Space Industry (Indemnities) Bill

Peter Lamb Excerpts

Friday 4th July 2025 Commons Chamber

[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.

--- Later in debate ---

[Peter Lamb (Crawley) (Lab)]

I will try to keep my remarks brief. I start by congratulating my hon. Friend the Member for Glasgow East (John Grady) on making many fine contributions today and still managing to find time to pass his own Bill.

This is an area of personal interest to me. I made the terrible choice 20 years ago to go into politics, but most of my family are scientists. My grandfather was Professor Sir Robert Boyd, who is often described as the father of British space science. My dad still works in the sector. The pace at which the industry is progressing is quite remarkable. When SpaceX and Virgin Galactic first came out, I thought to myself, “How on earth are these companies going to make any money at all?” But they could certainly see the future in all of this. As has been set out, the opportunities presented by space are vast, and legislation needs to keep pace.

Ultimately, it is a question of risk. Risk will always be part of the process, as it is in every part of life. It is perfectly possible to manage it in a way that makes it viable to undertake various activities. The Bill, in its four words, sets out to resolve that, addressing liability and insurance issues to enable the viability of the UK’s space industry, which surely will be seen as a vital area of economic growth in times to follow, and of national security, as has been discussed.

No doubt, the discussion of risks may arouse concern from the general public, but for the average person, the risks are vanishingly low. Most objects sent up into space are far too small to survive re-entry. Frankly, huge satellites pose a far greater risk to each other now, through what is known as Kessler syndrome, where one knocks into another and that sets off a cascade that destroys all the satellites in lower orbit, making them completely unusable. The risk of an individual being hit by space debris is less than one in a trillion. Rockets can blow up—they are very similar to missiles—but they tend to be limited to a small range of places, which consistently are remote, and follow a path unlikely to pose a risk to people’s property.

The industry has to have an approach to risk, but from an individual perspective, we should not in any way be worried. As has been highlighted, the Civil Aviation Authority, which happens to be based in my constituency, plays a significant role in that. It does fine work in this area, in addition to general aviation. The Bill manages these risks well. It is a vital part of how to deliver an economy of the future for the UK, and I am delighted to support it.