator’s liability when carrying out spaceflight activities from the UK. The Act enables commercial spaceflight activities, which include launching a spacecraft and operating a satellite in orbit, for example, or other activities such as the operation of a spacecraft and management of a range to be carried out under licence in the United Kingdom. The Act sets out the broad licensing and regulatory framework for carrying out such activities and is underpinned with more detailed provisions in the Space Industry Regulations 2021.
The 2018 Act currently provides powers for the regulator to specify a limit on the amount of the operator’s liability in the licence, but does not make it mandatory. Currently, section 12(2) provides that an operating licence may specify a limit on the amount of a licensee’s liability to indemnify under section 36. Current Government policy is that the regulator should use those powers to specify a limit on operator liability in the licence so that no operator will face unlimited liability.
The Government fully support the Bill and its further progress. It is consistent with our policy that all spaceflight licences should have a limit on liability, so it will not impose any more liability or risk on UK taxpayers than the current policy. The Government also recognise the value that industry ascribes to legislative certainty on this matter. The space sector continually expresses its concerns about the use of the word “may” in section 12(2 of the Act. I am therefore grateful to my hon. Friend for the Bill, which, by amending section 12(2), will meet a key request from the sector.
As a the Member of Parliament for Wakefield and Rothwell, let me end by paying tribute to the proud Yorkshireman and inter-cosmic former captain of the USS Enterprise, Patrick Stewart—“Star Trek: The Next Generation” being far the best iteration in the Star Trek franchise. I will leave the House with this: “Space: the final frontier. These are the voyages of the UK Government. Our continuing missions: to kick-start economic growth and make Britain a clean energy superpower; to seek out and break down barriers to opportunity and take back our streets; and to boldly build an NHS fit for the future.” Make it so!
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).
Madam Deputy Speaker (Judith Cummins)
The Member in charge of the Military Action Bill gave instruction earlier today that he wishes to defer it until Friday 4 July.
Space Industry (Indemnities) Bill
Wednesday 18th June 2025
(2 weeks, 3 days ago)
Public Bill CommitteesSpace Industry (Indemnities) Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we begin, may I welcome everybody and say that it looks as though the arrangement is quite simple today? We have one group, consisting of clause 1 stand part and clause 2 stand part, and I will call the promoter of the Bill first.
Clause 1
Licence terms relating to indemnification of government etc
Question proposed, That the clause stand part of the Bill.
John Grady (Glasgow East) (Lab)
It is a pleasure to serve under your chairmanship, Sir Christopher. I believe that you studied law at the University of St Andrews, and I very much hope that you feel at home with a room full of Scottish MPs.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
And St Andrews graduates.
John Grady
I do not want to cause some sort of inter-university fight first thing in the morning.
The purpose of the Bill is to help push forward vital investment in the UK’s space sector, which is vital for economic growth and also for the defence of the UK and Scotland. The UK, Scotland and Glasgow have great opportunities in the sector, which already employs more than 52,000 people with 126,000 jobs across the supply chain. It is worth over £18.9 billion to the economy. It is now possible to launch satellites from the UK, and Glasgow, my home city, builds more small satellites than anywhere outside California.
Clause 1 amends two sections of the Space Industry Act 2018 to provide legal certainty that all spaceflight operator licences must include a limit on the amount of an operator’s liability to the Government under section 36 of the Act. Section 36 provides for spaceflight operators to indemnify the Government in certain circumstances and the current risk for spaceflight operators is that claims from the Government exceed the carefully assessed insurance that is put in place by the spaceflight operators, following significant regulatory oversight by the Civil Aviation Authority. The current legislation does not require the Government and the CAA to cap operators’ liability; the Bill changes that, in essence by changing “may” to “must”.
Investors are unwilling to invest in companies that hold unlimited liability. It is not generally possible to insure against an unlimited liability in the space insurance market and there is very limited capacity in this specialist sector. The UK Government have a clear policy that licensees’ liability will be capped, but the issue for investors is that this is set out in a policy document and not in statute. This means that the Government and regulators could change the policy with comparative ease, which could mean that investors would find that they had exposure to unlimited liabilities. That deters future investment.
The issue is causing investors real concern and investors in the space industry have raised it with Government many times. It is a long-standing unresolved issue, on which I believe there is cross-party consensus. All our competitor nations limit liabilities or provide a state guarantee for launch activities of the type that take place from their territory. That puts the UK at serious risk of competitive disadvantage at a time when we are trying to grow the economy and focus on this important sector. The Bill, and these two simple clauses, confront the problem and make the UK, Scotland and, of course, Glasgow a much more attractive place to invest in space.
Clause 2 deals with the extent, commencement and short title of the Bill consistently, as one might expect, with the 2018 Act.
The Parliamentary Under-Secretary of State for Transport (Mike Kane)
It is a pleasure to serve under your chairmanship today, Sir Christopher, and I thank my hon. Friend the Member for Glasgow East for promoting this short but important Bill. He is without doubt a doughty champion for the space industry in his great city of Glasgow.
From the contributions we heard on Second Reading and this morning, we know how beneficial the Bill will be to many businesses in the UK’s thriving space sector, which contributes over £17.5 billion to the UK economy and directly employs more than 48,000 people. I am pleased to confirm that the Bill has the full support of the Government. The Government have economic growth at the heart of their agenda and this speaks directly to that. With 16% of UK GDP depending on satellite services, there is no doubt that the space sector is important to us as a nation, as my hon. Friend pointed out. The Bill, while advocating a minor change to legislation, will provide the sector with the legal certainty it is looking for to boost investor confidence and stimulate further growth in the UK economy.
The UK space sector is bolstered by being a member of the European Space Agency. Britian does better because of that key partnership. In the last quarter of 2024, UK businesses’ net revenues from the ESA were £80 million higher than our contribution. That is a record for any member state. As my hon. Friend pointed out, we now produce more satellites in this country, second only to California in the USA.
The Government recognise the question of liability insurance is of utmost concern. The industry has made clear it that holding unlimited liabilities will have an adverse effect on the UK spaceflight industry. If the Government did not limit a spaceflight operator’s liability, spaceflight companies and investors might move to other jurisdictions with more favourable liability regimes, where operator liability is limited and states provide guarantees to meet all claims or those above the operator’s limit of liability. That is why the Space Industry Act contains powers to limit a spaceflight operator’s liability when carrying out spaceflight activities from the United Kingdom. It is Government policy that the regulator should use those powers and specify a limit on operator liability in the licence.
The Bill is therefore fully consistent with Government policy. Furthermore, it improves the Space Industry Act by meeting a key request from industry to provide legislative certainty that spaceflight operators will not face unlimited liability when operating from the UK. For those reasons, we are pleased to support it.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
Bill to be reported, without amendment.