Space Industry (Indemnities) Bill

Karen Bradley Excerpts

3rd reading
Friday 17th May 2024 Commons Chamber

[Mr Jonathan Lord (Woking) (Con)]

I beg to move, That the Bill be now read the Third time.

Clause 1(a) is the central and crucial provision of the Bill, so I shall briefly explain its purpose and why it is necessary. Before a company can operate a satellite in orbit or carry out a launch mission from the UK, it must first obtain a spaceflight operator licence under the Space Industry Act 2018. The licence process ensures that spaceflight activities are undertaken safely, securely and in accordance with the UK’s international obligations.

Under United Nations space treaties, the state is ultimately liable for any damage or injury that may be caused by its space activities—even those undertaken by commercial space operators. The 2018 Act therefore contains provisions to help mitigate potential costs to UK taxpayers arising from UK commercial spaceflight activities. The provisions include the power to incorporate licence conditions requiring operators to hold insurance and, under section 36 of that Act, to indemnify the UK Government and other named public bodies against any claims brought against the Government or body in respect of damage or loss.

It is recognised, however, that placing unlimited liability on commercial space activities would be a barrier to operating in the UK. Other space nations, such as France and the United States, limit liabilities or provide a state guarantee for the launch activities that take place from their territory. Section 12(2) of the 2018 Act currently provides a power to specify a limit on the amount of the 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. That policy is set out in guidance, and I understand that all spaceflight operator licences issued to date under the 2018 Act contain a limit on the amount of liability. However, those in the industry have made clear, in response to consultation and in other fora, that they would welcome the legal certainty that they will not face unlimited liability when launching or operating a satellite from the UK.

Clause 1(a) amends section 12(2) of the 2018 Act by replacing “may” with “must”. That will change section 12(2) from being a discretionary power to a mandatory requirement by specifying a limit on the amount of an operator’s liability under section 36 in respect of the licence.

Clause 1(a) is a key regulatory improvement to the 2018 Act. It will provide assurance to investors that limits on the amount of an operator’s liability to indemnify Government and other named bodies will be included in licences. However, the existing provisions in legislation about the circumstances in which the limit on the amount of liability does not apply will continue to have effect. They include circumstances in which an operator is liable in gross negligence or wilful misconduct, or in which damage or loss is caused by non-compliance by the operator with its licence conditions, the requirements of the 2018 Act, or regulations.

Clause 1(b) contains a minor but necessary consequential amendment to section 36 of the 2018 Act. Overall, clause 1 meets a key request from the sector. It will also address a recommendation made by the Taskforce on Innovation, Growth and Regulatory Reform.

The amendments made by clause 1 are consistent with Government policy, which is designed to support and grow the UK’s commercial space sector. By setting a clear requirement in law for a limit on operator liability in the licence, the clause will provide UK industry and those looking to invest in the UK with greater certainty, and carry more force than reliance on policy statements and guidance.

As we convene for Third Reading of this vital Bill, I urge colleagues across the House to consider the profound impact it will have on safeguarding British industrial and business interests in the burgeoning field of space and spaceflight. The Bill seeks to address critical uncertainties surrounding liability and indemnity for our space industry, providing much-needed clarity for current and prospective spaceflight operators and investors alike.

[Dame Karen Bradley (Staffordshire Moorlands) (Con)]

I congratulate my hon. Friend on his Bill. Will he confirm that it will give the UK a real competitive advantage in the space industry? It seems to me that it will.

[Mr Lord]

I thank my right hon. Friend for that intervention. I can confirm that the Bill will set us on par with the United States and France, our friends and probably our main competitors in this important arena. The space industry is already worth £17.5 billion a year, and it is estimated that these measures will add tens of billions over the coming decade or more. My right hon. Friend makes a really important point; the Bill will make us competitive in an area where, currently, we are not quite there.

--- Later in debate ---

[Mr Mohindra]

I thank my hon. Friend. Like, I am sure, many colleagues in the House, when I was a child I aspired to be an astronaut. Unfortunately, I was not able to achieve that ambition, but I hope that in today’s debate we will inspire the next generation to ask themselves why they cannot be the next—

[Dame Karen Bradley]

Buzz Lightyear.

[Mr Mohindra]

The next Buzz Lightyear or equivalent in the years to come. We are at the forefront of a cutting-edge industry and are world leaders in many parts of it. I appeal to all colleagues, whenever they go to technical colleges, universities or schools in their constituencies, to inspire that generation to ask themselves, “Why not?”

The Government recognise that the question of liability and insurance is of utmost concern to the space sector. The industry has made it clear that facing unlimited liabilities could have an adverse effect on the UK space flight industry. If a space flight operator’s liability was not limited, space flight companies and investors might move to other jurisdictions that have more favourable liability regimes.

[Dame Karen Bradley]

I congratulate my hon. Friend on his debut at the Dispatch Box. I must anecdotally mention that, when I was first elected, we had a visit from a space shuttle crew. Having real spacemen in Parliament was terribly exciting.

I want to press my hon. Friend on a procedural point. He may know that the Procedure Committee is looking into the territorial constitution and how the scope of Bills can extend beyond just Westminster, and England and Wales, and also looking at ensuring that we speak to our parliamentary colleagues in devolved and other Parliaments. I note that the extent of the Bill covers the whole of the UK, the Channel Islands, the Isle of Man and the overseas territories. He is welcome to write to me about this, but will he set out what work the Government have done to ensure that Parliaments around the United Kingdom and others that are affected know about this Bill, and whether we will be looking to get any legislative consent motions?

[Mr Mohindra]

I thank my right hon. Friend for that intervention. With her permission, I will make sure that I or another Minister writes to her. As she correctly pointed out, Shetland remains very important in the space space, and the Bill incorporates all four corners of our great Union.

I was speaking about the liability regime, how operator liability is limited, and how other states provide guarantees to meet all claims—all those above the operator’s limit on liability—such as the US or France, as has been discussed. That is why the Space Industry Act 2018 contains powers to limit the amount of space flight operators’ liability when carrying out space flight activities from the UK. It is Government policy that the regulator should use these powers and specify a limit on operator liabilities in the licence.

The Bill is therefore fully consistent with Government policy and, furthermore, improves the Space Industry Act by meeting a key request from industry to provide legislative certainty that spaceflight operators will not face unlimited liability when operating from the UK. For those reasons, we are very pleased to support it.