Orders of the Day — Air Travel Reserve Fund Bill

Part of the debate – in the House of Commons at 12:00 am on 20 February 1975.

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Photo of Mr Michael Shersby Mr Michael Shersby , Hillingdon Uxbridge 12:00, 20 February 1975

I said that Court Line would probably have ceased trading. Whether it would have is a matter about which we can never be certain. I said "probably", and I was careful in my choice of words.

The balance of about £2 million held by the Tour Operators' Trust Fund from Clarkson and Halcyon-Horizon bonds will be paid out eventually in the most equitable manner possible. But, as my hon. Friend the Member for Northampton, South (Mr. Morris) pointed out, the pay-out has been delayed because of the legal arguments.

In asking the House to give the Bill a Second Reading it is incumbent upon the Government to say why they believe that setting up the Reserve Fund would be preferable to improved bonding arrangements.

As my hon. Friend the Member for Worthing (Mr. Higgins) pointed out, we have to consider the interests of three groups of people. The first is that group of holidaymakers who feel, whether or not the right hon. Gentleman agrees, that they were misled by his right hon. Friend. Surely the right answer to that group of people is for the Government to accept that they were given an assurance by a Minister of the Crown and for them to be reimbursed by the taxpayer.

I am appalled that the Minister has not already resigned and that the holidaymakers concerned have not been compensated long before now. As my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) said, we have come a long way since the days of Crichel Down. My hon. Friend the Member for Tonbridge and Malling made a powerful point when he said that the Secretary of State for Industry should not have gone beyond certain limits in his statement and that a mid-course would have been more preferable along the lines adopted in the case of Kirkby Engineering. We shall want to examine all these matters in great detail in Committee.

If, for example, the Government insist on the Reserve Fund Agency, I hope that they will be ready to consider the tour operators comprising part of its membership and will agree that, above all, the consumers should be adequately represented on the Agency.

It is reported in the Press that ways and means are being studied of extending the Reserve Fund scheme to other types of holidays. The Secretary of State touched upon this briefly in the early part of his speech. I hope that the Under-Secretary will be able to tell us whether the Government intend to introduce further legislation, either in this Session or next, or whether they propose to introduce amendments in Committee to extend this Bill to cover other types of holidays. When announcing the Government's decision last September to set up a reserve fund the Secretary of State for Trade said that the fund was to provide a strong second line of defence for holidaymakers travelling abroad by air. We know that already the Bill has been extended to cover overseas surface travel. We all know and understand the reason for that.

The important matter to realise is that the Bill is capable of considerable improvement in Committee. One of the interesting points that has arisen is the cover given by Thomas Cook & Son Ltd. To some extent it has pre-empted the Bill with the money back guarantee scheme which it is offering to its customers. I had a look at the scheme today. It is a straightforward money back scheme and it rests for its financial stability upon the substantial backing which the Thomas Cook group has from the Midland Bank. Nevertheless, it is a good example of a reputable travel firm setting about the business of guaranteeing the holidays of its customers. That is a matter that we shall want to take into consideration in Committeee.

One of the matters that the House has had in mind during the debate has been the forthcoming report of the Parliamentary Commissioner. We all recognise that to some extent the Bill is sub judice. I recall the remarks of my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) when he was challenged on that point. I think that he made a fair distinction when he was talking about political judgments as opposed to other forms of judgment.

I now turn to some small but important points on the contribution that will be made by the air travel organisers. The regulations that will be made under the Bill will be important. Under Clause 4 the Secretary of State will be able to make regulations requiring contributions, calculated in such manner as may be prescribed … for the purposes of the Fund by air travel organisers.… I hope that in Committee we shall be able to consider the enactment of such regulations subject to affirmative resolution of both Houses instead of the negative resolution procedure as described in the Civil Aviation Act 1971.

Next, there is the minor question of how the levy is to be raised. The issue of Parliamentary control is involved. We must also consider the loans which may be made to the Reserve Fund Agency by the Secretary of State. Clause 5 provides that such loans shall be of such amount and on such terms as the Secretary of State may, with the approval of the Treasury, determine. Bearing in mind the history of the whole affair, I feel that the terms of such loans should be more explicit in the Bill. That is a matter to which we should pay attention at a later stage. Possibly there should be an opportunity for a travel firm to be able to contract out of the reserve scheme provided that it can show that it is providing adequate insurance. That may be the best solution and may be the type of operation whereby we shall have a much better insurance and bonding arrangement, plus individual cover for holidaymakers if they so desire it.

Another interesting suggestion that came up during the debate, and which was put forward by my hon. and learned Friend the Member for Thanet, West, is that there should be a Ministry of Tourism. That idea has much to commend it. I am sure that it will give us all food for thought.

My right hon. and hon. Friends are prepared to allow the Bill to obtain a Second Reading. However, we have considerable reservations about the Reserve Fund scheme. We want to be sure that it is fair both to holidaymakers and to air travel organisers. We shall endeavour to make substantial improvements to the Bill in Committee. We shall if necessary return to the matter on Report and on Third Reading depending on the Government's flexibility and their willingness to consider worthwhile improvements. For these reasons, we shall not divide against the Bill, but look forward to improving it in Committee.