Space Industry (Indemnities) Bill

Judith Cummins Excerpts

Friday 7th March 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)]

I thank my hon. Friend the Member for Glasgow East (John Grady) for bringing this short but crucial Bill before the House. I commend him for delivering such a brilliant and informative speech and for managing to cling on for as long as he did; some would call him the “Rocket Man” of Parliament. I thank all other Members who have spoken in the debate. Speaking of stars, I wish my hon. Friend the Member for Beckenham and Penge (Liam Conlon) a very happy birthday for yesterday; I hope he had a stellar time.

I am pleased to confirm that the Bill has the full support of the Government. Before I begin, let me outline some general observations about the UK and spaceflight. The UK’s approach to launch positions the UK as a leading international partner in the space sector, ensuring Europe’s independent access to space. The Department for Science, Innovation and Technology has responsibility for co-ordinating civil space policy, working closely with Departments across Government to ensure that space services can support their needs and that space science and research can act as an enabler across the economy, while building strong links with the wider science ecosystem. To achieve our ambition, Government have invested more than £57 million through the LaunchUK programme to grow new UK markets for small satellite launch and sub-orbital spaceflight.

The UK has one of the most advanced and trusted modern space regulatory frameworks in the world. On 8 October, the Secretary of State for DSIT announced the new Regulatory Innovation Office, to reduce the burden of red tape and speed up access to new technologies that improve our daily lives. The RIO has made space one of its top priorities, and we look forward to working with it on our wider regulatory reforms to enable innovation.

This Government are implementing a series of space regulatory reforms stemming from the recommendations published in the space regulatory review in May 2024. The Government have worked with the sector to determine a prioritised approach to the reforms, to maximise the growth and innovation potential for the sector.

One recommendation involves the implementation of a regulatory sandbox to stress-test the regulatory framework for enabling rendezvous proximity operations. The sandbox commenced in October 2024, with stage 1 due to be complete in March 2025, providing vital recommendations to enable the growth of these novel missions and to strengthen the UK’s capabilities.

We are also exploring financial tools, incentives and market access schemes that promote sustainable activities and encourage self-investment, inward investment and support a level playing field for UK companies. Alongside the regulatory reform package, work is under way to develop a range of new innovative regulatory measures to support the growth of the UK sector, new mission types and to incentivise the uptake of space sustainability measures.

As my hon. Friend the Member for Glasgow East said, the Bill will amend two sections of the Space Industry Act 2018 to provide legal certainty that all spaceflight operator licences must include a limit on the amount of the operator’s liability to the Government under section 36 of the 2018 Act. This short, but crucial Bill will go “far, far away” to encourage much-needed investment into the sector.

Before I outline why the Government fully support the Bill, and boldly going where no man has gone before, I will briefly outline some of the UK’s achievements in spaceflight. On 9 January, the UK made history by conducting the first ever orbital launch attempt from UK soil through Virgin Orbit at Spaceport Cornwall, demonstrating the UK’s growing launch capability and position as a leading spacefaring nation. In December 2023, SaxaVord spaceport on the Shetland Islands became the UK’s first vertical launch site to receive a spaceport licence. In January 2025, Rocket Factory Augsburg became the UK’s first licensed vertical launch operator. The UK’s approach to launch positions the UK as a leading international partner in the space sector.

As my hon. Friend will be aware, Scotland makes a vital contribution to the wider UK space ecosystem. Scotland’s space sector is home to advanced satellite manufacturing capabilities, and has a fast-growing satellite launch market. In fact, Glasgow builds more small satellites than anywhere outside of California. The UK is now the second-most attractive destination for commercial space investment after the United States.

This Government have made clear that unlocking growth is vital to rebuilding the UK and supporting high-tech jobs, which unlocks investment and improves living standards across the country. We are capitalising on the UK’s excellence in science and innovation to ensure our world-class research translates to commercial success, rebalancing the system and setting up the financial services sector to innovate, grow and seize the opportunities for investment in business, infrastructure and clean energy across Britain.

The space sector is hugely valuable to the UK’s economy. It is worth more than £18.9 billion and directly employs more than 52,000 people. It supports more than 126,000 jobs across the supply chain and at least £346 billion of the UK’s GDP is supported by satellite services, such as navigation, metrology, communications and Earth observation. It is now possible to launch satellites from UK spaceports, rather than relying solely on overseas sites to launch UK-built satellites into orbit.

As I previously mentioned, in January 2023, Virgin Orbit conducted an historic first launch from the UK at Spaceport Cornwall. In December 2023, SaxaVord spaceport in the Shetland Islands became the first licensed vertical launch spaceport. This year, we hope to witness the UK’s first vertical launch by German company Rocket Factory Augsburg, with more to follow. Growing our launch capability is already creating high-skilled jobs and opportunities in communities right across the UK, as well as catalysing investment across the supply chain.

The Government are investing in new launch companies such as Orbex, which has built factories in Scotland, creating hundreds of new jobs, ready to take advantage of the new opportunities that the Government have created. SaxaVord spaceport anticipates that by 2025, the spaceport site could support a total of 650 jobs in Scotland, including 140 locally and 210 across the wider Shetland region. Other launch operators, such as Skyrora, a UK company based in Glasgow, are thriving. It has indicated that it will conduct its first sub-orbital launch from the UK in the near future.

The UK’s space industry already supports an industrial base of over 1,500 space companies. It provides high-skilled, high-quality jobs across the UK, with over 77% of employees holding at least a primary degree. Building on the success of the UK’s space sector, the Government will continue to support business through a stable policy environment, strengthening our economic institutions and giving investors the certainty they need to fuel growth. The Government recognise the important contribution that the space sector makes to ordinary people’s lives. Growth is the Government’s No. 1 mission, and the Bill has the potential to drive growth within the sector by encouraging further investment.

It is important that the UK builds on the successes of an already thriving and dynamic space sector. The Government are delivering our plan for change with investment and reform to deliver growth. We will ensure, through the measures that we are taking to deliver growth, that the UK becomes a leading provider of commercial small satellite launchers in Europe by 2030.

To achieve our ambition, the Government will continue to support spaceports and launch operators to grow new UK markets for small satellite launch and sub-orbital spaceflight. The Government are committed to making improvements to both the Space Industry Act 2018 and the space industry regulations to ensure that our legal framework and regulations remain effective and internationally competitive. The UK has one of the most advanced and trusted modern space regulatory frameworks in the world.

Let us explore for a moment what liabilities are covered by the 2018 Act. There are two types of liability covered. Section 34 places a strict liability for injury or damage caused to persons or property on land or water in the UK or in the territorial sea to the UK—or on an aircraft in flight over such land, water or sea—by a craft or space object being used by an operator carrying out spaceflight activities in the UK. The uninvolved general public suffering injury or damage can bring a claim against the operator without having to prove fault. Section 36 places a liability on the operator carrying out spaceflight activities to indemnify the UK Government, or a person or body listed in section 36(2), for any claims brought against them for loss or damage caused by those activities. Therefore, UK nationals have the same easy recourse to compensation and protections as foreign nationals have under the UN liability convention.

The Government recognise that the question of liability and insurance is of utmost concern to the space sector. In response to a consultation on the then draft space industry regulations in 2020 and a call for evidence to inform orbital liability and insurance policy in October 2021, the industry made it clear that holding unlimited liabilities will have an adverse effect on the UK’s spaceflight industry. The industry has advised that it is impossible to obtain insurance for an unlimited amount, and therefore impossible to obtain insurance that will provide full coverage of an operator’s liability to indemnify the Government and their liability to uninvolved third parties. Furthermore, potential liabilities for spaceflight are not easily quantifiable. 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 or by offering state guarantees, such as in the United States or in France.

As my hon. Friend the Member for Glasgow East explained, there are powers in the 2018 Act to limit a spaceflight operator’s liability when carrying out spaceflight activities from the UK. The Act enables commercial spaceflight activities, which include launching a spacecraft and operating a satellite in orbit, for example, or other activities such as the operation of a spacecraft and management of a range to be carried out under licence in the United Kingdom. The Act sets out the broad licensing and regulatory framework for carrying out such activities and is underpinned with more detailed provisions in the Space Industry Regulations 2021.

The 2018 Act currently provides powers for the regulator to specify a limit on the amount of the operator’s liability in the licence, but does not make it mandatory. Currently, section 12(2) provides that an operating licence may specify a limit on the amount of a licensee’s liability to indemnify under section 36. Current Government policy is that the regulator should use those powers to specify a limit on operator liability in the licence so that no operator will face unlimited liability.

The Government fully support the Bill and its further progress. It is consistent with our policy that all spaceflight licences should have a limit on liability, so it will not impose any more liability or risk on UK taxpayers than the current policy. The Government also recognise the value that industry ascribes to legislative certainty on this matter. The space sector continually expresses its concerns about the use of the word “may” in section 12(2 of the Act. I am therefore grateful to my hon. Friend for the Bill, which, by amending section 12(2), will meet a key request from the sector.

As a the Member of Parliament for Wakefield and Rothwell, let me end by paying tribute to the proud Yorkshireman and inter-cosmic former captain of the USS Enterprise, Patrick Stewart—“Star Trek: The Next Generation” being far the best iteration in the Star Trek franchise. I will leave the House with this: “Space: the final frontier. These are the voyages of the UK Government. Our continuing missions: to kick-start economic growth and make Britain a clean energy superpower; to seek out and break down barriers to opportunity and take back our streets; and to boldly build an NHS fit for the future.” Make it so!

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).

[Madam Deputy Speaker (Judith Cummins)]

The Member in charge of the Military Action Bill gave instruction earlier today that he wishes to defer it until Friday 4 July.