Space Industry (Indemnities) Bill

John Grady Excerpts

Friday 4th July 2025 Commons Chamber

[John Grady (Glasgow East) (Lab)]

I beg to move, That the Bill be now read the Third time.

I will start with a short summary of the Bill. Which will amend two sections of the Space Industry Act 2018 to provide legal certainty that all spaceflight operator licences must include a limit on the amount of the operator’s liability to the Government under section 36 of the Act. The reason for that is that under international law applicable to space, Governments including the UK are liable for damage to property or death or personal injury caused by space activities. Section 36 passes on that liability to spaceflight operators and requires them to indemnify the Government. Without legal certainty over a cap, much-needed investment in the UK space industry, which is critical for defence and civilian purposes, will be held back, and that investment will go elsewhere. That is the purpose of the Bill: to encourage vital investment in our space sector, of which we should be proud.

I realise that parliamentarians in this place have not always been enthusiastic about space. When the Soviet spacecraft Luna 2 reached the surface of the moon on 13 September 1959, the Foreign Secretary Selwyn Lloyd, who went on to be a Speaker of this place, reacted with great enthusiasm. He said:

“I don’t think many people are terribly interested in the Russian rocket”,

despite it being historic. Harold Macmillan, on the other hand, was much more enthusiastic. When Armstrong and Aldrin were waiting in the lunar module, and we had had a man on the moon, Harold Wilson said:

“We must all be filled with a profound sense of wonder and admiration in witnessing this historic event.”

In fact, the UK played an important role in that space mission, and UK industry was involved, too. There was somewhat of a stooshie—a Scots word for a row—about the failure of the British ambassador to attend the launch, and his letter in the National Archives explains why. His explanation basically boils down to the fact that he had been to one previously, and that once you have seen one space launch, you have seen them all. It just goes to show that the importance of the special relationship is nothing new, but it did cause somewhat of a stooshie. Of course, nothing in 1969 was as important as Newcastle United winning the Inter-Cities Fairs cup.

[Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)]

My hon. Friend just talked about the importance of the space sector to so many of us and, indeed, to the whole of the UK. Will he join me in welcoming this Labour UK Government’s investment in the space sector in Scotland?

[John Grady]

Yes. The UK Government have invested in Orbex, in Forres in the north of Scotland. It remains important to give grants to earlier-stage companies because they cannot get the equity and debt funding that more advanced companies can, so I welcome that important investment.

The space sector and satellites are central to almost everyone’s day-to-day lives. When we tap in and out of the underground on the way home or when we purchase things, that relies on satellite technology. Space is also a key focus for the national wealth fund, as confirmed by Lord Livermore, who is Financial Secretary to the Treasury, and John Flint, the chief executive of the national wealth fund, when we discussed the fund at the Treasury Committee this week. Space is an important future business for Britain, and an important economic opportunity.

Another reason why it is important to invest in space is for defence—it is critical to the defence of the United Kingdom. If we have a vibrant space industry in the United Kingdom, that will support the technological innovation we need to defend our country and our allies as we move into a much more difficult foreign policy context.

[Peter Lamb (Crawley) (Lab)]

I am sure my hon. Friend will be aware of the role that the Starlink system has played in Ukraine in enabling the frontline operations of the Ukrainian army. For a very long time, GPS was the main determinator of whether Trident could arrive at its destination. It strikes me that in some ways the technology, our ability to put things into space and what we are putting up there will be what absolutely determines the nature of warfare in the 21st century; does my hon. Friend agree?

[John Grady]

My hon. Friend makes an important point. The UK Government have committed to investing in defence and in advances in tech defence. As we develop defence, investing in space is utterly critical and central to that. It is a matter of some regret that Scottish companies that invest in military matters are not funded by the Scottish National Investment Bank or Scottish Enterprise, because they have the view that we should not invest in defence, even though it will create jobs and is important for defending the north of Scotland, which is where my mother came from and which is now very important for defence.

I am an MP for Glasgow, which has a rich history of innovation and an incredibly promising cluster of space expertise. My seat has the fantastic University of Strathclyde. I recently met Professor Malcolm Macdonald from the university, who is the director of the centre for signal and image processing and the applied space technology laboratory. He outlined to me with great enthusiasm and knowledge the amount of innovation in the space sector in Glasgow and across the United Kingdom. This is a critical industry that we must invest in and for which we must create the conditions of investment. Around 52,000 people work in the space sector across the UK, so this is a big opportunity.

Let me turn to talk about precisely what the Bill does, albeit with four words: it seeks to limit space operators’ liability. I emphasise that spaceflight activities are heavily regulated by the UK Civil Aviation Authority for safety. There is day-to-day scrutiny of their safety from an expert safety regulator—the CAA is one of the best regulators in the world—so we are concerned with small risks that are reduced to the very minimum extent possible by a very strong regulatory regime. One of the reasons why our family of nations has a great advantage in space is that because we are right at the end of Europe, we have a great place to launch, because we do not launch over big urban areas. If we go right up to Shetland, there is nothing for hundreds of miles.

There are treaties under international space law, and the UK Government have a long-standing legal liability for damage caused by UK spaceflight-related operations. Despite the space safety regime, there is a residual risk that things go wrong and the UK Government face claims. The UK Government can make claims against operators, which take place under section 36 of the 2018 Act. That is quite proper. Operators have to assume and bear risk, and the Government need to ensure that operators can pay out on claims made against them—as we are quite rightly adopting a cross-party spirit today, I commend the previous Government on their work on space law—which is why the regime under the 2018 Act makes provisions for space operators to put in place compulsory insurance.

The businesses have to insure themselves and are regulated by a very competent regulator. The question is: what happens if a claim exceeds the amount of insurance that can be put in place on a sensible basis? That is really what we are addressing here. The current legislation does not require the Civil Aviation Authority or the Government to include a cap in the licence; it makes it optional. Section 12(2) of the 2018 Act provides:

“An operator licence may specify a limit on the amount of the licensee's liability under section 36 in respect of the activities authorised by the licence.”

The critical thing that my Bill will do is quite simply to swap “may” for “must”, and as a consequence the word “any” in section 36 is changed to “the”. That is consistent with long-standing Government policy that the liability should be limited—there is a clear, documented policy that it is limited.

However, the problem with documented policies as opposed to statute—as a recovering lawyer, I go back to my legal career here—is that Government policies are ultimately much easier to change than statutes. We can have a claim for legitimate expectations and a breach of those, but that is a very difficult class of claim to run, and there has not been a huge number of successful cases of that sort in the courts. It is a difficult area of public law.

Business quite properly says, “You could change this policy and expose our existing investments to additional risk.” Business could also fairly go and look elsewhere for investment. Investors will not invest in the same way in the face of a lack of statutory protection, so the critical thing the Bill does is to include a statutory protection. It requires the Government to cap the liability and encourages people to invest, and that puts us on a par with our principal competitor nations for space investment. So, four words to the Bill, with two swapped, but it is absolutely critical for the future of an industry that could be brilliant for the United Kingdom and all our constituents for years to come.

[Melanie Ward]

Does my hon. Friend agree that the space sector gives our country—and indeed to the world—a sense of possibility and innovation? He talks about the four words in the Bill—Buzz Lightyear provides us with another four words to take inspiration from: “To infinity and beyond!”

--- Later in debate ---

[John Grady]

My hon. Friend makes an excellent point, as she does regularly. The space sector creates enthusiasm for young people. When I met young students at the University of Strathclyde, I could see that it had engendered excitement about the future, and that is a good thing.

--- Later in debate ---

[John Grady]

I will keep my remarks short. I thank all Members for their support today, on Second Reading and in Committee. I also thank the Department for Transport civil servants who assisted me. The Clerk of Private Members’ Bills puts in a lot of work to help us all with our Private Members’ Bills, and I give thanks to them as well.

This Bill will now go to another place, where Baroness Anelay of St Johns has kindly agreed to take it on, and I thank her for so doing. I should also thank the hon. Member for Wyre Forest (Mark Garnier), who has been nothing but enthusiastic about this Bill from the off. It is good to hear enthusiasm, and speaking as a new Member—or a year-old Member—it is always very helpful to have advice from Members from across the Chamber.

Of course, I thank my team for their help with the Bill. I thank you for your patience, Madam Deputy Speaker, and I also thank the voters and residents of Glasgow East, because it is a privilege to be here representing them. I love every minute of my time representing my seat.

Question put and agreed to.

Bill accordingly read the Third time and passed.