Space Industry (Indemnities) Bill

Chris Clarkson Excerpts

2nd reading
Friday 23rd February 2024 Commons Chamber

[Chris Clarkson (Heywood and Middleton) (Con)]

It is a pleasure to follow my hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory). There are few more intrepid voyagers in this particular enterprise, defiant in the face of adversity but also on a voyage of discovery. She made an excellent speech and picked up on what the Bill is really about.

My hon. Friend rightly identified that this not just about putting big shiny things on rockets and firing them into the sky; it is about unlocking other important bits of the economy. My hon. Friend the Member for Wyre Forest (Mark Garnier) also made that point incredibly eloquently. We can go back to Adam Smith and see the cosmic threads, if you will. We are opening up new sectors for the UK economy and empowering our people.

I am delighted by the idea of space lawyers. I promised not to go around waving my LLB about, but that sounds awfully like the superhero name I would end up giving myself. I am really excited about this. I am a member of the Science, Innovation and Technology Committee, so I was very pleased to hear my hon. Friend the Member for Woking (Mr Lord) mention our report. A lot of love went into it—we enjoyed ourselves a bit too much, I am not going to deny it!

I find this entire sector incredibly fascinating and extremely exciting, not just because of the aforementioned geekery but because of its potential. I think about kids in my constituency who are now being exposed to opportunities and new horizons that simply were not on the radar of young people even five or six years ago. Apprentices in my patch are talking about working in this area. Some have gone to work for Airbus, which is doing fantastic things with satellites. I recently went to its Stevenage factory as part of my Industry and Parliament Trust fellowship, which is in space and aerospace. One thing it purports to be doing is transferring energy from space, which will genuinely be a game changer. I was flabbergasted when that was explained to me.

To monitor climate change, satellites will tell us how much heat is transferring out of wood in forests, so we know whether rainforests need to be reforested and whether we are facing climate change at 1.5° or 2°. That is mind-bendingly brilliant stuff, and it is now available to kids who, five or six years ago, might have been told, “Right, once you finish school, you either go work in the JJB Sports factory down the road or in a shop.” It is exciting, fantastically valuable and hugely important for things like our financial sector. Greater Manchester has a fairly sizable financial sector, which is great for us. We also have a large legal sector—I know because I used to work in it. I would love to be a space lawyer. Let’s see how the rest of the year goes; I might need to become one.

Ultimately, the Bill is about empowering us. The other thing I love about it—again, I promise not to wave my LLB about too much—is its simplicity and elegance. It is that Coltrane sax solo: so simple that it is brilliant. Changing a word effectively empowers us to do so much more. The power of that is inestimable. That is why it was part of the report that the Science, Innovation and Technology Committee put out.

At the moment, we are disincentivising people from innovating, and that is not what we should be about. We are saying instead that people should go out and take risks, and we will ensure that they can be rewarded. They will not be completely and utterly obliterated for having a go. Even if the second-stage fuel pump does not work, it will not be the end of the business. We need to be alive to that because we need risk takers, as we do in every sector. We need people who are willing to boldly go into the final frontier. [Interruption.] I have not finished yet. When I shout “House!” everyone will know that I have done them all. Fundamentally, this is about ensuring that Britain’s future is not just here on Earth, but in the stars, and we have every right to be there—as much as any other country.

[Cherilyn Mackrory]

I thank my hon. Friend for allowing me to intervene, especially given that I have just rambled on for who knows how long. One thing I did not mention that he might be interested in is the defence sector. Again, when I visited Goonhilly, there was a huge amount going on there. We talk about our maritime fleet being bothered by the Russians and the Chinese on a daily basis, but our satellites and space are as well. It is hugely important that we are at the forefront of this. Does he agree?

[Chris Clarkson]

My hon. Friend is entirely correct. Like me, she has been on the armed forces parliamentary scheme. I was restraining myself from mentioning Culdrose when she was giving her excellent speech, but of course I have now done it. Our defence sector is incredibly important. Again, we are making this stuff here at BAE Systems and Airbus, and defence manufacturers in this country create jobs and opportunities. That is hugely important, and I am absolutely delighted to support the Bill. I love its technical merits.

My hon. Friend the Member for Woking has played an absolute blinder in doing something quite sensible. I will give a lived example because, quite frankly, the Empire would not have been able to build the second Death Star if it had been on the hook for the price of the first one. My hon. Friend has stuck the landing. I congratulate him and look forward to supporting the Bill.

--- Later in debate ---

[Anthony Browne]

My hon. Friend has expounded a very important point: we are critical to the space industry, and to space exploration more generally.

Coming back to the issue of regulation—coming down to Earth from our big visions, the Clangers and so on—the Government have been funding the industry. We put in place the Space Industry Act 2018, which my hon. Friend the Member for Woking talked about, and appointed the Civil Aviation Authority as a spaceflight regulator—that is why I am answering this debate, as a Transport Minister, rather than someone from the Department for Science, Innovation and Technology. Getting into space and orbit is a DFT responsibility. The civil aviation regulator—which has licensed SaxaVord, for example—enables the licensing of spaceflight activities from the UK, such as operating a satellite in orbit, and enabling a launch to orbit from UK spaceports for the first time.

The Government recognise that the issues of liability and insurance are of the utmost concern to the space sector, and they are obviously the entire point of the Bill. The industry made clear in its responses to the consultation on the then draft space industry regulations in 2020, and in response to the Government call for evidence to inform orbital liability and insurance policy in October 2021, that holding unlimited liability will have an adverse effect on the UK space flight industry. People sometimes object to private Members’ Bills because they are not based on consultation, but this issue has been endlessly consulted on and negotiated with industry, and the industry is calling for this Bill.

The industry has advised that it is impossible, not just difficult, to obtain insurance for an unlimited amount. Members might ask, “Why is that, if the chance of something happening is infinitesimally small?” The reason is that it is impossible for the actuaries to quantify it; with infinity over infinity, one could come up with any value. Also, insurers are required by regulation to show that they have the capital to meet any claim on them. Clearly, insurers cannot have unlimited capital, so it is regulatorily and legally impossible for insurance companies to insure to an unlimited amount. It is very difficult for the industry to say to investors, “Please give me money to fund the launch of a rocket, even though I may not be able to insure it.” We need liability limitations so that launch companies and other space operators can get insurance, and so can get the investment that they need.

If a spaceflight company cannot get unlimited insurance, it obviously cannot get full insurance. As a number of hon. Members have said, if the Government did not limit a spaceflight operator’s liability, spaceflight companies and investors would instead look to more favourable regulatory regimes in other countries, where Governments share the risks involved by limiting an operator’s liability and offering a state guarantee. The United States already does this, as does France with French Guiana.

As my hon. Friend the Member for Woking has explained, there are powers in the Space Industry Act that we can and do use to limit a spaceflight operator’s liability when carrying out spaceflight activities from the UK. Government policy is that the regulator should use those powers and specify limits on operator liability in the licence, so that no operator faces unlimited liability. However, the law sets out that the Government “may” do that, rather than “must”.

The Government fully support the Bill for two key reasons. It is consistent with our policy that all spaceflight operator licences should have a limit on liability. It will not, therefore, impose any additional liability or risk on UK taxpayers. My hon. Friend made that point. The Government also recognise the value that the industry places on legislative certainty on this matter. As I pointed out, if investors are to make an investment in a space company, they need to know that the company will be able to get insurance. The report by the Taskforce on Innovation, Growth and Regulatory Reform—the TIGRR report, for short—published in May 2021, expressed concerns from the space sector over the use of the word “may” in section 12(2) of the Space Industry Act. The Bill would replace that “may” with “must”.

I thank all hon. Members for their contributions. My hon. Friend the Member for Wyre Forest (Mark Garnier) explained his great interest in space, and mentioned financial services, which I want to come on to. The point was well made that before the UK was a spacefaring nation, we were a seafaring nation. London was the biggest port in the world for more than 200 years, which led to a whole maritime industry with insurance around it, including Lloyd’s of London, and lawyers. We have a huge maritime industry in London as a result of having a maritime fleet, and we now have the same opportunity with space. We can have space investors—I have met some of them—as well as space lawyers, space insurance companies, regulatory experts and so on. It is a huge opportunity. The Government and the regulators need to ensure that the industry has the right incentives.

[Chris Clarkson]

The Minister mentions ports. Obviously, quite a few of our maritime assets are considered critical national infrastructure. Have any discussions been had on whether our space assets will also fall into that category? That applies particularly if we are to launch a 3D printer so that we can build on the moon, which is apparently the only place where the Liberal Democrats will not try to block house building.

[Anthony Browne]

My hon. Friend asks an interesting question. I will raise it with officials and come back to him with an answer.

My hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory) gave the most fantastic and enthusiastic speech about the space opportunities for Cornwall. I bet most people in Britain do not realise quite how important space is for Cornwall. There are 150 different companies; I had no idea that Cornwall had its own space lawyers, so that is a great insight. We also heard about the use of satellites for the maritime sector and various other issues to do with Cornwall. I want to make sure that my hon. Friend knows that as the Government Minister responsible, I fully agree that the Cornish launch, which was before my time as a Minister, was absolutely a success from a regulatory and investor point of view. I agree that the whole regime worked.

My hon. Friend the Member for Wyre Forest made the point that we in this country tend to overemphasise the negative, and we always look at the bad things that happen. I think I am right in saying that the first three launches from SpaceX did not get into space, but were actually seen as successes because they contributed to the whole launch operation. Lots of things were learned from those launches, and the same is true of the Cornish launch.