Air Travel Organisers' Licensing Bill

Lord Callanan Excerpts

Report stage (Hansard): House of Lords
Wednesday 25th October 2017 Lords Chamber

[Baroness Randerson (LD)]

My Lords, I have added my name to this amendment because I felt that it raised some important issues for the Government to look at. I also felt it would be genuinely useful if the views of the Government on the progress made so far were put on record.

At the time of the failure of Monarch Airlines the Minister, in his Statement to the House, emphasised that it was the largest repatriation since D-day. But I put in contrast what the airline industry said in my discussions with it: that Monarch was a small airline and that the problems would arise if a big airline were to fail. Of course, those I spoke to believe that their whole industry is in robust health and that Monarch is definitely not an example of its state generally. The point is that, as the noble Lord, Lord Rosser, has just said, airlines have failed before and undoubtedly, at some point in future, something like this will happen again.

We are looking here at whether the Government have set some kind of precedent by bringing everyone back, for understandable and excellent reasons. I think everyone supports the way that was done and the reasons for doing it. But the point is that if and when it happens again people will expect a similar response and, for that to be possible, there needs to be a scheme. The consumer understands that there is a need for a scheme and understands the ATOL scheme. What the Monarch passengers probably did not understand was why some of them were covered by something and others were not. In the end, the Government need to look at the new ways of working—the new ways in which travel is offered—and present a new scheme which covers them. In the days when the ATOL scheme was devised, package holidays covered a huge percentage of the market. That is very much less the case now.

It is also important to look not just at the passengers who are affected by this. One airline’s failure can often adversely affect a number of package holiday operators. If one airline fails, several package holiday operators will find their business seriously affected. There is a serious knock-on effect within the industry from this and it needs to be addressed. I shall listen to the Minister’s answer with interest.

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)]

I thank the noble Lord, Lord Rosser, and the noble Baroness, Lady Randerson, for their contributions and for the constructive way that they have approached the Bill. I am extremely grateful to them and I recognise the purpose of Amendment 1 —to ensure that ATOL protection covers flight-only bookings made through airlines—but the simple fact is that the proposed amendment would not achieve that aim.

--- Later in debate ---

[Lord Callanan]

Before I turn to the subject of the noble Baroness’s amendment, which is about information to consumers, let me go through again the business of linked travel arrangements, which I know is causing some confusion—not least to us in the department. As I said to her when we discussed this privately, it was inserted into the directive and a lot of work is going on to work out what it actually is.

The package travel directive has broadened the scope of a package, so it is now clear that protection should apply when customers book customised combinations of travel online. As the noble Baroness outlined in her speech, it is not at all clear what a linked travel arrangement actually is. It is obvious if there is a direct advertisement on a flight website for a linked hotel and that hotel is promoted by the airline directly and is on the same web page. That, it seems to me, is an obvious linked travel arrangement. However, as we know, and as the noble Baroness has discovered in her meticulous research, on the internet, many adverts on webpages have no connection whatsoever with the originator of the webpage. They are placed by advertising companies, principally Google, among others, and the originator of the page has no idea what adverts are appearing on their page. So if you click on an associated advert, that would not necessarily be a linked travel arrangement, but how is the consumer supposed to differentiate between those two things?

Those are the issues we are grappling with at the moment: trying to come up with a definition of a linked travel arrangement and to implement it in regulations. As the noble Baroness said, the directive introduces information provisions to ensure that consumers have a good awareness of the kind of product they are buying, and we are consulting extensively with the industry to try to ensure that that is the case.

Turning to the subject of the amendment, I recognise the purpose of the proposed new clause and the need to ensure that consumers are better informed about consumer protection when they make a booking. This is well-intentioned and entirely in keeping with the Government’s wish that passengers should have a robust level of protection, and that their rights should be communicated to them in a timely and clear way.

However, I do not think that this is the right approach at this time. Let me explain why. First, we need to be mindful that package holidays and linked travel arrangements often do not involve a flight. They could involve a journey by road, rail or sea, so the Civil Aviation Act 1982 is not the most appropriate place for such an obligation. The UK already has regulations in place through the package travel regulations, which cover package holidays across all modes. We are in the process of updating these regulations alongside the Bill to extend them to cover linked travel arrangements, in line with the EU package travel directive.

This brings me to my second point. The new clause would unnecessarily duplicate the new information requirements in the EU package travel directive. The directive has introduced new information provisions which are designed to improve information for consumers. This sets out the specific information that must be provided to consumers about the type of product they are buying and the corresponding level of protection. This must be provided to the consumer both before and after they buy a package or a linked travel arrangement. We have recently completed a consultation on the directive, which proposed that the information provisions will be brought into force in 2018, through changes to the package travel regulations. We are also planning to retain the ATOL certificate alongside these new requirements to help reinforce awareness of consumer protection.

Finally, I fully accept the need to understand the lessons learnt from the Monarch failure, which I outlined earlier to the noble Lord, Lord Rosser, and to respond in the right way. We have to understand the issues that need to be addressed and whether we can make sensible changes to the laws. That is why we are undertaking an internal review, so that we can bring forward solutions that are feasible and have been assessed as being practically enforceable. As the Secretary of State said in his Statement in the other place,

“I do not want us to rush into doing something without doing the ground work properly. We need to look carefully at what has happened, learn the lessons and make any modifications necessary. I assure the House that that is what we will do”.—[Official Report, Commons, 9/10/17; col. 40.]

It is quite possible, of course, that additional information requirements will follow from that review, but it is important that we consider the options and ensure that the steps we take are the right ones and that they both work in the UK and are compatible with EU law.

I therefore believe that an amendment to introduce legislation of this nature—however well-intentioned the noble Baroness is—is premature. So, in summary, if her concern is that the Government are not taking steps to ensure that consumers are informed about consumer protection when they book a trip, I hope she can take comfort that we are ready to make provision through the package travel regulations and the ATOL certificates to do just what she has asked for. In addition, we will of course also consider consumer awareness as we review the lessons learnt from Monarch and, as I said earlier, as we develop our aviation strategy. Therefore, in the light of the assurances I have been able to give her, I hope the noble Baroness will withdraw the amendment.

[Baroness Randerson]

I thank the Minister for his response. I will certainly watch carefully as the Government respond; I am sure that they are working hard on this. My concern is largely with the consumer, but it is also with travel operators, because it is important that they be able to succeed as much as possible. Consumer confidence is an essential part of that. A simple sentence on a website saying that it is a particular type of arrangement is cheap, easy to organise and involves minimal effort for the companies concerned. It is an easy way to provide additional confidence for consumers. Having said that, I am happy to withdraw the amendment.