Space Industry (Indemnities) Bill
Wednesday 18th June 2025
(1 day, 22 hours ago)
Public Bill CommitteesSpace Industry (Indemnities) Bill 2024-26 View all Space Industry (Indemnities) Bill 2024-26 Debates 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.