Space Industry Bill [HL]

Debate between Lord Tunnicliffe and Lord Fox

Report stage (Hansard): House of Lords
Tuesday 14th November 2017 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, I shall speak also to the other amendments in this group.

I have read my speech in Committee, which was very good and persuasive. The trouble is that it was also unsuccessful and so, as a student of the Companion, I will not repeat it. However, I would like to say a final word or two on safety. I thank the Minister for the time she and her predecessor spent with us discussing this matter and for the letter she sent us on two points, to which I will come later.

NASA has been in the space business since I was a boy—and that was a long time ago. I have had a brief look at its website and, as far as I can see, it spends £2.9 billion a year on safety and security. However, despite its efforts, it has regularly killed people. The early rocket-powered flight experiments had fatalities; it is often forgotten that the moon programme killed three astronauts on the ground when there was a fire in the capsule; the shuttle programme managed only 135 missions, two crashed catastrophically and 14 people died. That was probably as well as could be done with all that effort, but we are asking the CAA and/or the United Kingdom Space Agency to tackle the same task. I am afraid that I am somewhat pessimistic about what the result will be in the early stages of any UK space programme. I hope in developing the skills they will need that they will spend a lot of time with our American cousins, in particular, stealing as much knowledge as is possible.

As I said earlier, I thank the Minister for the time she found for us. She was kind enough to send us a letter giving assurances about the role of the HSE and single point accountability with respect to safety. I will not repeat the letter because I am assured she is happy to read those assurances into her response. With that, I beg to move.

[Lord Fox (LD)]

My Lords, names of Members from our Benches are not attached to these amendments, but we would like to associate ourselves with all four of them. I want to say a few words about safety because it is obviously not in the industry’s interest to operate unsafely; in fact, quite the opposite. It would be a way of hastening its end. So it is not that the industry will set out to operate in a cavalier manner, and that is not what these amendments imply. From my experience of working in industries that have an inherent risk but are not necessarily as risky as the space industry, the greater prominence that safety is given in their operations at every level right up to senior management and in terms of the supervision of organisations, the more likely it is that they will be inherently safe. You can rely on processes and people on the ground to operate safely because of course it is in their interests to do so, but it is always more successful when safety is elevated to the highest possible level. It is with that in mind that we support these amendments.

--- Later in debate ---

[Lord Tunnicliffe]

My Lords, I support the general spirit and direction of the amendment. The task that the CAA and the space agency will face will be very difficult. I hope that the Government will be able to give us further assurances that resources will be made available to power this learning curve. I hope that there will be enough time for the skills to be in place before real applications come before the regulator. It is easy to underestimate just how difficult this task will be for the CAA and the space agency.

[Lord Fox]

The nature of this work, certainly in the early stages, could be quite lumpy. In earlier discussions —at Second Reading, I think—the Minister talked about perhaps only 12 launches a year. There could be moments of great intensity of activity followed by no activity and therefore no income. How will the regulator maintain this level of expertise through what could be feast and famine during that process?

--- Later in debate ---

[Lord Fox]

My Lords, I am afraid that this is Groundhog Day all over again. We have discussed these issues and I will not go into the economics, save to say that there is huge potential for very high insurance costs for multi-satellite constellation launches. In Committee, the Minister said that work was in hand and would be finalised within 12 months of the Bill receiving Royal Assent, so the amendment was not necessary. I feel that it is necessary because this is the make or break economically of the nano-constellation-style satellite. Without resolution of this issue, there will be no industry in this regard because it will be too expensive to launch these satellites in this country. For that reason, while the work is in hand—and I accept in good faith that it will be completed—we believe that the amendment should be agreed. I beg to move.

[Lord Tunnicliffe]

My Lords, we support the general thrust of this proposal and hope that the Minister will say sufficiently warm words so that the amendment will not be pressed. I hope that she will be driven by the simple fact that the industry almost certainly will not get off the ground unless the Government can produce some assurance that appropriate legislation will be brought forward at some stage to enable small satellites to be economically effective.

Space Industry Bill [HL]

Debate between Lord Tunnicliffe and Lord Fox

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

[Lord Fox]

My Lords, in moving Amendment 38, we seek to insert a new clause after Clause 37 which sets up a consultation on the licensing and insurance of small satellites, including what we call nano satellites, which I will speak to in a moment.

As was alluded to in our previous sitting, when my noble friend Lord McNally spoke about having the right level of liability and governance over these exercises, we seek to set up a process that recognises the varying risks according to the payload to be launched from these facilities. We want to reflect the relatively reduced risk posed by smaller micro-launchers and what are called nano-sat payloads, because both of these are growth industries which would be extremely valuable to the United Kingdom and could be a niche opportunity for such facilities, if they are to be successful. It is essential that the licensing, insurance and range-tracking costs are appropriate to the level of risk to payloads to allow the industry to succeed. We have already discussed how a burdensome regulatory requirement could negatively impact while, at the same time, in a series of amendments and new clauses, we have tried to maintain the right level of oversight.

In particular, a regulatory barrier exists around launch licensing for mega constellations. The current British law treats the nano satellite constellations no differently from large, $200 million satellites that go into geostationary orbit. Each satellite on a constellation is subject to the same licensing fee and must carry third- party insurance coverage of up to €60 million per satellite. Clearly, if there is an array of 750 satellites, it makes the whole affair expensive to insure, and it flies in the face of practice in other regimes, as I understand it.

The amendment would require the Government to consult on the desirability of changing how these small and nano satellites are insured and licensed, to ensure that it would be most beneficial to the industry while at the same time maintaining sufficient cover to be safe. I beg to move.

[Lord Tunnicliffe]

My Lords, this is an interesting point. I hope that the Minister will take it away and give it some consideration. I think we all agree that the whole issue of liability and insurance is important to get right so that the industry does not fail due to crippling cost.

Space Industry Bill [HL]

Debate between Lord Tunnicliffe and Lord Fox

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

[Lord Tunnicliffe]

My Lords, I said that the previous group of amendments was probing. We had had time with the Minister to try to understand the Bill but unfortunately we did not get as far as this area. Therefore, I will not attempt to explain the amendments in this group because I do not really understand the parts of the Bill that they relate to. With that admission, perhaps I may simply put a few questions to the Minister.

I think I understand that there is the concept of strict liability towards an uninvolved third party who suffers a loss. I would be grateful if the noble Lord could confirm that—we are moving forward question by question—obviously with the necessary caveats and niceties. As I understand it, the amount of liability may be capped. To me, that means that there is a limit on how much the operator—or the Government, who might be liable—must pay in damages to an uninvolved third party in the event of an accident. I hope that I have that bit right. However, I am not clear about who pays if the losses exceed the cap. Clearly, it is not the operator—that is what a cap means. Therefore, is it the injured third party?

It is very rewarding working in the safety sector, although it means that you get a bit ridiculed. However, we are talking about a TriStar with a bomb on it crashing in the middle of Glasgow. That is not an impossible scenario. Of course, it is not very likely but the unlikely happens—that is what the statistics show. Who would meet the costs of such a catastrophe? Even if there is no cap on the operator’s liability, the commercial structure of the company means that there will be a de facto cap because the company will rapidly go out of business without one or if it is uninsured. However, there will be circumstances in which the amount exceeds the cap.

Elsewhere in the Bill, the Government seem to have the ability to meet the obligations towards the injured third party. So if the answer to my question is that the Government will meet the excess over the cap, which part of the Bill provides for that? Is it an assurance to the uninvolved in society—us and the people around Prestwick—that where there is an event, their damages will be met either by the operator or by the Government? Who will meet the excess over the cap, or is society in general exposed above the cap? I beg to move.

[Lord Fox]

My Lords, I apologise to the noble Lord, Lord Tunnicliffe, for missing the first couple of words of his contribution and to the Committee for being slightly detained outside the Chamber.

Very briefly, the mission of these amendments, in the event that they were adopted by the Government, appears to be to create unlimited liability for the companies concerned in the pursuit of their business. Having asked a few questions of such operators, my understanding is that were they in an environment of that nature, the whole spirit of the Bill would be lost very quickly, in that no operator would undertake a risk of that level. I understand the concerns of the mover of this amendment, and the questions he has asked of the Government—who would pick up the liability?—are the right ones. However, the solution of creating unlimited liability across the board for the operator is not one that these Benches would support.