Wales and Borders Franchise

Jonathan Edwards Excerpts

Tuesday 7th November 2017 Westminster Hall

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I beg to move,

That this House has considered the devolution of the Wales and Borders franchise.

It is an honour to serve under your chairmanship, Ms Dorries, for what I believe is the first time.

The comedy of holding a debate on the delayed devolution of the Wales and Borders rail franchise will not be lost on the thousands of passengers who rely on the consistently tardy rail operator in Wales. In reality, however, it is no laughing matter. It is a tale of how an uncaring Westminster and incompetent Welsh Government have already cost taxpayers millions of pounds and could derail the whole franchise procurement process.

My speech will have three central elements. First, I will outline the development of a distinct Welsh rail franchise. Secondly, I will trace in, I hope, forensic detail how we got into the current mess. Finally, I will seek clarity on the next steps for the franchise and what passengers can expect.

Let me begin by setting the scene. Until the current franchise started in 2002, Wales was covered by myriad different operators. One franchise covered south Wales and south-west England, while mid-Wales and north Wales were linked to larger franchises based in Birmingham and Manchester respectively. Three inter-city franchises also served Wales.

Despite rejecting the idea of devolving the franchise, the British Labour Government did recognise that the Welsh rail network should form one unified system. The 2002-03 franchise competition was managed by the UK Government and the now defunct Strategic Rail Authority. In 2002 the British Labour Government awarded the first Wales and Borders franchise to the German state-owned train operator Arriva, and for the last 15 years we have been stuck with a service unfit for purpose. The Arriva Trains Wales-run Wales and Borders franchise has been dubbed the “no growth” deal. In effect, the poorly procured franchise failed to account for any growth in passengers. It was a franchise procured on the cheap and fundamentally not fit for purpose.

As would have been obvious to anyone with the semblance of an understanding of transport policy, passenger numbers continued to grow, and in the desperate scramble to keep up with the growth, money meant for devolved services was ploughed into the franchise. Sprinter units from the 1980s were bought using the Welsh block grant as a substitute for the increased UK Government subsidy that Arriva had originally envisaged. In fact, passenger numbers continued to grow, with overcrowding becoming “a daily struggle”, according to Transport Focus. In the last four years, 250,000 extra commuters have been using rail services in south Wales alone.

The 2002 franchise agreement is widely seen as one of the worst and most unimaginative since privatisation of the railways. It is unsurprising, therefore, that support for devolution of the franchise is overwhelming. The 15 years of chaos on Welsh railways lies at the door of the Department for Transport, and if something is not done soon, the next 15 years could be the same.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Does my hon. Friend agree that the previous franchise emphasised punctuality above all else in terms of success, and that for the next franchise to be a success, it must also include customer satisfaction in its criteria?

[Jonathan Edwards]

I am grateful for that intervention. My hon. Friend, who is the parliamentary leader of our party, serves on the Select Committee on Welsh Affairs, which has done very detailed work on this issue and specifically on the initial franchise procurement. The Committee, which consists of members from across the House, was especially damning of how that franchise was constructed.

Let us fast forward to 2015, when the story of this not-so-great train robbery steps up a gear. The then Prime Minister, David Cameron, and his deputy, Nick Clegg, graced Wales with their presence to announce a new devolution deal. As part of the so-called St David’s day agreement, we were told that powers over the procurement of the next rail franchise would be devolved. The cheers at our national stadium, where they made the announcement, were reminiscent of those at a Six Nations match. Finally, we thought, Wales would get the power to create a rail system fit for our people. Sadly, as is often the case, that optimism was misplaced.

In the next section of my speech, I will try to piece together what is a complex picture of confusion, chaos and ineptitude by Governments at both ends of the M4. As is often the case with such matters, each individual element of the story seems unremarkable—inconsequential even. However, in the round, we see an intriguing episode of incompetence, which has already cost millions of pounds and could mean chaos for rail users in Wales.

The story starts just over a year ago, in September 2016. Combing through what was then the Wales Bill—it is now the Wales Act 2017— I spotted what I assumed was an error. Despite the Government’s boy scout promises, devolution of the franchise was not included in the Bill. Being the assiduous and diligent parliamentarian that I am, I decided to flag up that omission to the Secretary of State for Wales. Following the appropriate procedures, I tabled an amendment to the Bill that would devolve the franchise. On 12 September, in a Report Stage debate on the Wales Bill, I sought the Minister’s assurance that the error would be rectified. I said:

“Before I get into my speech, may I say that I will gladly not say a word”—

regarding devolution of the franchise—

“if the Secretary of State or the Minister intervenes to say that they will proceed with that promise and if they outline the legislative vehicle whereby these powers will be devolved to Wales?”

The Secretary of State replied:

“We are negotiating with the Welsh Government over the use of a transfer of functions order under the 2006 Act.”—[Official Report, 12 September 2016; Vol. 614, c. 671.]

The more naive may have thought that that was job done, but as a veteran of many a Wales Bill, I know that devolving powers is not such a simple task, so we continued to push. During the Welsh Affairs Committee inquiry into procurement of the next Wales and Borders franchise, my hon. Friend the Member for Dwyfor Meirionnydd (Liz Saville Roberts) repeatedly asked how the Welsh rail responsibilities would be devolved. Every time she asked the question, whether to a UK or Welsh Government representative, she met with the same complacent response, “It’s just a technical thing; it will all get sorted,” yet everything seemed not to add up. Why wait to devolve the franchise if we could already do so? Why risk waiting? Why circumvent parliamentary scrutiny? Why be so complacent about the powers required for a multibillion-pound contract? Was the reason ignorance, incompetence or something more sinister?

Thanks to my hon. Friend’s excellent work, people will find on page 13 of the report two recommendations calling on the UK and Welsh Governments to update the Committee on the progress of the talks on the transfer of functions and to ensure that there is effective scrutiny of the transfer of functions and the way in which the Governments have agreed to devolve the powers. Of course, neither of those recommendations has been followed.

On 13 October 2016, despite still not having any powers actually to procure the franchise, the Welsh Government announced four shortlisted operators for it: KeolisAmey, a joint venture between French transport giant Keolis and public service provider Amey; MTR Corporation, which has interests globally from Australia to Sweden and is based in Hong Kong; Abellio Group, which operates bus and rail networks across Europe and is the international arm of the Dutch national rail operator; and the existing German state-owned operator Arriva. Those were the only four to enter a bid to run the next franchise.

According to the original plan, the four bids would be assessed by Transport for Wales, a Welsh Government-owned company. Through a process of “competitive dialogue”, the four bidders would work to create one of the most ambitious franchises ever, with the south Wales metro and the rest of the Welsh network covered by a single operator.

[Albert Owen (Ynys Môn) (Lab)]

I am listening carefully to what the hon. Gentleman is saying. He referred to the 2016 Bill. He will remember that both he and I supported amendments for a not-for-profit franchise. Does he believe that that is now possible? In 2017, both his party and mine, in our manifestos, asked for that. The Conservatives were soundly beaten in Wales, so they should not pursue this. There should be secondary legislation to add that to the Bill, so that Wales can have a fall-back situation.

[Jonathan Edwards]

As ever, the hon. Gentleman speaks with great experience and makes a very valid point. With the two major parties supporting such a policy, it is clearly the will of the National Assembly. I am not sure whether that is the reason why the UK Government are delaying the transfer of functions. Is ideology driving what we are seeing at the moment?

Let me reiterate that on 13 October 2016, when the shortlist was announced, the Welsh Government had no authority to procure a Welsh rail franchise. That still remained in the gift of the Department for Transport and the Minister. Now let me pull focus back to Westminster for a moment. On 6 December 2016, I asked, in Transport questions,

“now that the UK Government are devolving responsibilities for the Welsh franchise to Wales, is it not logical to devolve responsibility for the Welsh network?”

The Secretary of State’s response was dumbfounding. He said that

“we are not devolving responsibility for the whole Welsh franchise as he describes; we are doing so in part. I have said to the Welsh Government that I am happy with their taking control of the Welsh valleys lines, with a view to developing the metro system that they hope to put into service, but the Welsh franchise is not purely Welsh; it runs through large parts of England as well. We cannot have a situation where we, the Government in Westminster, give up control over services in England to the Welsh Government without checks and balances. That is not going to happen.”—[Official Report, 6 December 2016; Vol. 618, c. 128.]

Whether it was ignorance or incompetence, the UK Government and the Welsh Government were saying and doing diametrically opposed things. In fact, the UK Government, in the form of the DFT, and another bit of the UK Government, the Wales Office, were saying and doing diametrically opposed things. The Transport Secretary’s response set alarm bells ringing in Cardiff. As a result, later that day, Plaid Cymru forced an urgent question in the National Assembly. On 6 December, the very same day, the Welsh Government Cabinet Secretary responsible for railways, Ken Skates, assured the Senedd that everything was on track. He said that the Welsh Government

“have agreed with the UK Government that all services operated under the current Wales and Borders franchise will be included in the next Wales and Borders franchise and that we”—

the Welsh Government—

“will lead in the procurement of these services.”

Mr Skates’ response clearly stated that the Welsh Government continued to believe that responsibility for the procurement and management of the whole of the next Wales and Borders franchise, which covers all of the existing routes, will be devolved in time.

It is clear that the Wales and UK Governments have a fundamental difference of understanding. I wrote to the Secretary of State to notify him of this confusion and continued to raise the issue in Westminster, and my colleagues did the same in Cardiff Bay, in the hope of shunting them along the track, but still there is nothing: no clear plan, no public timetable, no parliamentary scrutiny of how the devolution of rail was—or more correctly, was not—happening.

It was only a few months before the snap election. Over this period we continued to raise concerns regarding the devolution of the franchise with questions in the National Assembly. From our conversation with industry we knew that deadlines were drawing closer. On my return to Parliament, I therefore tabled written question 3534, seeking clarity on when the devolution of powers over the rail franchise will take place. This clearly acted as a catalyst, as a few days later, on Sunday 13 July, Pandora’s box was opened. The UK Government confirmed that the necessary transfer of functions will not take place until autumn 2017. This meant the 18 August date set for the official tender submissions would be missed. However, the Department for Transport said that all would be resolved by moving that date to 26 September. What transpired, however, was hardly a simple procedural matter. An exchange between the Secretary of State and the Cabinet Secretary in the Welsh Government came to light, which showed a plethora of unresolved issues, including disputes over the ownership of the valleys lines infrastructure and how the Welsh Government will exercise powers over English railway stations served by the Wales and Borders franchise.

Most startling, however, was a £1 billion dispute over funding. A rebate, which is linked to track charges, is passed to Network Rail via a grant for improving railways. For the Wales routes, that amounts to £1 billion over the 15-year span of the contract. Due to a catastrophic breakdown in communication, the Welsh Government had been procuring the franchise in the belief that this was there to be used as they wish, but the Department for Transport believed that as the Welsh Government had no responsibility for the actual rail infrastructure, this money should remain in Whitehall. You could not make it up, Madame Chair, but what does all that mean for Welsh passengers?

According to Welsh Government, the delay in procuring the franchise in August cost around £3.5 million. Further delays could cost tens of millions of pounds and put the whole procurement process at risk. Surely that was all resolved by the time we got to the later September deadline I referred to earlier. Not this time. In a committee meeting with the Cabinet Secretary and his officials at the National Assembly for Wales on 27 September, it was confirmed that powers necessary to decide who runs most of Wales’ rail services may not be given to Wales until 2018. In fact, the official tender published the same day was made by the Department for Transport and not by the Welsh Government.

I appreciate that this is a long and complex narrative, but only a few twists in the track remain. Eight days ago the latest bombshell dropped: Arriva, the current franchisee, pulled its bid. Few tears will be shed at this revelation. Some commuters might even rejoice at the news, but it speaks to a deeper problem with the handling of the procurement process. The only reasonable conclusion is that Arriva’s decision to pull its bid to run the next Welsh rail franchise is largely due to the whole bungled process. Rumours are circulating that other companies are also teetering on the brink of pulling out of the franchise bid. To be fair, who can blame them? They do not know who they should be dealing with, the timetable of the process and, to put it frankly, whether this franchise will even go ahead.

In this final part of my speech, I want to understand what the next steps might be and seek clarity for commuters, train companies and perhaps even for Labour Ministers back home, as they seem incapable of getting these answers from the Department for Transport themselves. Devolution of the franchise was first on the list of hurdles in the Welsh Assembly Infrastructure Committee’s June report. Let us be frank: we are approaching a situation where the whole thing could collapse. I do not want to see that and I am sure the Minister does not want to either. I hope in his response he will be able to offer assurances that the powers will be devolved in the coming days, but contingencies must be made clear. Can the Minister confirm whether there has been any exploration of an interim arrangement with the existing operator to continue running their franchise under a direct award or—as is written into this franchise contract—there is an extension of seven “reporting periods” at the end of the franchise, which could take the existing franchise into spring 2019?

The option which I prefer, and I am sure the hon. Member for Ynys Môn (Albert Owen) would prefer, and which has always been the policy of my party, is a truly nationalised rail operator. Under the Railways Act 1993, it falls on the relevant authority to run franchises where there is no franchise agreement in place. These are known as the operator of last resort powers. The botched devolution job means there is no clarity on who exactly the relevant authority is in this case. Can the Minister confirm whether he understands the Welsh Government or Westminster to be the relevant authority?

On a more general point, my speech has been peppered with technicalities, dates and jargon, but the events surrounding the devolution of the franchise are symbolic of a wider and more fundamental symptom suffered by my country. Westminster does not care about Wales and a lethargic Labour party passively watches our managed decline. The examples can be technical, but the effects are tangible. Our society suffers at the hands of an apathetic Westminster and an inert Labour Welsh Government. The handling of the devolution of the franchise is yet again a reason for Wales to wonder why Westminster clings so tightly to our reins, when all we want is the ability to stand on our own two feet. Diolch yn fawr.

[The Parliamentary Under-Secretary of State for Transport (Paul Maynard)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on securing this debate. He has taken a long-term interest in this issue, as indeed have the hon. Members for Dwyfor Meirionnydd (Liz Saville Roberts) and for Ynys Môn (Albert Owen). I hope that I can provide some reassurance. I realise it is tempting to provide a running commentary on these issues, particularly when one is not involved in the negotiations, but I hope that I can set the mind of the hon. Member for Carmarthen East and Dinefwr at rest. He has asked many questions on the issue, both of me and in the House more generally, so I know he is very knowledgeable on these matters.

I start by reassuring the hon. Gentleman that we are committed to devolving rail powers to the Welsh Government, as we stated in 2014. The devolution of these powers takes forward one of the Silk commission’s recommendations and is an important part of the St David’s day Command Paper that he referred to. Like him, I want improved rail services for passengers in Wales. I always focus on the output for the customer, not just the input into the train set.

Last month, we saw the launch of the invitation to tender for the next Wales and Borders franchise. I agree with the hon. Gentleman’s comments about the previous franchise. It was a very good example of some of the flaws of the earlier franchising models, and one that we hope to learn from in setting out what we aim to do with this franchise. I am sure he will recognise that it is one key milestone among many on the journey towards a new franchise.

It may help if I set out the other milestones that we seek to achieve. First and foremost, we hope that bidders will respond by 21 December this year to the ITT. The evaluation will take place over January and February, and between March and June 2018 there will be a contract award by the Welsh Government, signed on 13 June 2018, we hope, with a new franchise commencement date of 18 October 2018.

We have a clear set of timelines ahead that we are looking to achieve. I remain committed to supporting the Welsh Government in progressing with the procurement of the next Wales and Borders franchise to make sure that it does indeed commence in October 2018. I also repeat our commitment to progressing with the procurement of an infrastructure provider for the south Wales metro. I am sure that the hon. Gentleman would agree that devolution cannot be a simple task, and it is worth reminding ourselves of what the Government are actually doing. We have seen tireless work by officials, both here and in Cardiff, to give effect to the formal transfer of powers, which had required the resolution of a number of very detailed policy and practical considerations, particularly around cross-border services, but I am pleased that we have been able to agree the broad principles under which that devolution should happen. This will see Welsh Ministers’ statutory powers in Wales supplemented by powers exercised on behalf of the Secretary of State.

These proposed arrangements will, for the first time, enable Welsh Ministers to procure a franchise that, like the current one, includes important cross-border services to and from parts of England, as well as services entirely within Wales. I am sure the hon. Member for Carmarthen East and Dinefwr will agree that it is in Wales’ economic interests to have a strong set of cross-border connectivity, not least to Manchester airport to the north of Wales, and to London along the Great Western main line to the south of Wales.

Both the hon. Gentleman and the hon. Member for Ynys Môn raised the point about not-for-profit services. As they will understand, because this franchise involves cross-border services, the nature of the contracting vehicle cannot be a decision solely for the Welsh Government. That is why a not-for-profit solution, tempting though it may be to hon. Members, is not necessarily appropriate in this case.

[Jonathan Edwards]

Will the Minister give way?

[Paul Maynard]

I will give way just once, but I am keen to make sure that I answer the hon. Gentleman’s questions.

[Jonathan Edwards]

I am grateful to the Minister for giving way. Can he explain why, if it is indeed his Government’s intention to improve the transport links between Wales and England, they have taken the treacherous decision to cancel the electrification of the main line all the way to Swansea?

[Paul Maynard]

The hon. Gentleman is almost tempting me to give another 10 minute speech on how to improve rail services for passengers. I am afraid, as ever, that he falls into the trap of focusing on how we power the trains, and not the benefits for the passengers. As he will be aware, if the 40 miles from Cardiff to Swansea were to be electrified, that would have a cost-benefit ratio of less than 0.3, with no added benefits for passengers—not a single extra seat, mile per hour of the train, or minute off the journey time. As he will also be aware, the National Audit Office and the Public Accounts Committee have been clear that the Department needs to consider each electrification project in isolation to ensure that it still represents good value for money.

It is my duty as Rail Minister to focus on how to deliver the benefits for passengers in south Wales, including in his constituency, and to bring those benefits forward as soon as possible. That is what we are doing with the Intercity Express Programme trains that are already in operation. When electrification to Cardiff is complete, that will save 15 minutes on the existing journey time. Electrifying further to Swansea would not reduce that journey time by a single minute; nor would it add a single seat to any one of those journeys.

--- Later in debate ---

[Jonathan Edwards]

I thank the Minister for his comments. There was one area of concern in his comments: he said that the franchise would be devolved but under the supervision of the Department for Transport. That indicates to me that there would be a Westminster veto over the actions of Welsh Ministers. I am sure that that would be an area of high contention back home in the motherland.

Question put and agreed to.

Automated and Electric Vehicles Bill

Jonathan Edwards Excerpts

2nd reading: House of Commons & Ways and Means resolution: House of Commons
Monday 23rd October 2017 Commons Chamber

[Mr Hayes]

The aim of the Bill is to create the greater certainty that is, as several Members have said, necessary for further developments. As I will explain in a moment, when I get to the main thrust of my contribution, we focused mainly on insurance. That is because we were told by the insurance industry that it was essential to establish absolute clarity about the framework for the development of a series of insurance products. The Bill sets out that framework. Those who recall the previous discussions on the matter, and who have studied the record, will know that the insurance industry has widely welcomed our endeavours in that respect. I have the Hansard here, but I would tire the House unduly if I merely read out that which Members already know. In essence, the Bill creates greater certainty about the development of insurance products, to put at rest any doubts that might have prevailed.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

What discussions has the Minister had with the insurance industry about the likely cost of premiums? If one of the main benefits of automated vehicles is increased safety, does he expect premiums to fall?

[Mr Hayes]

We explored that a bit with the industry in the witness sessions on the previous Bill. As Members know, we introduced the Bill and we gave it a Second Reading and a Committee stage—a very good one, actually—as part of which we took evidence from the insurance industry. The Bill that we are considering is very similar to the previous one, which, as a result of the general election, did not proceed.

My guess is that initially, as the marketplace develops and new products emerge, prices will be much as they are now; but that as the record becomes established and insurers’ calculations about the likelihood of claims are affected by the greater safety provided by autonomous vehicles, prices may well fall. That is, in the end, a matter for insurers. It is not something that the Government can stipulate, dictate or even, with any certainty, predict. Following on from the intervention by the hon. Member for Eltham (Clive Efford), it seems to me that if the safety of autonomous vehicles means fewer accidents, insurers will find that out. As they do so, the ability to insure a vehicle will grow and the price of doing so will fall. That is, as I say, a matter for the future and not for now.

--- Later in debate ---

[Mr Hayes]

Retrofitting is an important way in which we can improve the existing fleet of vehicles. As my hon. Friend will know, some of the money that is being invested in low emission vehicles is going towards changing the existing fleet, so she is right about that.

I thought of Disraeli as my hon. Friend rose, as I am sure did she. Disraeli said:

“Man is not the creature of circumstances. Circumstances are the creatures of men. We are free agents, and man is more powerful than matter.”

What we do in the future about these things is in our hands. It is in the hands of Governments and Parliament. We can create the kind of future we want and, in embracing this technology, ensure that it is harnessed to best effect. As I have said, not all technological change is implicitly virtuous, so people must not assume that all technological development is, by its nature, efficacious. It has no intrinsic moral aspect. It is for us to decide how the best outcome can be achieved through the kind of technological changes we are considering tonight. That will be done across the House, I know, by people of good will.

We need also to think about what workplaces can do. I want to help workplaces to provide charging facilities for fleets and employees’ cars. I want to ensure that vehicle charging is flexible to meet the demands of the grid and avoid extreme peaks in demand. It is in everyone’s interest to make the running of an electric vehicle as easy as possible and to get more of them on our roads as quickly as possible. In that vein, the Government will be—

[Jonathan Edwards]

Will the right hon. Gentleman give way?

[Mr Hayes]

I just want to make this point, because I am building up to an exciting part of my speech. That may not have been evident, but it will be in a moment.

In that vein, the Department will be seeking the views of the public on the design of the charging infrastructure. I promised previously a public consultation—indeed, a competition—to develop a charging infrastructure that is instantly recognisable. It seems to me absolutely right that when one drives down a street, one should be able to spot an electric charging point rather as one can spot a pillar box or Belisha beacon. It would be appropriate—although I leave this for others to decide—if my name were associated with such a thing. The shadow Secretary of State has suggested it should and I will take that as a proposal, but it is for the House to consider whether it agrees with that proposal and to make a decision on the exact nature of the name. Something alliterative and memorable might suit.

We certainly need to think about consistency with regard to charging points. People need to know where they are. We have electric vehicle charging points outside the Department for Transport, but I am not sure that anyone could spot them driving down Horseferry Road unless they knew that they were there and were familiar with what an electric charging point looked like. They do not stand out and perhaps they should.

HS2 Update

Jonathan Edwards Excerpts

Monday 17th July 2017 Commons Chamber

[Chris Grayling]

I do agree, and I am very grateful to my hon. Friend and to the people of Long Eaton; as she knows, we have had a long discussion about whether we should have a high-level embankment or a low-level one, and I hope the solution we have reached is one that her community will support. I am clear that I do not want people to lose out as a result of this, and I extend to the House the request that Members should come to tell me if there are any places where there is a danger of that happening.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Both Scotland and Northern Ireland have been awarded 100% Barnett consequentials from HS2, whereas Wales has had a 0% rating. With independent experts predicting a £100 billion or more cost for HS2, does the Secretary of State not recognise the inherent injustice of denying Wales its fair share?

[Chris Grayling]

If Members look at what we are doing now, they will see that we are in the process of modernising the signalling on the north Wales line. I am very clear that one beneficiary of the construction of HS2 will be north Wales, which will suddenly have significant additional capacity for services to London, Birmingham and elsewhere. This investment benefits everyone, by freeing up the capacity to deliver the services that they want.

Air Travel Organisers’ Licensing Bill

Jonathan Edwards Excerpts

2nd reading: House of Commons
Monday 3rd July 2017 Commons Chamber

[Mr Hayes]

I will come to that later, because the hon. Gentleman is right to draw attention to the role of the airlines in all this. As he will know, they are covered by other licensing arrangements, but I will address the specific points that he has made. As ever, he has made a case for his Luton constituents, and particularly for Luton airport, which I know is in his constituency.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

As the Minister knows, Cardiff International airport is owned by the Welsh people via our own Government. What discussions has he had with the Welsh Government about the Bill’s impact on operators working from Cardiff?

[Mr Hayes]

Prior to that first Bill, we had discussions with devolved Governments about its character and content, and I think that there is agreement across the kingdom about the necessity for these measures. I always enjoy my discussions with the devolved Governments, and will continue to do so in my role as Minister of State. However, the hon. Gentleman is right to say that the Bill will affect all parts of our kingdom, not least because of the travel that takes place to and from different parts of it by air. We will certainly want to continue to receive representations from those Governments as these matters roll out.

Before I go any further, let me say something that I should have said at the outset. As you will know, Madam Deputy Speaker, there has been some debate in the Chamber in recent days about sartorial standards. I ought to say, as a matter of courtesy, that I will not be taking interventions from any Member who is not wearing a tie, on whichever side of the House that Member may sit. However, I believe in generosity as well as in courtesy, and I will provide a tie, which I have here, for anyone who is sartorially challenged or inadequate. Of course, I exclude lady Members from that; I would hardly expect them to dress in my tie, their own or anyone else’s.

Let us move to the origins of the UK holiday market. This week will see one of the UK’s, and the world’s, leading travel brands celebrate 175 years of travel. It was on 5 July 1841 that Thomas Cook arranged the first excursion. That was a one-day train journey from Leicester to a temperance meeting in Loughborough. The train carried around 500 passengers a distance of 12 miles and back for a shilling. Contrary to popular belief, I was not the Transport Minister at the time, and I certainly was not one of the passengers, but those early excursions were significant. They helped to form the foundations of the travel and tourism sector in the UK. The growth of the railways meant that, for the first time, affordable travel could be combined with leisure activities or accommodation and offered to a growing population of consumers.

Of course, today’s holidays—today’s excursions—are quite different from those first ones. Society has changed, and the promise of sun, sea and sand means holidays are more likely to be driven by temperature than temperance. I personally choose to have my holidays on the east coast of England, largely, in Broadstairs, Northumberland and most places in between, but not everyone does, and those who want to travel further afield and those who wish to use technology to make those choices will want to know that they are protected in doing so.

The advancement of technology has continued to drive the biggest challenges facing the leisure travel sector. Affordable air travel and fuel-efficient planes mean that people are able to travel further, and for longer. The growth of the internet and mobile phone technologies have revolutionised the way people book holidays, creating greater opportunities for consumers and businesses.

We debated these issues on the Committee to which the hon. Member for Kilmarnock and Loudoun referred. It was clear to us then, and I think to the whole House, that the UK has continued to lead the way. We have one of the most innovative and advanced leisure travel sectors in the world and one of the biggest markets in Europe. Overall, tourism contributes close to £121 billion to our economy annually, with outbound tourism contributing around £30 billion.

Strong consumer protection is vital to underpin confidence in that important sector. By its very nature, there are a number of risks in the holiday market which have existed ever since those first excursions. It is common for consumers to pay up front on the promise of a holiday, which may be many weeks or even months away. There can be a lack of awareness of the financial stability of holiday providers, particularly as services are often provided by third parties. In the rare event of a company failure—I mentioned at the outset that it is rare—consumers may experience a financial loss from a cancelled holiday, or significant difficulties from being stranded abroad. It was against that backdrop that the air travel organiser’s licence scheme, the ATOL scheme, was introduced in the 1970s for UK holidaymakers flying overseas.

I will not tire the House with a long, exhaustive history of the ATOL scheme. I see that that is disappointing to you, Madam Deputy Speaker, and to others, but I want to give all Members as much opportunity as possible to contribute to this important debate. Suffice it to say that the ATOL scheme protects consumers if their travel company fails. It does that in two ways.

First, travel firms that sell flight packages in the UK must hold an ATOL licence, issued by the Civil Aviation Authority. That helps to regulate entry into the market and to filter out companies that are not financially robust. Secondly, the scheme acts as a fund to compensate consumers who might be caught up in a failure. The ATOL licensed company must pay a small levy, £2.50, for each person protected by ATOL. That money is then held in the air travel trust fund and used by the CAA to ensure that consumers are returned home or refunded when a company fails.