Lord Tunnicliffe

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My Lords, our four amendments in this group say more or less the same thing: the master plan may involve a need for compensation.

The Bill asks the philosophical question of who owns the airspace. There is almost a reasonable argument for you owning the airspace above what you own; that does not work so we must have some other ownership of the airspace. Clearly, the only such ownership that makes sense is that it is a national asset. It must therefore be managed for the general good.

That is a complex exercise because you must try to achieve two things: efficiency and equity. There is a problem with efficiency. Take a situation where individual entities have been working largely on their own and making optimal use of, in this case, airspace: if you recognise that it is becoming a scarce resource and therefore seek to manage it for maximum efficiency, there will be winners and losers. The problem is that, if that is so, the losers will look on it as inequitable. There are probably only three solutions to that lack of equity. One is to say, “Tough. Life is like that.” The second is the situation we have now: a suboptimal situation where you are not using the airspace to its maximum efficiency. The third is that you recognise the special position of the losers and pay compensation.

This is a difficult philosophical point. However, the problem is that United Kingdom airspace is no longer a philosophical point but a practical one. Therefore, as I said, we have tabled amendments that are similar to the Liberal Democrat ones to tease out the Government’s thinking on this dilemma and how we may take the debate forward.

Lord Tunnicliffe

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Does the Minister recognise that airline passengers pay quite considerable amounts of tax? It is not unreasonable for them to look to the state to provide operational efficiency in regard to that tax.

Lord Berkeley

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I was interested when the Minister gave the example of Heathrow Airport being prepared to provide the funding necessary for a small airport to propose changes. Heathrow Airport does it not exactly on a charitable basis but for its own benefit. It is a commercial outfit. It tried to do this in the last year with the flight I spoke about earlier from Newquay to Heathrow. The county council said: “We don’t want that. We’d rather stay at Heathrow than be transferred to Gatwick.”

The Minister is looking a bit bemused. My point is that Heathrow offering somebody else the funding to help make these changes is not exactly independent. It will be in its commercial interests, so it should probably be ignored.

Baroness Randerson

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My Lords, the responses from the noble Baroness and noble Lords who have taken part emphasise that this is a very tricky issue. I certainly would not disagree that aviation and its passengers have to pay their way, and we would not normally expect aviation to be subsidised by government—although of course, the public service obligation does allow for that.

A key point from the Government’s perspective was raised by my noble friend Lord Bradshaw, who talked about detriment versus benefit. We have been looking at big airports versus little ones. But take two airports —for example, Luton and Stansted—which are close to each other and reasonably similar in size. If an arrangement has to be made on their airspace modernisation that does not please both of them equally, how will that problem be solved financially? I am slightly surprised that the Government have got this far on this issue without having a clear answer to that. Fortunately, this debate has given us the opportunity to think about it in some detail.

I welcome further developments from the Government and am happy to withdraw the amendment.

Lord Grocott (Lab)

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My Lords, I must say that the thing that alarmed me the moment I picked up a copy of the report was its title: “Rethinking” HS2. As a strong supporter of HS2 since it was first proposed 10 years ago, I am getting weary of the constant appraisals, reappraisals, delays, rethinking and pulling up the plant to see the roots—we heard from the noble Lord, Lord Kerr, about rephasing and re-examining—that have characterised this railway since it was first proposed. The rhythm of these reappraisals is familiar. Objections are raised, inquiries are held, changes are made and tunnels are built instead of cuttings. As a result, costs rise and then objectors say that we cannot go on with it because it is too expensive.

Of course, we do not yet know what the Government will conclude—but, as someone living in the West Midlands, I feel a certain amount of foreboding and, indeed, a degree of paranoia about the way in which the region where I live is treated. London has done extremely well in recent decades for infrastructure investment, with Crossrail opening next year. While major infrastructure investments are proposed for London, largely for the benefit of London commuters, those of us in the Midlands face far more opposition and get none of the support that there seems to be for investment decisions in London. Maybe that is because we are so badly represented. A statistic worth checking is that only 19 noble Lords in this House live in the West Midlands, while 228 live in London and the south-east. We could do with a few more representatives here and, if the Prime Minister would like to ask me, I could suggest a few.

One of the strongest voices for the West Midlands, who cannot be with us today, is my noble and very good friend Lord Rooker, who has not been well and is recovering after a spell in hospital. I am sure that we all wish him well. He has not read my speech, but he said in advance that he would agree with every word that I said—so that is two of us.

Here we are, 10 years on from the original proposal, and the objectors do not give up. I remind the House, and in particular those objectors speaking today, that we have been here before, so far as railways to the West Midlands are concerned. Admittedly, it was a long time ago—1838—when the 112-mile railway from London to Birmingham was built. The first Bill to build the railway was thrown out by the Lords in 1832—so those objectors here today are operating in the finest traditions of this institution. Numerous objections were made, including one I particularly like which stated that the proposed railway would seriously impact on the ability to ride hounds over open country in pursuit of fox and deer. The Earl of Essex complained about the effects on his Cassiobury estate. The Earl of Clarendon worried about the Grove estate. Lord Brownlow of Ashridge complained about,

“the forcing of the proposed railway through the land and property of so great a proportion of dissentient landowners.”

Many of the objections today are not dramatically different. They are about the cost and threats to the countryside—it will destroy wildlife and damage agriculture—but we all know what happened in 1838. Despite ferocious opposition, a wonderful railway was built, which amazingly is still substantially unchanged, with the same cuttings, embankments, bridges and tunnels that have served millions over the years. It was built by 20,000 men with picks, shovels and barrows, and it took five years to complete.

What is it about this country and high-speed rail? We have built just one high-speed line so far: 67 miles from London to the Channel Tunnel. Everywhere else in the world these lines are being built; in Belgium, China, Denmark, Finland, France, Germany, Greece, Italy, Japan, Morocco, the Netherlands, Norway, Poland, Russia, Saudi Arabia, South Korea, Spain, Sweden, Taiwan, Turkey, the United States and Uzbekistan. Is it really the argument of the HS2 objectors that all these countries have got it wrong? Britain was the runaway leader in the first rail revolution. We are way behind with this one.

So it is high time that we stopped talking about HS2 and got on with building it. To delay the proposal now would be shameful, and to cancel it would be disastrous. Let us have no more committees, reappraisals or re-evaluations. Let us do what the Victorians did: get out the modern equivalent of picks and shovels and build the railway. We will find with HS2, just like with HS1 and the first line from London to Birmingham, that when the railway is built, everyone will be proud of it. All the objections will be forgotten, and the only thing people will say is, “What took you so long?”

Lord Howell of Guildford (Con)

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Can the clock be switched off? It is extremely off-putting. The speech by the noble Lord, Lord Grocott, was quite excellent, but I felt all the time that it was being undermined by the blinking.

Baroness Kramer (LD)

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My Lords, I will try and keep us in sync if I can.

It will be no surprise to anyone in this House that I am a fulsome supporter of the full HS2—not just London to Birmingham but the two parts of the “Y” going on to Leeds and Manchester. I am not going to reiterate the arguments made so well by the noble Lord, Lord Adonis, but we are out of capacity. We have a growing demand and the only way we can meet it with any sense is to create a new line, as advocated by the noble Lord, Lord Bradshaw, that frees up the existing lines for regional and commuter services, allowing them to be reshaped, modernised and advanced to meet the demands of the day.

However, I also agree that we need east-west capacity, and I very much resent the two projects being treated as if you can choose one but not the other. We should have put these projects in the ground 20 years ago, and at that time we could have sequenced them, but we did not have the level of demand that we are trying to deal with today. Today we cannot do that. We are out of time and out of rail. We must go ahead with both projects and find a way to do them. If not, we undermine the future economic growth of this country that we are all committed to and all want to see.

There are so many arguments for the positives of HS2, and they have been well made. I want to address something slightly different: our inability, within the context of government, to manage, communicate about and supervise large-scale infrastructure projects, of which HS2 is one, but not the only, prime example. Much of the opposition to HS2 comes from a lack of trust; every time someone receives a new piece of information, the cost of the project goes up. Turn around and it has gone up again. These are incredibly complicated, difficult projects. There must be transparency from the beginning, articulating where we can be confident of the actual cost and where we do not know and are estimating, and the information needs to flow regularly and freely, so that people do not feel that they have been deceived on day one by a deliberate understating of cost. We know that the Treasury tends to drive departments to do that. It is time that the Treasury changed and appreciated genuine transparency.

The cost-benefit analysis scheme that we use, which was described by the noble Lord, Lord Bradshaw, is so completely unfit for purpose that it tells us almost nothing. Many people assume that, when I say that, I mean that it underestimates cost, but the real problem is that it completely underestimates benefits on large, complex projects, particularly phased projects. When, as a Minister in the department, I tried to break down the algorithms—and I recommend this to the Minister—I realised that the full cost of both phases of HS2 goes into the calculation, but the benefits are limited to a seven-year calculation on phase 1. That is a very limited calculation, because most of the regeneration is excluded, with only two years of phase 2. The algorithm does not look at the project as two projects combined; it counts the seven-year period allowed for benefit from the date that phase 1 opens. That is completely insane. We went through an exercise while I was there of splitting the two projects apart and even limiting the benefit to seven years—seven years for a project of this scale. Suddenly the cost-benefit analysis easily exceeded 5:1. My guess is that, if this is done properly, we are looking at very different numbers.

If noble Lords take any major infrastructure project that has been built in this country and apply that algorithm not to the estimated cost at the time the decision was made but to the genuine cost that was loaded on and became part of that project, every single one of them would show a seriously negative number in the benefit-cost analysis. We are dealing with analysis that is completely unfit for purpose. Civil servants may argue—and it is entirely true—that this is just one of many tools that are used to try to open up and elaborate thinking around a project, but that is not the way that the measure is treated or the way that it is communicated.

I am concerned that, as we deal with these projects, we have to completely upscale the way in which we manage them. We need skills all the way through the system. We certainly need them at the top and, basically, at every level. We really lack the necessary infrastructure skills. I also want management in any of these schemes not to feel afraid of telling the truth to politicians and the public about the actual costs and changes that they experience. The absolute shocker with Crossrail, for example, was that few people had any idea that the project was completely off in terms of budget and timing until literally weeks before it was due to open. We cannot sustain a system where senior people within these companies feel so pressured that they do not speak out when they need to .

I want to use my last moments here to give thanks and ask for additional support for the very brave whistleblowers on HS2—there have been quite a number—who provided information very early on that made it clear that this project was going to cost significantly more and there were real problems in the way that it was being developed and managed. I will name one, because I have his permission: Douglas Thornton, who recognised that the prices that had to be paid for property would be well in excess of what was budgeted, that HS2 itself lacked the skill base in order to manage much of that process and that some of its contractors—only some—found it easy to take advantage because of the lack of resource and senior management’s fear of telling us the truth. We must change that and restore trust.

But it will then be incumbent on the Government and on us in this place not suddenly to start treating people who tell us the truth as if they had betrayed us because the information they give us is new—because costs have increased and the project has complexities that were not understood earlier. We must mature, and our management and the managers of these projects must mature.

Lord Bradshaw (LD)

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My Lords, the most important factor we should consider today is the impact that HS2 could have on climate change and the need to reduce emissions. Compare these figures from the Government: the emissions from a domestic flight are 254 grams, from a diesel car 171 grams—with four passengers they are 43 grams—from domestic rail 41 grams, and from a fully electrified railway 6.9 grams, a very small proportion of what comes from other places.

With these startling figures in mind, a fully electric railway such as HS2 has the potential to make a very significant contribution to making the country carbon-neutral. High-speed railways can have a dramatic effect on modal shift. Take these examples from Italy and Spain. From Rome to Milan, rail use has increased from 6% in 2008 to 74% by 2016, and in the case of Madrid to Seville, there has been an increase from 33% to 84% with the implementation of high-speed rail. Imagine the effect that such a modal shift would have on both aircraft and vehicle emissions on routes from Leeds, Newcastle and Scotland.

The primary argument that has been stated for building HS2 is to increase railway capacity in much of the country. As the main lines on the north-south axis are at full capacity and cannot cope reliably with existing traffic levels, the need for increased capacity is almost unanswerable.

Government constrains the railway in two ways. Insufficient modern infrastructure is provided; the railway industry and Network Rail are in part responsible for this, through lack of efficiency in the fragmented organisation that was created at privatisation, when so many competent engineers left the industry. Let us not forget that the east coast electrification was delivered on time, to a very tight budget, by British Rail. The engineering side of the railway is now being rebuilt under strong professional leadership, and the railway supply industry has got the message that only the most efficient outcomes will be acceptable. But the Government, for their part, need to recognise that improving infrastructure depends on their providing a continuous strategy of development stretching years ahead. They have failed to do this over many years. HS2 and its future must be seen in this context. The objectives of the National Infrastructure Commission should be changed to putting carbon reduction at the top of its list of priorities and revising the appraisal of investment to schemes with long-lasting benefits, such as further extensions to railway electrification.

The other way in which the Government constrain the use of the railway is railway fares. Government and Opposition blame railway fare rises on the franchisees, but they are entirely the Government’s decision. Commuters or business users using the railway face an annual fare increase. Car commuters are protected from that by the fuel tax freeze. What rational Government, allegedly concerned about pollution and the associated growing congestion on the roads, can defend this, particularly as it is associated with early deaths and damage to health? Other countries seek to encourage rail use to deal with these evils but in Britain, both the Conservatives and, I am sad to say, Labour, have closed their ears and listened only to the motoring lobby. There is an available solution: reduce fares and provide sufficient infrastructure.

HS2 can bring immense benefits to the north and the east Midlands—take, for example, the proposed Toton hub, which is not being decided today, which would bring together Nottingham, Derby and Leicester; Birmingham would be reached from Toton in 17 minutes, which at present takes 74 minutes by rail and 60 minutes by car—provided that the fares policy is reasonable. Similar activity is planned around Birmingham for the new railway. But can the Minister give any reassurances today about fares policy generally, and how it might affect HS2?

An important issue to address in considering the investment case for HS2 is project appraisal. Railway projects, particularly on the civil engineering side, have a very long timescale over which they may be enjoyed—the noble Lord, Lord Birt, referred to that. Tunnels and embankments last for well over a century, but current appraisal methodology has a high discount rate and does not take into account the period over which the assets will be in use. There is also the question of the enhancement of property values and the regeneration effects, which need to be factored into the equation. Surely it cannot be right that these benefits are not credited to the investment in HS2. There is an urgent need for the Government to overhaul the WebTAG arrangements they use to calculate the value of major infrastructure projects so as to reflect the longer-term benefits to communities.

I was once asked by a former Secretary of State for Transport—I think it was the noble Lord, Lord Adonis—why road schemes always come out better in investment appraisals than rail schemes. The answer lies in the methodology that is used: road investment schemes are appraised using the “value of time”. That is the time the investment is expected to save road users multiplied by the number of users and what they say they would pay for it through stated preference techniques. No money changes hands, although it does for rail journeys. Significant factors such as the short life of many road investment schemes, as they are overtaken by inevitable traffic growth, also need to be appraised. Railways are penalised for their long-term, lasting benefits in investment by the use of the discount rate, whereas road schemes are appraised using slovenly methods which the Government have failed to face up to for a long time.

The issue of routes across the Pennines and faster journey times between Glasgow and Edinburgh, for which there are now five direct railways, needs to be considered. The HS2 route, which we are considering in the Bill before us, has been adjusted to give Liverpool a direct rapid connection to London as well as to Manchester and Manchester Airport. Progress on modernising routes across the Pennines is incomplete. What is the department’s understanding—

Lord Bradshaw

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No. I have not been allowed enough time to debate this Bill because the Government of their own volition are proroguing Parliament. I am sorry, but I am not going to give way.

Lord Bradshaw

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I am aware of the advisory speaking time. It was imposed on us by the Government’s edict.

Lord Adonis

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My Lords, regardless of what the noble Lord has said, I think that it is quite unacceptable that speeches on a matter of such importance should be restricted in this way when in fact the House is under no time constraint whatever, except one artificially imposed by the Government.

Lord Bradshaw

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I am sorry, but the Prorogation of Parliament has had nothing to do with me. It is entirely at the Government’s behest.

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

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My Lords, the RNLI is an independent organisation that declares its lifeboats available to Her Majesty’s Coastguard. It determines how and where it deploys the resources that it has available. Based on historical incident data and the outputs of the RNLI’s risk-assessed five-year review, we do not anticipate that its decision to replace the all-weather lifeboat with an Atlantic 85 vessel at New Quay will have an impact on HM Coastguard’s capability to co-ordinate search and rescue in Cardigan Bay.

Baroness Sugg

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My Lords, the RNLI’s decision was underpinned by extensive research of incident reports as well as information gathered in face-to-face meetings and workshops at the lifeboat station both before and after the coast review visits, to ensure that local knowledge and concerns were considered. The decision is a significant investment by the RNLI in the area—which of course we are very grateful for—with new, faster boats at all three RNLI stations. The RNLI view is that that is the optimal combination for future life-saving in the area. It has shared a 30-page extract of the report with the lifeboat operations manager, and I understand that it is in dialogue with a campaign group to ensure it has the appropriate information.

Baroness Sugg

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My Lords, I am incredibly sorry to hear of the noble Baroness’s experience. She is absolutely right that these occurrences happen far too often, and that is what we need to change. Today is the United Nations International Day of Persons with Disabilities, and it is important that we as a country continue to work with international forums to promote greater accessibility to air travel for those with reduced mobility. One of the main reasons for some of these issues is the provision of information, particularly on inbound flights and when people travel internationally. That is absolutely something that we should get right, and we will work with our international partners to try to do so.

Baroness Sugg

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My Lords, we want to improve accessibility, not only at airports but in aircraft and we are working closely with industry to deliver changes in aircraft design. That will be for the slightly longer term. A number of issues are stopping people from travelling in their own chairs on planes—from ensuring that chairs can be tethered safely and safety issues around batteries to investigating flexibility in cabin seating to make it commercially viable for airlines. But I know that in order for some passengers to fly they of course need their own wheelchairs. I recently chaired a round table on that specific issue. We are working closely with the aviation industry, the CAA, wheelchair manufacturers and disability organisations to achieve the long-term goal of enabling wheelchair users to travel with their own airworthy wheelchair on a plane.

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

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My Lords, the Department for Transport and the Welsh Government are both committed to improving rail connectivity within Wales. We have worked collaboratively to deliver on our commitment to devolve powers to award the Wales and Borders rail passenger franchise. The new operator announced by Welsh Government Ministers on 4 June will improve rail travel for the benefit of passengers across Wales in the coming years.

Baroness Sugg

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My Lords, we are working with stakeholders to develop proposals for potential station improvements in and around Swansea, including looking at the case for additional stations. The department is looking carefully at the possibility of a west Wales parkway station which, as my noble friend has said, could help to improve connectivity and journey times in west Wales. However, the suggested sites are not currently served by regular passenger trains, and diverting them for this purpose could remove or reduce the number of direct trains from Neath and the main station at Swansea, so of course the proposals need to be considered carefully.

Baroness Sugg

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I thank the noble Lord for his question. On the issue of making sure that we get the decision right for passengers, as the Statement said, protecting the interests of passengers is the first principle which we look at and we will be looking at the comparison between the two on that basis. I have a copy of the reply to the noble Lord’s Question as I thought that he might bring it up; he helpfully read it out. We absolutely expect to meet those commitments. Whatever decision the Secretary of State makes on the running of the franchise up to 2019, whoever gets it will inherit those. Again, with the new partnership in 2020, they will be expected to deliver that.

Baroness Sugg

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As I pointed out, there is a high level of passenger satisfaction on this line and we aim to continue to keep that. I reassure noble Lords that there will be no impact on the running of the trains and the services will continue. Tickets are valid as normal. The Secretary of State has today set out the options being considered for the future. We are working to ensure that passengers continue to receive the service they expect.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Lord Hunt of Chesterton (Lab)

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My Lords, I welcome the Bill. There is no doubt that the UK’s growing involvement in space science and technology over the past 30 years, from a rather low point, has now definitely encouraged greater general interest in science and technology in schools and universities. The Russians and then the United States knew that animal and human participation was a great stimulus to popular interest—it was a dog first, as noble Lords will remember, and then some humans.

The UK has seen the same stimulus, with Helen Sharman becoming the first women from the UK in space and then Tim Peake’s space voyage last year. At the Royal Institution Christmas lectures two years ago, full of young, enthusiastic scientists, and at a Science Museum event recently, Tim Peake communicated with thousands of schoolchildren as he demonstrated his scientific experiments in the space environment. The excitement and risk of the voyages were definitely part of the attraction.

Along with fundamental scientific experiments, satellites have provided many practical and commercial benefits in navigation, communication and monitoring the environment near and above the earth’s surface, such as for weather and climate, ocean waves, volcanoes and the huge and dangerous effect of solar storms. As director of the Met Office, I represented the United Kingdom at the European meteorological satellite organisation, which worked closely with the UK space industry.

The UK has developed its space involvement through its membership of the European Space Agency and through UK and European-wide companies such as Airbus. Some of the UK’s satellite business was developed with Russian launchers; particularly, for example, the Surrey satellites. This continued involvement with European space research and commerce has competed and collaborated with the activities of the major space nations. An important aspect of the ESA business has been launching satellites from its base in French Guiana through the company Arianespace. The Bill proposes that satellites will be launched from one or more bases or spaceports in the UK. These will have to be carefully regulated, as set out in the Bill.

The Bill has to be broadly framed so that, first, spaceflight provides new business: for example, tourism and testing new systems and materials. The UK’s small satellite companies, such as Surrey, have been very successful—but they are now part of an international company. This approach should enable small countries to have their own satellites; for example, that company has worked closely with developing countries around the world. I believe that the use of space for development in these countries is a very important part of our space programme, and with the UK making a substantial financial contribution to developing countries, I trust that that will be part of the expenditure on space. Secondly, there will be connections between the international space station and low-orbit satellites. Through Tim Peake and others, the UK has been involved in the international space station.

Another interesting aspect to the science and technology is associated with microgravity, as the Minister described, with many applications of the extraordinary physical and biological experiments; for example, relating to drugs, aerosols and odours. There is a nice example on Google of what happens to a candle lit at ground level: when it goes up into space and gravity drops, the flame turns blue. I thought your Lordships would like a little bit of science.

The ranges for civilian operations extend over land and sea. Presumably these will be privately owned. Will foreign ownership be permitted? Surely security is important. What is not clear is how the Bill relates to the current regulations of United Nations agencies, which do not get a very full audience in this House, I am afraid. For example, the International Civil Aviation Organization—ICAO—will play a significant role in the growing business of space. ICAO will also have an important role with regard to UK satellites being launched from airspace or from foreign aircraft. Another aspect is the International Atomic Energy Agency, which regulates radioactivity and nuclear materials. Will any nuclear materials be involved in these near-orbit launches? I believe they should be.

There is also the question of whether there will be launches from shipping or oil platforms. I was at the annual meeting of the International Maritime Organization last week. The UK plays a prominent role in that UN agency. For example, one might have the situation that we have at the moment with ships with flags of convenience; some small countries have a large number of ships with their flag. One wonders whether the same thing may happen here. That needs to be considered very carefully.

I support the enthusiastic approach of the Minister to the Bill, which has my support.

Lord Ahmad of Wimbledon

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I do not agree with the noble Lord’s premise. I believe that the new rolling stock that I referred to will bring passenger benefits. As I am sure he knows from his experience in and vast knowledge of the area, the IEP fleet, which is coming into service on the whole route, will run in both diesel and electric modes. That will provide flexibility in the delivery and appropriate scheduling of the electrification programme, which I accept is challenging.

Lord Ahmad of Wimbledon

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I agree with my noble friend. As I am sure she is aware, Wales will benefit to the tune of £2 billion from rail modernisation. For her information, together with the Welsh Government we have allocated a further £125 million to update the initiative around the Valley Lines.