Business and Planning Bill

Baroness Doocey Excerpts

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

Moved by

[Baroness Doocey]

55: After Clause 15, insert the following new Clause—
“Amendment of the Package Travel and Linked Travel Arrangements Regulations 2018
(1) The Package Travel and Linked Travel Arrangements Regulations 2018 (S.I. 2018/634) are amended as follows.(2) In regulation 2(3) leave out “at least two different types of” and insert “the carriage of passengers with at least one other”.(3) In regulation 2(5) leave out “at least two different types of” and insert “the carriage of passengers with at least one other”.Member’s explanatory statement
This new Clause seeks to amend the Package Travel and Linked Travel Arrangements Regulations 2018 make transport a mandatory component of package travel. This would allow small local businesses to make a combined offer without incurring the responsibilities of a package holiday operator.

[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.

--- Later in debate ---

[Earl Howe]

My Lords, Amendment 55 tabled by the noble Baroness, Lady Doocey, and the noble Lord, Lord Redesdale, seeks to alter the package travel regulations in a manner similar to the amendment tabled in Committee. The noble Baroness is right to identify the difficulties facing the UK tourism sector, in particular the many SMEs in the sector. It is therefore right that we do all we can to support this sector through the crisis.

On 3 June, we announced a £10 million kick-starting tourism package, which will give small businesses in tourist destinations grants of up to £5,000 to help them adapt following the pandemic. As of last week, the VAT rate applied to most tourism and hospitality-related activities has been cut from 20% to 5% for six months to help the sector get back on its feet. We have launched the “enjoy summer safely” national marketing campaign to encourage British people to enjoy UK tourism. Ministers and officials have been meeting representatives from the tourism sector regularly via the Tourism Industry Emergency Response Group. We are actively considering all the recovery ideas suggested to us by stakeholders, including schemes to promote domestic tourism.

In that spirit, I would like to follow this up by arranging a meeting with the sector representatives that the noble Baroness, Lady Doocey, has met to explore the points she has made about domestic tourism and package travel. I hope that offer is welcome. As confirmed in Committee, the Government have indicated that we will undertake a further review of the package travel recommendations. As these are EU laws, this review is better conducted when the transition period with the EU is over. I say that with some emphasis, as the EU Commission has recently commenced infraction proceedings against several member states that have amended laws in contravention of the package travel directive.

It is also important to reflect, as the noble Baroness recognised, on the balance to strike between business flexibility and consumer protection, so it is important to consult a wider range of interests. For the reasons I have given, I am not able to accept this amendment, and I hope the noble Baroness feels able to withdraw it.

[Baroness Doocey [V]]

I thank the Minister for his response, for offering to review the regulations and for the meeting that he suggested. It will definitely be followed up. If we wait until January 2021 in order to start reviewing the regulations, I fear that tourism will be pushed to the back of the queue behind so many other issues that the Government will need to resolve after Brexit is complete. I therefore suggest that the review should take place now in readiness for legal change as soon as possible in the new year. I hope the Minister will consider this, that we can discuss it further at the meeting he suggested and that he will engage further with me and the industry on this critical point of timing. However, at this stage I thank the Minister for the constructive way in which he has engaged with this issue, and I beg leave to withdraw the amendment.

Amendment 55 withdrawn.