Air Travel Organisers’ Licensing Bill

Lindsay Hoyle Excerpts

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Report stage: House of Commons
Tuesday 11th July 2017 Commons Chamber

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

I beg to move amendment 2, in page 1, line 13, at end insert—

“(4) The Government must publish a review within one year of this Act receiving Royal Assent on the impact on UK consumers using EU-based companies affected by changes to consumer protection introduced by this section.”

This amendment requires the Government to review the impact of provisions under this section to ensure that they are not adversely affecting UK consumers using EU-based companies.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

With this it will be convenient to consider clause 1 stand part.

[Karl Turner]

The amendment would require the Government to review the impact of clause 1 to ensure that it does not adversely affect UK consumers using EU-based companies. Essentially, the clause updates ATOL—the air travel organisers’ licence—to ensure that it is harmonised with the 2015 EU package travel directive. The provision therefore extends ATOL to cover a wider range of holidays and protect more consumers. UK travel companies, we are told, will be able to sell more seamlessly across Europe, as they will need to comply with protections based not in the country of sale, but the country in which they are established. Those are the objectives that the Government seek to achieve. There is no difference of principle between the Government and the Opposition on this matter. Indeed, it is due to the package travel directive that it has been necessary to put such a provision into the Bill.

However, we seek clarification on some issues, which was why we tabled amendment 2. The amendment would provide a guarantee that the Government will review the impact of the ATOL revisions to ensure that they do not adversely affect UK consumers using EU-based companies. The whole idea of the clause is to improve the range of protections available. The broad substance of the changes to ATOL are necessary and are broadly welcome. As I said, they will harmonise UK law with the latest EU package travel directive, and that should have many benefits. A wider range of operators, including more dynamic package providers, are likely to be covered by the changes. That will hopefully bring protection to many more UK holidaymakers who are not covered under existing ATOL provisions.

For UK travel companies, standards will have to be in line with those of the country in which the company is established, rather than the place where the company sells the holiday. That should mean that companies established in the UK can sell far more seamlessly across Europe by simply adhering to the widely respected ATOL flag. However, the changes at the EU level could have adverse effects for UK consumers who purchase their holiday or travel from EU-based travel companies, rather than British companies that sell into other European countries.

Amendment 2 would address that issue. The changes made through the directive will now mean that EU-based companies selling in the UK will have to adhere to ATOL-equivalent insolvency protections laid out in the member state where the business is based. In practice, that could lead to unintended consequences and, more significantly, costs for UK consumers. Processes and timescales for recompense may be distinctly different from what many travellers would expect under the current ATOL provisions, which are in many ways regarded as the gold standard.

The impact assessment warns:

“If consumers purchase a trip from a business established elsewhere in the EU and the company becomes insolvent there may be some costs to the consumer of processing a claim with a non-UK insolvency protector.”

Based on the latest Civil Aviation Authority figures, this will affect not just a relatively small number of holidaymakers. If this goes wrong, more than 500,000 passengers could be compromised, so a significant number of people could be adversely affected. It is therefore important that the Government take steps to anticipate and prepare for any possible negative impacts.

Amendment 2 would achieve that by requiring the UK Government to monitor the impact on UK consumers using EU-based companies. That would help to inform whether the UK Government should consider issuing further guidance, or co-operating with consumers and member states to ensure that protections are adequate.

The changes envisaged by the clause clearly make sense and are in line with what is required under the package travel directive. There is no doubt that when UK-established companies are selling into other countries, the consumers in those countries will have the benefit of the gold standard of ATOL protection. However, we are concerned about the protection given by EU-based companies selling in the UK. We hope that it will be equivalent to that under ATOL, but it will be subject to the rules and regulations of the EU country concerned. We are nervous about whether UK holidaymakers could lose out, so we are asking the Government to consider the issue and to monitor the situation properly.

As with so many other things, the environment is changing, particularly in relation to Brexit. ATOL will still be there post-Brexit, but we will explore possible changes when we discuss the next group of amendments. The package travel directive will no doubt still be there for those states that will still be members of the EU. What is uncertain at this stage is what the interface will be between the two things post-Brexit.

--- Later in debate ---

[Vicky Ford]

I do recall mentioning in the Chamber the last time we discussed the Bill that I chaired the negotiations on the package travel directive in my previous role.

My right hon. Friend refers to the technicalities of the amendment. Of course we should continue to review the impact of the changes on British consumers, because the Bill means that the ATOL guarantee will cover companies based in the UK, not companies selling into the UK, so it would not, for example, have caught the Low Cost Holidays situation last year.

On the technicalities of the impact assessment, if we read the underlying package travel directive, member states in Europe are not due to implement—

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order.

[Vicky Ford]

rose—

[The Chairman]

Order. It is one thing to intervene, but another to make a speech. Please, if the hon. Lady needs to do that, she should do it over a couple of interventions. When I stand and say, “Order,” she should please sit down. I do not want to stop a new Member; I want to try and help you, but you have to help me as well. If you need to come back, I am sure the Minister will give way again.

[Mr Hayes]

I am extremely grateful, Mr Hoyle.

I will address my hon. Friend’s remarks later in my brief speech. She is right, of course, that it is too early to know how the package travel directive will lead to changes in purchasing behaviour across borders. That was a point that the hon. Member for Kingston upon Hull East made, too. We hope—

--- Later in debate ---

[Mr Hayes]

Well, okay. I am being persuaded to do so by popular demand and acclamation.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. The Minister says “by popular demand”, but those Members were not here when he first started. He has had to wait until now.

[Hon. Members]

Start again!

--- Later in debate ---

[Mr Hayes]

I do not know whether anyone else wants to—

[The Chairman]

Order. The danger is that someone might blow out that light. Come on, Minister.

[Mr Hayes]

I just wondered whether anyone else wanted to intervene in a similar vein.

--- Later in debate ---

[Victoria Atkins (Louth and Horncastle) (Con)]

My right hon. Friend and Lincolnshire neighbour, as a Transport Minister, has been diligent in attending to the concerns of my constituents about the infamous Bull Ring bottleneck in Horncastle, where the A153 and A158 cross. Has he paid the same diligence, care and attention to this Bill, such that he is able to reassure the Committee that the amendment is not to be passed and that we must keep the Bill as it is?

[The Chairman]

I have been quite generous to Members coming in late and intervening. If you are going to intervene, let us have short interventions.

[Simon Hoare]

It was short.

--- Later in debate ---

[The Chairman]

Mr Hoare, I assure you that I do not need any advice. I remind the Minister that there are others who wish to speak, including on his own Benches.

[Mr Hayes]

Then I will draw my remarks to a gradual conclusion. I have already brought my introductory remarks to their conclusion, and I am now moving to the main thrust of my response to the hon. Member for Kingston upon Hull East.

--- Later in debate ---

[Patricia Gibson]

The Minister is being a wee bit disingenuous here—

[The Chairman]

Order. That is not a word we would use, and I am sure the hon. Lady can think of something much more pleasant. The Minister is a nice man, after all, and I do not believe he would mislead the House.

[Patricia Gibson]

The Minister is an eminently sensible man, but the point is that I can only wonder why he is resisting yearly reviews which he has told us already happen. If they already happen, why not write them into this piece of legislation, if for no other reason than to reassure passengers as we face a post-Brexit world? I know he is an honourable man, and I urge him to reconsider and accept the amendment.

--- Later in debate ---

[Patricia Gibson]

I beg to move amendment 1, page 2, line 10, at end insert—

‘(8) Regulations under subsection (6) may not be laid before Parliament until the Secretary of State has published an assessment of their impact and has launched a consultation on the proposed amendments to the definition of “Air Travel Trust.””

This amendment requires the Secretary of State to undertake an impact assessment and launch a consultation before bringing forward any regulations to amend the definition of Air Travel Trust under this Act.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

Amendment 3, page 2, line 10, at end insert —

‘(8) Before laying regulations under subsection (6), the Secretary of State must publish a full impact assessment and consult on the proposals.”

This amendment would require the Government to undertake a full impact assessment and consultation before bringing forward regulations to create any new air travel trusts through an affirmative resolution.

Clause stand part.

[Patricia Gibson]

Amendment 1, which stands in my name and that of my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), would require the Government to undertake a full impact assessment and consultation before introducing any regulations to amend the definition of air travel trust under the Bill. Clause 2 requires that—[Interruption.]

[The Chairman]

Order. There is a lot of conversation. I really am struggling to hear, and I am not sure whether the mic is picking up this speech. Would hon. Members please have their conversations when they have left the Chamber?

[Patricia Gibson]

Clause 2 requires only that the Secretary of State has an affirmative resolution from each House of Parliament, but that is not enough. The Government should be required to conduct a proper consultation and assess the potential impact of any proposed changes to the ATOL scheme and air travel trust that they intend to introduce through secondary legislation. Any proposals must be fully transparent, and consumers and businesses alike must be formally consulted in the process to allow for proper scrutiny. We trust that the Minister will accept that and our reasons for tabling the amendment.