Air Travel Organisers’ Licensing Bill

Jonathan Edwards Excerpts

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

[Mr Hayes]

I will come to that later, because the hon. Gentleman is right to draw attention to the role of the airlines in all this. As he will know, they are covered by other licensing arrangements, but I will address the specific points that he has made. As ever, he has made a case for his Luton constituents, and particularly for Luton airport, which I know is in his constituency.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

As the Minister knows, Cardiff International airport is owned by the Welsh people via our own Government. What discussions has he had with the Welsh Government about the Bill’s impact on operators working from Cardiff?

[Mr Hayes]

Prior to that first Bill, we had discussions with devolved Governments about its character and content, and I think that there is agreement across the kingdom about the necessity for these measures. I always enjoy my discussions with the devolved Governments, and will continue to do so in my role as Minister of State. However, the hon. Gentleman is right to say that the Bill will affect all parts of our kingdom, not least because of the travel that takes place to and from different parts of it by air. We will certainly want to continue to receive representations from those Governments as these matters roll out.

Before I go any further, let me say something that I should have said at the outset. As you will know, Madam Deputy Speaker, there has been some debate in the Chamber in recent days about sartorial standards. I ought to say, as a matter of courtesy, that I will not be taking interventions from any Member who is not wearing a tie, on whichever side of the House that Member may sit. However, I believe in generosity as well as in courtesy, and I will provide a tie, which I have here, for anyone who is sartorially challenged or inadequate. Of course, I exclude lady Members from that; I would hardly expect them to dress in my tie, their own or anyone else’s.

Let us move to the origins of the UK holiday market. This week will see one of the UK’s, and the world’s, leading travel brands celebrate 175 years of travel. It was on 5 July 1841 that Thomas Cook arranged the first excursion. That was a one-day train journey from Leicester to a temperance meeting in Loughborough. The train carried around 500 passengers a distance of 12 miles and back for a shilling. Contrary to popular belief, I was not the Transport Minister at the time, and I certainly was not one of the passengers, but those early excursions were significant. They helped to form the foundations of the travel and tourism sector in the UK. The growth of the railways meant that, for the first time, affordable travel could be combined with leisure activities or accommodation and offered to a growing population of consumers.

Of course, today’s holidays—today’s excursions—are quite different from those first ones. Society has changed, and the promise of sun, sea and sand means holidays are more likely to be driven by temperature than temperance. I personally choose to have my holidays on the east coast of England, largely, in Broadstairs, Northumberland and most places in between, but not everyone does, and those who want to travel further afield and those who wish to use technology to make those choices will want to know that they are protected in doing so.

The advancement of technology has continued to drive the biggest challenges facing the leisure travel sector. Affordable air travel and fuel-efficient planes mean that people are able to travel further, and for longer. The growth of the internet and mobile phone technologies have revolutionised the way people book holidays, creating greater opportunities for consumers and businesses.

We debated these issues on the Committee to which the hon. Member for Kilmarnock and Loudoun referred. It was clear to us then, and I think to the whole House, that the UK has continued to lead the way. We have one of the most innovative and advanced leisure travel sectors in the world and one of the biggest markets in Europe. Overall, tourism contributes close to £121 billion to our economy annually, with outbound tourism contributing around £30 billion.

Strong consumer protection is vital to underpin confidence in that important sector. By its very nature, there are a number of risks in the holiday market which have existed ever since those first excursions. It is common for consumers to pay up front on the promise of a holiday, which may be many weeks or even months away. There can be a lack of awareness of the financial stability of holiday providers, particularly as services are often provided by third parties. In the rare event of a company failure—I mentioned at the outset that it is rare—consumers may experience a financial loss from a cancelled holiday, or significant difficulties from being stranded abroad. It was against that backdrop that the air travel organiser’s licence scheme, the ATOL scheme, was introduced in the 1970s for UK holidaymakers flying overseas.

I will not tire the House with a long, exhaustive history of the ATOL scheme. I see that that is disappointing to you, Madam Deputy Speaker, and to others, but I want to give all Members as much opportunity as possible to contribute to this important debate. Suffice it to say that the ATOL scheme protects consumers if their travel company fails. It does that in two ways.

First, travel firms that sell flight packages in the UK must hold an ATOL licence, issued by the Civil Aviation Authority. That helps to regulate entry into the market and to filter out companies that are not financially robust. Secondly, the scheme acts as a fund to compensate consumers who might be caught up in a failure. The ATOL licensed company must pay a small levy, £2.50, for each person protected by ATOL. That money is then held in the air travel trust fund and used by the CAA to ensure that consumers are returned home or refunded when a company fails.