My Lords, I will comment briefly on this set of amendments. The noble Lord, Lord Fox, has put the point very vividly. This gets to the heart of the economics of the space industry.
There are risks in space, as we have heard in the past hour in which we have been debating. First, probably the greatest risks are at launch. Not all launches are successful, which is why, by and large, launch facilities aim to launch rockets out over the ocean. I am sure that will be a relevant consideration when the rival claims of different locations, especially for vertical launch, are considered. I have to say that Prestwick is very fortunate to have my noble friend Lord Moynihan—if only every possible spaceport candidate had a similarly assiduous Member of this House to make its case.
Secondly, there is some risk in orbit of satellites colliding and doing damage, or one person’s identified satellite taking out someone else’s satellite. That is rare but it does happen. Thirdly, there is the very remote possibility, but it can happen, that a satellite falls out of orbit. In those circumstances they mostly burn up and it is a managed process, but a bit could reach the ground and do damage.
These are, thank heavens, all very remote risks. However, if the worst conceivable thing happened—if a satellite came out of orbit and did not burn up in the atmosphere and landed in the middle of a busy conurbation—serious damage would be done. These remote but potentially large risks are very hard to insure. Therefore, many of the countries that ultimately take responsibility as launch nations for satellites provide some kind of cap on the liability that a private launch operator would face. I very much welcome, therefore, the conception behind Clause 11: that the Government intend that an operator licence may specify a limit on the amount of the licensee’s liability.
There are complicated arguments behind this. I can report from my own time as a Minister that I was regularly asked by the industry if it would not be possible to reduce the maximum liability operators would face, and I was regularly pressed by the Treasury that the liability that the operators faced should be as large as possible. I suspect that those arguments carry on to this day and will never be finally concluded.
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There is also an issue about state aid rules and to what extent assistance in this area in capping the liability would be regarded as state aid if there is competition between different European locations.
The Minister is facing a range of considerations but I hope he will be able to give an assurance today that the Government fully understand that capping this liability for private operators will be important if we are aiming to promote this area as an important British business and as part of our wider ambitions in space activity. Unless these costs are capped at a manageable level—the cap was reduced a few years ago—that a launch company can afford to pay as an insurance premium, we will not achieve the objectives in this legislation.
I realise that the detail of this provision will be decided subsequently, but I hope the Minister will be able to give an assurance in this debate about the approach he will take to encourage this important sector.