Draft Package Travel And Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018

Lord Swire Excerpts

Tuesday 4th December 2018 General Committees

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Mr Hosie. As the Minister indicated, with the rise of the internet and the boom in low-cost airlines, the way we book our holidays has changed significantly. Last year, 38% of all holidays abroad by UK residents—17.5 million holidays—were package holidays. Holidays to the European Union made up 79% of all holidays, and 74% of package holidays, by UK residents. Consumers often buy packaged holidays a long time in advance. They often spend a considerable amount of money—a very significant proportion of their income—on a holiday, including on flights, hotels and car rental.

As the popularity of package holidays rises, so do the risks, including the risk of trader insolvency leaving consumers stranded, the risk of accommodation providers going bust, and the risk of difficulties with access to information, help or redress, to name just a few. That is why the EU directive was an important step forward in protecting consumers in both the UK and the EU.

As the Minister outlined, this statutory instrument amends EU-derived regulations that protect consumers buying package holidays or linked travel arrangements to ensure that these protections continue to operate effectively after the UK’s departure from the European Union. It proposes a new obligation on UK businesses that sell package holidays put together by a European Union business. Those UK businesses will be required to comply with UK insolvency protection requirements, unless they can demonstrate that the EU business has taken out appropriate insolvency protection.

Clearly it is vital that insolvency protection schemes work. To give just one example, in 2016, Lowcostholidays failed, which left 140,000 UK consumers at risk of losing the money they had paid for their holiday, and some stranded overseas. At the time of the failure, the company, which sold primarily to the UK market, was based in the Spanish Balearic islands, following a controversial move in 2013, and its insolvency arrangements were held there. The UK regulator, the CAA, was powerless to prevent the company selling to UK consumers, or to obtain information on its insolvency arrangements. Fortunately, in that case, the majority of UK consumers ended up receiving refunds through the Consumer Credit Act 1974, which covers refunds of credit card payments. However, it has since emerged that the company’s insolvency protection came nowhere near to covering the sales it had made. That illustrates the potential risks of insolvency protection schemes not working in a joined up manner. It is not enough to have a scheme; it needs to work in a joined up way.

The intention behind the mutual recognition rules is to prevent this type of scenario occurring, but without those rules, the only way to do that is to require UK sales to be protected here. As a result of the regulations, the mutual recognition of insolvency protection with EU member states will end. As part of the withdrawal negotiations, have the Government attempted to negotiate continued mutual recognition of this? If not, do they intend to?

As UK individuals and businesses will no longer benefit from mutual recognition of insolvency protection, they could see a reduction in their consumer rights. Is that compatible with the Prime Minister’s statement in October 2017 that she wanted a partnership with the European Union based on strong consumer rights?

Furthermore, the Minister will know when this SI came to the Committee in May, an impact assessment was undertaken, as it was recognised that businesses offering packages that would be newly within the scope of the package travel directive of 2015 would face costs of £21 million in ensuring proper performance of the package. Does she not agree that an impact assessment should have been prepared prior to this debate? The right hon. Member for South Holland and The Deepings asked how businesses could be made more aware of these changes; should that not have been costed as part of an impact assessment? Will she estimate what exactly the cost will be to businesses?

The Minister did talk about an impact assessment. What assessment has she and her Department made of the number of travel companies that may move away from the UK market as a result of the new changes in insolvency protection? Finally, what discussions has she had with British trading standards on the impact these amendments will have on its workload? We know British trading standards has, unfortunately, been underfunded. Will this add to its workload without adding resources? My final question: given the 56% reduction in staffing for trading standards due to Government cuts, has the Minister any assurance to make?

[Sir Hugo Swire (East Devon) (Con)]

How much more money would the hon. Lady’s party give to the trading standards body?

[Chi Onwurah]

I thank the right hon. Gentleman for his intervention, even though it is a little mischievous in nature. As he knows, we would have undertaken these negotiations in an entirely different and more effective way. To ask questions on the detail of what we would do—

[Sir Hugo Swire]

Will the hon. Lady give way?

[Chi Onwurah]

I will finish answering the right hon. Gentleman’s first point before I give way a second time. Asking how we would mitigate the negative consequences of agreements that are part of the Government’s deal—we will see whether it will be approved by the House in a week’s time—is taking hypothetical questions to the extreme.

[Sir Hugo Swire]

For the sake of the Hansard reporters, let me state that I would never want to be accused of saying that the Opposition were strong on detail, but the hon. Lady has just accused the Government of cuts, and of reducing the amount payable to a body, which suggests that her party would commit more funds. It is not hypothetical; we need to know what she means by this.

[Chi Onwurah]

It is entirely wrong to say that I am making an accusation against the Government by simply stating that there was a 56% reduction in staff numbers. How is that an accusation? That is a statement of fact, a statement of the consequence of this Government’s and the preceding Government’s austerity agenda, which has led to our consumer protection services being decimated. The right hon. Gentleman was looking for more detail on this point, and I am happy to give it to him. Our services have been decimated as a consequence of the Government’s austerity agenda. His Prime Minister has said that austerity has ended, but his Chancellor has in no way committed the funds to make that real.

[Sir Hugo Swire]

Will the hon. Lady give way?

[Chi Onwurah]

Again, I would like to answer the right hon. Gentleman’s first point before giving way another time. A Labour Government will ensure that our public services are properly funded. We need to see exactly what mess this Government leaves for us before we can say exactly how much that will cost.

[Sir Hugo Swire]

Hopefully it will not be as great a mess as the one we inherited from her Government in 2010. People are beginning to rumble the Opposition for being opportunistic. The hon. Lady has talked about cuts and decimation; she has accused the Government of decimating this particular body. It is entirely right that, as parliamentarians, we should know what her counter-proposals are. It is no good trying to lose the room in blandishments and vague promises. We need to know, if she has looked at this, how she would better resource it.

[Chi Onwurah]

Our commitments are to comprehensive investment in our public services and our infrastructure, and to strengthening consumer rights and protections. I will not go through every line of funding in our first Budget as a Labour Government, because I am not in a position to do that. However, I am in a position to say categorically that we would not have indulged in the failed economic policy of austerity, which has cut our public services while also giving us the lowest economic growth within the Organisation for Economic Co-operation and Development, and the second lowest within the European Union. If that is successful economic investment, then I think the right hon. Gentleman has a lot to learn about a successful economic policy.

South-west Growth Charter

Lord Swire Excerpts

Tuesday 22nd November 2016 Westminster Hall

[Sir Hugo Swire (East Devon) (Con)]

I congratulate my hon. Friend the Member for South West Devon (Mr Streeter) on securing this timely debate. It is the latest in a series of debates on the south-west and it is fantastic to hear so many colleagues speaking with one voice about our area.

I welcome the south-west growth charter, which originated, as we have heard, at the south west growth summit at Exeter University. I was able to attend part of that summit and I congratulate Pennon, the CBI and the Western Morning News on putting it together. Too often, we have not spoken as one voice in the south-west; the time to do so is now.

It is no secret that the south-west has lost out in terms of infrastructure investment in comparison with other areas. I just say gently to the right hon. Member for Exeter (Mr Bradshaw), who talked about successive periods of under-funding, that he was a member of a Labour Government that did nothing for the south-west for 13 years. Nevertheless, it is true to say that during those years, and before, we have suffered from under-investment. One example is that during the past 20 years transport spending in the south-west has averaged £35 a head compared with a national average of £98 a head, which has left the region £2 billion behind other areas. That has been a wasted opportunity, considering the vast economic potential of the area.

To take my own constituency of East Devon as an example, just a week or so ago I was at Exeter science park to look at the new £97 million Met Office supercomputer, which will make Exeter and the surrounding area a world-class place to do science. There is also the brand new and growing community of Cranbrook, just near Exeter airport, which offers another fantastic opportunity for local growth. As for Exeter airport itself, I very much hope that the Chancellor will say something about air passenger duty, which discriminates against Flybe, which operates out of the airport.

The south-west has huge connectivity, not least to Northern Ireland. When I was Minister of State for Northern Ireland, I used to fly regularly from Exeter to Belfast. I must say that the south-west welcomes tourists, of course, not least—I am pleased to say that I was in some way involved with this—the First Minister of Northern Ireland, who has holidayed in Cornwall in the past few years and who enjoyed herself there very much indeed.

I welcome Government plans to dual and upgrade the A30 and the A303. This is a much-needed and overdue upgrade that should have been carried out decades ago. I regret that there is still a question over some of the funding for this project; that question needs to be urgently resolved. Personally, I am disappointed that full dualling of this stretch of the road has been ruled out. I believe that a half-baked compromise will give the impression, once again, that the south-west is forgotten when it comes to infrastructure investment.

I give wholehearted support to the work of the Peninsula Rail Task Force. We have heard about the timely announcement today; it is also an appropriate announcement, in a sense, given the problems we are experiencing today as a result of all trains from Exeter to Taunton being either delayed or cancelled. That underscores, yet again, the need for greater resilience, faster journey times, more capacity and connectivity. These are absolutely the right priorities.

I also agree with the right hon. Member for Exeter that too often over the years when we have heard about investment in the “south-west”, people are talking about Bristol. However, some of us in the Chamber mean Exeter, Plymouth, Penzance and so forth, and we would like to see some of the money that is going to the north of England to unlock the northern powerhouse and to provide HS2 being used instead for small projects in our area. For instance, I support Devon County Council’s bid to the new stations fund for a new station at Marsh Barton, in the right hon. Gentleman’s constituency, which will make it much easier for constituents in East Devon and so forth to travel into and around Exeter and the surrounding area.

On broadband, we have had some leaked announcements, or some possible announcements, coming out of the autumn statement that we will have more money for connectivity and broadband. Again, we cannot argue for that too much in the south-west; it is absolutely a priority. Curiously, it is the more urban parts of East Devon, such as the Exeter suburb of Newcourt, that often have the worst internet speeds in the area, so improving connectivity and broadband is absolutely key.

As for the growth deal funding, considering the historic underfunding and the future potential of the south-west, it is disappointing—to say the least—that the provisional growth deal award is set to be so low. The Heart of the South West local enterprise partnership put together a £109 million growth deal that contained 26 projects, including investment in superfast broadband. The provisional allocation of £15 million to £20 million is nowhere near sufficient and the Government need to go away and look at this issue.

As the right hon. Member for Exeter reminded me, it was the south-west Members of Parliament who delivered a victory for the Conservative party in 2015. So, we are owed for the victory that led to the formation of a Conservative Government. We had a manifesto for the south-west and at the next election in 2020 we should feel proud to be held to account for the commitments that each and every one of us stood on. At the moment, we have made a start, but we are by no means there. Nevertheless, this debate today represents a good move in the right direction.

--- Later in debate ---

[Jesse Norman]

The idea is not to slow the process of investment—as has been recognised today, there has been considerable investment across the south-west, in the form of city deals, enterprise zones, expansions and local growth funding—but to incorporate it within a more nuanced national consensus about what the future will look like, out of which we should get a shared view of how the south-west and other parts of the economy can grow.

I draw my hon. Friend’s attention to the Prime Minister’s early words: she pointed out that there are no privileged areas of the country. Some might have had deals in the past, on the basis of areas coming together, but that model can be embraced by everyone. One of the interesting things about this debate is that the unity of Members of Parliament is so evident, but it is not absolutely evident that that unity is shared all the way down the tree of local government. It might be worth reflecting on whether that might have an impact on the region’s long-term development.

[Sir Hugo Swire]

My hon. Friend the Minister is doing a magnificent job at a time when it is impossible to get from Exeter, the capital city of Devon, to London because we have no trains. Can he communicate our frustration to the Government? If that were the case on the lines from Leeds to London, from Bradford to London, or from Manchester to London, there would be merry hell. We will not continue to put up with this sort of neglect for much longer.

[Jesse Norman]

I welcome my right hon. Friend’s point. I need not say it myself, because he did so much more eloquently than I could. I recognise the issue that he and my hon. Friend the Member for Torbay (Kevin Foster) referred to, which was mentioned in the Peninsula Rail Task Force report, and on which campaign work has been done. I congratulate them on that.

I am conscious of the passage of time, notwithstanding your incendiary words, Sir Roger, so let me proceed. The key themes of the industrial strategy will be those that have been flagged up in this debate. There will be an emphasis on sectors, the commercialisation of research and development, and innovation, and there will be a particular focus on infrastructure, skills and abilities, and the embedded institutions in particular regions. Those issues have been brought out very well today.

As the hon. Member for South West Devon said, this is a relatively tightly defined debate in terms of place, but an industrial strategy has to reflect the fact that places are very different from one another. Defining what the south-west is and where it ends can be a challenge for the Government, even if it is not a challenge for those who live there. It is an extraordinarily diverse, beautiful region, which has extraordinary assets to be cherished and developed. It is home to world-class universities, very skilled people and hundreds of thousands of growing businesses, many of which are in advanced, high-tech areas. The development at Hinkley Point C, which has already been mentioned, will give the region a major boost. The counterpart to that is the need to invest in smaller pieces of infrastructure.

An awful lot of people’s happiness, certainly in rural areas —I speak as a Member of Parliament for Herefordshire, which can only gaze at the quality of the south-west’s infrastructure and its access to higher education—depends on small-scale road and rail infrastructure, as well as large-scale connectivity. I certainly hope, as I know colleagues do, that that aspect of infrastructure development will be reflected in the plans to come.