Space Industry Bill [HL]

Debate between Lord McNally and Lord Callanan

Committee: 3rd sitting (Hansard): House of Lords
Monday 23rd October 2017 Lords Chamber

[Lord Callanan]

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

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

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

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

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

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

[Lord McNally]

Perhaps I could clarify this. When we discussed this kind of approach in the past, it was suggested that such SIs would be amendable. Am I assuming that these would be unamendable?

[Lord Callanan]

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

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

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

Space Industry Bill [HL]

Debate between Lord McNally and Lord Callanan

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 18th October 2017 Lords Chamber

[Lord McNally (LD)]

It is always a pleasure to follow the noble Lord, Lord Tunnicliffe. He is the reason why I do not have a fear of flying. When I am sitting at the back—and it is always at the back—of a 747, I always assume that there is somebody up the front who knows a lot about getting it up and down and who has just the same reason for getting it up and down safely as I do. His interventions are important because there is a danger that we treat what we are talking about as just an extension of present civil aviation, and it is a step change, a quantum leap in what we are doing. In his first intervention, the noble Lord, Lord Tunnicliffe, pointed out that rockets are explosions, very possibly dangerous explosions at that.

This amendment strengths the test for the regulator to be liable in respect of spaceflight-related actions to include gross negligence as well as wilful misconduct. I am hoping it is just one of those things that got left out and that when the Minister sees the House of Commons Science and Technology Committee’s recommendation that such wording should be in the Bill he will stand up and say that he will make sure that it is. Given the central role of the regulator in determining how large aspects of spaceflight should be conducted, it seems fair and logical that it should have its protection removed in case of gross negligence.

The noble Lord, Lord Tunnicliffe, spoke about legislation being drafted nearly 100 years ago to stimulate a nascent industry. We are trying to do that in the Bill, but in so doing we have to make sure that there are also checks and balances to ensure that in making this step change in travel, those responsible have checks and balances on their behaviour that contribute to safety. I beg to move.

[Lord Callanan]

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

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

Space Industry Bill [HL]

Debate between Lord McNally and Lord Callanan

Committee: 1st sitting (Hansard): House of Lords
Monday 16th October 2017 Lords Chamber

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

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

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

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

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

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

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

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

[Lord McNally]

My Lords, I beg leave to withdraw the amendment.

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[Lord Callanan]

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

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

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

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

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

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

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

[Lord McNally]

My Lords, we shall now move to the nitty-gritty of what is essentially a planning Bill with lots of environmental, health and other matters. Beyond that, however, I was delighted by the two interventions. There is a need to bang the drum on this. It is such an exciting prospect, and although some may be keeping quiet about their intentions, entrepreneurs such as Virgin, Elon Musk, Professor Cox and others, tell us that this is just round the corner. I was therefore glad that the noble Lords, Lord Willetts and Lord Moynihan, took the opportunity to bang the drum, as did the Minister, but we have to keep up the momentum on this. For the moment, I beg leave to withdraw the amendment.

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[Lord McNally]

My Lords, having listened to that debate, I feel this amendment should perhaps have been grouped with it—I hesitate to criticise the groupers because I know how difficult it is. It was a fascinating debate. The Minister need make no apology about the length of his reply. It will be studied closely. Following it was a bit like following those things that come on your iPad to say that you have agreed, but I am sure when we have time to read Hansard—

[Lord Callanan]

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

[Lord McNally]

Yes, I know that every Minister wishes that was there.

I thought that the opening from the noble Lord, Lord Tunnicliffe, was sobering for us all. On the one hand is the tremendous enthusiasm and real excitement about the prospects of the industry, yet we know from history that there are dangers. I live in St Albans, down the road from where the de Havilland Comet was developed, launched and flown with a design fault. I saw a very moving documentary a few weeks ago about the Space Shuttle. Its final conclusion was that, from beginning to end, the Space Shuttle was never safe. They knew it, but because of the pioneering nature of what they were doing they took the risk. That is not open to us when we are legislating like this, so it is a matter of getting it right between risk and cover.

I tabled my amendment simply because we have been approached by the industry with concerns about the way UK law treats the licensing and insurance of small and nano-satellites. Current law makes it difficult and expensive to launch small satellites because of long licensing processes and large insurance costs. Licensing of individual satellites can dramatically increase operator liability. This amendment would allow would-be operators to feed in their concerns and work towards a proportionate but effective insurance regime. I beg to move.

[Lord Willetts]

I will add one comment to that. I thank the Minister, who has already given a full and lucid account of the Government’s intentions, which itself is very helpful. Another issue we should add, which the noble Lord, Lord McNally, touched on, is that historically we have been thinking about very large satellites and the risks associated with them. That is not really the issue for a UK space launch capability. It is much more likely to be constellations of small satellites, some of them meeting real UK requirements. Imagine there was a trouble spot in which UK troops were involved or a natural disaster affecting us—let us think of what happened in the British Virgin Islands recently—where you wanted to get a satellite over the scene urgently; small satellites are very likely to be used in those situations. They are often launched in constellations, and one other issue on which, again, I hope at some point we will have guidance from the Minister is whether each individual small satellite in a constellation has to be separately insured and licensed or whether, as we appear to be heading for constellations of small satellites, there could be significant flexibility in the regime so that constellations of satellites could have a single launch permission and a single insurance arrangement. If not today, I hope that during the passage of the Bill that is also made clear.

[Lord Callanan]

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

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

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

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

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

[Lord McNally]

My Lords, those who asked us to table this amendment will read the Minister’s reply. In the meantime, I beg leave to withdraw the amendment.

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[Lord Callanan]

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

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

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

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

[Lord McNally]

In the light of those assurances, I beg leave to withdraw the amendment.

Space Industry Bill [HL]

Debate between Lord McNally and Lord Callanan

2nd reading (Hansard): House of Lords
Wednesday 12th July 2017 Lords Chamber

[Lord Callanan]

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

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

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

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

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

[Lord McNally]

Before the Minister leaves the point about consultation, there is concern in the industry about the machinery by which the players influence regulations as they become firmer and clearer. They want to be sure that they can continue to influence the development of policy, rather than be faced with a fait accompli.

[Lord Callanan]

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

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

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

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