Antoinette Sandbach
Main Page: Antoinette Sandbach (Liberal Democrat - Eddisbury)Department Debates - View all Antoinette Sandbach's debates with the Department for Transport
(5 years, 2 months ago)
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Grant Shapps
Let me see what we can deal with here. It is true, as the hon. Gentleman outlined, that the world has changed. In 2007, Thomas Cook bought MyTravel just as the internet was starting to take off. In 2016, when the high street was clearly struggling because the internet had taken off, it bought the high street shops of Co-op Travel, further expanding its problems and its massive debt to £1.7 billion. I agree with him that this was, in the end, a very poorly run business that was going in the wrong direction at the wrong time.
The hon. Gentleman made a very sensible point in his query about the return of the bonuses that we have all been reading about. I have described how my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has written to the Insolvency Service. Under the Insolvency Act 1986, the official receiver has the power to require the return of bonuses in certain circumstances. I absolutely agree with the hon. Gentleman that that needs to be fully looked into, including the role of the auditors.
That is where we agree. Where we disagree is that it is not the case that this situation is somehow unique to Thomas Cook. As I mentioned, airlines elsewhere in the sector are in good health. Many of them have been very helpful in bringing Thomas Cook passengers home over the past couple of days and have offered extraordinary help, even lending aircraft and, in the case of one well-known airline, cutting prices for Thomas Cook customers, rather than charging more. However, in response to what the hon. Gentleman said about this insolvency, it is only right to point out that Germania, a German airline, went bust; Primera Air, a Danish airline, went bust; Air Berlin, a German airline, went bust; as did Cobalt Air of Cyprus and FlyVLM of Belgium. This is not a UK issue; this is an issue where some airlines manage to do the right things and succeed, and others do not.
The hon. Gentleman rightly mentioned what has happened with Condor. Here, we will find partial agreement and partial disagreement. Condor was operating under a somewhat different business model. In Germany, people do not book holidays in quite the same way as they do in the UK, partly because UK citizens tend to use the internet in a different way and are much more becoming their own travel agents. With Condor, the business remained profitable. [Interruption.] The hon. Member for York Central (Rachael Maskell) asks what difference that makes. The difference is that it was a profitable business, unlike the business here.
It is also the case—this is where I think there will be a degree of agreement—that German insolvency rules allow for administrations to take place, and then for aircraft to carry on being used and for other buyers to come in during the administration process. That is not something that our current rules on airline liquidation and insolvency allow for.
The hon. Gentleman rightly pointed out that the previous Secretary of State said he wanted to do something about that and commissioned a review. So that we are all clear on the timeline, that review reported on 9 May 2019. It suggested that we should have rules that are not dissimilar to the German rules to allow our airlines to trade in administration. That would make repatriation massively easier, because we could use those airlines. I entirely agree with the hon. Gentleman on that. Perhaps he did not hear me mention it during my statement, but we need a new Session of Parliament to introduce that primary legislation in order to bring that in. We are very happy to have a new Session of Parliament. If we get agreement, perhaps that is something we can progress.
I believe that, given the number of people and the number of lives that have been affected by this situation, we should be working together cross-party to get this job done. I welcome the hon. Gentleman gesturing that he will provide support to sort out this problem, because that would clearly be in everybody’s interest.
The hon. Gentleman referred to whether foreign Governments were prepared to ride to the rescue. I confirm that I received no approach from the Turkish Government and that the only contact via the Spanish Government was not a viable plan and came so late in the day that the company was already starting its administration proceedings. There was no viable plan out there at the time.
I agree with the hon. Gentleman that the ATOL system should be reformed. As he rightly pointed out, although the funds are limited because of Monarch, ATOL itself is reinsured to cover most of that cost. Finally, on a point of accuracy, he mentioned that £40 million has been spent on Monarch. In fact, we think that the final cost was £50 million.
Mr Speaker
We cannot take points of order during a statement. Points of order will flow after either this statement or other statements at the discretion of the Chair.
Grant Shapps
I do have a lot of sympathy with the hon. Lady’s comments. To me, the process of knowing that an airline is struggling and having Operation Matterhorn underway without being able to say anything, lest it precipitate collapse, is highly unsatisfactory. Many hon. Members have mentioned the need to have a route out of this situation—one that includes administration, so that there is no instant collapse and there is a much better and more controlled path for everyone, including employees. I agree absolutely with the hon. Lady, and we will get something done about this.
Antoinette Sandbach (Eddisbury) (Ind)
Will the Secretary of State join me in praising Thomas Cook employees who turned up for work on Monday to help to repatriate passengers? Will he make sure that the inquiries by the Insolvency Service take in the impact on Thomas Cook of the 20% depreciation in the pound against the euro, to help an assessment of whether other travel industry firms based in the UK are vulnerable to those currency movements?
Grant Shapps
My hon. Friend is right about the extraordinary work done by employees who know they have lost their job still working, even today, and by those who are uncertain about their future in many foreign and British locations. I pay tribute to them on behalf of the whole House, I am sure.
Many factors led to the collapse of Thomas Cook. Management, which has been mentioned many times, makes a large contribution, but so do other factors, including a very hot summer last year, which stopped people from going away, following the wrong business model, and the growth of the internet—problems that stretch back way before any of us in this House voted to have a referendum on Brexit.
Antoinette Sandbach
At the start of this session, the Secretary of State gave the impression that primary legislation could not be introduced in this House without a further Prorogation of Parliament and a Queen’s Speech. I seek your guidance on whether that is, in fact, the correct position.
Mr Speaker
In procedural terms, there is no bar to the introduction of primary legislation in the course of the current Session, if the Government are minded to schedule it. I think, to be fair to the Minister, what he was probably driving at is that the Government have to take a holistic view of a wide range of potential legislative options, and that the best or most propitious time for considering the inclusion of a new measure might be in the context of the Gracious Speech. I am sure that that is what the Secretary of State meant to say, and as he did not quite get round to saying it, I know that he will be inordinately and probably permanently grateful to me for saying it on his behalf. We will leave it there for now.