Air Travel Organisers’ Licensing Bill

Vicky Ford Excerpts

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

[Vicky Ford (Chelmsford) (Con)]

It is a great pleasure to follow the hon. Member for Luton South (Mr Shuker), who cares passionately about Luton airport in his constituency, and to follow my hon. Friend the Member for Redditch (Rachel Maclean), who has just given an outstanding maiden speech. I thank her so much.

In a modern and outward-looking Britain, it is significant that the first piece of legislation in this new Parliament is a Bill making it easier for consumers—our constituents— to travel overseas and for people from other countries to travel to Britain. It is also significant that this first Bill is about consumer protection, because this Government believe that we should put people first.

The ATOL system offers protection to holidaymakers if their tour operator goes bust. The UK is proud of having had the system in place since the 1970s. It is robust consumer protection that gives confidence to people booking their holidays and, therefore, contributes to our vibrant travel markets. The system supports the economy—not only the destinations to which people go, but also our local tourism industry. I am particularly thinking about the 800 residents of Chelmsford who work at Stansted airport. It is important for their jobs that we continue to have a vibrant holiday market.

Although holidays are always meant to be the happiest time of year, that happiness so quickly turns into a nightmare if there is a problem with a tour operator. Last summer, 27,000 British travellers found themselves overseas when the company, Lowcostholidays, collapsed. Another 110,000 British consumers had booked their holidays through that operator and did not know what the future would hold. Lowcostholidays had, of course, moved its location from Britain to Spain, so it was no longer ATOL-protected. That reminds us exactly how important it is to look at the consumer protection we offer people buying from British-based companies and that we offer British consumers who buy from companies based in other countries. That is why the EU countries agreed new changes to the package travel directive in 2015, requiring all European countries to have ATOL-type protection. The bit of law we are discussing today will implement that decision.

In the European Parliament, the committee that looks at such issues is the Committee on the Internal Market and Consumer Protection, because consumers are at the heart of the market. As the person who chaired that committee, I chaired the negotiations on the package travel directive. It is important that we ensure that the measure is implemented equally across all of Europe, otherwise we could find that some countries bring in a different system. There is an important difference in that ATOL membership will now be based on whether or not a company is based in Britain, as opposed to whether it just sells into Britain.

As colleagues have said, another important part of the legislation was updating the guarantee system so that it is fit for purpose in a digital age. If someone buys their flight from the wonderful Stansted airport, they will probably click on the airline operator. They will then click through from the airline operator to buy their hotel and then on again to buy their car rental. That might feel like buying a package to some of us, but it was not covered under the old rules in the package travel directive. I welcome the Minister’s work on modernising the measures, which will ensure that those click-throughs are now covered by the ATOL protection.

However, we had many other discussions in those detailed negotiations. For example, should business travellers get the same protection as consumer travellers? That is where we have tended to have a bit of a difference between Conservative Members and Labour Members. My excellent hon. Friend the Member for Redditch has just explained the challenges for small businesses, and an extra cost burden may be unaffordable for them, so we were concerned that they should not automatically have to pay the extra cost of ATOL protection. That is the sort of discussion I hope we will now be able to look at in more detail.

There were also discussions about whether the package should cover add-ons. For example, if someone gets to their holiday destination and decides to buy excursions, or if they bought them before they went, should those be included in the package? We had a lot of representations from small businesses saying, “No, please don’t put these in the package, because it will add bureaucracy and reduce consumer choice.” While I am absolutely passionate about the need to provide consumer protection, we also need to take a step back from time to time and to be on the side of consumer choice and of not adding additional, unnecessary costs for businesses.

In a post-Brexit Britain, our consumers will still want to purchase goods and services from those in other countries, and it will be important to continue to engage with other countries—especially our nearest neighbours in Europe—on issues such as consumer protection. It is important in the Brexit negotiations that we focus on getting a deal that works for consumers as well as businesses, because a vast range of consumer rights are embedded in EU law, on issues to do with not only holidaymakers but misleading advertising, unfair contract terms and the right to seek redress. Crucially, there is also really important legislation about the safety and standards of food. It appears that the tragic fire at Grenville Tower may have started because of an electrical fault in a domestic appliance, which is a brutal reminder of how important it is that we maintain high standards for consumer products.

Today’s consumers are changing, and they embrace innovation. Markets are also constantly evolving, and we are constantly getting new products. Of course, we also have the digital revolution. We therefore need to be constantly working on making sure that our consumer protection, consumer laws and consumer standards are fit for purpose.

The excellent consumer organisation Which? has sent us all a briefing on what it would like from the Brexit negotiations, and it makes a strong case that the UK should continue to work with our European neighbours on consumer standards, on measures to counter fraud and on developing and sharing best practice. In particular, it recommends that we should at an early stage reach agreement on continued co-operation with such agencies as the European Medicines Agency, the European Food Safety Authority, the European Chemicals Agency and the European Aviation Safety Authority. We should listen very carefully to what our consumer organisations are saying.

As the hon. Member for Luton South mentioned, there are other issues that affect holidaymakers, such as the need to negotiate landing rights. There is also an issue about making sure that any deals about how we use our mobile phones overseas are covered. The UK was a great champion of removing expensive mobile phone roaming charges, which put such a huge burden on consumers. However, other issues, such as the motor insurance directive, have not been perfect for the UK; indeed, that directive is causing great uncertainty in the motorsports industry in the UK, and we will need to continue to engage on that.

When the Prime Minister talked about our offer on EU citizens, I was pleased to hear her offer to keep the European health insurance card, which makes it easier for people to get medical care when they travel across Europe. That is a very generous offer from the UK to the rest of Europe, and we should welcome it.

To wrap up, maintaining consumer confidence is key to a modern, dynamic economy. As we seek to leave the EU and to create a new, deep economic partnership with those across the channel, it is important that we continue to stand on the side of consumers and that we find new ways to co-operate with our neighbours and those across the world who seek to make sure that consumers are fairly protected.

Air Travel Organisers’ Licensing Bill

Vicky Ford Excerpts

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

[Mr Hayes]

Although I do not want my sermocination to be excessive, I will deal with those matters at greater length in my later remarks. My hon. Friend is right to say that Britain can be justly proud of our record in respect of ATOL. To be clear, the Labour party acknowledged that on Second Reading a few days ago. There is an acceptance across the House that Britain has done this well; that that is recognised in continental Europe; and that there is a desire to ensure that future arrangements are inspired by, and perhaps even emulate, the best practice exemplified by the United Kingdom.

I said that I could go further still in building a bridge across the House, and that is because I am sympathetic to the aims behind the amendment. It is crucial that we carefully craft our policy, and the regulatory framework is the key to good governance. To gubernate is to be prepared to listen and learn, and it is absolutely right that we do so in respect of the changes that the Bill will make. It would not be fair to set any of this in stone, which is why I accept the need to consider these matters, as the hon. Member for Kingston upon Hull East (Karl Turner) set out, in the context of future changes to our relationship with Europe.

As I have said repeatedly, I am open-minded about reviewing the effects of these changes, but let me explain a little more. The Bill introduces the ability for ATOL to protect sales by businesses established in the UK and in other member states. It will be for protection schemes in other member states to provide the protections for UK consumers to which the amendment refers. That is not our responsibility—we do not have the power that the amendment suggests we should have—so I am not sure that the amendment works on a technical level.

The amendment does, however, highlight an important point, which it is right for us to consider. It seems to me that the hon. Gentleman’s argument was twofold: first, that we need to understand the potential impact on UK consumers of purchasing from traders that are based overseas under different protection regimes; and, secondly, that we need to consider how Government should keep that element of protection under review. Let me deal with those points in turn.

[Vicky Ford (Chelmsford) (Con)]

Will my right hon. Friend give way?

[Mr Hayes]

I will happily give way to my hon. Friend, who is a great authority on these matters, having led the process that resulted in the directive that was mentioned earlier.

[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.

--- Later in debate ---

[Mr Hayes]

Yes, which is why I have said that, in principle, I agree. I will come to how I am going to satisfy the hon. Gentleman by assuaging his fears. He has already declared his intent to divide the Committee, Mr Hoyle, but I might be able to persuade him not to. I might be able, in the generous remarks that I am about to make, to discourage him from that course of action. We shall wait to see. If I do not, I am not going to blame myself. Just so you know, Mr Hoyle, there will be no self-blame here; I will blame it on the hon. Gentleman. But let me do my best.

The hon. Gentleman is right to say that it is not clear how this will work out. If other member states implement as they are required to, consumers will be able to purchase across Europe knowing that the protection offered will need to meet the improved standards in the new directive. In practice, that should see insolvency protection across the EU improved to levels, as my hon. Friend the Member for Solihull (Julian Knight) said, that are broadly in line with ATOL.

There is also an increased onus on member states to ensure that businesses in their own territory have effective protection in place, but if the Civil Aviation Authority or trading standards has doubts or concerns about traders based overseas, it will be able to contact designating bodies in other member states to check compliance. We will ensure—I say this directly to the hon. Member for Kingston upon Hull East and to the shadow Secretary of State, the hon. Member for Middlesbrough (Andy McDonald)—that compliance in other member states is a matter that the CAA monitors, and that it makes contact with its like in those member states to ensure that proper practice is being observed. But—

[Vicky Ford]

Will the Minister give way?

[Mr Hayes]

I will, before I move to the next exciting piece of my speech, because I want to go further to satisfy all Members of the House.

--- Later in debate ---

[Vicky Ford]

Given that other member states do not need to implement this measure until halfway through next year, would not an impact assessment within a year be too soon? Should we not be calling for a more constant and regular review of the impact on British holidaymakers, and a review once the system is established in 2021, say, like the European legislation?

[Mr Hayes]

In that punchy and pithy intervention, my hon. Friend made the point that I made when we debated these matters in the Committee considering the previous legislation of which this was originally a part. That is rather convoluted, but it makes the point. I said that the problem with an early review is that it would be too early and would not take account of the changing circumstances in exactly the way she suggests. But I am minded to go further. Given that we discussed the issue in Committee on the Vehicle Technology and Aviation Bill, I want to make two further points.

First, the Small Business, Enterprise and Employment Act 2015—I have a copy with me for the benefit of any hon. Member who may wish to look at the particular clauses—makes a review obligatory within five years of the passing of the legislation. That existing obligation would of course apply to ATOL. However, we can do better than that. I am proud of my Department’s reputation for producing robust analysis to underpin and inform policy decisions, including providing full regulatory impact assessments to assess the effect of significant changes to regulation. That is a principle to which we have adhered in recent years throughout the ATOL reform process. We have already reformed ATOL once, in 2012, as the hon. Member for Kingston upon Hull East knows. We went through a consultation exercise, which I also have with me, and it is important that we continue the process of consulting and publishing the kind of impact assessments I have described before any regulatory changes take place.

It is really important that, when we changed the Civil Aviation Act 1982 in 2012 better to reflect current market practice, the call for evidence on the long-term review of the ATOL scheme produced responses that both informed the changes we made then—as they certainly did—and any further changes.

--- Later in debate ---

[Mr Hayes]

I do not want to disagree with any hon. Member unnecessarily, and certainly not with a Member on my side of the Chamber. However, it is true—as my hon. Friend will know as he is a student of these matters who has taken a keen interest in this Bill from its inception—that ABTA has produced a briefing for this debate, and in a moment I will go through it in some detail. While it is true that ABTA welcomes, as the Opposition have, the changes that we are making to ATOL, and there is a broad recommendation from it that we should be doing just that, it has given a detailed critique of the measures we are introducing and the amendments, and, at face value—that is something of an understatement—it seems rather sympathetic to the Opposition amendment. However, it will not have had the benefit of the further commitment I am about to give, which this Committee will be the first to know, for that is as it should be.

I am now going to catch the eye of the hon. Member for Kingston upon Hull East. I am sure that that independent committee, which was set up by a Labour Government for the very purpose of reviewing these matters regularly to ensure they are fit for purpose and with the mission of observing and making recommendations in the interests of consumers will doubtless want to consider the impact of the changes we are making, and will of course be aware of the contextual changes in our relationship with the European Union and the effect of the directive on other countries and their arrangements. Nevertheless, I am prepared to write to the committee reflecting the sentiments the hon. Gentleman has articulated persuasively enough—I was going to say “so persuasively,” but I do not want to overstate the case—to encourage me to make this commitment, and to ask it not only in its annual report to review the implementation of these changes, but also to take account of the other remarks he has made.

[Vicky Ford]

Will my right hon. Friend confirm that ATIPAC meets every year to review issues affecting consumer protection for British travellers buying not only from EU-based companies, but from anywhere they wish to travel in the world so, of course, British travellers will have this review every year?

[Mr Hayes]

On the pithiness index that you are clearly keeping, Mr Hoyle, that was not quite as pithy as my hon. Friend’s first intervention, but it is still pithy enough for me—and, I am sure, for you, Mr Hoyle, the ultimate arbiter of these things. My hon. Friend is absolutely right, of course: the committee, set up by a previous Labour Government, does indeed have exactly that purpose. It produces that annual report, which is a public document, but I have said that I would go further than that and request that that committee looks particularly at the very things this amendment seeks. So, not only are we going to have impact assessments and full and comprehensive consultations, not only have I committed to subjecting any further regulations to that kind of transparent and open debate with the appropriate scrutiny, and not only does the committee exist for the very purpose of producing an annual report in the interests of defending consumers in this field of work, but, further than that, I will to write to the committee to tell it that it should do exactly as the hon. Member for Kingston upon Hull East has asked.

[Vicky Ford]

Will the Minister give way?

[Mr Hayes]

I am frightened that my hon. Friend’s pithiness will decline over time, but I give way to her.

[Vicky Ford]

Will my right hon. Friend confirm that, if we pass this Labour amendment, we will be asking for a review that is to take place anyway, and that the amendment is therefore unnecessary?