Package Travel and Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018 — House of Lords, 2018-11-28
Topic: Foreign Trade
Jennifer Elizabeth Randerson (Liberal Democrats, Centre to centre-left): My Lords, this is obviously a case of more preparations for a no-deal Brexit. It might be one where the public could suffer directly, and there will certainly be an impact on small businesses and traders in the travel business as a result of this. The key point is that on Brexit, the UK will no longer benefit from the mutual recognition provided for in the EU package travel directive. The remaining 27 EU states will no longer be required to recognise insolvency protections put in place by the UK 2018 regulations, and the remaining EU states will potentially no longer protect UK travellers under the insolvency protection established by their travel organisers and traders So the UK does not consider it appropriate to continue to recognise insolvency protection put in place by traders established in the remaining 27 states. This is a simple tit-for-tat: if they do not recognise ours, we will not recognise theirs. As the Explanatory Memorandum points out, this mutual protection is clearly an economic benefit. It facilitates trade and this SI puts an end to that benefit. The big issue is whether consumers and travellers will still benefit from the same level of protection after Brexit. This is not a theoretical situation; insolvency happens with some regularity in the travel business. In the last calendar year Monarch Airlines collapsed, and there are concerns in today’s press about the profit situation of an organisation as large as Thomas Cook. I do not for one moment suggest that it is in a Monarch situation, but it is a tough world out there I have some questions for the Minister. Paragraph 7.1b of the Explanatory Memorandum states that, "the role of a central contact point serves no purpose once the mutual recognition", of the insolvency protection ceases. Indeed, the Minister referred to this in her introduction. The CAA was that central contact point, so can the Minister explain more about what exactly that role has been in the past so that we can understand why it is no longer needed. Referring back to the Monarch situation, I recall that when the airline collapsed, the CAA had a vital co-ordinating role in organising the repatriation of travellers and compensation provisions. Who will do that in future if the CAA no longer acts as a central contact point? I am trying to tease out the precise meaning of that phrase My second question refers to UK retailers selling packages organised by EU traders. Let us imagine that I go into a travel agent and buy a package consisting of hotel and bus travel in Europe. If that package is put together by an EU-based company, as opposed to a UK-based company, how does a travel agent ensure that insolvency cover is adequate? Maybe the UK travel agent himself puts together the package by choosing a hotel and bus, but in that case does the UK travel agent have to satisfy himself that both the hotel and the bus company have satisfactory insolvency arrangements? Paragraph 7.1c of the Explanatory Memorandum clearly states: "This may place additional obligations on UK retailers" Paragraph 12.2 states that it, "could present an additional cost to … retailers" Hence I was surprised to read in paragraph 13.2, on regulating small business: "No steps have been taken to minimise the impact of the requirements on small businesses … as no new requirements are being introduced" That seems a direct contradiction, and there will be a serious impact and additional responsibility on small businesses. That is, with respect, clearly incorrect. There is also no mention here of the consumer, and the potential impact on them if UK businesses are unable to satisfy themselves accurately about insolvency cover The package travel directive has been a major source of protection for consumers. It has been the foundation for the huge growth of the travel industry, giving people the confidence to undertake what might otherwise be financially and personally risky foreign travel. It is important always to remember the significance of the annual, or perhaps twice-yearly, holiday for the average person in this country. That directive was originally introduced simply because the guarantees it brought were, demonstrably, badly needed. Anything that reduces those guarantees or makes them more complex undermines public confidence, and therefore the travel industry itself My question for the Minister is: what about bookings made now, before 29 March 2019, for holidays to be taken after that time? What is the situation and what rules should the travel industry follow at this point? Hundreds of thousands of people are making those bookings, and millions will do so in the next few months. The public need absolute clarity on their rights should something go wrong with the process Earlier this year the regulations were updated, as the Minister stated, to take account of the digital age. They now encompass so-called linked travel arrangements, which we welcomed at the time. But LTAs provide a lower level of protection than that provided by traditional packages, and the LTA is itself a complex concept. When we debated this before, we emphasised the importance of clarifying this with the public. The Minister referred to that, but the concept of "ATOL protected" is well understood by the public. For example, at the end of an advert on television it very quickly said, "ATOL protected". People understand it. What are the Government doing to advertise the new concept of linked travel arrangements and the protection that brings? Do the Government intend after the end of March to continue with the concepts of linked travel arrangements and binary levels of protection that come into place as a result of the EU directive, but which we will, of course, no longer be obliged to follow in the future?