Holiday Pricing

Julian Lewis Excerpts

Monday 24th February 2014 Westminster Hall

[John Hemming]

I thank the hon. Lady for making that excellent point. I would happily have made it myself, but I now no longer need to.

[Dr Julian Lewis (New Forest East) (Con)]

I draw the hon. Gentleman’s attention to the situation of my constituent Amanda Wooding, who is a child care specialist. She, of course, finds herself particularly in demand during the school holidays, but she has children of her own, so she can never take them on holiday at other times because of her profession.

[John Hemming]

The hon. Gentleman makes an excellent point. The issue is all about considering individual cases. Perhaps the hardest case is that of the police, who not only often do not have any choice as to when they take holiday, but also can be fired if they are fined. That is a double whammy. Not only is taking holiday difficult; they also face losing their job. That is clearly unfair to those people.

Another constituent of mine says that they have one family holiday a year. Until this year they have been fortunate enough to take it for a week during the school term, always authorised by the school, but they cannot afford to take the same holiday during the school holidays, although their children’s attendance is otherwise excellent. That is my constituent’s point: they ensure that their children’s attendance is excellent and that they maintain their educational standards, do work and so on. Now, from a cost-effectiveness point of view, it is cheaper to pay the fines. It is not very good to have a structure in society that effectively encourages people to break the criminal law because it would cost them thousands of pounds not to.

I have another story from some people from Australia who have difficulty visiting family if there is no flexibility at all. They say:

“What is clear is that this ruling actually favours the rich. Those who can afford it pay the fine for taking their children out—I know of one family who recently took themselves skiing to do this—while those on low incomes who cannot afford the fine but feel they must go will get a criminal record. The ruling is draconian.”

Similarly, I have a constituent with links to Pakistan who has concerns that the ruling is damaging their family links as well. Those examples give us some idea of the exceptions that are now not being treated as exceptions.

On mechanisms for change, we should first look to the Taylor report itself, as that drove the changes. Recommendation 6 was that

“changes are made to the pupil registration regulations to strengthen the rules on term time holidays. While head teachers should continue to have discretion, holidays in term time should be the exception rather than the rule.”

Actually, they are not happening at all now. One obvious question in all this is what pressure Ofsted is placing on head teachers to reduce the numbers. The numbers were that 7.5% of absence in primary schools and 2.5% in secondary schools was related to holidays. Obviously, if head teachers are under pressure to reduce those numbers, there will be an effect.

We must consider the mechanisms for change. One is for the Government to produce guidance saying clearly that going to a great-uncle’s funeral, for instance, is reasonable. Secondly, the Government could introduce a new statutory instrument changing the regulations. The final question is whether a judicial review under article 8 of the European convention on human rights, or using the UN convention on the rights of the child—a point made in one of the other petitions—could have an effect.

There is undoubtedly a problem. The fact that so many constituents have highlighted the issue and so many people have signed online petitions about it demonstrates that. There are numerous solutions, including working with schools to stagger school holidays or changing regulations. We need to do something.

--- Later in debate ---

[Damian Hinds]

The hon. Lady is correct that the rises coincide with school holidays. To some extent, the existence of those holidays creates those spikes, but the holidays themselves coincide with the high season. As I outlined earlier, the prices for holidays marketed to couples, older people, singles, groups and clubbers typically go up in late July and August because that is the most popular time of the year, particularly to visit European, sun-based resort destinations.

This debate is no place to start deconstructing the profit and loss accounts of holiday companies, but contribution to profit is a key concept. I will talk about hotels, but the same logic applies to airlines and other travel products. The direct marginal cost of someone staying in a hotel room is rather low. Globally, the figure is somewhere between $15 and $20. That is the cost of laundering towels and sheets, issuing soap and providing heat, light and power, and so on. On one level, a hotel will make a profit if it charges anything over $20. The problem is that there are other, fixed costs. For an airline or hotel, the biggest fixed cost is the building or aircraft—loan repayments do not go up and down. Taken together, the cost per night goes up from $20 to, say, $100, which is a big difference. In the off-season, a hotel room might be sold for $80, $70, $60 or $50 a night. In other words, a hotel might deliberately make a loss. Why would a hotel do that? It does it because as long as it charges more than $20 a night, which is the direct marginal cost, it is contributing to profit. If a hotel tried to charge the $100 profitable rate, it would not sell the room.

[Dr Julian Lewis]

I fully appreciate my hon. Friend’s argument that the rich seasons help airlines and the tourist industry to function during the off-seasons. What does he think would happen if some flexibility were introduced so that schools in different areas took their school holidays at different times? Would he anticipate prices remaining low during those times, or would he anticipate the travel industry increasing prices to reflect such an expansion of the season?

[Damian Hinds]

My hon. Friend makes a good point. The short answer is that such a measure would be welcomed by the travel business because it would extend the season, which would be good for capacity utilisation. There would be an effect, but the effect would not be nearly as big as many people anticipate. The season might be extended by a week or two, but those would still be shoulder periods. They would not be peak periods, so there would be a difference, but the difference would not be huge.

--- Later in debate ---

[Penny Mordaunt]

rose—

[Dr Lewis]

rose—

[Mr Mudie]

I said that I would give way to the hon. Lady.

--- Later in debate ---

[Mr Mudie]

I will answer my hon. Friend when I come on to the DFE. I was thanking the people who have signed the petition, because they have performed a great feat in putting the matter in the public consciousness and the political arena. However, we would be making a grave mistake if we chased after the Department for Business, Innovation and Skills. From the answer it gave to the e-petition, I am sure that the Department would not bother if we chased after it, because its answer is quite dusty, but I have some sympathy for it, as the people who should be answering are in the DFE.

[Dr Julian Lewis]

I am slightly conflicted over the whole issue. The hon. Gentleman made the point about people needing to save money. A constituent of mine, Joy Drake, took her children on a once-in-a-lifetime holiday and saved £1,000 on the air fares. Does he not agree that, if the issue is left to individual head teachers and schools, they will be put in an invidious position in deciding which families get to save on the air fares and which families do not? Therefore, should we not look at something that enables the general discretion to be applied—other than, of course, bereavements and similar things—as to when the holiday is taken by everyone, rather than just flexibility on an individual case by an individual head teacher?

[Mrs Annette Brooke in the Chair]

[Mr Mudie]

That is an important point.

One of the things that has come from this e-petition is a request from the travel and tourism industries to get together with the Government and local authorities to see if they can work something out to alleviate the problem. The option of regional staggering has been mentioned on more than a couple of occasions. That is one thing that the industry has suggested it wishes to talk about. It has asked for talks, and I look to BIS for an acceptance of that invitation and to get the industry around the table as soon as possible to start talks. I say that not because a quick solution would be forthcoming, but because it will take such a time to get a solution that the sooner they start, the better.

[Mr Andrew Turner in the Chair]

Let me return to the point made by my hon. Friend the Member for Wirral South (Alison McGovern). In this place, roles are reversed at a bewildering speed. If I was standing here giving the education policy of a future Labour Government, I would be told, “You don’t trust the professionals. Leave it to the doctors and teachers”. When the solution—this is coming from a Labour MP—is about trusting head teachers, suddenly that is not enough.

I have discussed this matter—more than anything else this past week—with my wife, who is a head teacher, and all I get is common sense. None of us would be prepared to stand here and say this, particularly as two weeks ago, my wife had Ofsted in at 24 hours’ notice, but head teachers have great discretion, great judgment— on the whole—and great empathy. They have great relations with parents and know them. They can look at the attendance records and do all the things that have been suggested as a matter of common sense and as part of being a good head running a good school. I would be content to leave it at that.

I would like hon. Members to say if they had a problem with kids’ attendance when families could take an in-term holiday. Where were the letters about that? Where were the public complaints? They were not there—it was not a problem. What did the Secretary of State for Education do? I do not want to make the issue political; I have been gently asking him, for once in his life, just to act with a bit of humility and take the measure off the table, and I do not want to make it easy for him not to do it by being political. That is all he needs to do, because the situation was okay.

Due to the fuss that has gone on and the hurt that has happened, why should the Government not just take the measure off the table? The Secretary of State has caused it, so he has in his hands a remedy. If he wants change, he should get together with all the parties. Even the travel trade is saying that it has to lay people off because the measure is affecting its business.

What have the Government done? They have put through the measure without any real consultation. The first bad thing the Secretary of State did was to push through the measure to operate from last September, but people had already made their arrangements for holidays. They had taken the advice of the travel trade and got in quick, seeking the cheapest bookings. Suddenly, it was illegal to do so. There was no consultation. The measure was peremptorily introduced, smuggled through the Joint Committee on Statutory Instruments.

The second bad thing is that the Secretary of State will fine the parents £60 if they do it, and it could be £120 if they are late in paying.