Space Industry Bill [HL]

Lord Fox Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 18th October 2017 Lords Chamber

[Lord Fox (LD)]

I must confess that in looking at the roster of the amendments, I tried to work out what the main thrust of the argument of the noble Lord, Lord Tunnicliffe, would be for deleting this provision. On hearing his detailed and comprehensive presentation, we find ourselves agreeing that there should be more powers to control noise than are currently available within the confines of the Bill. The noble Lord has identified that the provision may not be the optimal way to deliver that outcome. We would be interested to hear how the Minister might take this issue on board. The planning process should take it into consideration. The rejuvenated noble Lord, Lord Moynihan, will probably suggest that a launching facility that goes out over the sea may be one way of mitigating some aspects of the problems described. However, leaving that to one side, we believe that somewhere in the Bill firmer and more direct controls are needed within the armoury of Ministers.

[Lord Moynihan (Con)]

I thank the noble Lord, Lord Tunnicliffe, for reminding us of the importance that Prestwick Airport has already attached to the noise question and agree with many of the points that he made. Nobody in this Chamber has as much experience or expertise as him when it comes to flying 747s—indeed, it will be principally 747s that are adapted for these purposes. Those airports from which such aircraft currently fly and land will already have taken into account the importance of the noise question. It is vital that the point raised by the noble Lord, Lord Tunnicliffe, be taken into account. There should be full consultation with local communities. This is a new technology for many of them and there will be considerable concern about the level of noise. That should be dealt with through the planning applications that will in many cases be necessary; it should also be done in any event by those seeking licences. They should communicate and engage with local communities and make sure that this point is high on the agenda. If that is what the noble Lord, Lord Tunnicliffe, is aiming for, I support him. I know that everybody associated with Prestwick Airport is already minded to focus on this important issue, although, as was rightly pointed out, we have the benefit of a runway which would be used to take off pretty much immediately over the sea.

--- Later in debate ---

Moved by

[Lord Fox]

38: After Clause 37, insert the following new Clause—
“Consultation on the licensing and insurance of small satellites
(1) The Secretary of State must, within the period of one year beginning with the day on which this Act is passed, launch a consultation on the licensing and insurance of small satellites.(2) The consultation under subsection (1) must explore the following areas—(a) the suitability of a traffic light system whereby small satellites meeting certain launch, orbit and technical criteria can be fast-tracked to licensing;(b) whether in-orbit operations insurance could be waived completely for any such fast-tracked small satellites; and(c) how insurance requirements could be aggregated for constellations of satellites.”

--- Later in debate ---

[Lord Fox]

My Lords, in moving Amendment 38, we seek to insert a new clause after Clause 37 which sets up a consultation on the licensing and insurance of small satellites, including what we call nano satellites, which I will speak to in a moment.

As was alluded to in our previous sitting, when my noble friend Lord McNally spoke about having the right level of liability and governance over these exercises, we seek to set up a process that recognises the varying risks according to the payload to be launched from these facilities. We want to reflect the relatively reduced risk posed by smaller micro-launchers and what are called nano-sat payloads, because both of these are growth industries which would be extremely valuable to the United Kingdom and could be a niche opportunity for such facilities, if they are to be successful. It is essential that the licensing, insurance and range-tracking costs are appropriate to the level of risk to payloads to allow the industry to succeed. We have already discussed how a burdensome regulatory requirement could negatively impact while, at the same time, in a series of amendments and new clauses, we have tried to maintain the right level of oversight.

In particular, a regulatory barrier exists around launch licensing for mega constellations. The current British law treats the nano satellite constellations no differently from large, $200 million satellites that go into geostationary orbit. Each satellite on a constellation is subject to the same licensing fee and must carry third- party insurance coverage of up to €60 million per satellite. Clearly, if there is an array of 750 satellites, it makes the whole affair expensive to insure, and it flies in the face of practice in other regimes, as I understand it.

The amendment would require the Government to consult on the desirability of changing how these small and nano satellites are insured and licensed, to ensure that it would be most beneficial to the industry while at the same time maintaining sufficient cover to be safe. I beg to move.

[Lord Tunnicliffe]

My Lords, this is an interesting point. I hope that the Minister will take it away and give it some consideration. I think we all agree that the whole issue of liability and insurance is important to get right so that the industry does not fail due to crippling cost.

[Baroness Sugg (Con)]

My Lords, I thank my noble friend Lord Willetts, who is not in his place, for his comments in Monday’s debate about the need for flexibility for licensing constellations and the benefits of small satellites. I hope also to address the concerns of the noble Lord, Lord McNally, from that debate about the length of the licensing process and the insurance cost for smaller satellites—and, indeed, nano satellites.

This amendment gives me the chance to explain the work that the UK Space Agency is already doing to improve the current licensing regime under the Outer Space Act. This work is of course relevant to the Bill as, when it comes into force, it will regulate the operation of a satellite in orbit that is carried out from the UK.

The amendment moved by the noble Lord, Lord Fox, would make it mandatory that, within 12 months of Royal Assent, the Secretary of State must issue a consultation. This consultation would explore a traffic light system to license the operation of small and nano satellites, with the potential to waive the in-orbit insurance requirement under certain circumstances for some small satellites fast-tracked under that system. Finally, it would also explore how insurance requirements could be aggregated for constellations of satellites.

The UK Space Agency already has this work in hand, and I shall take this opportunity to set out what it is doing in more detail—at some length, I fear. The agency conducted a review to evaluate how the UK’s regulatory approach might be tailored for the in-orbit operation of small satellite systems. The outcome of the review was a series of recommendations, and comments on these recommendations were invited from industry.

Feedback was also sought at the regulatory advisory group, which is a meeting co-chaired by the UK Space Agency with industry, where the small satellite community is represented. This review allowed the agency to develop the traffic light system which is currently being trialled ahead of full implementation in the near future. This system gives potential applicants of standard, small satellite operations an idea of the likely outcome of their licence application in advance of lodging a full application. It is a fairly simple system. A green rating will be given where a mission is likely to get a licence; an amber rating signals that a mission is likely to get a licence with some modifications or clarifications; and a red rating means that the potential applicant is unlikely to receive a licence.

For recurrent applications for very similar missions by the same operator, the questions an applicant will be required to answer will be streamlined. Where an applicant is engaging in a repeat mission, some answers will be reused by UKSA in order to minimise the administrative overhead to operators. We expect this to speed up the licensing process for these types of missions.

At this point I shall say a few words about the way in which constellations are licensed. A constellation can be launched under a single launch licence if all the satellites can go on a single launch vehicle. However, the activity of operating a satellite also needs to be licensed as the operator needs to be licensed to carry out the in-orbit operation of each satellite. This is to ensure that the regulator has effective regulatory oversight of each satellite within the constellation. That allows the regulator to direct the operator to take action in relation to each satellite without affecting any of the other satellites under the control of that operator. For example, if 100 satellites are to be launched over four launches, an operator would need to submit only four applications and will result in a licence being issued for each of those 100 satellites.

In addition to the satellite system, the UK Space Agency is considering whether, for certain green-rated missions, the insurance requirement can be reduced or even removed. This assessment will be dependent on a number of risk factors, including the satellites’ operating altitude and whether they are equipped with propulsion systems that allow them to avoid potential collisions with other space objects. Furthermore, the agency is already evaluating policy options to tailor insurance requirements for satellite fleets or constellations, which we discussed in the debate on Clause 3. The feedback from industry is that obtaining a set level of insurance cover for every satellite in a large constellation is prohibitively expensive. Such a requirement could also quickly exceed the capacity of the space insurance market.

We understand that we need a solution that is available and affordable but still offers government and the taxpayer protection by providing sufficient funds in the event of a claim. UKSA is currently developing a policy model which is likely to require operators of multiple satellites to hold a given level of insurance coverage for the damage caused to third parties through collisions—in other words insurance per event rather than per satellite.

Key stakeholders will be invited to comment on the Government’s proposed new policy model, which has been developed in response to the space sector’s innovative approach towards new business models and the development of smaller and more capable satellites, including the nano satellite mentioned by the noble Lord. These matters will be discussed at a workshop on the traffic light system and the insurance requirements for small satellites, constellations and fleets, which is expected to take place by the end of this financial year.

As work on both the traffic light regime for small satellites and nano satellites and insurance requirements for constellations and fleets is already well in hand and likely to be finalised within 12 months of the Bill receiving Royal Assent, this amendment is not necessary. While we appreciate the content of the amendment, the agency is already engaging with the industry and a mandatory consultation in this area would be a duplication of work. I therefore ask the noble Lord to withdraw Amendment 38.

[Lord Fox]

I thank the noble Baroness for her comprehensive answer, and I will be studying it closely in Hansard as it is hard to take in on the fly. If she could write to me about the basic criteria used to flag green, red and amber, that would also be helpful, to give an idea of the parameters being used to make those judgments. On that basis, I beg leave to withdraw the amendment.

Amendment 38 withdrawn.

--- Later in debate ---

I wonder how this interacts with the image of a new tourism industry and viewing platforms that the noble Lord, Lord Moynihan, mentioned in his speech on Monday. Will this fit with that concept of how space travel and the space industry will develop in the future? I think again of my happy campers on Shell Island. How will this impact on their summer holidays and on the business that is so well established there? I use that as a real-life example of the kind of impact this kind of activity could have. I entirely endorse the comments of both noble Lords; we need much more precision in these clauses.

[Lord Fox]

Briefly, there seems to be an internal inconsistency around the frequency and the success of these spaceports. Not only is it envisaged that they would launch commercial satellites but that they would launch recreational spaceflights—I believe that was set out at Second Reading. For that dream to be realised, it seems unrealistic that only 12 flights a year would be the norm. Once again, therefore, across the board, the idea that, “It won’t happen very often, so it doesn’t matter”, is not a reasonable response.

[Baroness Ford (CB)]

In the absence of the noble Lord, Lord Moynihan, I would hate the opportunity to go past without mentioning Prestwick and the spaceport again. I have a lot of sympathy with what the noble Baroness, Lady Randerson, says. Although the airport at Prestwick is already well established, with a clear area around it where the public do not come, that will not be true of everywhere. The lack of precision in these clauses, even for somewhere like Prestwick where it is clear where the field of operations will be, still does not do the job. The Government need to think again about being rather more precise in these clauses around what exactly they mean with regard to these restricted areas and what those restrictions will mean. I can see that in other places, where the airport is perhaps not as established or as big, there may be difficulties. I therefore have a lot of sympathy with the noble Baroness’s argument.