Space Industry Bill [Lords]

John Hayes Excerpts

2nd reading: House of Commons
Monday 15th January 2018 Commons Chamber

[Mr John Hayes (South Holland and The Deepings) (Con)]

It is an honour and a pleasure to speak from the Back Benches for the first time not quite in a lifetime but in very many years. It is a particular pleasure to speak in a debate on a Bill that I helped to shape, as the Minister generously acknowledged. I am grateful both for his words and for the words of the shadow Secretary of State. It has been a pleasure to work on this subject, and indeed on transport more widely, with colleagues on both sides of the House.

Reflecting during this sojourn on the Back Benches, I thought that parliamentary and political life constantly gives the impression, perhaps the illusion, of permanence, but in practice it offers the reality of impermanence; all things we do here are ephemeral. Knowing that guides and shapes how we behave; nothing lasts long. However, it is vital that Governments do things that are long lasting, far sighted and strategic, and not simply piecemeal or reactive. Of course Governments must deal with the day-to-day events, the week-to-week affairs of the nation, but they must also set their sights on a more distant horizon, what Kennedy called a “new frontier” and what popular culture called “the final frontier”—of course no frontiers are entirely final for me, as you know, Madam Deputy Speaker, but none the less it is important that Governments do just that.

Governments in democratic polities struggle to do that, partly because of those daily and weekly imperatives; partly because no one wants to take responsibility for big decisions that might go wrong and so it is easier to deal with small things that can be corrected quickly; and partly because the five-year electoral cycle means that they get no credit for planning and thinking through things that might bear fruit 10 years or more later. Governments in democratic polities have a history of not doing those long-term things, so I am pleased to see that this Bill is an exception to that general thesis.

The Bill sets out a way forward for the space industry that is far sighted and strategic. It is vital that we should do so, but there is another challenge for Government in this respect: creating a legislative framework that is sufficient to allow and, indeed, encourage further investment, but not going so far as to attempt to predict an unpredictable future. This is a highly dynamic sector and the technology we are debating this evening will be unrecognisable by the time this Bill bears fruit those five or 10 years down the line, as it grows, alters and metamorphoses. Someone mentioned Reaction Engines earlier, and I was pleased and proud to go there as a Minister to see precisely what it is doing, and to witness and begin to understand—I say no more than that—the technological changes it envisages in propulsion. It is developing a whole new method of propulsion, which will change assumptions about the speed with which we travel and therefore open up all kinds of new chances to do so.

The speed and pace of technological change requires Governments to know when to be modest, as well as when to be bold. This Bill attempts to square that circle; to walk that tightrope, and it does so reasonably well. I acknowledge what the shadow Secretary of State said: when we do that, we risk—perhaps that is too strong and I should say open the possibility of—a great deal of secondary legislation. This Bill is, in essence, a framework, which will require further measures to bring it to life as we are clearer about what is required. That secondary legislation deserves proper scrutiny and should come to this House for consideration in exactly the same agreeable, convivial, co-operative and collaborative spirit that has engendered during the course of our considerations of these matters thus far. None the less, we need to have proper scrutiny, of a non-partisan kind, as we enjoyed in another area we have been debating recently—electric and autonomous vehicles. My legacy is so wide and deep that I hesitate to go further, because we could speak about so many things. I am a man of the future with an eye to the past.

[Sir Oliver Letwin (West Dorset) (Con)]

rose—

[Mr Hayes]

Now I see the past coming back to haunt me.

[Sir Oliver Letwin]

I wish to echo my right hon. Friend’s tribute to himself, as he was indeed a visionary on electric vehicles and there will in due course be a Hayes electric vehicle launched in this country.

[Mr Hayes]

My right hon. Friend and I enjoyed many happy moments—it seemed much longer than that—on the Automated and Electric Vehicles Bill Committee recently. His contribution to that Committee, may I say with absolute seriousness, was very important. It helped to shape and hone the legislation in a way that, had he not been there would not have happened. I could say the same about colleagues on the other side of the Chamber, too. Proper scrutiny in this House does improve legislation and we should never assume that we are merely going through the motions—that is not what this House is about. At its best, it is the very apex of good democratic polities.

[Mr Nigel Evans]

Will my right hon. Friend give way?

[Mr Hayes]

This is going to be a relatively short speech, but I am happy to give way to my hon. Friend.

[Mr Evans]

I am more past than future, that is for certain, but I am as excited as my right hon. Friend about the potential for space development, particularly in a multi-billion industry in the UK, which is growing at an incredible 8% a year. As we have the desire to put more satellites into space, so that we can do all these wonderful things he has spoken about, is he happy and content that the Bill gives sufficient regard to debris mitigation to ensure that we are not just putting more junk for the future into space?

[Mr Hayes]

To avoid delaying the House unduly, I refer my hon. Friend to Room, The Space Journal, which contains an article that I was reading just this weekend on exactly that point. It is headed “Space debris break point” and sets out precisely the kind of risks and problems he highlights. It is unsurprising he does so, given his interest in this subject and the expertise he has gained in it over many years. I am sure that reading that will allow him to take the matter further, perhaps by tabling some difficult written questions for the new Minister, of the kind that my officials used to bring to me, not just often, but daily. I merely echo what he and others have said: that the UK space industry is indeed a leading world player. The income for the industry in 2014-15 was reported at £13.7 billion, which is equivalent to 6.5% of the global space economy. As has been said, it is a rapidly growing industry. It is growing much faster than the economy as a whole. This is something we do well and can do still better, but only if Government play their part.

So what is that part? It is definitely about creating the legal framework necessary to build certainty. Investors will not spend money in the UK space industry, or will not continue to do so, unless they know that the legal framework to provide appropriate protections is in place. Secondly, it is about facilitating and encouraging the co-operation that is at the heart of the industry. I refer to the co-operation between the world of academia, industry and Government. That is what Reaction Engines, for example, embodies; it is an example of such co-operation, and others are too. Thirdly, it is about trying to anticipate those future changes, although not to stipulate them and certainly not to constrain any of the organisations involved in the sector, because, as I have said, there will be secondary legislation. This is just the beginning of a journey—a journey into space, one might say—which is certainly not definitive. It could not be so, because of the nature and the character of the technology with which we are dealing.

There are, though, some challenges with the Bill. I acknowledged them as Minister and know that the current Minister will do so too. There are certainly challenges in respect of liability. I would be surprised if, in our scrutiny of the Bill, we did not face up to that and ensure that the sector feels no doubt about the effect on the wider public of any changes that follow the advent of launch facilities in the UK.

This is not a lesson to the current Minister, because he is already experienced, but it is a lesson to newer Ministers. It is true that some—they may even be civil servants—will say, “But what about state aid, Minister?” There are those who will say, “But what about the Treasury, Minister?” These are always the stock lines. The first is, “The Secretary of State doesn’t agree with you,” to which one says, “I’ve cleared it with the Secretary of State.” They then say, “Downing Street’s not happy,” and one says, “I have been to Downing Street.” They then say, “The Treasury will never wear it,” and finally state aid gets pulled out—“It won’t pass the test of state aid.” I take the simple view that the purpose of a Government is to aid those whom they serve. We should support British industry and the British people. I have never been entirely convinced by the arguments about state aid; what is the purpose of a state if it does not aid the circumstances of the people it serves?

I urge caution—I put it no more strongly than that—that in our consideration of liability we do not allow ourselves to do less than we should. We must leave no third party worse off as a result of anything that occurs in this industry and which follows the Bill. We must leave no one feeling vulnerable and no business feeling that anything that results from the Bill might lead to a vulnerability that might prevent further development of or investment in a technology. The liability issue must be settled.

The second challenge is that of skills. It is known that I take a profound interest in the development of skills and we have made great progress in recalibrating our estimation of the importance of technical, vocational and practical skills. I have long believed that it is those skills, aptitudes, tastes and talents that will allow us to make the best of the opportunities that will grow as we increasingly develop as a high-tech, high-skilled nation. Our future lies in that direction, but we must have the people to make that future a reality.

[Stephen Kerr (Stirling) (Con)]

I add my praise of my right hon. Friend to that already expressed. I served on the Automated and Electric Vehicles Bill Committee—one of my first—for which he was the Minister. It was an illuminating and inspiring experience to be on the same Bill Committee as him and my right hon. Friend the Member for West Dorset (Sir Oliver Letwin). Space has an inspirational value—there is something inspiring about it that really will turn on the younger generation to the study of the technical subjects that my right hon. Friend is describing.

[Mr Hayes]

Yes, it is true—I think the shadow Minister made this point, and perhaps the Minister did, too—that there is a particular allure to this kind of technology. It is exciting. We are reminded of that first space race when, as I said, Kennedy spoke of the new frontier. There is something wonderful and marvellous about looking to the heavens as men and women have looked to the heavens since men and women began, when God made Adam and Eve. It is certainly true that young people will be attracted to the industry, but if we are to take advantage of this opportunity, we need them in significant numbers indeed. It is still true that we underestimate the value of technical and vocational competencies.

Let me cite some figures. According to the OECD, fewer than 10% of the UK adult population aged between 20 and 45 have professional education and training qualifications, compared with more than 15% in the United States and Australia and almost 20% in Germany. It is the mid-range technical qualifications, which lead to higher technical learning, that require greater attention and further progress. As I say, we have made strides, but we can do still more. To satisfy the needs of companies such as Reaction Engines and many others, we will need to do more, and that requires the collaboration that I described. That is the second challenge.

The final challenge is to continue the spirit in which this debate began. We must understand that across the House and throughout the nation there is a willingness to make this work; to make it happen. If we can maintain that kind of enthusiasm—if we can make this glitter and sparkle—we will retain, maintain and grow that spirit. This is a British success story, but we must not rest on our laurels. The Bill is indeed far-sighted, and if it passes Second Reading, receives the scrutiny that it deserves and becomes an Act, it will send a signal to the space industry that not only the Government but more still this House understands the industry’s potential and what can be achieved.

In the end, it will be about changing lives by changing life chances. It is easy for us to define all such matters in technological terms, but really these are distinctly, profoundly human matters. How can space and space travel make lives richer? All that we do with the Bill in this House must be founded on the principle that our duty, indeed our mission, is to promote the common good and the national interest. This Bill does just that.

Space Industry Bill [Lords]

John Hayes Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 6th February 2018 Commons Chamber

[Karl Turner (Kingston upon Hull East) (Lab)]

New clause 2 would ensure that Parliament is kept up to date on negotiations between the UK and the European Union in regard to the UK space industry.

New clause 2 differs very slightly from new clause 1, which was tabled by the hon. Member for Oxford West and Abingdon (Layla Moran). Both new clauses have the same aims. New clause 2 asks the Government to produce a summary of any discussions between the UK Government and the European Union to ensure that Parliament is kept up to date on the progress of the negotiations. Just as importantly, new clause 2 would also provide clarity to the UK’s space industry.

It goes without saying, or at least it should, that the Government must ensure we get the best possible deal with the EU to help support the UK space industry’s continued growth. That is the whole point of the Bill, and it is why the Labour party is broadly supportive of it. UKspace, the trade association of the UK space industry, claims:

“The UK leaving the EU has created significant uncertainty which is already affecting the integrated supply chain, R&D collaboration and joint programmes with other EU countries.”

As colleagues have pointed out, the UK space industry makes a noteworthy contribution to our economy and employs close to 40,000 people. The industry is currently highly dependent on EU-led space programmes. As a result, the Government must ensure the UK gets a deal that secures the long-term future and growth of our space industry to ensure that the Government’s ambition for the UK to be a leading player in the global space industry is not just all talk and no action.

The Government provided a report to the Exiting the European Union Committee with a sectoral analysis of the UK space sector after our Opposition day debate on 1 November 2017—it is fair to say that we forced the issue. We welcome the Government publishing that document. However, the Opposition believe the document is not sufficient and that Parliament should be kept up to date with a further summary, which would also give the sector the additional clarity it asks for.

Any further uncertainty would hinder any potential growth in the UK space industry. New clause 2 is a reasonable and sensible amendment that would require the Government to publish a report setting out a summary within 12 months of Royal Assent, which is absolutely fair.

[Mr John Hayes (South Holland and The Deepings) (Con)]

The hon. Gentleman speaks about growth in the industry. We heard a lot about growth on Second Reading, and the Minister has acknowledged the need for skills. Leaving aside new clause 2, but relevant to it, is there a case for cross-departmental work on developing those skills, given the complexity of meeting the industry’s needs? Would the hon. Gentleman offer that as a possible compromise to the Minister?

[Karl Turner]

The right hon. Gentleman makes an excellent point. I was about to say that I do not intend to divide the House on new clause 2, but I hope the Minister takes his point on board.

--- Later in debate ---

[Carol Monaghan]

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 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.

[Mr John Hayes]

I intend to speak briefly on this issue, having heard what the hon. Member for Glasgow North West (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.

[Layla Moran]

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, 28 November 2017; 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.

[Mr John Hayes]

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.

[Layla Moran]

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.

--- Later in debate ---

[Joseph Johnson]

I thank all hon. Members who have spoken to the measures tabled by the hon. Member for Central Ayrshire (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 the Member for South Holland and The Deepings (Mr Hayes), including with regard to the licensing of UK entities carrying out certain space activities and in the development of all 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. 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.

[Mr John Hayes]

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.

[Joseph Johnson]

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.