Air Travel Organisers’ Licensing Bill

Jim Shannon Excerpts

2nd reading: House of Commons
Monday 3rd July 2017 Commons Chamber

[Karl Turner (Kingston upon Hull East) (Lab)]

This has been an excellent debate, in which we have had 22 Members speak and no less than 13 maiden speeches. There have been too many to mention, but the contributions have been truly excellent, in what has been a non-contentious debate, given that the Opposition agree with the Government’s position. As my hon. Friend the Member for Middlesbrough (Andy McDonald) stated at the outset of the debate, the Opposition are not opposed to the Bill; indeed, we are broadly very supportive of it. There are, however, some concerns about the impact of some provisions, so we want to press the Government on some issues.

The Bill will bring ATOL up to date and ensure that it is harmonised with the latest EU package travel directive, extending coverage to a wider range of holidays and protecting more consumers, as well as allowing UK travel companies to sell more seamlessly across Europe. Labour welcomes the extensions, which will ultimately help to protect more holidaymakers, but we want clarity on how UK consumers will be protected by EU-based companies, as they will no longer be subject to ATOL, but to member state equivalents.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Karl Turner]

If the hon. Gentleman does not mind, I will not give way at this stage. I am hoping to mention some of the wonderful maiden speeches if I have time later.

The implications of ATOL after Brexit are also a cause for concern. Hidden in the Bill are proposals that the Secretary of State will require only the affirmative resolution procedure to significantly reform ATOL and the air travel trust fund. Labour recognises the merits of some reforms, but we believe that an impact assessment, full consultation and full scrutiny will be required before any fundamental changes are made to this well-respected consumer protection. These issues bring to the forefront uncertainties about the future of UK aviation following the decision to leave the European Union. Labour has been clear that whichever framework is chosen, the Government should prioritise retaining an essentially unchanged operating environment.

In conclusion, the Labour party broadly supports the Bill, as it will extend protections to many more holidaymakers. However, we want clarity on how EU-based companies—which will no longer be subject to ATOL, but rather to their respective member states’ equivalents—will provide protections to UK consumers. We are committed to securing the best possible framework to ensure that the sector flourishes, but this means adequately preparing ourselves for the many implications that Brexit will have for ATOL and our aviation sector as a whole.

Given that I have a few minutes, I want to mention some of the maiden speakers, kicking off with the hon. Member for Redditch (Rachel Maclean). She spoke very passionately about her constituency and the fact that her daughter Ruth encouraged her to stand and continue the long tradition of Redditch electing women to Parliament. That was an excellent move, because her speech was extremely well received and very good. She also spoke warmly of her immediate predecessor, Karen Lumley, who retired from this place due to ill health. We send our very wishes to her from all parts of the House. The hon. Lady also mentioned her predecessor Jacqui Smith, who was the first woman Home Secretary from this place.

The hon. Member for Chelmsford (Vicky Ford) eloquently described the need for consumer protections in this area. She spoke with great knowledge about the EU and the importance of these consumer protections given that we are leaving the EU. I understand that the hon. Lady is a Member of the European Parliament.

My hon. Friend the Member for Crewe and Nantwich (Laura Smith) spoke with great pride about representing the constituency in which she had been raised. She also spoke about the very important issue of gender inequality and the pay gap, and the injustice represented by the WASPI women.

The hon. Member for East Renfrewshire (Paul Masterton) rightly used his opportunity to right the wrong of forgetting to mention his wife in his general election acceptance speech. The hon. Member for North East Derbyshire (Lee Rowley) spoke with great passion about the constituency in which he grew up, and also spoke very warmly about his predecessor, our very own Natascha Engel, who is greatly missed here. My hon. Friend the Member for Weaver Vale (Mike Amesbury) spoke with great passion about his constituency as well, and also, very cleverly, mentioned his wife, referring to the fact that she had been born and bred in Runcorn.

The hon. Member for Clacton (Giles Watling) was, I have to say, very entertaining. He was, I understand, an actor, but he said that this was probably a more interesting theatre. If I remember rightly, he appeared in “Bread”, which I recall watching as a kid. That, of course, was the comedy series about a family in Liverpool who had suffered a terrible time under the Thatcher Government.

The hon. Member for Isle of Wight (Mr Seely) spoke with great passion about notable people in his constituency—too many to mention—but he also decried the privatisation of the ferry service, and many Labour Members would probably agree with him. The hon. Member for Stirling (Stephen Kerr) spoke with great passion about his constituency too, especially when referring to the wonderful shortbread and whisky. The hon. Member for Walsall North (Eddie Hughes) spoke about a very serious issue: the fact that nearly one in four of his constituents do not own a passport, and the importance of the Bill in protecting people who spend an awful lot of their hard-earned money on holidays and expect to be protected by legislation.

The hon. Member for Ayr, Carrick and Cumnock (Bill Grant) spoke of the terrible tragedy that is Grenfell Tower, having had a great deal of experience as a long-standing fire officer. I am sure that the House will benefit from his expertise in that area, and in others.

The hon. Member for Harborough (Neil O’Brien) told us how innovative his constituents were, making everything from jet engines to milk floats. He also mentioned the Jo Cox Commission on Loneliness, and said that he would support it. All of us, in all parts of the House, would be grateful for that support. Last but not least among the maiden speakers, the hon. Member for Dumfries and Galloway (Mr Jack) also spoke about innovation in his constituency, in which the first bicycle was created.

The Bill is not particularly contentious, and Labour supports the Government’s efforts to legislate in this regard.

[The Parliamentary Under-Secretary of State for Transport (Jesse Norman)]

It is an absolute honour for me to be able to close the Second Reading debate on this Bill. I must tell you, Mr Speaker, that when I first looked at the Order Paper and saw that we had six and a half hours in which to debate a Bill consisting of four clauses, my heart slightly quailed for a second, but I would like to put it to the entire House that tonight has been an absolute triumph. I have enjoyed every speech: it has been just marvellous.

When I heard my hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant) stand up and quote, in the context of a number of maiden speeches, the maiden-seducing Robbie Burns himself, and not only that but mentioning his famous poem “To a Mouse”, which begins, as the House will know:

“Wee, sleekit”—

I will not do the accent—

“cowrin, tim’rous beastie,

O, what a panic's in thy breastie!”

I was tempted to think that none of the new Members speaking could count as a sleekit, cowrin or tim’rous beastie, and that the panic was likely to be in the Labour breastie. So it has been a delight. I must say it has been less a parliamentary debate than an episode of “Britain’s Got Talent”, with dazzling speeches and new voices—and especially, may I say with delight, Scottish voices from my side of the House, a rare and delightful occurrence. We have lost great colleagues across the House, but this evening has brought home to us what absolute legends we have received instead.

We have had an extremely useful debate and I warmly thank all those who have taken part, including the many Members on both sides of the House who have made their maiden speeches. As the debate has made clear, this is not a Bill that is politically charged or partisan. We are collectively seeking to act in the interest of the UK businesses that sell holidays, and in particular in the interest of the travelling public who wish to enjoy those holidays free of care. This may not be the largest of Bills when measured in terms of the number of its clauses, but it is a very large Bill when measured by its potential to bring peace of mind to people in every constituency throughout the UK.

That reassurance is what the ATOL scheme was originally created to provide, when it was set up in 1973. Today, not only does it help to prevent rogue traders from entering the market, but it provides important protection to consumers in the event that their travel organiser should fail. It has provided effective protection to consumers for over 40 years and it is well regarded both by those who use it and by the travel sector itself.

Consumer protection is an important pillar of the holiday sector owing to the nature of the market. Holidays are frequently booked and paid for many months in advance of travel, and the consumer may often be unaware of the financial stability, or instability, of their holiday providers. The impacts from the failure of a travel company can be grievous. Consumers may face a serious financial loss from not receiving a refund, or from the cost of having to make alternative arrangements to get home. Even worse, they may experience the trauma, heartache and sheer inconvenience of a cancelled holiday, or of being stranded abroad without accommodation or a ticket back.

[Jim Shannon]

I thank the Minister for his response to the issue that we face. He will be aware that, for many holidaymakers and travellers, delayed and cancelled flights are an issue. Does the legislation that he is bringing forward address the issue for people who are in that very difficult position, whether domestically, in Europe or further afield?

[Jesse Norman]

I am not quite sure I have taken the point the hon. Gentleman has raised. If it is about Brexit, I am not expecting this to change at all. He would be welcome to put the question again if we had more time, but I am afraid I will have to move on. I apologise for that.

The ATOL scheme provides important protection in these situations. It ensures that, if an ATOL holder fails, its customers are able to continue their holiday and return home, or that they will not lose out on the money paid if they are yet to travel. Fortunately, the failure of travel companies is relatively rare, but it does happen. In the last financial year alone, 19 ATOL holders collapsed. In each of those situations, the Civil Aviation Authority had to step in to deliver the appropriate protection to consumers through the scheme.

Many colleagues will be aware of the recent failure of the Spanish online travel agent, the Lowcost Travelgroup. When that business failed last summer, it was reported that there were 27,000 customers on holiday and over 100,000 customers who were yet to travel. Although many of those customers were from the UK, the company did not have ATOL protection as it was regulated under the Spanish regime. The collapse of companies such as that is an important reminder of the need to ensure that consumer protection keeps pace with the way people book their holidays. The huge growth in online booking means that customers have a much wider choice of providers, including those based overseas. Yet it is clear from the low-cost holiday situation that not every travel provider is covered by the same level of protection, and inconsistencies apply across borders. That is why we have already begun to take steps to update the ATOL scheme and bring it into line with modern trade practices.

The Minister of State for transport, legislation and maritime, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), has already mentioned in his opening remarks the legislative changes that we made to ATOL in 2012. These introduced the flight-plus category, to bring ATOL protection to the many consumers who book mix-and-match holidays online, in addition to those who buy traditional package holidays on the high street. The then Government also introduced the ATOL certificate, so that consumers know when they have booked an ATOL-protected holiday, and who to contact if their travel provider fails. We believe these interventions have had a positive impact for consumers and many businesses. Not only have we seen an increase in the number of protected consumers, but the changes have also helped to level the playing field between online and high street businesses.

For similar reasons, we have also been working with the European Commission and EU member states since 2012 to ensure that the European regulations are also brought up to date. The original package travel directive was agreed in 1990, and its provisions were introduced into UK law through the package travel regulations of 1992. As my right hon. Friend said earlier, the ATOL scheme is a crucial means by which UK businesses can meet their obligations to have insolvency protection under the EU directive.

The EU and UK package travel regulations have contributed significantly to consumer protection rights since their introduction. However, those regulations were originally designed for a world where people booked their pre-prepared package holidays through a high street travel agent or tour operator. The regulations thus pre-date the growth in the internet, where people are able to create their own informal packages online. As the House well knows, the internet has since become a vast travel marketplace, providing opportunities for consumers and businesses. Indeed, we heard at the start of the debate that around 75% of UK holidays are now booked online.

That being the case, it is important that regulations and consumer protections are able to keep pace with major changes in the marketplace. That is why a new package travel directive was finally agreed across Europe in December 2015.

The UK Government have supported the rationale for updating the directive, in order to bring greater clarity on what constitutes a package holiday in today’s marketplace and to improve and harmonise protection across the continent. The updated package travel directive will do just that: it brings protection across the rest of Europe closer to the model we have operated since we updated ATOL in 2012. Once again, the UK is leading in Europe; that is good news for consumers.

Overall, it will mean consumers will see insolvency protection extended to cover a broader range of holidays. In particular, it has updated the definition of a package holiday, so that an informal package booked online will need to be protected in the same way as a traditional package holiday booked on the high street.

As has been noted, it also brings a new concept of “linked travel arrangements” into the scope of protection. Like a package holiday, these involve a combination of at least two different types of travel services purchased together for the purpose of a holiday. However, those arrangements are looser, involving the separate selection and payment of each travel service, and separate contracts with different travel service providers. Linked travel arrangements will not be protected to the same level as a package holiday; however, under certain conditions, a refund or repatriation will apply.

There should also be benefits to business. A harmonised approach will help to level the playing field, with the same rules applying for businesses across the EU selling similar products. This harmonised approach will also help to remove barriers for UK businesses that want to trade across borders.

Concerns have been raised about air passenger rights when the UK leaves the EU. The Government are committed to delivering an orderly withdrawal and are preparing to introduce legislation that will preserve the EU acquis on the domestic statute book for the time being. The Government are also seeking to have UK consumers continue to enjoy the strong protections and effective consumer regime that they currently enjoy both inside and outside the EU.

Today, we are taking forward the ATOL Bill to harmonise our domestic regulations with the changes coming in across the EU in 2018. As the House has heard from my right hon. Friend the Minister, the Bill will update the ATOL powers to align them with the scope of the directive. It is a fine piece of work, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Air Travel Organisers’ Licensing Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Air Travel Organisers’ Licensing Bill:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on Consideration and up to and including Third Reading

(2) Proceedings in Committee, any proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House.

(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings in Committee of the whole House.

(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to other proceedings up to and including Third Reading.

Other proceedings

(5) Any other proceedings on the Bill may be programmed.—(Mike Freer.)

Question agreed to.