Space Industry Bill [Lords]

John Hayes Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 6th February 2018 Commons Chamber

[Karl Turner (Kingston upon Hull East) (Lab)]

New clause 2 would ensure that Parliament is kept up to date on negotiations between the UK and the European Union in regard to the UK space industry.

New clause 2 differs very slightly from new clause 1, which was tabled by the hon. Member for Oxford West and Abingdon (Layla Moran). Both new clauses have the same aims. New clause 2 asks the Government to produce a summary of any discussions between the UK Government and the European Union to ensure that Parliament is kept up to date on the progress of the negotiations. Just as importantly, new clause 2 would also provide clarity to the UK’s space industry.

It goes without saying, or at least it should, that the Government must ensure we get the best possible deal with the EU to help support the UK space industry’s continued growth. That is the whole point of the Bill, and it is why the Labour party is broadly supportive of it. UKspace, the trade association of the UK space industry, claims:

“The UK leaving the EU has created significant uncertainty which is already affecting the integrated supply chain, R&D collaboration and joint programmes with other EU countries.”

As colleagues have pointed out, the UK space industry makes a noteworthy contribution to our economy and employs close to 40,000 people. The industry is currently highly dependent on EU-led space programmes. As a result, the Government must ensure the UK gets a deal that secures the long-term future and growth of our space industry to ensure that the Government’s ambition for the UK to be a leading player in the global space industry is not just all talk and no action.

The Government provided a report to the Exiting the European Union Committee with a sectoral analysis of the UK space sector after our Opposition day debate on 1 November 2017—it is fair to say that we forced the issue. We welcome the Government publishing that document. However, the Opposition believe the document is not sufficient and that Parliament should be kept up to date with a further summary, which would also give the sector the additional clarity it asks for.

Any further uncertainty would hinder any potential growth in the UK space industry. New clause 2 is a reasonable and sensible amendment that would require the Government to publish a report setting out a summary within 12 months of Royal Assent, which is absolutely fair.

[Mr John Hayes (South Holland and The Deepings) (Con)]

The hon. Gentleman speaks about growth in the industry. We heard a lot about growth on Second Reading, and the Minister has acknowledged the need for skills. Leaving aside new clause 2, but relevant to it, is there a case for cross-departmental work on developing those skills, given the complexity of meeting the industry’s needs? Would the hon. Gentleman offer that as a possible compromise to the Minister?

[Karl Turner]

The right hon. Gentleman makes an excellent point. I was about to say that I do not intend to divide the House on new clause 2, but I hope the Minister takes his point on board.

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[Carol Monaghan]

I thank the hon. Lady for her contribution, but I think she is missing the point, which is that there must be a cap in place for these companies to get insurance. Without it, they cannot get insurance, and without insurance, they cannot launch. If the Government are considering this cap, why is it not in the Bill? Why does the Bill not contain a statement that a cap will be put in place? I am not asking for a figure and I certainly did not talk about unlimited liability; we talked about limited liability. Unless this is in place, we are stifling a serious growth industry. So I call on the Government to accept the new clause and to listen to the concerns of the space industry.

[Mr John Hayes]

I intend to speak briefly on this issue, having heard what the hon. Member for Glasgow North West (Carol Monaghan) said and having looked at these matters in my previous life, as it were. Liability is salient to this Bill. The Government have acknowledged that in what they have said and in the changes they have already made as a result of our consideration in Committee.

I pay tribute to the new Minister for the work he has done on this. It is right to say that he is continuing discussions with the industry. As the hon. Lady said, there is a fragility about the industry. That is not to say that it is not successful, growing or doing wonderful things, but when one innovates or is on the margins of innovation, as this industry is bound to be, given that it is pushing the frontiers ever further, of course one is in a risky business. To gain the necessary investment to make that innovation happen and to take on board those risks, one needs to create a framework of certainty, and the certainty is to some degree about liability.

If I may say so, though, there is a simpler way to deal with the hon. Lady’s points. As I said, I shall be brief. I notice that the Government have already made changes to clause 35(3), where the word “may” has been changed to “must”. They could make similar changes to clause 34(5). Were the Government obliged to make regulations to deal with liability, I think that would go a long way towards satisfying the hon. Lady. I have sufficient trust in the Minister and his Department to know that even with the word “may” in the provision, it is likely that, following the discussions that he and others are having with the industry, further regulations will be introduced for the very reasons the hon. Lady set out in a measured and moderate way.

It is vital that we create the investor confidence that will allow the industry to grow and, as I have said, push forward the frontiers of technology in what is necessarily a risky business. This can be a great success and the Bill takes us a long way towards enabling that success. To get the issue of liability right will be the icing on the cake, but as everyone who has ever dressed or consumed a cake knows, the icing is vital—it is what draws us in, encourages and seduces us to consume the cake. With that overture, I hope that the Minister can provide the reassurance that the industry and I seek and that on that basis the hon. Lady might see fit to withdraw her new clause, although that is a matter not for me but very much for her.

[Layla Moran]

I rise to speak briefly to amendments 1, 2 and 3.

Amendment 1 deals with the catch-all powers in the Bill and, at your discretion, Madam Deputy Speaker, I shall seek to press it to a vote. In the House of Lords, the Government agreed to remove the Henry VIII power from the Bill in response to concerns expressed by my Liberal Democrat colleagues in the other place and by Lord Judge, the former Lord Chief Justice of England and Wales. However, there is still a need to go further to tackle the Government’s power grab.

Several stakeholders have expressed concerns about the Bill’s skeletal nature. In particular, the House of Lords Constitution Committee said that some of the powers in the Bill were “very broad” and that the Bill would be

“challenging for Parliament to scrutinise meaningfully”

because so many of its powers were delegated to Ministers. That Committee also expressed concerns about a power in clause 68 that allows Ministers to make regulations but which might prevent people from being able to take the Government to court for judicial review because the Government could easily argue that their powers were within the Bill’s scope. The power permits the Government to make almost any law relating to

“space activities…sub-orbital activities, and…associated activities …carried out in the United Kingdom.”

That covers pretty much anything to do with the industry.

In response to the raising of such concerns in the other place, the Government suggested that there was no need for concern and, according to Baroness Sugg, that the powers were needed to

“deal with any unexpected circumstances.”—[Official Report, House of Lords, 28 November 2017; Vol. 787, c. 613.]

I am afraid that that is not good enough. Liberal Democrats remain concerned that the scope of clause 68 is far too wide. We believe that, if the Government are not willing to remove the power or to limit its scope, it is only right and proper to increase parliamentary scrutiny of legislation passed under the power, which is why I shall seek to divide the House on amendment 1, which would require any new secondary legislation passed using clause 68 to be subject to the affirmative procedure.

[Mr John Hayes]

I understand the hon. Lady’s point, but she must know that a Bill of this type essentially establishes what I called earlier a framework of certainty. This is a highly innovative industry and technology changes very rapidly. To be prescriptive about what the future might look like would be a woeful error. There has to be a degree of flexibility in the Bill, which she risks limiting by being prescriptive at this stage.

[Layla Moran]

I thank the right hon. Gentleman for his intervention, but I disagree that the amendment would prevent innovation. I think it would be absolutely fine. The affirmative procedure is employed in 13 other parts of the Bill. Parliamentary scrutiny should not just be waved away, as it has been in other Bills. All we are asking for is the affirmative procedure, which would allow Parliament to scrutinise regulations that little bit more.

--- Later in debate ---

[Joseph Johnson]

I thank all hon. Members who have spoken to the measures tabled by the hon. Member for Central Ayrshire (Dr Whitford). In addition to new clause 3, she tabled new clause 4, which would introduce a mandatory requirement for the Government to lay a report before Parliament setting out their plans in relation to a cap on a licensee’s liabilities. The new clause would also mandate consultation with the devolved Administrations and UKspace, a trade association of the UK space industry. The Government have consistently listened to the industry’s concerns about liabilities, dating back to the early development of our policy by my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), including with regard to the licensing of UK entities carrying out certain space activities and in the development of all the provisions in the Bill.

The Government are well aware that the main space launch nations, including France and the US, limit a launch operator’s liabilities in some form, which is why the Bill contains powers for certain liabilities to be capped in licence conditions by way of regulations. Having such powers enables the UK to compete on a level playing field and allows the Government to share the burden of liabilities with operators.

However, launch from the UK is a new activity, and we should cap a launch vehicle operator’s liability, and thereby confer contingent liability on the Government, only if there is clear evidence that that is necessary. It is therefore important that the Government are able first to gather such evidence. To do that, as has been highlighted in earlier stages of the passage of this Bill, we will undertake a call for evidence specifically on liability and insurance, and that will take place shortly after Royal Assent.

Alongside that, the UK Space Agency is already working on, and considering its approach towards, risk assessment, insurance and liability requirements for launch activities taking place from the UK. If, following that work and the call for evidence, a cap on the launch vehicle operator’s liability for launch activities taking place from the UK is deemed appropriate, a full consultation will take place, which will include the publication of Government proposals and draft regulations. As I have said, this will be an open and comprehensive consultation that will include the devolved Administrations. Any proposals outlined in such a consultation will be subject to compliance with relevant trading rules, whether they are EU state aid rules, or other rules applying after our exit from the European Union.

[Mr John Hayes]

It seems that the Minister has exceeded even my expectations. The big billing that I gave him was entirely justified, because he has addressed exactly the point that was made earlier: we need to know precisely what the circumstances are as launch facilities are developed. The combination of a call for evidence and a potential consultation seems to go a very, very long way towards what those who asked for further work on liability wanted to achieve. I am delighted to hear what he has said in his brief contribution.

[Joseph Johnson]

I thank my right hon. Friend for his support for the Government’s approach of gathering the evidence base in a call for evidence, and then, if necessary, holding a further consultation, particularly involving the devolved Administrations.