Business and Planning Bill

Debate between Lord Redesdale and Baroness Doocey

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Monday 20th July 2020 Lords Chamber

[Baroness Doocey (LD) [V]]

My Lords, Amendment 55 standing in my name aims to modify the package travel regulations, retaining protection for consumers travelling abroad but removing barriers which stop small businesses working together in the domestic market. The amendment does so by stipulating that, for something to constitute package travel, an element of travel must be part of the package.

Visitor numbers in the domestic tourism industry are down by 30% to 50%, and research shows that only a third of families intend to take a domestic holiday this year. Tourism in the UK is by definition a feast and famine industry—a feast in summer and a famine in winter. What small businesses in the sector face this year is the famine of the lockdown, followed by the seasonal famine of winter. The industry therefore desperately needs to attract trade and to persuade people to start taking holidays in the UK.

The primary purpose of the package travel regulations is to protect consumers who take package holidays overseas by making the tour operator legally responsible for the package and ensuring that the holidaymaker can be repatriated if the tour operator goes bankrupt. These are very valuable protections. The problem for small domestic tourism businesses is that the definition of a package holiday has been poorly drafted so that the smallest B&B working with a local pub or a local golf course to offer a discounted deal ends up being deemed to be a package tour operator. The consequence is an intolerable legal jeopardy for the small business concerned, because the regulations make the B&B owner legally responsible for what happens to the customer while they are at the golf club or in the pub. If the customer suffers any injury there, it is the B&B owner who is sued. Small businesses simply cannot get insurance to cover them, which makes the financial risk of offering deals too great. The customer then loses access to discounts and the businesses are unable to stimulate sales.

In addition, the regulations require the B&B owner to be a bonded travel company, which is expensive, or to use a trust fund so that payments can be withdrawn only after the customer has visited. Anyone who has ever run a small business knows that this is not a sustainable way to operate. These problems are why most accommodation businesses in the UK do not offer discounted deals. The Government have said that the significant component element of the package travel regulations guards against the problems I have outlined. These provisions are totally unsatisfactory, because they require a business to guess whether a consumer would or would not have bought their product without the additional benefit of the deal. Furthermore, the 25% element is both inadequate and invidious because standard deals can easily exceed the 25% level, and a percentage threshold disadvantages those parts of the country with the cheapest accommodation.

This simple amendment preserves all the protections for customers taking holidays overseas while freeing up small businesses here in the UK to provide discounted added-value deals to their customers. A survey by the Tourism Alliance estimated that this modest change would increase domestic tourism expenditure by £2.2 billion per annum, which is enough to protect 40,000 jobs. This is not a boost that our domestic tourism industry can afford to wait for. We cannot wait out the winter while the Government consider this further. The famine is now, so the time to change the law is now. I beg to move.

[Lord Redesdale (LD) [V]]

My Lords, I have added my name to this amendment and I will speak in support of it. I shall be brief, considering the time of night. I am pretty certain that my noble friend will not press this amendment, but I hope that the Minister can give some assurance that, although changes to the legislation will not come about through this amendment, he will agree to meet with representatives of the travel industry to look at how the law can be reformed. The regulations that underpin this area are part of European Union law and, as we leave the EU and start to look at British iterations, this is the perfect time to address the issue. I hope that the Minister can give an assurance that his officials will meet with members of the travel industry to discuss these matters.

Business and Planning Bill

Debate between Lord Redesdale and Baroness Doocey

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 13th July 2020 Lords Chamber

[Baroness Doocey [V]]

My Lords, in moving Amendment 50, I will speak also to Amendments 74 and 75 in my name.

Amendment 50 seeks to modify the regulations introduced in 2018 around package travel, in order to support the recovery of small domestic tourism businesses and destinations. The intention of these regulation was to provide additional protection to those taking package holidays abroad, so that they do not lose their money if the tour operator goes bust, and so they can be repatriated to the UK. However, a sort of reverse loophole has emerged, where small domestic businesses working together to produce a value-added offer are caught up in the regulations and deemed to be tour operators.

The consequence is that if a B&B, for example, offers a deal to customers where meals at a local pub or a round of golf at a local course are included, that B&B finds itself legally responsible if the customer has an accident while visiting the other business. No insurance company will give a B&B insurance to cover that. This prevents the sort of constructive enterprise between small local businesses that is needed if the domestic tourism industry is to recover from coronavirus. The industry estimates that remedying this anomaly would boost domestic tourism by about £2.2 billion.

Unfortunately, there is a drafting error in my amendment, for which I apologise. It inadvertently seeks to leave out the words “at least one other”, which do not actually appear in the existing regulations. However, the important part of the amendment is about the carriage of passengers, and it is to those words particularly that I am speaking this evening.

The purpose of the amendment is to ensure that package travel should include the carriage of passengers—in other words, actual travel. That means that if you are offering a coach holiday with hotel accommodation included, that would of course count as a package because you are taking the customer on holiday and must be responsible for them. However, if a small business offering accommodation co-operates with another small business that is offering food, it is not taking someone on holiday. It is providing the customer with a value-added product while they are on holiday. With no actual travel involved in the transaction, under the terms of the amendment, it would not count as a package. This small measure of deregulation could save 47,000 jobs in the sector.

I know that the Government believe that the current regulations should not be prohibitive for small businesses because there is a rule of thumb which says that any tourism service providing accommodation must make up at least 25% of the total for the regulations to apply. This is unsatisfactory for two reasons. First, it is only a rule of thumb, so businesses do not have certainty about their obligations. Secondly, a small B&B could offer weekend accommodation for, say, £70 a night, and the food on offer at a local restaurant or pub might well have a value of £70 or more. So as things stand, co-operating on meals and accommodation for two people can easily trespass into regulated territory.

In considering this amendment, it is also important to note that the benefits it would provide come at no cost to the consumer as there is no erosion of consumer protection by removing value-added products as I have described from the package travel regulations. All that would happen is that two businesses would become separately liable for their component of the product. The principle that I have articulated, and what is intended in the amendment—making packaging hinge on whether an actual travel component is sold—is a better and clearer position which I hope the Government will consider carefully between now and Report.

Amendment 74 has been inspired by and closely follows the Government’s own proposal to expedite planning applications by varying planning conditions on construction hours. The amendment would speed up applications to lift planning conditions where they restrict campsites and caravan sites from being used for holidays in the winter months. After months when so many sites have been unable to operate, this would enable many of them to extend the holiday season, subject to a final but expedited say on the part of the local authority.

The present situation is quite unsatisfactory in that the Government say that local planning authorities can choose not to enforce their local regulations. This puts businesses in a very invidious position. My amendment would clarify the position because it would mean that in straightforward cases, an extension to this year’s season could be agreed quickly without the need to require an applicant to produce numerous documents. Crucially, however, local authorities would retain control over more complex cases. Where a council has concerns about an application to extend, it would have 14 days either to refuse or to agree modifications with the applicant. This seems proportionate and fair, and again it would make the regulations around domestic tourism much more equal to the task of helping businesses out of the Covid crisis.

Amendment 75 would give property owners and local authorities the same flexibility to remove planning conditions that prevent the use of their holiday accommodation for lets over the winter months, but it would give local authorities control. It would allow properties that are presently used for short-term lets over the summer to be let on a longer-term basis in the winter. The most common planning restriction at the moment is the 28-day maximum stay that is applied to permissions. Many of the properties affected are converted farm buildings where the farmer has sought to diversify his or her business. Industry figures suggest that up to 25,000 properties are limited in this way. Removing the 28-day limit would allow these businesses to operate longer-term winter lets, typically to temporary or seasonal workers, or to students.

For these businesses, gaining valuable winter income would go some way to levelling the playing field with their competitors in the sharing economy, such as Airbnb, while helping to make up for so much lost income this year. But without this support, many holiday cottages will be obliged to close only a few months after their reopening on 4 July. It is surely right to expedite these applications now to extend the season and, in doing so, to help good but struggling businesses to survive.

The tourism industry generates £155 billion per annum for the UK economy, but this contribution is in peril because 92% of these businesses say that their revenue has at least halved during the coronavirus crisis. I hope that the Government will give a helping hand by modernising the regulations on packages and allowing domestic businesses to extend their usual season into the winter months. Without these changes, many businesses simply will not survive and thousands of jobs will be lost. I beg to move Amendment 50.

[Lord Redesdale (LD)]

My Lords, I refer to my interests in the register and will speak to Amendment 74 because I have just been appointed as an officer of the new all-party group on holiday parks and camping sites. My noble friend Lady Doocey has covered many of the points that I was going to raise and at this hour, of course, brevity is much to be commended so I will raise only one point. It is to hope that the Government could agree to write a letter to local authorities, setting out the benefits of relaxing planning laws. This is something that many local authorities have undertaken, including East Lindsey District Council in Lincolnshire. Its local development order for the coastal zones authorises 12 months’ operation for the next two years.

To be brief, the problem that many campsites across the country face is that while they are starting to reopen, at the moment there is a degree of caution among those undertaking camping. So, they are running at about 40% of the capacity they were expecting; the season will therefore be quite short for them. Extending the season would make a great deal of difference. It would also show some clarity, because the Scottish Government have already advised their local authorities that a

“temporary relaxation of planning controls will help businesses to re-start.”

They cited enabling

“seasonal businesses such as holiday parks to continue to operate beyond any conditioned limits to their seasons”

on 29 May, under the heading “Changing business practices during physical distancing restrictions”. The Welsh Assembly is also looking to write a letter. I hope that the Minister can give us an assurance that the Government will raise this issue with local authorities as being beneficial to their local economies.