Air Travel Organisers’ Licensing Bill

Robert Courts Excerpts

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

[Robert Courts (Witney) (Con)]

It is an honour to be called to speak in the debate on the first piece of substantive legislation in this Parliament, and to be the first Back Bencher to do so. The Bill brings back some traces of memory lane for me; I declare an interest in that I practised in consumer protection at the independent Bar before my election to Parliament. Indeed, I was involved in lecturing and cases in this very area. Somewhat optimistically, I called it “holiday law”, which makes it sound—I can hear one of my colleagues saying this—like rather good fun. Having spent years prosecuting trading standards legislation and defending criminal law, as well as working in the personal injury sphere, I must have been on my way back from holiday while looking for a new area to branch into, and then an opportunity came up. I obviously decided that if I could not actually be on holiday, I might as well at least talk about being on holiday. I therefore produced a lecture, which I covered with lots of rather attractive pictures of happy people on holiday, sun-dappled beaches and palm trees, but that of course rather missed the point, because when one goes to see a lawyer, one is telling them not how good a holiday was, but that something has gone wrong. That is the all-important point that I was addressing in my career and that the Government are seeking to address through this Bill.

Things occasionally go terribly wrong when people are on holiday and, from my experience at the Bar, that can be anything from simply poor quality through to a catastrophic failure of holiday, injury or, in some cases, even death. That is what we are seeking to address through the Bill.

I started my lecture to the Bar with the same story that the Minister told of the temperance campaigners—it is one of those throwaway anecdotes we tell at the beginning of what can sometimes be detailed lectures—and I thought for one moment that I was about to hear him repeat my lecture back to me. I am glad that he went on to more substantive matters.

In my constituency I have not only a great many places that people come to visit—I will refer to some of them in a moment—but, of course, many people who, as we all do, look for places to tour abroad. It is for the constituents of Witney and west Oxfordshire that I most strongly desire to see the Bill enacted.

I express my support for the Bill at the outset, because ATOL protection is a critical part of the protection that we all rely on when we book a tour. It is only right—and necessary—that we seek to extend that protection to a broader range of holidays. When ATOL protection started in 1973, the world was very different from the one that we inhabit now. It was a world with few airlines—a world of British Caledonian and nationalised airlines such as British European Airways and British Overseas Airways Corporation. One might even say that it was an era before the benefits of a free market were fully explained and realised in this country—we should perhaps remember that at all times in this debate. It was a day before the internet. It was a day when going abroad was full of uncertainty, and sometimes even danger. It was into that world that the package tours regulations came into being, and rightly so.

[Kevin Foster]

Does my hon. Friend agree that at that time it would have been unimaginable that someone could use a mobile phone to book a holiday with an operator in Germany, France or another country in Europe? At that time, walking into a travel agent on the high street was the only real way of booking this type of project.

--- Later in debate ---

[Robert Courts]

My hon. Friend makes an outstanding point. We could be sitting in the Chamber now, if we were not paying attention to the debate—I am sure every Member is paying attention with alacrity—and booking ourselves a holiday on our mobile phone. Such a world was not even envisaged in 1973, but we did have the advent of the package tour, and British Airtours, a subsidiary of British Airways, was one of the leaders. People’s ability to have their package holiday protected, provided that they had a flight, was a major innovation, and it is something that we have now lost.

I say that from personal experience because, through my work, I have first-hand knowledge of how the package holiday industry now works. Not only do we have what is called “dynamic packaging”, in which a vast choice of providers, destinations and activities are available to members of the public, who can tailor bespoke packages for themselves, but those selling holidays can seek to step around some of the relevant legislation. A website might purport to be operating and offering a package but, when one actually looks, it turns out that the flight is offered by a subsidiary, the accommodation is operated and offered by another company, and other packages—perhaps excursions—are dealt with by someone else. It is quite easy in this day and age to step around the regulations that ATOL provides, which is why the Bill is so necessary. The travel market has changed significantly in recent years. In those days, and it was a romantic era—

[Mr John Hayes]

Talk of romance was not what drew me to my feet, although it might have done. My hon. Friend talks about the changing character of the industry and the need to ensure that the regulations are updated. Reflecting on the remarks made by the hon. Member for Middlesbrough (Andy McDonald), who speaks for the Opposition, I reaffirm my commitment to consult further before any regulations are brought before the House under the affirmative procedure. I draw the attention of my hon. Friend the Member for Witney (Robert Courts) to section 71B of the Civil Aviation Act 1982, which already makes provision for consultation by the CAA in the light of any such changes.

[Robert Courts]

I am grateful to the Minister for making that clear. The prospect of amendment has been ongoing for some time, so I am delighted that we are addressing it in the House today.

Although the image we all have of walking down the high street, flicking through a brochure and speaking to somebody behind a till still happens in many cases—many people avail themselves of the services that exist, including at the excellent travel agencies in my constituency—many people do not do that. It is now so easy to go on the internet to put together a bespoke package for ourselves. In a sense, we have become our own travel agents, but that brings challenges as well as opportunities for this new generation of travellers. In this House we embrace the opportunities that come with those challenges. Indeed, I would go so far as to say that we have seen the free market in action with the expansion of providers, destinations and activities. We have seen so many of the advantages that a free market can bring in the interest of consumers. Indeed, the online travel market has led to reduced costs for holidaymakers, as well as increased choice and flexibility.

Of course, we have to reassess protections at the same time as we reassess, and benefit from, those changes. The mix and match of lower prices and wider opportunities has to be seen alongside the protection. Many holidays now fall outside the scope of ATOL, which is very different from the situation in 1973. In 1998, approximately 90% of all leisure flights were covered by ATOL, but I understand that the figure has fallen to under 50% in recent years. I welcomed the Minister’s comment at the start of his speech. As much as I have praised the free market and its benefits in terms of opportunities, choice and reduced costs, I also understand that there is a role for Government. I agree with him that it is appropriate for the Government to step in and ensure that consumers in this field are protected.

That is why I welcome the measures in the Bill to address such changes. The Bill will ensure that the ATOL scheme keeps pace with innovation in the online travel market, while also ensuring that protections are in place, regardless of whether someone books online or on the high street. We will therefore ensure that more than 20 million holidaymakers each year continue to be protected.

[Kevin Foster]

Given my hon. Friend’s comments, will he say something more about clause 1, which extends ATOL to sales made by UK companies within the European economic area? Does he think that that provision is worth while?

[Robert Courts]

I am grateful for my hon. Friend’s timely intervention, as the next page of my notes deals with clause 1. Existing ATOL legislation applies only when the first leg of a relevant flight booking departs from a UK airport. The new legislation introduces a single-market approach to insolvency, whereby EU-established companies will be required to comply solely with the insolvency protection rules of the state in which they are established, as opposed to the place of sale, which is the current position. The legislation is therefore much wider, and the company will only have to be established.

[Julian Knight (Solihull) (Con)]

Does my hon. Friend agree with me and several consumer groups that £2.50 is a low price to pay for ATOL protection compared with the cost of standard travel insurance? In the longer term, we might see a decline in the cost of travel insurance as more holidays are covered by this enhanced ATOL protection.

[Robert Courts]

My hon. Friend makes an excellent point. He is right that the ATOL scheme is funded by a levy of approximately £2.50 per protected passenger and that it would be extremely unwise of any holidaymaker to go abroad without adequate travel insurance. I encourage everyone always to have such insurance, although it can sometimes be pricey, especially if someone is looking to protect themselves against some of the more routine failures that are easily covered in the ATOL scheme. However, more serious misfortunes can occur when people are on holiday, which is why travel insurance is, of course, still advisable. As my hon. Friend suggests, the cost of insurance may come down in time as a result of this enhanced package.

Clause 1 will allow travel companies established in the UK that sell flight-inclusive packages to use their ATOL membership and protection to cover all EU-wide sales without needing to comply with the insolvency protection rules of any other member state. Clause 2 deals with funding and qualifying trusts within the ATOL trust management structures. The Department for Transport is alive to the fact that because we have seen significant changes to the travel industry—not only since 1973, but since 2004, as well as more recently—it might be necessary to enter into separate trust arrangements for the greater business model, such as linked travel arrangements, to give greater transparency to businesses and consumers. It might be necessary to introduce a new form of qualifying trust to ensure that the ATOL trust will still protect consumers in the all-important area of flight accommodation. The Bill allows the flexibility under trust arrangements so that we can increase funding and ensure that ATOL is adequately funded as time goes on.

Clause 3 addresses a slightly different point: the ability of the CAA—the House will realise that the authority is responsible for running the ATOL scheme—to require and request information from airlines selling ATOL-registrable products within the UK and more widely. Under the Bill, an important change would apply to airlines that have an air service operator’s licence from another EU member state and therefore would not need any of the licences that have been granted by the Civil Aviation Act 1982.

The House will be delighted that this is a short Bill, containing only four clauses. I have needed to deal with only three, so I do not need to go through the other one—I am sure everyone is delighted. [Interruption.] The Bill is short in terms of clauses, as the House will realise.

[Kevin Foster]

My hon. Friend referred to clause 3. Those who have an air service operator’s licence from other European countries will not need a CAA licence. Is he satisfied that the measure will still give full consumer protection?

[Robert Courts]

I am indeed satisfied that it will give full consumer protection. I say so because the Government have consulted widely. Once again, my hon. Friend has somehow, with extraordinary prescience, managed to prompt me to move on to the next stage of my speech, which may have been his subtle intention.

The Government have consulted widely, and the industry’s response has been favourable. We have received broad support from a majority of respondents to the proposals to harmonise ATOL with the scope of the EU package travel regulations. I noticed that during proceedings on the Vehicle Technology and Aviation Bill, evidence given by the group director of consumers and markets at the CAA stated:

“There are a number of important and welcome developments from”

the Bill

“which will be good for UK consumers. First, the directive makes it much clearer what the definition of a package is.”––[Official Report, Vehicle Technology and Aviation Public Bill Committee, 14 March 2017; c. 63, Q143.]

I hope that the House will forgive my mentioning that in detail. I do so simply because of my experience of having argued the concept of what a package is in the courts of this country throughout my career at the Bar. The Bill has wide support in the industry.

I wish to make one more point, which is simply to note the educating effect of tourism. We are of course leaving the EU, but we are not turning our back on Europe or ceasing to be a European country—I will not make more detailed comments. As all Members will appreciate, travelling to a new country and appreciating a new culture is one of the most educating and enlightening things an individual can undertake. We will want people from this country to be able to expand their horizons throughout the EU, as indeed we will want people from the EU to be able to come here. West Oxfordshire has a plethora of tourist attractions, such as Blenheim palace, the great stately house; Cotswold wildlife park; and Crocodiles of the World, which is an excellent attraction that I invite all hon. Members to visit—I have been. We have many picturesque villages throughout west Oxfordshire, including Bampton, of “Downton Abbey” fame.

I have gone on at some length. The House will probably realise by now that this Bill has my full support, and I urge Members to give it its Second Reading.