Space Industry (Indemnities) Bill

Lord Moylan Excerpts

2nd reading
Friday 5th September 2025 Lords Chamber

[Lord Moylan (Con)]

My Lords, I thank my noble friend for introducing this Bill, which, although a Private Member’s Bill, received the support of the previous Conservative Government; I understand that it has the support of the current Government as well.

I do not want to sound the slightest bit grinchy in the midst of such enthusiasm for space travel as has been expressed in this debate, but it falls to me, I think, to ask a few practical questions about how this measure is going to operate and what the justification is for transferring this liability to the taxpayer, who has not been mentioned so far by any of the speakers in the debate. We on these Benches obviously welcome the prospect of space travel originating in the United Kingdom. As Conservatives, we particularly welcome the fact that private investors are expected to be the driving force behind this programme. That is right and proper, for the large rewards that may flow to private investors are earned because of the risk they assume, but, if too much of that risk is transferred to the taxpayer, the balance is lost.

This leaves me with some questions for my noble friend and the Minister. First, it is implicit in the current arrangements that insurers are providing, and available to provide, only capped cover for damage caused by operators. Is that correct? Is that insurance available even on a capped basis and is it the norm for current operators?

Secondly, the Government will in future, as a result of this Bill, be obliged to bear the liability above an agreed cap, but we have no indication of how that cap will be determined. How will the Government ensure that they are not accepting an excessive or indeed unnecessary amount of risk on behalf of the taxpayer? Will the Government charge a fee or a premium for the unlimited risk that they are taking on? After all, the arrangement proposed is not unusual. I have it in respect of my own motor car: I have an excess that I have to pay myself, then an unlimited liability passes to the insurer in the event that I cause any damage. But I have to pay quite a chunky premium for that. Will the beneficiaries of this arrangement have to make a payment akin to an insurance premium?

Thirdly, if an operator can obtain free or nearly free top-up cover from the Government, what incentive will he have to maximise cover from the insurance sector? Surely the incentive would be to minimise expensive private insurance and maximise the Government’s indemnity.

Fourthly, risk affects not only balance sheets but behaviour. Someone whose potential loss is fully covered may act more recklessly than someone who has more skin in the game, to use that rather horrible phrase. Are the Government confident that transferring a higher level of risk to the taxpayer will not encourage a more insouciant attitude to safety on the part of operators? I say this with no disrespect to the CAA as the regulator, but it cannot inspect what is going on inside boardroom heads.

On a point of some detail which I am genuinely curious about, I draw attention to Section 4(1) of the Space Industry Act 2018, which provides:

“A person does not require an operator licence to carry out spaceflight activities in respect of which it is certified by Order in Council that arrangements have been made between the United Kingdom and another country to secure compliance with the international obligations of the United Kingdom”.


It follows from this that at least theoretically and in certain circumstances there will be operators operating from the United Kingdom who will not have a licence, because they do not require an operator licence under Section 4(1).

The Bill before us today seeks to moderate the current arrangements through the means of the wording of the operator licence. But in circumstances where there is no licence, it is clear that this Bill is going to have no effect. My question is whether such arrangements already exist and whether there are examples of such arrangements that have been certified by Order in Council. What liability arrangements does the Minister envisage in those circumstances and will he confirm that those liability arrangements are going to remain unchanged?

Would the matter be different if those arrangements were made with a private company? Imagine a circumstance where our obligations under NATO, which are international obligations and so would fall under Section 4(1), result in the United States launching satellites from the United Kingdom. I can understand that happening. What if the United States were to contract that to, say, Mr Musk’s operation—a very likely possibility? How does the liability work in those cases, and will that change as a result of the Bill? If so, how do the Government envisage that working?

I have other questions that I would like to ask, but I think that is enough for the Minister to be going on with. The enthusiasm that we have for space is tremendous and I encourage it. I myself do not expect to see the earth down there below me, not in my time, but no doubt there are younger Members of your Lordships’ House, some of them behind me, who have that prospect, and I wish them well in it. In the meantime, I would simply like to know that we have buttoned down exactly what it is that the Bill is leading to, and that the taxpayer is not going to be given a large liability that should more properly be borne by those who reap the financial and commercial benefits of space travel.

Space Industry (Indemnities) Bill

Lord Moylan Excerpts

3rd reading
Friday 12th December 2025 Lords Chamber

[Viscount Stansgate (Lab)]

My Lords, I will not detain the House, because, as we all know, there is important business ahead. However, I congratulate and thank the noble Baroness, Lady Anelay, for her work on the Bill and for having brought it to the stage where it is poised on the brink of the statute book. As someone who, in the past, has piloted a Private Member’s Bill through to its final stages, I know very well that the Private Members’ Bill procedure can indeed change the law of this country.

The Bill literally changes one word, from “may” to “must”. As a member of your Lordships’ UK Engagement with Space Committee—I am not here to talk about our report, Act Now or Lose Out, interesting though it was—I believe that the Bill will unlock investment and a space economy for the future. The UK could be well placed to play an active part in that. I thank all those involved and wish this Bill very well in the future.

[Lord Moylan (Con)]

My Lords, this is the second Bill this week that, in effect, transfers risk or cost away from private investors to the taxpayer or the fare payer, to help put Britain on the path to industrial success in the future. I say to the Minister, who supports the Bill, that this is a long way from the days of the railways, when private money without government support and without any transfer of risk—and sometimes with private investors losing their funds—built our great railway network. However, it turns out that this is necessary for our success in space and so we support the Bill and congratulate my noble friend Lady Anelay of St Johns on bringing it forward and to a successful conclusion. Like her, I thank not only the Minister for his friendly and open engagement but his civil servants, who have been supportive in this process.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, I thank all noble Lords for their contributions to and support for the Bill. I offer particular thanks to the noble Baroness, Lady Anelay, for steering the Bill through this House and to John Grady for bringing forward this short but important Bill in the other place.

The Government recognise that the question of liability and insurance is of utmost concern to the space sector, given the value that the industry places on having legislative certainty on this matter and the concerns that it has raised about the use of the word “may” in Section 12(2) of the Space Industry Act. I am therefore grateful to the noble Baroness for the Bill, which, by amending Section 12(2), will meet a key request from the sector.