Potential impact of leaving the EU on consumer protection under the ATOL scheme

Air Travel Organisers’ Licensing Bill – in the House of Commons at 5:15 pm on 11th July 2017.

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(1) The Secretary of State must carry out an assessment of the potential impact of the UK’s exit from the European Union on consumer protection under the Air Travel Organisers’ Licensing scheme and the Air Travel Trust.

(2) The Secretary of State must lay a report of the assessment before Parliament within 12 months of the passing of this Act, and once in each calendar year thereafter.—(Patricia Gibson.)

This new clause would require the Government to report regularly on the effect of Brexit on consumer protection under the ATOL scheme and to report annually on the progress that is made.

Brought up, and read the First time.

Photo of Patricia Gibson Patricia Gibson Shadow SNP Spokesperson (Consumer affairs)

I beg to move, That the clause be read a Second time.

The new clause stands in my name and that of my hon. Friend Alan Brown. It would require the UK Government to report regularly on the effect of Brexit on consumer protection under the ATOL scheme and to report annually on the progress they have made.

Brexit throws up great uncertainties, not least in the aviation sector with regard to passenger rights, compensation schemes and how much change and/or stability can be expected. There is also the question of how EU airlines and passengers may be affected. The overriding concern about the Bill, welcome as it is, is that consumer protections must be safeguarded and, furthermore, that such protections must continue to be enhanced and updated as society and technology evolve, just as has happened during our EU membership. The UK cannot be left behind, stagnating in a post-Brexit world.

New clause 1 is an extremely important move to provide some comfort and confidence to consumers; a lack of guarantees will otherwise leave passengers vulnerable and might put people off booking holidays. That could only be bad news for our outbound tourism economy, which is so vital for jobs in Scotland and the rest of the UK. We intend to press the new clause to a Division.

Photo of John Hayes John Hayes Minister of State (Department for Transport) 6:00 pm, 11th July 2017

As I did with the amendments, I start by saying that I fully endorse, and indeed support, the purpose of the new clause. By the way, I am grateful to Patricia Gibson for withdrawing her earlier amendment following the assurances that I gave her. I say to Karl Turner that I am fully committed to full consultation and a full impact assessment on the regulations as they are rolled out as a result of the Bill.

The point is that the ATOL legislation is not dependent on the package travel directive. The Bill will harmonise ATOL with the package travel directive in the immediate term. As I made clear earlier, ATOL legislation and protection will remain in place as we leave the European Union. They are made by, framed in and supported by domestic legislation.

Although I understand the point that the hon. Member for North Ayrshire and Arran makes, I have to tell her that the new clause is unnecessary, because ATOL is enshrined in an Act of this Parliament, and only this Parliament can change that. Mindful of that; mindful of the assurances that I have given about consultation, further review and impact assessments, which I repeat; mindful of the fact that, as I have mentioned, there will be a review of all these matters; and given what I have said about ATIPAC, I hope that she might withdraw the new clause.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

New clause 1 seems eminently sensible. These consumer protection measures require an assessment, so we will support the new clause.

Question put, That the clause be read a Second time.

The House divided:

Ayes 273, Noes 308.

Division number 7

See full list of votes (From The Public Whip)

Aye

No

Question accordingly negatived.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

Photo of John Hayes John Hayes Minister of State (Department for Transport) 6:15 pm, 11th July 2017

I beg to move, That the Bill be now read the Third time.

What a pleasure it is to move the motion for the Third Reading of this important Bill, and to do so in the knowledge that it will be considered in the spirit that it deserves. We have had a properly reasoned, measured and sensible debate about its provisions, and I am grateful to Members on both sides of the House for contributing to that process. I did think it a little unnecessary for us to vote once or twice earlier, but let us put that to one side, because I fully appreciate that the Opposition must do their job, if only to maintain the declining morale of a parliamentary party that knows it is no nearer to power now than it was a week, a month or a year ago. [Interruption.] But let us put that to one side.

This is an important piece of legislation, which, as we have said repeatedly, brings up to date and up to speed the arrangements under the ATOL scheme which protect travellers. Those arrangements have been proved to be effective time and again. They are necessary and desirable, as has been acknowledged throughout our considerations. Benjamin Disraeli, of whom we have heard too little this afternoon, said:

“Like all great travellers, I have seen more than I remember, and remember more than I have seen.”

What I will remember of today’s considerations is that, as I have said, they have been conducted in the way in which Parliament should consider all such matters.

I am entirely confident that the Bill, as it proceeds, will continue to provide the necessary reassurance for travellers and the necessary measures for businesses, and that, in those terms, it will do the Government and the House proud. It is right for Governments to act in the interests of the common good, for that is enshrined in all that we are in my party, and I hope that other parties in the House will gradually, over time, learn from that. I entirely welcome the way in which we have dealt with these matters, and I look forward to further consideration of them once the Bill becomes law. As I said again today, I am committed to reviewing the position thoroughly, and when the regulations come before the House—I repeat this, because I think it important to emphasise and amplify it—we will review the implications in the way recommended by the House.

We can be proud of the Bill. I am sure that it is not just fit for purpose, but necessary, desirable and efficacious.

Photo of Karl Turner Karl Turner Shadow Minister (Transport) 6:17 pm, 11th July 2017

The Labour party supports the Bill, and we will vote in support of it. There are, however, some concerns about the impact of some parts of it, which we expressed when the clauses were first debated as part of the Vehicle Technology and Aviation Bill and again throughout the passage of this Bill. We hope that the Minister has taken on board the points raised by Labour and echoed by the Scottish National party, who re-tabled Labour’s amendments to VTAB in Committee. As the House will know, the Prime Minister has asked the Opposition to help the Government by providing some policy suggestions. However, it seems that SNP Members are not even asking for help, but are simply taking Labour’s policy ideas as their own. We should probably take that as a compliment.

We support the Bill because it brings ATOL up to date and will ensure that it is harmonised with the latest European Union package travel directive, extending to a wider range of holidays and protecting more consumers, as well as allowing United Kingdom travel companies to sell more seamlessly across Europe. While we harbour some real concerns over whether UK consumers will be sufficiently protected by EU-based companies, as they will no longer be subject to ATOL but to member state equivalents, we welcome changes that will ultimately help to protect more holidaymakers.

The implications for ATOL after Brexit are also a cause for concern. Hidden in the Bill are proposals that the Secretary of State should require only an affirmative resolution to significantly reform ATOL and the air travel trust fund. Labour recognises the merits of some reforms, but we believe that an impact assessment, full consultation and full scrutiny should have been required before any fundamental changes are made to these consumer protections.

These issues bring to the forefront uncertainties over the future of UK aviation following the decision to leave the EU. The Labour party has been clear that, whichever framework is chosen by the Government, we should prioritise retaining an essentially unchanged operating environment. They should prioritise air service agreements as part of exit negotiations. As is customary, such agreements should be negotiated separately from, and prior to, the UK’s negotiations on trade with the EU. The Government must not waste the opportunity this Bill presents to clarify their intended future arrangements for our aviation industry.

The UK aviation sector is the largest in Europe and the third largest in the world, supporting 1 million jobs and bringing £9 billion into the Treasury in tax receipts. Over a quarter of a billion passengers were transported in 2015. But aviation also provides a network infrastructure that enables other industries to do well. Half a million jobs in the UK tourism industry are supported by aviation, and 40% of UK imports and exports by value go via UK airports. The EU is the UK’s single biggest destination, accounting for 49% of passengers and 54% of scheduled commercial flights. Airlines that operate from within the UK are able to rely on the EU single aviation market, which allows any airline owned and controlled by EU nationals to operate freely in the EU without restrictions on capacity, frequency or pricing.

Additionally, EU carriers are able to take advantage of the traffic rights contained in the many air services agreements that the EU has negotiated on behalf of all member states with non-EU countries. Significantly, this includes the EU-US open skies agreement which enables airlines from the EU and the US to fly between the EU and the US. If Britain leaves the EU without retaining any form of European common aviation area membership, airlines will need to negotiate new rights to operate freely within the EU and operate transatlantic routes. This means that there will be no legal framework that allows airlines to fly to those destinations from the UK. So UK airlines would also lose the right to operate within the remaining EU27, and EU airlines might lose the right to fly UK domestic routes as well.

Aviation is legally unique: it is separate from trade agreements and does not form part of the World Trade Organisation system. Instead, countries negotiate bilateral or multilateral air services agreements to provide airlines with the legal rights to fly to certain places. To ensure the continuity of connectivity, the UK will need to negotiate a new air services agreement with the EU and countries such as the US. If there is no such agreement by the time the UK leaves the EU, the UK’s connectivity will be undermined and its ability to trade will be more difficult. So it is imperative that the Government prioritise retaining an essentially unchanged operating environment. That is why they should prioritise air services agreements as part of Brexit negotiations.

While the measures in this Bill are important and will provide additional security to UK holidaymakers, it is strange that the Government thought it necessary to debate the Bill in a Committee of the whole House. The measures in the Bill were included in VTAB, which had passed through its Committee stages before the Prime Minister decided to call the unnecessary snap general election. I think I am right in saying that these provisions in that Bill were debated in no more than 45 minutes in Committee. The Government have not made changes to their proposals and the Opposition supported them as part of VTAB in the last Parliament, so we simply do not understand why the decision was taken for this small, agreeable and largely non-contentious niche Bill to take up time in the Chamber, other than to try to disguise the fact that this chaotic Government have a threadbare legislative programme for this Parliament.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

As a result of that scrutiny—which the hon. Gentleman should not disparage because he has played an important part in making it real—we have had a good debate on the issues of review, of impact assessments and of further consultation. He will have heard what I have said about all those things, which are matters close to his heart, so actually the debate has served a really useful purpose.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

The Minister makes a fair enough point, but with respect, it has been a terrible waste of time debating this matter in the Committee of the whole House when it was previously dealt with in 45 minutes in Committee upstairs. For the sake of appearances, VTAB has been broken up into its component parts and is now being given undue time for debate in this Chamber.

Photo of Sylvia Hermon Sylvia Hermon Independent, North Down

It is never a waste of time to discuss anything pertaining to the whole of the UK in this House or in a Committee of the whole House. This gives me the opportunity to remind the Minister that we have three airports in Northern Ireland. We are the only part of the United Kingdom that is physically connected to another EU member state—the Republic of Ireland—and it is really important, as has been stated in the debate, that we do not lose air traffic and business from Northern Ireland to airports such as Dublin.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

The hon. Lady makes her point on behalf of her constituents, and she makes it well, but I do not think that it requires a response from me.

Photo of Mark Francois Mark Francois Conservative, Rayleigh and Wickford

This is a bit of an occasion, really, because when legislation is debated in this place, the Opposition traditionally complain that it is not given enough time, that the Government have tried to rush it through or that there has been insufficient examination of the provisions. The shadow Minister seems to be setting a precedent here today, in that he seems to be complaining that the Bill has been given too much time. Why is that?

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

If the right hon. Gentleman will allow me to continue, I will make the point in a moment that important issues were debated in VTAB that are not now going to be discussed or made into legislation.

As a result of breaking up VTAB, measures that were previously included have been dropped, and measures that could have been included to improve this legislation through new clauses and amendments can no longer be added because they are no longer within the scope of forthcoming Bills. The proposal to make the shining of lasers at vehicles or control towers an enforceable criminal offence, which was strongly supported by those on this side of the House and which we would still be happy to support, has been dropped altogether. That is clearly concerning. We do not want to see avoidable disasters brought about by the malicious use of laser pens, and neither does the Minister, so will he explain why he has dropped these crucial plans, and whether or indeed when he proposes to legislate to tackle this serious problem?

There is also nothing in the Bill on the inclusion of much-needed regulations on drones—a matter previously caught by VTAB. The Government will respond to the consultation on drones in the next few weeks, but they should have made much more progress already, including making decisions on whether the UK should follow other countries by establishing a compulsory registration scheme and getting systematic geo-fencing in place to physically prevent drones from getting near airports and other places where they have the potential to be so dangerous.

It makes no sense for the Government to have abandoned the Bill in which action on drones could have been included. These are decisions that will make aviation less safe than it should be. The latest figures show that 33 such incidents were confirmed in the first five months of this year, and 70 last year, whereas there were 29 in 2015 and just 10 in the preceding five years. We need legislation to regulate the use of drones in order to tackle the worrying trend of near misses with planes. The aviation industry has been clear that it needs the Government to act on these concerns now. The Opposition have been pressing the Government on this issue for many years. Without action, it is a question of when, rather than if, a passenger plane is involved in a drone-related incident, so will the Minister explain why the proposal has been dropped and what plans he has to put this right?

We are just one month into this new Parliament and the Government are already running out of steam, which is why we have been debating this Bill on the Floor of the House rather than upstairs in Committee. The Prime Minister is attempting to crowd source policy ideas from the Opposition, and we can assist in this instance. The Government need to bring forward legislation on the misuse of lasers and on the regulation of drones and to provide clarity and certainty for UK aviation post-Brexit. We would welcome the Government adopting those policies, and they will have our full support if they do so. Labour broadly supports the Bill, because it extends protections to many more holidaymakers, but we want clarity on how EU-based companies, which will no longer be subject to ATOL but rather their respective member state equivalents, will provide protection to UK consumers. We want the best possible framework to ensure that the sector flourishes, but that means adequately preparing ourselves for the many implications that Brexit will have for ATOL and our aviation sector as a whole.

Photo of Patricia Gibson Patricia Gibson Shadow SNP Spokesperson (Consumer affairs) 6:30 pm, 11th July 2017

I end where I began by welcoming and supporting the Government’s measures to update the ATOL scheme to provide more protection for passengers when they go on holiday and to align it with the latest EU directives. I welcome the progress made in this evening’s debate, but I was disappointed to hear Karl Turner complain that today’s process has taken too long. If he sees that as a problem, I suggest that he perhaps contributed to it with his extensive remarks. I am sure that we all enjoyed them, but he seems to have contributed to the problem that he identified.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

I did not complain that the process was taking too long; I simply made the point that time in this House is incredibly important. An awful lot of things that were discussed during the proceedings on the Vehicle Technology and Aviation Bill could have made this legislation, but time has been wasted. These matters took 45 minutes in Committee. That was my point.

Photo of Patricia Gibson Patricia Gibson Shadow SNP Spokesperson (Consumer affairs)

I believe that the Minister has taken on board the legitimate concerns expressed tonight about how consumers are to be protected and have their current rights guaranteed as we head towards a post-Brexit world. There must be no diminution or stagnation of passenger rights as society and technology advance. It has been heartening to see how the Bill has proceeded through the House, and I have been delighted to be a part of these debates.

Photo of Eleanor Laing Eleanor Laing First Deputy Chairman of Ways and Means

Order. I am sure that the Minister is going to beg the leave of the House to address the House again.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Thank you, Madam Deputy Speaker.

I do not want to detain the House unduly except to affirm my thanks to all Members who have contributed to the debate. I hear what Karl Turner says about the previous Bill. He drew attention to those elements of the Bill that are not being considered today. This legislation is very much part of that earlier Bill, but we made it clear in the Queen’s Speech that we intend to introduce further transport legislation. I am happy to continue to have conversations about drones and lasers along the lines that he suggested. It has been a good debate, and it is a good Bill. I think we can leave it at that.

Question put and agreed to.

Bill accordingly read the Third time and passed.