Space Industry (Indemnities) Bill

Lord Moylan Excerpts

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.