Package Travel and Linked Travel Arrangements Regulations 2018

Lord Snape Excerpts

Wednesday 16th May 2018 Grand Committee

[Lord Snape (Lab)]

My Lords, I have no personal interest to declare on this matter though, as a fellow of the Institute of Travel and Tourism, I have some degree of affection for the subject before the committee today. Having been appointed way back in 1992 as a transport spokesman in the other place, I think it was the first directive I actually dealt with from the then Opposition Front Bench. As far as I remember, it amounted to about five pages in those days. It included the Explanatory Memorandum. It is a measure of how far we have come—whether forwards or backwards I leave to the Committee to judge—that the legislation before us is 41 pages with a 47-page impact assessment. As the noble Baroness, Lady Randerson, said, things are a lot different these days compared with 1992. In a way, the Minister was being too modest when he talked about the Government’s involvement in this package. I do not often find myself in a position of praising Ministers and accusing them of undue modesty, but it is true to say that the British Government have led the field, as far as the EU is concerned, on consumer protection in this area. The Government should be commended for that.

There are three main advantages to the instrument: as has been said, it widens the definition of a package holiday; it will enable British companies to sell across the EEA; and it guarantees repayment if any aspect of a holiday package fails. Will the Minister confirm that the implementation date is July this year? He might have said that in his speech. If he did I beg his pardon, I missed it.

Although the industry feels that there could and should have been a little more time for consultation, it appreciates the consultation that has already taken place. Indeed, I spoke to Mr Steven Freudmann, the chairman of the Institute of Travel & Tourism, about this legislation a few days ago. He expressed his view on behalf of a substantial chunk of the travel industry that this legislation goes a long way to increasing consumer protection and is to be widely welcomed.

As far as the linked travel arrangements are concerned, praise ceases there. Indeed, when I read and reread the linked travel arrangements I was, like the noble Baroness, completely baffled as to what it meant. Indeed, I was so baffled that I got the ITT to pass me the name and telephone number of a lawyer who specialises in these things. I rang him with some trepidation. Noble Lords will be aware that ringing lawyers is never a very wise thing to do. It is inevitably followed by a whacking great bill that makes the bank manager blanch, but on this occasion the information I requested came gratis.

I hope I can go some way to addressing the noble Baroness on the situation she outlined. Having booked one aspect of a package holiday, namely the flight, she asked whether other aspects booked separately were covered under the legislation. My point to the Minister and the noble Baroness is that as far as I can see, and as far as the legal advice I have had is concerned, no part of the package is, in fact, covered other than the first part. If she makes a mistake, if that is the right term, in booking the flight and then returning to book a hotel, hire a car or whatever subsequently, that aspect of her package will not be covered under the legislation. I am sure the Minister will be able to tell me whether I have that right or wrong, but it indicates a weakness in the legislation. If we are to have these welcome packages that assist holidaymakers and package bookers, it is of some concern that the difference in treatment is not immediately apparent between those booking their package straight off and those booking parts of the package, albeit at the same time.

I repeat that there appear to be no benefits as far as the second service is concerned. I would be grateful if the noble Lord will tell us whether we have it right. If we have, what is the department prepared to do about it? The travel industry generally welcomes the legislation and the proposed consultation. I ask the Minister to see that the travel industry is properly consulted if any difficulties arise and that its views are heard following the implementation of the directive. It is welcome, with a caveat about the weakness of the linked packages and the baffling nature of the legislation which, quite frankly, I did not understand. I am sure that the Committee, like the travel industry, will give a cautious welcome to this legislation.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank the noble Baroness, Lady Randerson, and my noble friend Lord Snape for their comments. They have eased the amount of ground I have to cover because they have raised issues that I would otherwise have dealt with.

Although I welcome the regulations, I join the noble Baroness, Lady Randerson, in saying how confusing they are—certainly the latter part on travel arrangements. However, I am comforted by what my noble friend Lord Snape said, not least because he is on my side for a change. Normally when he speaks in debates, he attacks me from the Benches behind, but this time we are on the same page and singing from the same hymn sheet. We think that these regulations will do a lot for consumers and we are grateful for that.

[Lord Snape]

I apologise for interrupting my noble friend but I have never actually attacked him; I have merely tried to give him some helpful guidance.

[Lord Stevenson of Balmacara]

That is what I meant. Perhaps I may deal, first, with the date of implementation, which I am sure will be entirely in line with the Minister’s expectations. This measure has been in genesis for a number of years. We knew that it was coming from about 2015, so waiting until 1 July 2018 to implement it seems rather like an overabundance of time, and I wonder whether the Minister will comment on that.

Secondly, why implement this measure in the middle of the holiday season? Changing the regulatory structure and the information for consumers bang in the middle of when they will be taking their holidays is an extraordinary thing to do and does not seem very sensible. It is certainly odd that the expectation was that the regulations would be implemented no later than 1 January 2018, although a six-month extension was allowed. However, we have managed to do it on the very last day possible, which, as I said, is not at a very convenient time, and I would be grateful for the Minister’s comments. I point out to him that, having heard his exhortations to himself to try to do better, we are now in a situation where only one of the last 10 SIs has been implemented on the common commencement date, and even for that one it was the wrong common commencement date. I look forward to a positive response on how performance will improve.

Having said all that, I thought that the Explanatory Memorandum was terrific and I congratulate the civil servants on what they have done. I read it with great interest right the way through. It was convincing and covered all the points that I had in mind. They did a very difficult job very well. It is a very complicated area. I am not complaining about the complications; nevertheless, work was done to try to come up with figures reflective of the changes, and I thought it was very good.

However, what I missed in the regulations was the complementarity of the effect that they will have on consumers. These are the Package Travel and Linked Travel Arrangements Regulations 2018, but they are not to be taken separately from the negative instrument. That instrument will be brought forward by the DfT but I am afraid I could find nothing about it. That may be my fault but I understand that there is to be another regulation which is not under the control of BEIS and therefore BEIS will not be answerable for it. However, as someone who is interested in this area, I, and certainly consumers, would have found it very helpful to have both measures together. I do not know whether the Minister can comment on that but perhaps he can arrange for me either to be informed or to be sent a copy of the negative instrument so that we can see both sides of the story.

The negative instrument, which is coming from the Department for Transport, provides the answer to a number of questions around whether flights booked separately form part of a package. The regulations that the CAA is responsible for come into force because of that instrument and not this one. I think that this is covered in detail in paragraph 4.6 on page 2 of the Explanatory Memorandum. The Air Travel Organisers’ Licensing Act 2017, which was given Royal Assent in November 2017, is the founding legislative form for that.

The other thing that I wanted to pick up was the question of guidance. There are two aspects to that. First, there is the question of how consumers will work out how this is. I would be interested to hear more comments from the Minister on that. Secondly, there will clearly need to be guidance for those in the business who actually operate this stuff. On page 5 of the Explanatory Memorandum, paragraph 9.1 says that BEIS,

“will issue non-statutory guidance for business on their responsibilities under the new Regulations at the same time this instrument is laid”.

As we heard, it was laid on 16 April so presumably that guidance is available. I would be grateful if the Minister could make sure that we get a copy of that as well. I would like to read what is being said by the department to businesses.

--- Later in debate ---

[Lord Snape]

I am sorry to interrupt the Minister again but, regarding the question of what constitutes a package, set against linkage, it is not just about going on to a computer and booking a flight. What would happen if I went into a travel agent and said I wanted a weekend in Marbella, they had the perfect flight for me from Birmingham, my local airport, at 6 o’clock on a Friday evening, I booked it and paid for it there and then, but then said, “What about car hire at the other end?” Is that covered by the package, or is that regarded as a linked package and therefore not covered, in the way that getting the whole thing together and paying for it all at once would be? I am sorry if that is a bit complex, but I hope the Minister understands what I am getting at.

[Lord Henley]

I will deal with these points when I get on to the different sorts of coverage. I was broadly trying to get across that we were trying to give coverage where there was not coverage in the past. I believe it was the noble Lord who congratulated the Government on being the first to offer these protections, helping to get these regulations and trying to get a degree of protection for the consumer in them.

I will deal with some of the points raised, starting with the common commencement date. My advice is generally that common commencement dates do not apply to the implementation of EU legislation and, in this case, there was no compelling reason to diverge from that position. What we did—I appreciate that we have taken some time over it—was to give a degree of time. I think that has been useful for the industry and this is why we have gone up to the wire, going up to 1 July rather than doing it on 1 January.

The noble Lord, Lord Stevenson, also asked about the other regulations coming from the Department for Transport, which will be negative regulations. I remind noble Lords of how seamless the Government are in the way they operate, with no silos between departments. My advice is that the Department for Transport expects to publish its final ATOL regulations and the formal government response to the ATOL conversation in the coming weeks. At the same time, they will be laid before Parliament and come into force in line with the implementation deadline of 1 July, so the noble Lord has time and we will try to make sure that we can meet this.

I return to the questions, largely led by the noble Baroness, Lady Randerson, on the single point of sale and the complication of the LTAs. Put simply, it is when the same retail premises, the same website or the same telephone service is used to put those together. I appreciate there is a degree of complexity; that is why we hope to provide guidance that will help to explain the concept as far as possible, making it easy for the consumer so they know that they are buying an LTA. Although LTAs do not offer the same level of protection as a package, traders who facilitate putting together an LTA will be required to inform the traveller that they are not buying a package and therefore will not benefit from the protections associated with that package.

We want to make sure that there is appropriate guidance to assist the industry with that concept and, as a result, to assist the consumer and make sure that they are aware that they are buying an ATOL-protected product. The noble Baroness was correct to stress the importance of the initials ATOL.