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Space Industry Act 2018: Insurance and Liabiities

Volume 682: debated on Tuesday 13 October 2020

I am today publishing the consultation on the draft insurance, liabilities and charging requirements to implement the Space Industry Act 2018. This consultation seeks views on the operability and effectiveness of the proposed liabilities, insurance and charging requirements to implement the Space Industry Act 2018, including the use of licence conditions to cover insurance requirements. It also seeks views on the draft Space Industry (Liabilities) Regulations and the associated guidance documents, as well as to gather new evidence and test the assumptions in the consultation-stage impact assessment.

The UK’s space sector is a unique national asset, and this Government are committed to growing this exciting industry. Our regulatory framework for spaceflight will support safe and sustainable activities that will drive research, innovation and entrepreneurship in this vital sector, exploiting the unique environment of space, and providing a catalyst for growth across the space sector. Harnessing the opportunities provided by commercial spaceflight will also feed into our emerging national space strategy, the Government’s agenda to level-up the UK, and global Britain.

Government and industry have set a target to grow the UK’s share of the global market to 10% by 2030. To support this, our spaceflight programme aims to establish commercial vertical and horizontal small satellite launch, sub-orbital spaceflight and space tourism from UK spaceports. To expand the UK’s spaceflight capabilities, Government are funding a range of industry-led projects. Separately, we are investing in related facilities and technology. This will provide industry with new commercial market opportunities, grow our export share and help to build new UK supply chains.

Liabilities and insurance requirements

An important element of the Space Industry Act 2018 concerns operators’ liabilities arising from their spaceflight activity. Under UN space treaties, the UK Government are ultimately liable to pay compensation for damage caused by their space objects on the surface of the Earth or to aircraft in flight, and liable for damage due to its faults in space. This means that another state suffering damage can bring a claim against the UK Government under the UN space treaties. The Space Industry Act 2018 places an obligation on an operator carrying out spaceflight activities to indemnify the Government or listed person or body for any claims brought against them for loss or damage caused by those activities. It also includes liability provisions to provide the general public in the UK with easy recourse to compensation.

We recognise that this is an important issue for the UK space sector and understand that we need to create the right environment for the UK to be competitive and for our British companies to compete on the global stage. We have listened to the concerns industry has raised about liabilities and insurance and our consultation sets out approach to address those concerns, as well as other issues relating to insurance and liabilities. This follows a call for evidence on these matters published in March 2018.

We are proposing to limit operator liability and use the modelled insurance requirement approach, which is considered to be critical to enabling launch and unlocking the benefits of spaceflight.

The insurance proposals and liabilities regulations are part of the package of regulations needed to implement the Space Industry Act 2018 and to allow commercial spaceflight launches to take place from the UK. They supplement the consultation which was launched on 29 July 2020 on the draft Space Industry Regulations, which covers the other secondary legislation and guidance needed to enable commercial spaceflight in the UK.

Together with the Department for Business, Energy and Industrial Strategy, the UK Space Agency and Civil Aviation Authority, we have legislated to allow for the regulation of a wide range of new commercial spaceflight technologies, including traditional vertically launched vehicles, air-launched vehicles and sub-orbital spaceplanes and balloons. It is our intention to merge the draft Liabilities and Space Industry Regulations once the consultations have concluded.

Next steps

The deadline for responses to the consultation is the 10 November, following which I will update the House and publish the Government’s response to the consultation.