Space Industry (Indemnities) Bill

3rd reading
Friday 17th May 2024 Commons Chamber

Bill, not amended in the Public Bill Committee, considered.

Third Reading

13:45

[Mr Jonathan Lord (Woking) (Con)]

I beg to move, That the Bill be now read the Third time.

Clause 1(a) is the central and crucial provision of the Bill, so I shall briefly explain its purpose and why it is necessary. Before a company can operate a satellite in orbit or carry out a launch mission from the UK, it must first obtain a spaceflight operator licence under the Space Industry Act 2018. The licence process ensures that spaceflight activities are undertaken safely, securely and in accordance with the UK’s international obligations.

Under United Nations space treaties, the state is ultimately liable for any damage or injury that may be caused by its space activities—even those undertaken by commercial space operators. The 2018 Act therefore contains provisions to help mitigate potential costs to UK taxpayers arising from UK commercial spaceflight activities. The provisions include the power to incorporate licence conditions requiring operators to hold insurance and, under section 36 of that Act, to indemnify the UK Government and other named public bodies against any claims brought against the Government or body in respect of damage or loss.

It is recognised, however, that placing unlimited liability on commercial space activities would be a barrier to operating in the UK. Other space nations, such as France and the United States, limit liabilities or provide a state guarantee for the launch activities that take place from their territory. Section 12(2) of the 2018 Act currently provides a power to specify a limit on the amount of the 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. That policy is set out in guidance, and I understand that all spaceflight operator licences issued to date under the 2018 Act contain a limit on the amount of liability. However, those in the industry have made clear, in response to consultation and in other fora, that they would welcome the legal certainty that they will not face unlimited liability when launching or operating a satellite from the UK.

Clause 1(a) amends section 12(2) of the 2018 Act by replacing “may” with “must”. That will change section 12(2) from being a discretionary power to a mandatory requirement by specifying a limit on the amount of an operator’s liability under section 36 in respect of the licence.

Clause 1(a) is a key regulatory improvement to the 2018 Act. It will provide assurance to investors that limits on the amount of an operator’s liability to indemnify Government and other named bodies will be included in licences. However, the existing provisions in legislation about the circumstances in which the limit on the amount of liability does not apply will continue to have effect. They include circumstances in which an operator is liable in gross negligence or wilful misconduct, or in which damage or loss is caused by non-compliance by the operator with its licence conditions, the requirements of the 2018 Act, or regulations.

Clause 1(b) contains a minor but necessary consequential amendment to section 36 of the 2018 Act. Overall, clause 1 meets a key request from the sector. It will also address a recommendation made by the Taskforce on Innovation, Growth and Regulatory Reform.

The amendments made by clause 1 are consistent with Government policy, which is designed to support and grow the UK’s commercial space sector. By setting a clear requirement in law for a limit on operator liability in the licence, the clause will provide UK industry and those looking to invest in the UK with greater certainty, and carry more force than reliance on policy statements and guidance.

As we convene for Third Reading of this vital Bill, I urge colleagues across the House to consider the profound impact it will have on safeguarding British industrial and business interests in the burgeoning field of space and spaceflight. The Bill seeks to address critical uncertainties surrounding liability and indemnity for our space industry, providing much-needed clarity for current and prospective spaceflight operators and investors alike.

[Dame Karen Bradley (Staffordshire Moorlands) (Con)]

I congratulate my hon. Friend on his Bill. Will he confirm that it will give the UK a real competitive advantage in the space industry? It seems to me that it will.

[Mr Lord]

I thank my right hon. Friend for that intervention. I can confirm that the Bill will set us on par with the United States and France, our friends and probably our main competitors in this important arena. The space industry is already worth £17.5 billion a year, and it is estimated that these measures will add tens of billions over the coming decade or more. My right hon. Friend makes a really important point; the Bill will make us competitive in an area where, currently, we are not quite there.

[Nickie Aiken (Cities of London and Westminster) (Con)]

I congratulate my hon. Friend on Third Reading of his Bill, which will make a huge difference to the space industry. Does he agree that it is imperative, as we move through the 21st century, that we encourage more women and girls to consider taking up the skills and employment opportunities that the space industry offers? Sadly, to date the industry has been too male focused. If we are going to pass Bills like this that give the industry the confidence to expand, hopefully we will be able to encourage more women and girls to consider a career in the space industry.

[Mr Lord]

My hon. Friend makes an excellent point. The Bill will help provide certainty for our space industry for many years to come. Of course, we need all the talent that we can provide in this country. I completely agree that we want more girls going into science, technology, engineering and maths, and considering a career in this fantastic, relatively new industry.

By amending section 12(2) of the Space Industry Act 2018, the Bill will firmly establish in law the imperative that all spaceflight operator licences will have a defined limit on liability. Such clarity will not only fulfil a long-standing demand from the sector, but ensure that our regulatory framework aligns with international standards and best practice. In an era when commercial space activities are poised for the huge growth that I have just mentioned, the Bill is a decisive step towards fostering a competitive and thriving space industry on our shores. Members from Cornwall and Scotland in particular will know the benefits of that, with our new spaceports.

Mandating specific liability limits, essentially forming a type of risk sharing between the commercial operator and the Government, will empower businesses to navigate risks prudently while encouraging continued investment in space-related ventures. As a nation, we must seize every opportunity to cultivate an environment in which British enterprises can flourish and contribute to the advancement of our economy and our technological prowess.

Furthermore, we should acknowledge the collaborative efforts that have shaped this legislation, drawing on insights gleaned through consultation with industry stakeholders and from expert recommendations. The Bill reflects a balanced approach that prioritises the interests of both business and the public purse, ensuring that our regulatory framework remains robust yet adaptable to evolving circumstances. By enshrining these principles in law, we affirm our commitment to fostering a vibrant yet responsible space industry that serves the interests of our nation, our businesses and our citizens.

By passing this Bill, we not only bolster confidence in our regulation but lay the groundwork for a future in which British ingenuity propels us to new frontiers of discovery and prosperity. I urge all Members to support this Bill, recognising its significance in shaping the trajectory of our nation’s space industry for decades to come.

13:56

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to speak on this Bill, for which I commend the hon. Member for Woking (Mr Lord).

As others have said, private companies need a spaceflight operator licence, as set out in the Space Industry Act 2018, before they can operate from the UK. I am pleased to say that we continue to support the Act as a means to ensure safety and compliance, and it is right that the Act works to limit the extent to which UK taxpayers are liable for picking up the cost of commercial spaceflight.

I recognise that the limits to liability in the licences that the Act allows are key to ensuring the potential economic viability of space activities. In that spirit, I welcome the move towards legal certainty regarding liability limits when launching or operating satellites from the UK. As we have heard, the Bill seeks to do this by amending the Space Industry Act to legally require liability limits in space operator licences. This will provide welcome clarity and reassurance to investors. We want to see a thriving UK space sector and to help our strong space sector businesses fulfil their potential.

As a nation, we have a proud history of space exploration and global collaboration in this important field, going back to 1957 when British Skylark rockets were launched from Woomera in Australia. In 1962, the UK partnered with NASA to launch rockets from an Italian base off the coast of Kenya, and, at the turn of the millennium, the British National Space Centre was the third largest financial contributor to the European Space Agency. It is also worth noting that pioneering British astronauts such as Helen Sharman and Major Tim Peake have made a significant contribution to space exploration.

Fast-forwarding to today, the UK space sector has a turnover of £17 billion or more and employs over 48,000 people, including 2,300 apprentices, in exciting roles. There is a notable space cluster in Surrey, and my area of Berkshire has significant space businesses, so this legislation affects many of our constituencies.

Space technology is not just for those involved in advanced manufacturing. It is for all of us. Whether it is combating and measuring climate change, using and deploying rural broadband or supporting transport and agriculture, space is vital for security and resilience. Satellite communications play an important role in communications across the world, and space provides opportunities for crucial economic growth, as the hon. Member for Woking mentioned, from Cornwall all the way to Shetland. Indeed, aerospace research and development is a long-term endeavour, and our industrial strength in the UK is the result of decades of support by successive Governments. We would seek to build on that legacy, including by developing spaceports and centres such as the North East Space Skills and Technology Centre, which has created over 350 jobs and injected around £260 million in the north-east economy.

We have also proposed a regulatory innovation office to support our science, research, innovation and space ventures. Our regulators must be responsive to innovation, from in-orbit manufacturing to space-based renewables. Labour’s regulatory innovation office would rewire regulators to support innovation, including in the space sector. The office would set and monitor targets for approvals, benchmarked internationally, and would give regulators steers from our wider industrial strategy. We would also support the Regulatory Horizons Council, with deadlines for Government to respond to its work.

I will turn briefly to the importance of broader economic stability in supporting the UK’s space sector. As well as regulation, industry desperately needs support and stability from Government, and it is somewhat sad that the current Government have failed to always offer that stability. The National Space Council was set up by one Prime Minister, sadly cancelled by the next, then reinstated by the one after that. In addition, the UK left Galileo, a project we had done so much to bring about. The Government subsequently made a U-turn on a rival system, which cost the taxpayer £60 million.

The Science, Innovation and Technology Committee has expressed concerns about the lack of coherence in the current Government space strategy. Indeed, it has said this ambiguity added to harmful speculation about the OneWeb Eutelsat merger. Unfortunately, the space industry plan was three months late, and it is unclear how the Government see space relating to key technologies in the science and technology framework. In contrast, Labour’s industrial strategy, with our statutory industrial strategy council, will provide the stability and partnership the industry needs.

Turning to skills, when colleagues spoke at the UK space conference last year, attendees heard the same concerns mentioned by hon. Members earlier: that we need to raise the profile of space careers to secure the skilled workforce that the industry demands. We propose a national skills body, Skills England, to provide leadership and to bring together Government, business, training providers and trade unions to meet local skills needs. We want to reform the apprenticeship levy to maximise the opportunities that learners have.

Expanding opportunities in the industry should, as was indicated earlier, help to create jobs for people from all backgrounds. Space Park Leicester, where the university, local government and industry work together to make space more accessible to all, is an example of the developments we would like to support. If we were to enter Government, we would want to see a cross-Government action plan for diversity in STEM.

I would like to leave the Minister with a few constructive questions. I hope he will address my points about stability and set out how the Government will reassure business that Britain is still a great place to invest in respect of commercial space ventures. In his response, will he agree with me that skills and training are vital to the sector, and that we must provide high-quality jobs for people from all backgrounds?

In conclusion, on the whole we support the Space Industry (Indemnities) Bill. Adequate licensing will be a key contributor to creating important growth in the space sector. However, the space industry lacks stable long-term investment and support from the Government. I look forward to the Minister’s response on these matters.

[Mr Deputy Speaker (Sir Roger Gale)]

I welcome the hon. Member for South West Hertfordshire (Mr Mohindra) to the Dispatch Box for his first outing as a Minister of the Crown.

14:03

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

I thank my hon. Friend the Member for Woking (Mr Lord) for taking this important Bill through the House. I applaud him on his excellent speech. Given what the shadow Minister has said, I am pleased to confirm that my hon. Friend has cross-party support for the Bill.

From the contributions we heard on Second Reading and in Committee, we know how beneficial the Bill will be to the many businesses in the UK’s thriving space sector. The sector contributes over £17.5 billion to the UK economy and directly employs more than 48,000 people. The Bill supports our Government’s ambition to make the UK the leading provider of commercial small satellite launch in Europe by 2030. We are harnessing the opportunities provided by launch, which will meet the aims set out in the national space strategy and the Government’s agenda to level up the UK. This will create skilled jobs around the UK, as well as inspiring the next generation of space professionals.

To achieve our ambition, the Government have already invested over £57 million through the LaunchUK programme to grow new UK markets for small satellite launch and sub-orbital space flights. Growing our launch capability is already creating highly skilled jobs and opportunities right across the UK, as well as rocket boosting investment across the supply chain, supporting the Government’s aims to grow and level up the economy.

[Nickie Aiken]

My hon. Friend is making a great speech, and I congratulate him on his introduction to the Dispatch Box. Does he agree that, as I said earlier, the space industry is an excellent place for women and girls to consider, and does he see any particular area of the industry as important for women or girls to consider?

[Mr Mohindra]

I thank my hon. Friend. Like, I am sure, many colleagues in the House, when I was a child I aspired to be an astronaut. Unfortunately, I was not able to achieve that ambition, but I hope that in today’s debate we will inspire the next generation to ask themselves why they cannot be the next—

[Dame Karen Bradley]

Buzz Lightyear.

[Mr Mohindra]

The next Buzz Lightyear or equivalent in the years to come. We are at the forefront of a cutting-edge industry and are world leaders in many parts of it. I appeal to all colleagues, whenever they go to technical colleges, universities or schools in their constituencies, to inspire that generation to ask themselves, “Why not?”

The Government recognise that the question of liability and insurance is of utmost concern to the space sector. The industry has made it clear that facing unlimited liabilities could have an adverse effect on the UK space flight industry. If a space flight operator’s liability was not limited, space flight companies and investors might move to other jurisdictions that have more favourable liability regimes.

[Dame Karen Bradley]

I congratulate my hon. Friend on his debut at the Dispatch Box. I must anecdotally mention that, when I was first elected, we had a visit from a space shuttle crew. Having real spacemen in Parliament was terribly exciting.

I want to press my hon. Friend on a procedural point. He may know that the Procedure Committee is looking into the territorial constitution and how the scope of Bills can extend beyond just Westminster, and England and Wales, and also looking at ensuring that we speak to our parliamentary colleagues in devolved and other Parliaments. I note that the extent of the Bill covers the whole of the UK, the Channel Islands, the Isle of Man and the overseas territories. He is welcome to write to me about this, but will he set out what work the Government have done to ensure that Parliaments around the United Kingdom and others that are affected know about this Bill, and whether we will be looking to get any legislative consent motions?

[Mr Mohindra]

I thank my right hon. Friend for that intervention. With her permission, I will make sure that I or another Minister writes to her. As she correctly pointed out, Shetland remains very important in the space space, and the Bill incorporates all four corners of our great Union.

I was speaking about the liability regime, how operator liability is limited, and how other states provide guarantees to meet all claims—all those above the operator’s limit on liability—such as the US or France, as has been discussed. That is why the Space Industry Act 2018 contains powers to limit the amount of space flight operators’ liability when carrying out space flight activities from the UK. It is Government policy that the regulator should use these powers and specify a limit on operator liabilities in the licence.

The Bill is therefore fully consistent with Government policy and, furthermore, 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 very pleased to support it.

[Mr Deputy Speaker (Sir Roger Gale)]

I was interested in the hon. Gentleman’s remarks about his childhood dream to be an astronaut. When I was a child, I recall one Yuri Gagarin circumnavigating the world, I think for 90 minutes. It seems like a very long time ago. I call Mr Jonathan Lord to wind up.

14:10

[Mr Lord]

With the leave of the House, I would like to thank all Members of this House for attending. For those who attended Second Reading, I am pleased that we had fewer space-related puns today, although it was a very humorous—and, beneath the humour, very serious—debate that went on for some time and covered all issues. I also thank those Members who served on the Bill Committee, and the Clerk of private Members’ Bills, Anne-Marie Griffiths, who has given such good help and advice to me and to other colleagues who have brought forward private Members’ Bills in this session.

Our space industry is thriving, but this measure is vital to securing an equally exciting and dynamic future. I am so pleased that the Bill has cross-party support. The shadow Minister, the hon. Member for Reading East (Matt Rodda), spoke very eloquently about the space cluster that we have in Surrey and the wider south-east. One of those companies is Surrey Satellite Technology Ltd, which is just outside of my constituency, but has many employees living in my constituency who will benefit. Other firms—large, medium and small—will grow in the UK and come to the UK if this measure is passed.

It was a great honour to see my hon. Friend speaking from the Dispatch Box—the first of many times, I am sure. This measure has cross-party support and, to ensure that exciting and dynamic future that I mentioned, I commend the Bill to the House.

Question put and agreed to. 

Bill accordingly read the Third time and passed.

[Mr Deputy Speaker]

I congratulate the hon. Gentleman on his successful excursion into space.