Space Industry Bill [Lords]

Layla Moran Excerpts

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

[Layla Moran (Oxford West and Abingdon) (LD)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss new clause 2—Potential impact of leaving the EU on the UK space industry (No.2)—

‘(1) The Secretary of State must, within 12 months of this Act receiving Royal Assent, lay before Parliament a report setting out a summary of any discussions between the UK Government and the European Union on the future relationship between the UK space industry and the European Union, following the UK’s withdrawal from the European Union.

(2) The report under subsection (1) must make reference to, but is not limited to—

(a) options for future cooperation and partnership between the UK space industry and the European Union; and,

(b) any new arrangements with, or proposed access to, EU space programmes, following the UK’s withdrawal from the European Union.’

This new clause would ensure that Parliament is kept up to date with negotiations between the UK and European Union in regards to the UK space industry, in order to provide clarity to the UK space industry

[Layla Moran]

I rise to speak to new clause 1, which is in my name and those of my right hon. and hon. Friends and would require the publication of an assessment of the impacts of leaving the EU on the space industry. I do not wish to take up too much of the House’s time rehashing the arguments about the impact of Brexit on the space industry, as many such arguments were made on Second Reading, in Committee and in the other place, but I briefly want to place on the record the industry’s continuing concerns, which should require the Government to publish an assessment of the sort set out in new clause 1. I will take each of the areas that I would like to see in such a report in turn, starting with research and development and Horizon 2020.

The Minister is a former Science Minister, so I do not need to explain to him the importance of certainty for scientists in the space industry. Sadly, however, we still do not have that certainty so many months later. The UK is a net beneficiary of EU space funding, contributing 12.5% of the total budget but winning contracts worth 14% of total spend. The British space industry needs a guarantee of continued access to research and development funding, expertise and facilities currently provided at EU level after the UK leaves the EU. Of course, the European Commission also provides space-related research funding through Horizon 2020, and the Government have said they will guarantee successful bids made by UK participants before exit. However, beyond that the sector has had only warm words, and it needs certainly beyond the next few years. The Government’s science and innovation discussion paper states that the UK would “welcome discussion” on remaining a participant in certain EU science and innovation programmes.

[Mr Jim Cunningham (Coventry South) (Lab)]

If the guarantee is only for another two years, there will be a profound effect on research and development, particularly in universities. If there is no guarantee beyond that, there will be a great deal of uncertainty for both universities and the industry.

[Layla Moran]

The hon. Gentleman is right, and my constituency is affected by such uncertainty.

I repeat a point that I made during the passage of the Nuclear Safeguards Bill: we must remember that this is not just about funding. At a recent hearing of the Public Accounts Committee, of which I am a member, witnesses were clear that the most valuable asset we have as a nation is our ability to attract human capital. To put it bluntly, the funding follows the brains. There is real consternation across the entire science industry that European scientists are actively looking to move, if they have not already, to more welcoming countries. Their lives are more than just their jobs; this is about where they live, love and participate in the community, so the tone of this debate matters hugely. It is therefore critical that we maintain freedom of movement for the world-class scientists, specialists and technicians who contribute to the space industry, so that we keep those brains and the funding here.

Patrick Wood, CEO of Surrey Satellite Technology Ltd, an existing supplier to Galileo, has said that

“there are still a lot of unknowns”

about whether UK space companies will be able to access high-quality staff post-Brexit, noting that UK space infrastructure companies

“have a high percentage of staff that come from across Europe”

partly due to a lack of UK applicants. Aerospace companies are heavily reliant on the rapid movement of workers between different sites. A favourite fact of mine is that Airbus moved employees 80,000 times between the EU and the UK in 2016. It even has its own jet shuttle between Toulouse and Broughton. Any additional border checks between the UK and the EU could therefore prove a significant burden.

On Galileo, the European Commission is demanding the right to cancel existing contracts with UK companies that are constructing the £10 billion Galileo satellite navigation system unless the UK negotiates a new security relationship with the EU. If no long-term agreement can be found, UK companies may only be able to retain their contracts by setting up EU subsidiaries. With them will go the tax take, the brains and the supporting jobs.

Finally, I turn to the crucial effect of leaving the single market on supply chains within the UK space industry. Last year, I asked the Minister, in his former role, a series of parliamentary questions about the impact on the UK space sector supply chain of leaving the single market, but sadly there was not much in the answers to give heart to the industry. It has just not received the answers that it needs. Stuart Martin, CEO of the Satellite Applications Catapult said that

“Brexit represents a risk to the United Kingdom in sustaining its leadership position”

among sectors such as satellite manufacturing and navigation services. He also stated that the UK needs to sustain its leadership role within the European Space Agency and maintain access to the single market. Before anyone says, “But we will stay in the European Space Agency,” yes we will, but we must not forget that a quarter of its funding comes from the EU.

It is clear that the industry needs certainty on all those issues. We have had warm words, but not enough action. The Government’s shambolic handling of impact assessments and sectoral analyses, as well as this week’s uncertainty over future customs arrangements, is not inspiring confidence among the space industry. There are few specific commitments or guarantees in the Bill, so it is not unreasonable for the Government to publish an assessment of the sort that new clause 1 would require, and I hope that the Minister will consider doing so.

[Carol Monaghan (Glasgow North West) (SNP)]

I start by passing on the apologies of my hon. Friend the Member for Central Ayrshire (Dr Whitford), who has been heavily involved in the Bill since the beginning. Unfortunately, she is extremely unwell this week and has uncharacteristically heeded her daughter’s advice by staying at home, but she is no doubt watching from her sickbed.

I rise to support new clauses 1 and 2, which attempt to ensure a proper assessment of the potential damage that an extreme Brexit could cause our space industry. During the passage of the Bill, we have had a glimpse of the opportunities ahead for the UK’s space industry, but this relates to the wider reaches of the EU. The EU funds space research through Horizon 2020, and we want to ensure that we remain a player beyond that point. Although the European Space Agency is separate from the EU, it does still receive significant funding from it, so we need to know whether the Government have made any assessment of the impact of Brexit on our space industries. Given the previous impact assessment fudge, the answer is probably, “Probably not, but if we have, we will not be publishing it anyway.” That is simply not good enough. The new clauses make it clear that the Government will make that assessment and will publish it. If they do not accept these amendments, the question must be: what do the Government have to hide?

The European Commission has made it clear where it wants to go on space, so do the Government intend to remain part of the strategy and programme it has outlined? If we are not an integral part of the European space programme, what will be the impact on our viability as a spaceport centre, compared with other spaceports located within the European family?

How will we retain access to EU research and development projects, which are so important to our space industry? As has been mentioned, how will changes to freedom of movement affect this industry, an industry that exchanges talent across frontiers on a regular basis? Not all that talent will be at a salary threshold that allows easy access to the UK. Will we retain full access to programmes such as Galileo and Copernicus? Will we be marginalised in EU procurement decisions?

Those are all important questions for the Government to consider now, and they should be included in any impact assessment.

--- Later in debate ---

[The Minister of State, Department for Transport (Joseph Johnson)]

Like the hon. Members for Oxford West and Abingdon (Layla Moran) and for Glasgow North West (Carol Monaghan) and my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), the Government want the UK to make the most of the opportunities that lie ahead. We want the UK to be a go-to place for scientists, innovators and tech investors in the years ahead. We intend to secure the right outcomes for the UK research base, including our space community, as we exit the European Union.

As hon. Members will remember, the agreement that successfully concluded phase 1 of the exit negotiations in December 2017 made it clear that, as part of the financial settlement, the UK will remain part of Horizon 2020 until at least the end of this budget period in December 2020. As part of the new deep and special relationship with the EU, recognising our shared interest in maintaining and strengthening research collaboration, the UK will seek an agreement that promotes science and innovation, including on space, across Europe now and in the future. We would welcome a specific agreement to continue collaborating with our European partners on major science, space research and technology initiatives, and we will be approaching the upcoming negotiations on that basis.

New clause 1 would require the Government to undertake an assessment. As Members will remember, the Secretary of State for Exiting the European Union provided the relevant Select Committees with reports on many sectors, including the space sector, on 27 November 2017. The space sector report contained a description of the sector, the current EU regulatory regime, the existing frameworks for facilitating trade, including between countries, and the sector views on it. Ministers have a specific responsibility, which Parliament has previously endorsed, not to release information that would undermine our negotiating position, and I know Members present understand that position.

On new clause 2, the Government’s September partnership paper set out our intent with regard to discussing options for future co-operation and partnership with the EU through the EU space programme. The Secretary of State for Exiting the European Union has given a clear undertaking to the House that he will keep the relevant Select Committees informed of progress in discussions with the EU Commission on EU exit matters. That commitment to openness needs to be balanced with the overriding national interest in preserving our negotiating position.

I recognise the interest of the hon. Member for Kingston upon Hull East (Karl Turner) in how our future relationship with the EU will help support the continued strong growth in the space sector—it is an interest the Government share—but I hope he will appreciate that we cannot enter into commitments to inform Parliament about the EU exit negotiations on a sector-by-sector basis, through various bits of legislation. In the light of that, I ask the hon. Member for Oxford West and Abingdon to withdraw new clause 1.

[Layla Moran]

I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New clause 3

Publication of regulations

‘(1) The Secretary of State must, within 12 months of this Act receiving Royal Assent, lay a report before Parliament setting out details of the regulations issued under this Act.

(2) The report in subsection (1) must include, but is not limited to, regulations that have effect for licences for—

(a) spaceports;

(b) launch operators;

(c) satellite operators; and

(d) range control operators.

(3) Before exercising their duties under subsection (1), the Secretary of State must consult the Scottish Government, the Welsh Government and the Northern Ireland Executive and have regard to their views in respect of any proposed regulations.

(4) As well as consulting those in subsection (3) the Secretary of State must consult with—

(a) UKspace, and

(b) any other such persons as the Secretary of State considers appropriate.” .—(Carol Monaghan.)

This new clause would require the Secretary of State to publish clear guidelines on the regulations issued under this Act.

Brought up, and read the First time.

--- Later in debate ---

[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.