Space Industry Bill [HL]

Lord Fox Excerpts

2nd reading (Hansard): House of Lords
Wednesday 12th July 2017 Lords Chamber

[Lord Fox (LD)]

My Lords, we have heard of “Star Trek”, Dan Dare, Buzz Lightyear and “Star Wars”. I am rather disappointed that no one managed to work HS2 into the narrative—but there may yet be an opportunity. I declare my interests in aerospace as listed in the Members’ register.

We have heard overwhelming support for the spirit of the Bill, with some serious reservations, particularly around safety. In the knowledge-based economy of the future, scientific research, innovation and skills will be important to the prosperity of this country. Any Bill that is aimed at strengthening that has the support of the Liberal Democrats. We have to be in a position to attract investment in the future, supporting the innovative technologies that have been outlined today.

As we have heard from the Minister, the noble Baroness, Lady Bloomfield, and others, we already have a very valuable space industry in this country. The UK Space Agency estimates that it is worth about £13.7 billion —or a 6.5% share of the global space economy. The UK space sector, Space Agency and Innovate UK have the ambitious target of growing that share to 10% of the global market by 2030.

If you look at market trends in the space economy, you will see that there are two major developments. One is large satellites in geostationary orbit delivering massive broadband capability, and the other is the very large constellations of smaller and micro satellites in orbit, also delivering new services such as broadband, connectivity for driverless cars, 5G and other “internet of things” services. As we have heard from many speakers, already in this country we have companies that contribute well to the global economy in both those areas.

It is clear that one of the major bottlenecks in the growth of the small satellite sector will be launch capacity, and we heard from the noble Lord, Lord Dunlop, about the market need. Waiting lists could become prohibitive. If the noble Lord, Lord Moynihan, is correct and there are 10,000 satellites lined up to be launched over the next decades, there will need to be capacity, otherwise the bottleneck will become even more apparent. A lot of the satellite applications which will drive future growth of the UK space industry require those satellites to be launched. In other words, the growth plans for the UK industry cannot be realised unless the satellites are there to create the data opportunities for the industries of the future.

So there is a gap in the market, and the UK could be a competitive alternative to some of the existing facilities and the potential facilities that are being considered. If a low-cost launcher programme could be put together, it could become a workhorse for European satellite programmes—as well as, as we have heard, a jumping-off point for what I call space tourism or lower-level flight.

As the Minister has already said, we are not the only country having these thoughts and considering such legislation. Other European countries have the same idea and are moving forward in this area. It is therefore right that we are trying to move swiftly and it is also right that we should move to the point where we have a flexible legislative environment in place.

The Government’s ambition is not to have a sovereign launch capability; rather, it is, as we have heard, to rely on the private sector to come up with the capital to build several UK spaceports. As my noble friend Lord McNally suggested, the UK Government should not get sucked into draining more from the money tree that we hear about to support this process; there are many other pressing terrestrial travel needs that require investment. We have heard of one example from industry of putting together consortiums. Does the Minister have examples of other groupings coming forward? What kind of support is envisaged along the lines of the £10 million that has been referred to, which seems a large number but also a small one when compared with other transport needs.

The noble Lord, Lord Moynihan, talked about the need for a timetable for approval, which is very important. What kind of time are we looking at? When we consider the example of Russia and building spaceports, we can see that it is a six to 10-year project. We need to know the lead time between when we cut the first grass and actually launch the first satellite or spaceplane. To meet the growth that we need will be the equivalent of creating by 2030 two new Inmarsats—the biggest company we have. Growing this industry to the size that people want will be a big ask and it is important that we get moving on it quickly. As the Minister, my noble friend Lord McNally and others have said, we want to get into a position of being able to drive those technologies with the data that we can produce from satellites. I understand that there is a proposal to use part of Innovate UK’s industrial strategy challenge fund to stimulate the adoption of services, which again would help to develop more space companies. Can the Minister confirm this and explain how it might operate in the future?

There are one or two concerns. Heeding the advice of my noble friend Lord McNally about not going into too much detail on some of the regulatory and insurance issues, I would like to pick up on a couple of points around licensing and insurance for the mega-constellation style of launch. We heard from one noble Lord about the potential for 1,000 micro satellites to be released in a single launch. This creates certain issues. British law currently treats nano satellite constellations no differently from a $200 million satellite in geostationary orbit: in other words, each satellite in a constellation would be subject to a licensing fee of around £6,500 and would have to be covered by its own third party insurance. All of that adds up to a huge sum of money which starts to become a big barrier, particularly when we consider how the US Government deal with similar issues. So I will ask in Committee whether we will have an opportunity to rethink the process. As the noble Lord, Lord Suri, said, we need flexible and appropriate legislation, and this is an area that requires some thought.

The noble Lord, Lord Hunt, raised some thoughtful issues which I am sure that the Minister has taken on board. I would highlight the question of foreign ownership that he mentioned—because, of course, defining the ownership of a company can be extraordinarily difficult. It would be interesting to hear the Minister’s thoughts on that, as well as on the issue of offshore launches.

No Liberal Democrat spokesperson can ever stand up at the moment without mentioning Brexit, so I am afraid that I am going to mention it briefly. First, will we retain full access to the vital EU space programmes? Where are we on that? Secondly, can the Minister confirm that the UK will continue to participate in Galileo and where will we be in Horizon 2020 on this issue? Thirdly, the chairman of UKspace has called for the UK to “enhance” its investment in the European Space Agency following Brexit—a point that was echoed by my noble friend Lord McNally. Our relationship with the ESA, which is not part of the EU, will be an important symbol of our continuing commitment to European co-operation. The Minister’s thoughts on the future of that and how we will take it forward will be helpful.

Finally, other noble Lords mentioned the free flow of talent. The Minister quite rightly talked about wanting to attract world-class scientists to this programme and it being part of a magnet. We need some assurance, not just in this industry but in practically every other technology-based industry and all the university sectors, around free movement of talent and people. To make the UK the most attractive place to work, it has to be a place where people feel welcome, needed and valued.

Another issue that again was touched on by the noble Lord, Lord Moynihan, in his comprehensive speech, was the format of the Bill. He is right that it is substantially less skeletal than it was. My Benches have some concerns about skeletal Bills, not least because we feel that this may be the shape of things to come in other legislation. We recognise that this has been improved but it is not perfect. We would like to put that on record.

My noble friend Lord McNally and the noble Lords, Lord Moynihan and Lord Balfe, raised safety. They are correct. I am sure that we will have an opportunity, given that concern and the importance of the issue, to come back to it in discussions with the Minister and in Committee.

In summary, the space industry is highly collaborative. For us to succeed in it, it has to have access to private and international funding; it has to be able to co-operate extensively with other states and allow the free flow of people and ideas around the world; and it has to be governed by a flexible and facilitating regulatory structure. This Bill provides for only the last of those three conditions. I hope that the industrial strategy will fill in some of those details. Notwithstanding that, it is a welcome Bill.