Space Industry (Appeals) Regulations 2021

Baroness Vere of Norbiton Excerpts

Tuesday 29th June 2021 Grand Committee

Moved by

[Baroness Vere of Norbiton]

That the Grand Committee do consider the Space Industry (Appeals) Regulations 2021.

Relevant document: 4th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, these regulations relating to the space industry are made under the powers conferred by the Space Industry Act 2018, which I will call the SIA. The contracting-out order is made under the powers conferred by the Deregulation and Contracting Out Act 1994. There are four draft instruments before the Committee, each addressing a different aspect of the legal regime required to regulate commercial spaceflight from the UK. These instruments will apply to England, Scotland, Wales and Northern Ireland, as space is a reserved matter.

Regulatory functions for satellite licensing under the Outer Space Act 1986 are currently undertaken by the UK Space Agency on behalf of the Secretary of State, but because the space agency is also responsible for administering grants to stimulate market growth, in June 2020 the Secretary of State directed that those activities under the Outer Space Act 1986 and all activities under the SIA should be regulated by the Civil Aviation Authority, the CAA. This is to avoid a potential conflict of interest for the UK Space Agency and follows the policy of successive Governments to separate safety regulation from sector promotion following the 1988 Piper Alpha disaster. To enact this direction, the contracting-out order will authorise the CAA to carry out regulatory and licensing activities under the Outer Space Act 1986 on the Secretary of State’s behalf, in addition to its responsibilities under the SIA.

An additional instrument will follow, using the negative resolution procedure. This is an employment relations SI that will enable the transfer of staff from the UK Space Agency to the CAA.

The CAA is a seasoned regulator with over 40 years’ experience regulating aerodromes, aircraft, security, the environment and the use of airspace. With its expertise and strong international reputation, the CAA has been a partner in the development of the Space Industry Regulations from the outset. Once stood up as the regulator, the CAA can begin accepting licence applications for spaceflight activities.

The CAA cannot yet commit to a precise timeframe for granting licences, especially for initial applications, but it is expected that applications will initially take between six and 12 months to process. Of course, as the industry develops and the regulator grows its expertise, this timeframe will reduce. The regulator will be in contact with applicants at every step so that this timing will not impede industry’s ambitions. I am aware that other spacefaring nations, such as the US, have shorter stated application times of, for example, 180 days. It should be noted, however, that this excludes the pre-application period, which can be two to five years ahead of any application being submitted.

The Space Industry Regulations are a result of a collaboration across government, building on existing space and aviation legislation and harnessing a range of regulatory, technical and legal expertise. The Department for Transport, the Department for Business, Energy and Industrial Strategy, the UK Space Agency and the CAA have worked together closely, with the support of the Health and Safety Executive and the Air Accidents Investigation Branch, to develop these regulations.

The Space Industry Regulations make provisions to enable the licensing and regulation of spaceflight activities, the establishment of spaceports and the licensing of range-control service providers in the UK. These regulations are designed to enable UK launches from 2022 and will promote growth, innovation and sustainability while protecting public safety, security and the UK’s international relations.

The Space Industry Regulations provide transparency to prospective licence holders and wider stakeholders on the outcomes that are expected of licence holders, facilitating consistency, fairness and proper decision-making by the regulator. These regulations are augmented by detailed and practical guidance documents and the regulator’s licensing rules.

The regulations include provisions regarding eligibility, risk, training, security, debris mitigation, and insurance and liabilities. Insurance and liabilities were one of the key issues raised in your Lordships’ House and by industry stakeholders during the passage of the SIA, with key concerns about unlimited liability and the availability and cost of insurance to cover such unlimited liability. The Government have listened to these concerns and taken action to limit operator liability in all operator licences. Their policy intention is that all operator licences issued under the SIA will contain a limit of operator liability with respect to claims made under Sections 34 and 36 of the Act. Operators will therefore not face unlimited liability for actions carried out in compliance with the Act and licence conditions. The regulations contain the necessary provisions to implement this policy.

In line with the statutory guidance requirements of the SIA, the guidance material sets out the form and content of an assessment of environmental effects—an AEE—which is required to be submitted with every spaceport and launch operator licence application.

In order to ensure that accidents are investigated by a body independent of the CAA, the Spaceflight Activities (Investigation of Spaceflight Accidents) Regulations 2021 establish the space accident investigation authority and make provisions for how accident investigations will be carried out. Building on the long- established principles used to investigate aircraft accidents, these regulations are necessary to ensure that lessons are learned, safety is improved and further accidents are prevented.

The Space Industry (Appeals) Regulations 2021 add to the provisions in the SIA relating to appeals by specifying which decisions under the Space Industry Regulations are appealable. These regulations set out how a panel will be established and the process which the appeal panel and the parties to the appeal are to follow. They also set out the process that should be followed by the parties to the appeal, right from the initial application for permission to appeal all the way through to the decision that may be taken by the panel and the consequences for the parties.

To conclude, these regulations are a modern legal and regulatory framework that will enable the UK to launch commercial space flights. They create the conditions for accessing space from the UK, and, as I am sure that all noble Lords will agree, they will give us the opportunity to accelerate the growth of the UK space sector and demonstrate the UK’s maturity as a spacefaring nation.

--- Later in debate ---

[Baroness Vere of Norbiton (Con)]

My Lords, as always, all the briefing in the world will not cover all the questions asked by noble Lords. Nor will I be able to make some—at least one—of the commitments asked of me without getting into deep trouble. That means that I will write with a number of answers to the questions asked today.

Our aim here is simple, even if the regulations are a little lengthy and complex. We want to be the first country in Europe to offer small-scale satellite manufacturers a direct end-to-end route to launch from Europe, building on the UK’s leading small satellite industry. As the noble Lord, Lord Bilimoria, pointed out, it is absolutely critical that we are part of this industry. He reminded noble Lords of the huge opportunities ahead; I welcome his support.

The noble Lord, Lord Tunnicliffe, asked specifically how the regulations would support our scientific research communities. The answer is simple: they will provide domestic access to space for the UK’s scientific community, for whom space is an invaluable research environment, opening up new opportunities for exploration and discovery, and it could accelerate the exploitation of revolutionary future spaceflight technologies.

The noble Lord also asked about investment in the regions and whether the industry would benefit the whole of the UK. The UK Space Agency has awarded substantial grants across the UK. This will help the UK’s growing spaceflight capabilities. Such investment includes £31.5 million to help establish vertical launch services from Scotland, comprising £2.5 million to Highlands and Islands Enterprise to develop Space Hub Sutherland, £7.35 million as part of £20 million central and local government funding to support horizontal launch by Virgin Orbit from Spaceport Cornwall, and up to £1.3 million to develop business plans for small satellite launch and sub-orbital flights from airports in Machrihanish, Snowdonia and Cornwall.

These places are across the UK. The funding will support new, quality jobs in all these regions. I point out to the noble Lord that we will not be directing the supply chain as to what it can and cannot buy from whom, because I think we all recognise that this is a very technologically advanced industry, but of course we will work with the sector as it develops to make sure that we have the skills, the technology and the materials so that if we are able to provide those domestically, we will.

The noble Lord, Lord McNally, asked whether we really will have our first commercial launch by 2022. I really hope so. I admit that this timeframe is a little ambitious, but with this level of investment and these regulations I think we are laying a very solid foundation. As I have mentioned, space is a reserved matter, so the regulations apply to the entire UK.

The noble Lord, Lord Teverson, said that we needed a space strategy, while the noble Lord, Lord Tunnicliffe, felt that there was a lack of ambition and direction from the Government. I can assure all noble Lords that this is absolutely not the case. The Prime Minister, the Secretary of State and the Government as a whole are determined to develop an ambitious national space strategy by the summer. This will ensure that the UK can establish itself as a global player and seize these economic opportunities.

Back down to earth, so to speak, and on the CAA as regulator, I reassure the noble Lord, Lord Teverson, that the CAA is specified in Part 2 of the Space Industry Regulations, but I will clarify that in writing. I welcome the intervention from my noble friend Lord Hannan, who I see has printed off all 500 pages of the regulations et cetera. I am not entirely sure that he has read them all, so I hope he will use that paper as scrap if he does intend to use them in future.

It is important that we focus on the role of the CAA, which is a hugely capable regulator. It is gearing up for its role as the regulator. It will utilise its existing space capability and transfer nine or 10 staff from the UK Space Agency and take on new staff, including specialist engineers. The noble Baroness, Lady Randerson, asked, as she does with regularity, about resourcing for the Civil Aviation Authority. I reassure her that it will have a dedicated budget for regulating space flight. It has the capacity and some of the skills already, and it will be able to build on those.

The noble Lord, Lord Tunnicliffe, asked when the CAA would undertake responsibilities under the contracting-out order. The functions under that order will not be transferred to the CAA until it comes into force, which I believe will be later in July, but, of course, practical preparations have already been made at the CAA.

On the question from the noble Lord, Lord Tunnicliffe, about whether UK licences reflect similar licences in other countries with similar space industries—absolutely. These regulations have been developed alongside a careful examination of international licensing regimes all over the world, including New Zealand, so that we make sure we are as up to date as, and hopefully even more up to date than, the competitors. I have already mentioned that we expect the licensing process to begin very soon. We expect engagement from the operators with the CAA to make sure that the process is as smooth as possible.

Here comes my mea culpa of the day. I said in my opening remarks that it will take six to 12 months for an application to be processed. I misspoke: it is six to 18 months. The timeframe will depend on a number of factors, such as whether the mission is bespoke or novel, how mature and experienced the operators are and the nature and completeness of the information provided. So many things will make up these applications, so some will be simpler than others.

The noble Lord, Lord Tunnicliffe, also raised some queries regarding the costs, particularly relating to appeals. We are not expecting many appeals, if any, in the next few years. Those costs will be picked up with normal departmental allocations. I would like to reassure him that the whole appeals process has been developed alongside representation from the space industry, as indeed have all these statutory instruments. I assure all noble Lords that we had a detailed and lengthy conversation with the industry and undertook a formal consultation as well. Noble Lords will also be interested to know that we recently published the outcome of the consultation into the draft environmental objectives—something that I know is important to all of your Lordships.

I suspect I will probably write in more detail on insurance and liabilities, because this issue was subject to a lot of consideration over the passage of the Bill and as we built up to these regulations. Absolutely key to the Government is that we want to tailor the insurance required to the risk and diverse range of UK launch activities expected. The Government have committed to carrying out a review of liabilities and insurance in 2021. This will include the issues raised by respondents in the consultation. Work is under way, and more information will be available in due course.

On accidents, the noble Lord, Lord Tunnicliffe, asked why the accident investigation SI had not been introduced as primary legislation. We feel that it is appropriate. When noble Lords discussed the Space Industry Act in 2018, it was very much presented as a framework Bill. We knew that the regulations coming out of that would potentially be complex, and the House was happy with that at the time. Although it is a new industry, of course, as a nation we are very good at accident investigation.

I fear I am slightly running out of time, so I just want to make sure I have covered the point raised by the noble Baroness, Lady Randerson, about planning permissions and other consents. The CAA will provide the operating licence, but many other consents, considerations and planning permissions, et cetera, will be needed. Therefore, to have a successful spaceport, operators will need to work with the local authority to make sure that everything is done to protect the environment and the local community. It will be really critical that they have the support of the local community. I fear that the Chair has started the countdown to lift-off, so I commend these instruments.

Motion agreed.