Space Industry (Indemnities) Bill

Baroness Anelay of St Johns Excerpts

2nd reading
Friday 5th September 2025 Lords Chamber

Moved by

[Baroness Anelay of St Johns]

That the Bill be now read a second time.

[Baroness Anelay of St Johns (Con)]

My Lords, I am grateful for the opportunity to present this Bill to the House today. It was guided through the House of Commons by John Grady MP, whom I congratulate for his work, and it received cross-party support.

The Bill seeks to amend the 2018 Space Industry Act in a way that should strengthen investment in the UK’s space sector. This is important for both the economic growth and defence of the United Kingdom. The nub of the matter is that under the 2018 Act, anyone carrying out spaceflight activities must indemnify the Government or a list of bodies included in that Act. The uncertainty faced by potential investors is that the Act states that an operator licence “may” specify a limit on the amount of the licensee’s liability. That leaves potential investors not knowing whether there will be a cap to that. I understand that investors remain unwilling to invest in companies that hold unlimited liability. Changing that “may” to “must” is at the heart of today’s Bill.

The Bill would amend Sections 12 and 36 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—under Section 36—thereby ensuring that operators are not exposed to unlimited liability. As a result of much hard work by my colleagues in Conservative Governments over recent years, and now Labour’s Government, and that of organisations such as the UK Space Agency, there is now agreement that we have a firm foundation for the development of the space industry.

There are currently two operational spaceports in the UK: Spaceport SaxaVord, in the Shetland Islands, which is licensed for vertical launches, and Spaceport Cornwall, which is licensed for horizontal satellite launch services. It is based on a site adjoining RAF St Mawgan near Newquay. The Spaceport Cornwall team is working closely with schools, colleges and higher education institutions across the region to build the skills base to meet the needs of the space industry. The Bill before us today should help to create economic growth, jobs and prosperity for decades to come across the UK, from Cornwall to Shetland.

The 2018 Act was introduced to enable space activities from UK spaceports, such as satellite launches and suborbital spaceflight. These activities require a spaceflight operator licence. International law places the responsibility for activities in outer space on states, not individuals. Launch states are liable for any damage caused on earth or to aircraft in flight. Damage caused by spaceflight activities could therefore result in claims against the UK Government. To alleviate that eventuality, Section 36 of the 2018 Act provides for spaceflight operators to indemnify the Government in certain circumstances, but the risk currently facing spaceflight operators is that the 2018 legislation does not require the Government to cap the operator’s liability. The policy of Conservative Governments and the current Labour Government was and is that licensees’ liability to indemnify government will be capped, but that commitment is in a policy document. It does not give the certainty of a provision included in statute law.

This is a long-standing unresolved issue. I understand that during consultation exercises and discussions with those involved in the space industry, a key request from the industry has been that there should be legislative certainty that spaceflight operators will not face unlimited liability when operating from the UK. It is not possible for that uncertainty to be removed via the regulation-making power, as there simply is not such a power in 2018 Act. In Section 12(2) of that Act there is no power to have a regulation on this matter. Therefore, the way forward is in the Bill before us today. It would introduce certainty by amending the Space Industry Act 2018 as follows: Clause 1(a) would change “may” to “must” in Section 12(2) of the 2018 Act, and Clause 1(b) would change “any” to “the” in Section 36 of the 2018 Act. Clause 2 simply deals with the extent, commencement and short title of the Bill, consistent with the terms of the 2018 Act. I should note that the Delegated Powers and Regulatory Reform Committee of this House reported on 18 July that there is nothing in this Private Member’s Bill that it would wish to draw to the attention of the House.

The Bill has a bit of a black back story. It was passed by the House of Commons early last year, when the sponsor was my then MP and friend, Jonathan Lord, who secured cross-party support for the Bill. He is still very much a friend, though sadly not a Member of Parliament. The Bill made its way here, and I was the sponsor. However, very shortly after the Bill received its First Reading in May, my right honourable friend Rishi Sunak decided to call the general election a little earlier, perhaps, than some of us were expecting, so the Bill was lost for lack of time.

Today, we have the opportunity to breathe life into the Bill. I hope the House will seize that opportunity, and I look forward to hearing the contributions from noble Lords today. I beg to move.

--- Later in debate ---

[Baroness Anelay of St Johns (Con)]

My Lords, I am very grateful to all those who have participated today and for the way in which noble Lords have expressed cross-party support for the Bill. It is right not only to congratulate noble Lords on showing the way forward that the Bill could produce, which would mean a strengthening of investment within the space industry, but on giving us the opportunity to show that the UK is indeed intending to be a leader in the development of all the technological changes that are about to come.

My noble friend Lord Moylan was rather coy about his age, whereas he is but young in this House. I am not saying I am going to send him into space—I promise noble Lords that I will never do that to him—but I would say to him that we have the opportunity here to ensure that we support the development of technology. He was right to ask the questions that he did. I was intrigued by the question about Section 4 of the 2018 Act. I will check again, but I read the Hansard of this House for that Bill—I did not fully read the Commons Hansard—and I was not aware that there had been questioning regarding that. I thank my noble friend for asking that, because it is now on the record, and the Minister gave such a good answer. Me saying a Minister has given a good answer probably has not happened since last summer—I can change occasionally, but not often.

This is an opportunity for the Bill to go through this House, with, I hope, further support so that we are able to get the Bill through in a timely manner, so that those who are willing to invest in a very important industry feel that they have been given the ability to do so, still facing risk, but knowing where the risk lies.

Bill read a second time and committed to a Committee of the Whole House.