‘(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—
(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.
With this it will be convenient to discuss the following:
New clause 4—Cap on licensees’ liability limit—
(2) Before exercising their duties under subsection (1), the Secretary of State must carry out a consultation on what an appropriate maximum limit would be on the amount of a licensee’s liability, and lay a report before Parliament setting this out.
(3) The report under subsection (1) must provide for, but is not limited to—
(a) a maximum limit on the amount of a particular licensee’s liability for each launch undertaken by the operator;
(b) a maximum limit on the amount of licensees’ liability for each launch classification type;
(c) divisions of responsibility and the level of liability for parties’ spaceflight activities, including—
(i) the Spaceport;
(ii) the launch operator; and
(iii) the satellite operator.
(4) In subsection (3) “launch classification type” means the level of risk attached to each type of launch as determined by the regulator.
(5) 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.
(6) As well as consulting those under subsection (5) the Secretary of State must consult with—
(a) UKspace, and
(b) any other such persons as the Secretary of State considers appropriate.”
This new clause would require the Government to consult on and set a mandatory cap on licensees’ liability for each individual launch, based on the classification type of each launch.
Amendment 4, in clause 9, page 8, line 24, at end insert—
‘(10) The Secretary of State must, within 12 months of this Act receiving Royal Assent, publish guidance about any regulations in relation to operator licences. Such guidance must be issued by the regulator (if the regulator is not the Secretary of State).
(11) The regulator must hold pre-licensing discussions with any potential operator before an operator licence can be issued to them.
(12) Discussions under subsection (11) must include, but are not limited to, providing potential operators with guidance on any regulations in relation to operator licences.”
This amendment would require the Secretary of State to publish guidance about any regulations issued in relation to operator licences, and to hold discussions with all potential operators before a licence can be issued to them, to ensure that the UK space industry is sufficiently aware of the regulatory framework.
Amendment 1, in clause 68, page 44, line 35, after “offences,” insert—
“(n) regulations under subsection (1) of this section”
This amendment would make regulations made under section 68(1) subject to the affirmative procedure.
Amendment 2, in schedule 6, page 61, line 2, after “authority” insert “and devolved administration”
This amendment would make it a requirement that when an order is made to obtain rights over land, notices about the orders must be served to devolved administrations, where relevant.
Amendment 3, page 61, line 22, after “authority” insert “and devolved administration”
This amendment would make it a requirement that when an order is made to obtain rights over land, notices about the orders must be served to devolved administrations, where relevant.
Once again, this amendment stands in the name of my hon. Friend Dr Whitford, who cannot be here this afternoon. New clause 3 will ensure that guidelines for spaceports are clear and published, and take into account the views of devolved Administrations and stakeholders. The devolved nations currently have the majority of the sites being considered for spaceports, so we are looking for some consultation in the event of rights being taken over land that would be with the devolved Government.
The lack of a liability cap in the Bill is causing us concern. New clause 4 would ensure that there must be a cap. It calls on the Government to come to Parliament, after consultation, and provide their plans on what an appropriate cap would be. A liability cap would bring our space industry into line with those of Australia, France and the USA, which is the world space leader. The purpose of the liability cap is to allow spaceflight operators to obtain affordable insurance—without it, the prohibitive cost of obtaining insurance for unlimited liability would undermine the growth of the space industry in the UK, which is the key point of the Bill. Simply put, without a cap in place, launches will not take place in the UK.
The industry stakeholders’ main worry with the Bill is the absence of a mandatory liability cap for spaceflight operators. The Government have said that they need to be flexible but, if the industry is calling for a cap, they need to both listen and take action. We understand that a cap level will not necessarily be set at this point, but a guarantee that there will be a cap would go some way to providing assurance to the industry. The chairman of UKspace, Richard Peckham, has said that insurers have made it clear that they would not be prepared to do business without a benchmark, so it is vital this takes place.
Our new clause 4 would allow the Government to be flexible on the liability cap by creating different caps for different launches, given there will be quite a broad range of risk depending on the scale of the satellite. One mechanism that has been discussed in Committee is the red, amber and green risk assessment to describe different types of missions, with a different cap for each type of mission. I am not entirely convinced that that would be entirely useful, as clearly those classified as a red risk would not get a licence. However, this could be done by class, for example, with horizontal take-off vehicles carrying cube satellites being given a different classification from a vertical take-off vehicle carrying large satellites, as has happened elsewhere.
It is also important that we do not speak about liability per satellite and actually move towards a cap based on a per-launch system. That would be better suited to much of the growing UK industry. In Committee, I mentioned the importance of the cube satellite industry to Glasgow, which is second in the world, behind San Francisco, in the manufacture of cube satellites. Such satellites are often launched in clusters. If the figure for a liability cap were to be €60 million for each one of these tiny satellites, that would be prohibitive in terms of growing the industry.
In the longer term, this issue could affect where future developments take place in the space industry. Some countries do not require satellites to be built locally, whereas other jurisdictions require satellites that are being launched to be built in the local area or in the country of launch. If cube satellite businesses do not get a mandatory liability cap in this Bill, there is a danger that future investment will be affected and a real possibility that when those businesses are looking to expand, they will do so in a jurisdiction where liability is capped and insurance can be obtained.
That is exactly how the liability works: the insurer covers up to whatever that liability is and the rest is picked up by Government. Once that is picked up by Government, we have to look at the revenue that is generated from that industry and at the amount of growth and jobs created. If we look at proper regulations on our spaceports, liability or risk will be extremely low. Every other country that is launching has a liability cap. We cannot possibly compete unless we have that in place.
As I have said, I understand that the Minister has committed to looking into the issue of the cap and talking to industry leaders about this issue. As I have also said, I am not pressing today for a figure, but the indication that a cap will be in place will provide great reassurance for the UK space industry and will allow it to grow in the way in which we hope it will.
In Committee, I heard the hon. Lady press the case for an unlimited liability cap. I also heard the Minister give an extraordinarily good and detailed explanation of the work that needed to go into the detailed preparation for such a cap. That is why it was decided in Committee not to put this measure in the Bill, by a vast majority, with cross-party support. It is not that we do not understand the need for this, but it needs to be set in the correct way.
I thank the hon. Lady for her contribution, but I think she is missing the point, which is that there must be a cap in place in order for these companies to get insurance. Without it, they cannot get insurance and without insurance, they cannot launch. If the Government are considering this cap, why is it not in the Bill? Why does the Bill not contain a statement that a cap will be put in place? I am not asking for a figure and I certainly did not talk about unlimited liability; we talked about limited liability. Unless this is in place, we are stifling a serious growth industry. So I call on the Government to accept the new clause and to listen to the concerns of the space industry.
I intend to speak briefly on this issue, having heard what 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.
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,
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.
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.
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.
On amendments 2 and 3, it was noted in the other place that clauses 39 and 41 are essentially planning powers, so I question why they are going to be held in Westminster. It seems to me that the security powers should be shared between Westminster and the devolved Administrations. The Bill should enshrine a formal relationship between the UK and devolved Governments over the securing of launch sites, and there should be specific reference to the need of the UK Government to gain the consent of devolved Ministers, not least because as things currently stand information on the launch sites would be published in local papers, which would be the point at which civil servants in the devolved Administrations might find out.
The Government should go further and create a formalised process whereby the devolved Administrations could object to orders made under clauses 39 and 41. Amendments 2 and 3 would do just that by requiring notices of such orders to be sent to the devolved Administrations, where relevant, in addition to local authorities, so that they would be officially informed that an order had been served, rather than having to read about it or use some sort of grapevine to do their jobs well. I hope that the Minister will see that that would be a sensible step and accept the amendments.
I rise to speak to amendment 4, which I tabled, as well as the remaining new clauses and amendments.
Amendment 4 would give clarity to the UK’s space industry. As it stands, the Bill makes no provision to ensure that the industry works with the Government to create the regulatory framework that it so badly needs. The amendment would increase the focus on making the UK commercially attractive for potential spaceflight operators. As with new clause 3, the amendment was tabled to press the Government to publish clear regulations for the UK space industry, which is one of the Bill’s key issues.
Under the amendment, the Secretary of State would have to publish guidance for any forthcoming regulations and hold regular discussions with any potential operator before a licence was issued. The UK’s space industry needs as much clarity as possible; we do not want further uncertainty that may hinder growth. If the Government do not get this right, they could quite possibly deter investment, recruitment and growth in the space sector. It will be interesting to hear the Minister’s views.
Labour Members are generally supportive of the aims of new clause 3, which was tabled by Dr Whitford. The Bill does not set out the criteria for awarding licences, and nor does it describe the procedures in any great detail, which is a problem issue. When I spoke to new clause 2, I alluded to the fact that Labour wants the UK space industry to grow in the coming years, but the Government need to get this legislation right and have had the opportunity to do so. The industry must be made aware of regulations. We agree that the Government should lay a report before Parliament setting out the proposed licensing regulations in detail. That is fair and reasonable.
On new clause 3(3), Labour tabled an amendment in Committee that would have ensured that if space activities were established in any of the devolved Administrations of Scotland, Northern Ireland and Wales, their respective environmental agencies and bodies, and respective Governments, would be consulted before any decision was made to grant an operator licence in their jurisdictions. Unfortunately, our amendment was defeated, so I welcome new clause 3, which presses the issue a little further.
The hon. Member for Central Ayrshire also tabled new clause 4, which deals with the liability issue that came up time and again in Committee.
My hon. Friend makes an excellent point. He is right to say that 40,000 jobs rely on such a measure. Colleagues on both sides of the House have made the point that investment may be deterred if that is not in place.
New clause 4 deals with this very important issue of liability. The issue has been raised at every stage of the Bill’s consideration, both here and in the other place. Labour broadly supports the Bill, as we have reiterated throughout its passage, because we want the industry to grow so that high-skilled, high-paid and secure work is created across the country. Labour previously tabled amendments to get a discussion going about a liability cap. My colleagues in the other place tabled an amendment that would have removed any cap on a licensee’s liability, but that was merely a probing amendment with the intention of grabbing the Government’s attention so that they would seriously consider providing for a definite liability cap in primary legislation. I am grateful to my colleagues in the other place for the work that they did. As I said in Committee, we were never opposed to a cap; we just wanted some clarity from the Government, as they must get this right. I think it is fair to say that the Government have listened carefully to the points we made in Committee.
The UK space sector has made repeated representations to the Government that they should implement a cap for UK-licensed satellite launch operators. Britain’s space industry wants the Government to introduce a cap, I think at around €60 million. The Bill makes no mention of that, apart from the vague and lax use of the word “may”, which has now been amended to “must”. We are aware, however, that the Government stated previously—I think in Committee—that they opposed writing into legislation a mandatory cap on liability, as well as mandatory compensation from the Government, because that might breach state aid rules. I would be really grateful to the Minister if he clarified this particular point.
The industry has maintained throughout that it would not be able to secure insurance without a benchmark liability figure. The ambiguity from the Government on this issue could put off potential investment in the industry, as we have already heard, and harm the growth that the Bill sets out to achieve.
Requiring the Government to consult on and set a mandatory cap on a licensee’s liability for each launch individually, as well as basing it on the classification type of each launch, is reasonable and fair. We believe that the Government need to look again at this, and I see that the Minister is taking note of what is being said.
I will speak very briefly to Liberal Democrat amendments 1 to 3. Amendment 1 would make regulations made under clause 68 subject to the affirmative procedure. In the other place, Labour colleagues worked on a cross-party basis, it is fair to say, in an attempt to ensure that a number of the regulations under the Bill would be subject to the affirmative procedure. Labour also tabled a similar amendment in Committee. We are grateful to the Government for listening and taking on board the concerns raised in the other place, and the Bill now ensures that there is enhanced scrutiny of regulations under the affirmative procedure, which I am very glad to see.
Amendments 2 and 3 to schedule 6 are about ensuring that the devolved Administrations are notified when an order is made to obtain rights over land. In Committee, Labour tabled an amendment to ensure that, before any decisions or notices were made, there would be consultation with not only the relevant environment agencies of the devolved Administrations, but the devolved Administrations themselves. I pressed that amendment to a Division because I did not think that the Government went anything like far enough to ensure that the devolved Administrations would be involved in the overall process. Unfortunately, that amendment was defeated, but I hope that the Government have now fully appreciated its intent.
I thank all hon. Members who have spoken to the measures tabled by Dr Whitford. In addition to new clause 3, she tabled new clause 4, which would introduce a mandatory requirement for the Government to lay a report before Parliament setting out their plans in relation to a cap on a licensee’s liabilities. The new clause would also mandate consultation with the devolved Administrations and UKspace, a trade association of the UK space industry. The Government have consistently listened to the industry’s concerns about liabilities, dating back to the early development of our policy by my right hon. Friend Mr Hayes, including with regard to the licensing of UK entities carrying out certain space activities and in the development of all of the provisions in the Bill.
The Government are well aware that the main space launch nations, including France and the US, limit a launch operator’s liabilities in some form, which is why the Bill contains powers for certain liabilities to be capped in licence conditions by way of regulations. Having such powers enables the UK to compete on a level playing field and allows the Government to share the burden of liabilities with operators.
However, launch from the UK is a new activity, and we should cap a launch vehicle operator’s liability, and thereby confer contingent liability on the Government, only if there is clear evidence that that is necessary. It is therefore important that the Government are able first to gather such evidence. In order to do that, as has been highlighted in earlier stages of the passage of this Bill, we will undertake a call for evidence specifically on liability and insurance, and that will take place shortly after Royal Assent.
Alongside that, the UK Space Agency is already working on, and considering its approach towards, risk assessment, insurance and liability requirements for launch activities taking place from the UK. If, following that work and the call for evidence, a cap on the launch vehicle operator’s liability for launch activities taking place from the UK is deemed appropriate, a full consultation will take place, which will include the publication of Government proposals and draft regulations. As I have said, this will be an open and comprehensive consultation that will include the devolved Administrations. Any proposals outlined in such a consultation will be subject to compliance with relevant trading rules, whether they are EU state aid rules, or other rules applying after our exit from the European Union.
It seems that the Minister has exceeded even my expectations. The big billing that I gave him was entirely justified, because he has addressed exactly the point that was made earlier: we need to know precisely what the circumstances are as launch facilities are developed. The combination of a call for evidence and a potential consultation seems to go a very, very long way towards what those who asked for further work on liability wanted to achieve. I am delighted to hear what he has said in his brief contribution.
I thank my right hon. Friend for his support for the Government’s approach of gathering the evidence base in a call for evidence, and then, if necessary, holding a further consultation, particularly involving the devolved Administrations.
Can the Minister offer any timeframe for the consultation and the ongoing process, because the industry would welcome that?
The Government have committed to launch the call for evidence as soon as the Bill receives Royal Assent, which we hope will not be too long now. Should the evidence show that there is demand and a need for a liability cap of the kind that the hon. Lady has been describing, we will launch a formal consultation at that stage. That consultation will, properly, involve the devolved Administrations and others with interests in this matter.
Through amendment 4, Karl Turner rightly raises the importance of the timely provision of guidance to applicants for spaceflight operator licences, and the benefits of pre-application discussions between prospective applicants and the regulator. The Government fully recognise that all potential licence applicants under the Bill—spaceports, satellite operators, range control service providers and spaceflight operators—will need to understand the regulations and processes with which they will need to comply. I hope that my earlier responses to Carol Monaghan, who is speaking on behalf of the hon. Member for Central Ayrshire, have helped Members to understand the approach that we will be taking.
Pre-licence application discussions are already a key part of current Civil Aviation Authority and UK Space Agency licensing, and they will remain a central part of the process for licences under the Bill. Such discussions benefit prospective licence applicants and the regulator, because they help to build effective working relationships. The hon. Member for Kingston upon Hull East will be pleased to know that discussions of this sort are already under way with a number of interested companies.
Finally, I turn to the amendments tabled by Layla Moran. As hon. Members are aware, the Government have made considerable concessions in relation to delegated legislation under the Bill. We listened to concerns previously expressed about clause 68, and have been convinced by arguments that there is a need for enhanced parliamentary scrutiny in some areas. The Bill has therefore been amended to include a statutory duty to carry out a public consultation before making any regulations under the affirmative procedure. The Secretary of State will report to Parliament about any such consultation. It is proposed that subsequent regulations, if any, that would materially change the substance of the original instruments would also be subject to consultation. Amendment 1 would lead to a duplication of effort, and it is therefore not required.
The same is true of amendments 2 and 3, which once again raise the involvement of the devolved Administrations in the making of orders under clauses 39 and 41. The amendments are similar to a measure that was tabled by the hon. Member for Central Ayrshire in Committee. Without going into the same level of detail, I will take this opportunity to remind hon. Members that before the introduction of the Bill, officials worked to agree this set of land provisions, and the devolved Administrations have confirmed they are content with them.
The current drafting of schedule 6 requires that notice of a proposal to make an order under clauses 39 or 41 must be published in local newspapers and served on the local authority. This gives a devolved Administration the opportunity to raise any concerns about a specific order. Should the devolved Administration be aggrieved by the making of an order, it will have the opportunity to apply to the High Court for the order to be quashed, as is provided for by schedule 7.
I reiterate the fact that any orders made under clauses 39 and 41 will be compatible with existing planning legislation, which means that nothing in the Bill will restrict the ability of local planning authorities to take planning decisions. That is important because it means that, should Ministers in the devolved Administrations wish to call in any planning decision in relation to the development of a spaceport site, their right to do so will not be affected by any provision in the Bill.
On that basis, I ask the hon. Member for Glasgow North West, speaking on behalf of the hon. Member for Central Ayrshire, to withdraw new clause 3.
I am happy to withdraw new clause 3, so I beg to ask leave to withdrawn the motion.
Clause, by leave, withdrawn.
New Clause 4