Orders of the Day — Holiday Travel Trade

– in the House of Commons at 12:00 am on 13th December 1965.

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Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Harriet Slater.]

9.57 p.m.

Photo of Mr Edward Milne Mr Edward Milne , Blyth

Almost as soon as the Christmas cards have been cleared from our letter boxes the travel brochures enticing us to go on all sorts of holidays in faraway places in the sunshine will be arriving. It is therefore a useful point in time to remind the travelling public of the warning of the Consumer Council about the promises made by many of the travel firms. The Council pointed out that an elegant brochure with pretty coloured pictures is no measure of a firm's efficiency.

For that and many other reasons which I intend to mention during this debate, no more appropriate time could be chosen for a discussion on the question of the future of the travel trade in Britain. We are dealing not only with the holiday enjoyment of innumberable people but with one of our main growth industries. No fewer than 4½ million people holidayed abroad last year, spending about £250 million in the process. By 1970 it is estimated that about £484 million will be spent on holidays abroad. When we remember the firms handling this trade, and which have been responsible in recent years for the growth of this industry, we realise the tremendous chances that have been taking place and are still taking place. We have watched the John Bloom washing machines disappear, along with English and Overseas Tours Ltd., which handled the holidays offered to purchasers of these commodities. Canned food firms have offered prizes in competitions, the Provident Clothing Company has sent round about 11,000 door-to-door tally salesmen offering holidays on the "never-never". Tea and detergent and other firms have offered holidays to the public——

It being Ten o'clock, the Motion for the adjournment of the House lapsed, without Question put.

Motion made, That this House do now adjourn.—[Mrs. Harriet Slater.]

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. When Mr. Speaker is standing, the hon. Member for Blyth (Mr. Milne) should sit down.

Question again proposed.

Photo of Mr Edward Milne Mr Edward Milne , Blyth

My apologies, Mr. Speaker. I was getting engrossed in my subject and failed to notice the movement of the clock.

As I was saying, about 11,000 door to door tally salesmen on behalf of the Provident Clothing Company are offering holidays to the public on the "never-never" In the course of this fantastic trade and the tremendous increase in the trade, there have, of course, been major and minor disasters. The case of Four-ways, the Fiesta crash, Omar Khayyam and the others are all gloomy landmarks in the history of the industry's progress.

We are now seeing further bids to break into the United Kingdom travel market by one of Britain's top four mail order companies. Also, in recent weeks, there have been efforts by the Travel Trade Association to set up a joint travel trade consultative committee and to appoint an ombudsman to deal with complaints from holidaymakers. All of this is an indication of present trends. Also in recent weeks, we have seen "Operation Stabiliser", as it has been rather clumsily termed by the Association of British Travel Agents, which has as its foundation a merger between the Association of British Travel Agents and the Travel Trade Association.

I would call the attention of the Minister of State to the Guardian's comments on 30th October about this stabilising of the travel trade: By clever manoeuvring, the Association of British Travel Agents has made it virtually impossible for honest travel agents and tour operators to remain outside the organisation. Its claim that the A.B.T.A. agent is the reliable agent must now become a reality.As the biggest and most powerful association (689 members with 1,452 offices) the A.B.T.A. itself must bear some of the responsibility for the unhappy reputation that the British travel trade has acquired in the past few years. It is not surprising, therefore, that they should have taken the lead in the question of the future of the travel trade industry.

The Times, two days earlier, in an editorial headed "Holidays without Tears", said this of the stabiliser project: It now seems likely that the two largest associations of travel agents will he amalgamated. If this comes off, it should remove the last argument from the critics of the travel agency business that want to see it regulated by law. Credit must go to the Association of British Travel Agents for making the offer to the Travel Trade Association, and also for devising new safeguards for the public against the possibility of losing their holiday and money or being stranded abroad. When the Travel Trade Association hold their conference next month the forces urging them to accept the offer will he powerful, and it is to be hoped they will be successful". Operation Stabiliser has now passed into history. At an extraordinary general meeting of A.B.T.A. it was passed by 178 votes to 36. I hope that the Minister of State will take note of the number of member firms of this organisation and see that the figure in the voting for this Stabiliser Operation represents only a minority of the members of the Association of British Travel Agents. The claim made by its chairman, I feel, is a justifiable claim—that tour operators will market their holidays abroad only through A.B.T.A. retail agents and that, arising from this, no one booking a holiday through A.B.T.A. will be stranded abroad.

But what one must remember when dealing with the future of this trade is that the foundations for the success of this experiment were based on the necessary merger between the two travel trade organisations.

Photo of Mr Henry Hynd Mr Henry Hynd , Accrington

Which has not taken place.

Photo of Mr Edward Milne Mr Edward Milne , Blyth

It has not taken place. I was about to show that. Indeed the negotiations in this matter have broken down and we have not had the Stabiliser which was promised.

This brings me to the kernel of this Adjournment debate. I want to turn for a moment to two main points. I believe that we are facing a situation in which, in order to protect holiday makers in this country, Board of Trade and Government action is now needed. I refer the Minister of State to his replies to two of my Questions on past occasions on this matter. On Wednesday, 17th February, 1965, in a Question to the Board of Trade, I asked the President of the Board of Trade … what steps he will take to protect those who take holiday tours abroad against default by travel agencies". The Minister of State replied: I am considering whether it is practicable, without restricting legitimate enterprise by new or small firms or materially increasing costs to the travelling public, to devise legislation which would give protection to tourists against the risk of financial default by tour organisers who provide inclusive holidays abroad."—[OFFICIAL REPORT, 17th February, 1965; Vol. 706, c. 237.] As recently as 9th December, 1965, I again put a Question to the President of the Board of Trade: If he will further examine the need for legislation to protect holidaymakers, in view of the breakdown in negotiations for an amalgamation between the Association of British Travel Agents and the Travel Trade Association. The Answer which I received was: My right hon. Friend keeps the need for such legislation constantly under review; but, before reaching a decision, he wishes to see how the holidaymakers and the travel trade are affected by the Association of British Travel Agents' 'Stabiliser' scheme"—[OFFICIAL REPORT, 9th December, 1965; Vol. 721, c. 148.] We can see from recent developments in negotiations between the various members of the trade, and from the different types of trading activities in which the travel trade has indulged, that this trade is very much in the melting pot. As I have pointed out, a trade which is expanding in the way in which the travel trade is expanding needs examination by this House—examination of the methods to be followed in its future operations, because it is almost three years ago that what is now the British Travel Association and what was then the British Travel and Holidays Association said that it did not feel that any statutory control over the travel trade was necessary at that stage. But the Association said that 'if and when such action is considered necessary the Association feels that the machinery of control as proposed in the Bill would be on the right lines. The Association also felt … that the trade association concerned should be given the opportunity to take action to strengthen its position in maintaining and improving standards of service and should consider such changes in its regulations which would make it possible for all reputable agencies to join the association if they wish. It went on to deal with some of the points which have been mentioned tonight; the protection of holidaymakers, safeguards which should be given and the necessity to ensure that the promises made in brochures and contracts are kept.

Although I will not go into great detail on this matter tonight, hon. Members will agree that we are painfully aware that many firms which operate in the trade have departed from the best standards set by the leading firms. In view of the extensive ramifications of the trade and the fact that we have seen enormous changes taking place in the last few years —even in the last three or four years; with people taking their holidays on the "never-never" and so on—it is important that the best standards of the trade are maintained. In this connection, even detergent and tea firms are offering holidays when selling their respective commodities. The best standards must be maintained for the 5 million to 6 million people who will go abroad for their holidays next season.

10.13 p.m.

Photo of Mr Roy Mason Mr Roy Mason , Barnsley

I am obliged to my hon. Friend the Member for Blyth (Mr. Milne) for raising this subject tonight, particularly since he has done so under the wide heading of the future of the travel trade. That gives me considerable scope to speak broadly about the industry, which I will do at the outset.

I was pleased that my hon. Friend mentioned the British Travel Association which, in its modern form, goes back to only 1950, when it was entrusted by the President of the Board of Trade with the comprehensive mandate which still guides and fashions its current activities. It is the Government's chosen instrument for the purpose of promoting travel to and within the United Kingdom.

Its principal objects are, first, to increase the numbers of visitors from overseas to the United Kingdom; secondly, to foster and develop among residents of the United Kingdom the practice of spending holidays in the United Kingdom; thirdly, to stimulate the demand for goods and services, and to promote international understanding through travel; and, fourthly, to assist in every way the improvement to the tourist and holiday accommodation, catering, transport, entertainment and other amenities in the United Kingdom.

For all that has been achieved in the sphere of tourism over the years, the British Travel Association, its successive presidents and chairmen, the members of its Board and its various committees, and by no means least its expert and industrious executive staff, deserve a great share of the credit. Nor must we overlook the complementary and valuable work, with somewhat different and more limited objectives, which has been done through the years by the Scottish Tourist Board, the Wales Tourist and Holidays Association and the Northern Ireland Tourist Board.

Nor can I pass over in silence the efforts of the London Tourist Board, with its special responsibility for Britain's most powerful of all magnets for visitors from overseas; the great and historic metropolis of London. The London Tourist Board came into existence only three years ago, but already it has done a great deal, not least in building up London as an attractive and convenient centre for international conventions and conferences.

Recently—and I think this is specially commendable—the British Travel Association have taken the initiative in giving impetus and guidance to regional developments in the promotion of tourism. In October 1964, the Yorkshire Travel Association emerged, followed in October this year by the South West Travel Association—the latter covering Britain's most popular holiday region which currently attracts about one in every five of our holidaymakers. A third regional association is on the point of maturing in the North East, and studies and discussions are proceeding with a view to the establishment of a fourth association in the North West.

I am convinced that, in order that Britain may effectively meet intensifying competition for shares in an expanding international market for tourism, we in the Board of Trade and the British Travel Association, as the organisation which carries out Government policy in this sphere, must put increasing emphasis on the development side of tourism. The decisions whether or not to proceed with individual development projects must, of course, depend in the main on what expectations of profitability are entertained by private interests or individual local authorities. But the Government have the responsibility of creating the appropriate climate, and the British Travel Association is the Government's instrument for encouraging all those concerned to proceed energetically with the development of facilities which experience has shown to be sound, and not to be unduly cautious before embarking on promising experiments.

Tourism is big business, and business which, unless I am mistaken, is going to increase substantially during the next few years. Indeed, in the two decades which have passed since the end of the last war, tourism has progressed from negligible proportions to become one of the most important economic sectors in the country.

In 1964, Britain received about 2½ million visitors from outside the British Isles, or 3 million if visitors from the Irish Republic are included. These visitors spent nearly £200 million whilst they were actually inside our country; that is to say, the figure excludes fare payments which in many cases, of course, were made to British air or sea carriers. Perhaps a decade or so from now we an look forward, a little optimistically, perhaps, but by no means unrealistically, to an intake of about 5 million visitors from overseas.

However, all concerned with tourism, whether here in the House, or in the Board of Trade and other Government Departments, at the British Travel Association or in the various trade organisations and commercial firms comprising the travel industry, must realise that, though the world market for tourism is expanding, and expanding fast as living standards rise in many parts of the world, competition for shares in the market is simultaneously becoming more intense. There is evidence that the revenue from tourism is tending to level off, though the numbers of our visitors continue to increase steadily.

This situation means that none of us, whether in the Government or in the industry, can afford to sit back, and to feel complacent. We must make every effort to attract to our shores increasing numbers of travellers and holidaymakers; and, perhaps more important, we must also do everything in our power to ensure that these visitors, as well as the growing numbers of our own people who take one holiday or more in their own country, are properly looked after and provided with the best and most comprehensive facilities and amenities possible. Development on these lines is now receiving far more attention.

We live in islands which are, in many areas, crowded and congested. It is essential that, if we want more visitors who will spend more money to the benefit of our economy and our balance of payments, we must ensure that they can reside here in comfort and contentment, and have adequate room to move around without strain or irritation or frustration when they wish to do so. All this requires a determined and concerted effort by all those concerned with the travel and tourist trades.

This year has seen one innovation which holds out some hope of relieving congestion at the peak of the holiday season in late July and early August. For the first time in history——

Photo of Mr Henry Hynd Mr Henry Hynd , Accrington

On a point of order, Mr. Deputy Speaker. I have an idea that the Minister has brought the wrong speech. He has so far said nothing about the subject raised by my hon. Friend. He is talking about the British Travel Association.

Photo of Sir Samuel Storey Sir Samuel Storey , Stretford

That is the subject of the debate.

Photo of Mr Roy Mason Mr Roy Mason , Barnsley

The title of the debate, Mr. Deputy Speaker is "The future of the travel trade in Britain", or something of that nature. Perhaps I may be allowed to paint a rather broad picture, instead of looking rather narrowly at the seamier side of what may be a very small area of the travel trade. If my hon. Friend the Member for Accrington (Mr.H.Hynd) will exercise a little patience, and not be too impulsive, I will come precisely to some of the points raised by my hon. Friend the Member for Blyth.

For the first time in history the date of a Bank Holiday was changed to bring about better staggering of holidays and encourage holiday taking in September. This Bank Holiday experiment will continue and will indeed be extended to Whitsun during the next three years, after which we shall have to consider what might be done on a more permanent basis.

Next year too—and much more important—all but one of the examining bodies will be completing before July starts the school examinations for the G.C.E. at both O and A levels. This kind of innovation together with the gradual unrolling of the road programme and the building of new hotels and so on, will obviously give us a better basis for looking after our growing intake of visitors.

These reflections lead me to emphasise one point. With greater numbers of the public travelling whether at home or abroad, and including these days not just the wealthy and the privileged but people literally from all walks of life including many who are not very experienced, it becomes the more important for the travel trades to ensure that the services which they sell to the public are fully as good as the public can reasonably expect.

In this connection, I have been noting with particular attention the assurances of the leaders of the Association of British Travel Agents that their "Stabiliser Operation" has been designed with one single aim—the aim of affording a better assurance to any customer of any member firm who buys one of their inclusive tours that he will, when the time comes, get the tour he has paid for.

Recently, and more particularly since the widely publicised accounts of holidaymakers stranded abroad or losing holiday or money or both as a result of financial default on the part of a handful of tour organisers during the summer of 1964, there has been a good deal of pressure for Government legislation to control the activities of travel agents and tour operators. The Government has the greatest sympathy with the victims of the defaults I have mentioned and is greatly concerned that the public should not lose their holidays or the money they have saved for them.

As my hon. Friend mentioned, it will be recalled that I told the House in February this year that I was considering whether it would be practicable, without restricting legitimate enterprise or materially increasing costs to the travelling public, to devise legislation to protect tourists against the risk of financial default by organisers of inclusive tours. However knowing the difficulties there are to provide protection—for most buyers of inclusive tours—if this problem can be adequately dealt with by action within the trade itself this will be all to the good.

Before attempting to reach a conclusion on the practicability of legislation, therefore, we are now proposing to await some experience of how the travel trade and its structure are in practice being affected by the introduction of the A.B.T.A. "Stabiliser Operation" to which I and my hon. Friend have referred. This will of course be without prejudice to any eventual conclusion of the Government on any restrictive aspect of the scheme and on the question of possible legislation. If, as I have said repeatedly, the scheme shows signs of developing in any direction which seems on balance to be undesirable, we should need to consider intervention. As at present advised, however, we do not feel that we should be justified in urging A.B.T.A. to reconsider its scheme.

Efforts have been made by the two major travel trade bodies. For 1965 the Travel Trade Association took out an insurance to protect clients of its members from loss of holidays through financial default on the part of a tour operator. Limits of liability are £100,000 in the aggregate and £25,000 on any one tour operator. So far as we know, only three T.T.A. members are tour operators on a substantial scale.

The Association of British Travel Agents has been exercising its mind a great deal on this problem. Talk of legislation may have encouraged this. A.B.T.A. has a scheme which really falls into three parts—first, accounting rules; secondly, the common fund; and, thirdly, now upon us, operation stabiliser.

The accounts rules were adopted in October, 1964. They require every member, whether tour organiser or true travel agent, to submit balance sheets in prescribed form to an independent qualified accountant at regular intervals of no more than one year, to open his books to the accountant, and to give him all other necessary information. The accountant reports to the member: and within six months of the balance sheet date the member must present a signed copy of the accountant's report to the A.B.T.A. Council.

The by-law establishing a common fund was adopted in February, 1965. All members are to contribute such sums as may be directed by the Council, subject to a maximum of one-half of the individual member's annual subscription to the Association. The fund, expected to realise £13,000 in the first year, rising to —35,000 in the second, assuming there are no claims on it, is to be used mainly to prevent members of the travelling public from being stranded overseas because of financial default on the part of an A.B.T.A. member. A secondary use, if funds permit, would be for the benefit of tourists who have paid for holidays which had not started before the financial collapse of the member tour organiser responsible for the arrangements.

A.B.T.A. claims that operation stabiliser, which was duly adopted at its Annual Convention held in Jersey late last October, is a necessary complement to the earlier establishment of the common fund. The essence of the arrangement is that for the sale in the United Kingdom of holidays or tours to places outside the British Isles, first, tour operators who are members of A.B.T.A. shall appoint as agents and pay commission only to travel agents who are also members of A.B.T.A. and, secondly, travel agents who are members of A.B.T.A. shall sell tours and holidays as defined above only on behalf of tour operators who are members of A.B.T.A.

These arrangements already take effect, though a period of grace until 1st November, 1966, is allowed to existing agents of A.B.T.A. tour operators, provided they undertake during that period not to sell tours produced by non-A.B.T.A. members and to pay to the A.B.T.A. common fund the minimum contribution currently required of A.B.T.A. members. To ensue that firms now wishing to join A.B.T.A. are not prevented from doing so on grounds other than insolvency or the employment of inadequately qualified staff, A.B.T.A. is setting up a Membership Arbitration Panel of three people, one a representative of the Association and the other two, including the chairman, independent persons of standing outside the travel industry—I understand that the persons in mind are General Sir Malcolm Cartwright-Taylor and Mr. F. W. Beney, Q.C. A.B.T.A. tells us that about 50 firms from the T.T.A's two northern branches are in process of being admitted to membership and that "hundreds" of applications from other retail firms, some of them no doubt T.T.A. members, are already under consideration.

I have recently received several representations about the operation stabiliser scheme from those who fear that it might tend to create a closed shop in a trade where initiative, enterprise, imagination and new ideas are essential. I have answered such representations on the following lines. A.B.T.A.'s scheme, which will come fully into effect next year, is certainly likely in practice to confine the organisation and retailing of virtually all inclusive tours to places outside the British Isles to tour operators and travel agents in membership of the Association. A.B.T.A., however, claims that the scheme is a necessary complement to the establishment of a reserve fund for protecting the customers of member firms in case any firm defaults financially after a client has booked and paid for a holiday. It disclaims any intention to stifle competition from financially sound firms with experienced staff, and so far we have no reason for challenging their disclaimer.

I am watching this development most closely and I want to inform the House that we have the right, if it so needs exercising, either to legislate or to refer it to the Monopolies Commission if it tends to develop in a most undesirable way.

Photo of Mr Henry Hynd Mr Henry Hynd , Accrington

I have less than one minute. I must declare a small interest. I want to emphasise that the Minister of State seems to overlook the fact that this, as he says, Stabiliser, is in operation. In the meantime this amalgamation has not taken place. Therefore, many firms outside A.B.T.A. will be shut out from the opportunity of booking tours through A.B.T.A. tour operators. It is very unfair——

The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.