Air travel organisers’ licences

Air Travel Organisers’ Licensing Bill – in the House of Commons at 4:31 pm on 11th July 2017.

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Photo of Karl Turner Karl Turner Shadow Minister (Transport) 4:31 pm, 11th July 2017

I beg to move amendment 2, in page 1, line 13, at end insert—

“(4) The Government must publish a review within one year of this Act receiving Royal Assent on the impact on UK consumers using EU-based companies affected by changes to consumer protection introduced by this section.”

This amendment requires the Government to review the impact of provisions under this section to ensure that they are not adversely affecting UK consumers using EU-based companies.

Photo of Lindsay Hoyle Lindsay Hoyle Chairman of Ways and Means, Chair, Panel of Chairs

With this it will be convenient to consider clause 1 stand part.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

The amendment would require the Government to review the impact of clause 1 to ensure that it does not adversely affect UK consumers using EU-based companies. Essentially, the clause updates ATOL—the air travel organisers’ licence—to ensure that it is harmonised with the 2015 EU package travel directive. The provision therefore extends ATOL to cover a wider range of holidays and protect more consumers. UK travel companies, we are told, will be able to sell more seamlessly across Europe, as they will need to comply with protections based not in the country of sale, but the country in which they are established. Those are the objectives that the Government seek to achieve. There is no difference of principle between the Government and the Opposition on this matter. Indeed, it is due to the package travel directive that it has been necessary to put such a provision into the Bill.

However, we seek clarification on some issues, which was why we tabled amendment 2. The amendment would provide a guarantee that the Government will review the impact of the ATOL revisions to ensure that they do not adversely affect UK consumers using EU-based companies. The whole idea of the clause is to improve the range of protections available. The broad substance of the changes to ATOL are necessary and are broadly welcome. As I said, they will harmonise UK law with the latest EU package travel directive, and that should have many benefits. A wider range of operators, including more dynamic package providers, are likely to be covered by the changes. That will hopefully bring protection to many more UK holidaymakers who are not covered under existing ATOL provisions.

For UK travel companies, standards will have to be in line with those of the country in which the company is established, rather than the place where the company sells the holiday. That should mean that companies established in the UK can sell far more seamlessly across Europe by simply adhering to the widely respected ATOL flag. However, the changes at the EU level could have adverse effects for UK consumers who purchase their holiday or travel from EU-based travel companies, rather than British companies that sell into other European countries.

Amendment 2 would address that issue. The changes made through the directive will now mean that EU-based companies selling in the UK will have to adhere to ATOL-equivalent insolvency protections laid out in the member state where the business is based. In practice, that could lead to unintended consequences and, more significantly, costs for UK consumers. Processes and timescales for recompense may be distinctly different from what many travellers would expect under the current ATOL provisions, which are in many ways regarded as the gold standard.

The impact assessment warns:

“If consumers purchase a trip from a business established elsewhere in the EU and the company becomes insolvent there may be some costs to the consumer of processing a claim with a non-UK insolvency protector.”

Based on the latest Civil Aviation Authority figures, this will affect not just a relatively small number of holidaymakers. If this goes wrong, more than 500,000 passengers could be compromised, so a significant number of people could be adversely affected. It is therefore important that the Government take steps to anticipate and prepare for any possible negative impacts.

Amendment 2 would achieve that by requiring the UK Government to monitor the impact on UK consumers using EU-based companies. That would help to inform whether the UK Government should consider issuing further guidance, or co-operating with consumers and member states to ensure that protections are adequate.

The changes envisaged by the clause clearly make sense and are in line with what is required under the package travel directive. There is no doubt that when UK-established companies are selling into other countries, the consumers in those countries will have the benefit of the gold standard of ATOL protection. However, we are concerned about the protection given by EU-based companies selling in the UK. We hope that it will be equivalent to that under ATOL, but it will be subject to the rules and regulations of the EU country concerned. We are nervous about whether UK holidaymakers could lose out, so we are asking the Government to consider the issue and to monitor the situation properly.

As with so many other things, the environment is changing, particularly in relation to Brexit. ATOL will still be there post-Brexit, but we will explore possible changes when we discuss the next group of amendments. The package travel directive will no doubt still be there for those states that will still be members of the EU. What is uncertain at this stage is what the interface will be between the two things post-Brexit.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

I have been following the hon. Gentleman’s line of thought carefully. He seems to be seeking full protection for UK consumers buying in the EU. The EU package travel directive applies while we are still a member of the EU, but when we cease to be a member, the repeal Bill will have put its provisions in UK legislation, so surely the hon. Gentleman’s argument is unnecessary.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

With respect, we do not know that yet, and nor do we know what the insolvency arrangements will be for companies abroad. The Government must address this real issue.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

I will not give way.

We ask the Government to get the ball rolling within a year of the Bill receiving Royal Assent, but a regular review is also needed, particularly in the light of Brexit. Our amendment is supported by the Association of British Travel Agents and other travel organisations. Despite ministerial assurances, we want our amendment to be made to the Bill, so we will press it to a Division.

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

I welcome the spirit in which the Opposition have gone about their business on these provisions. We have had measured and sensible exchanges, first when we started to explore the issues in the Vehicle Technology and Aviation Bill earlier this year, before the election, and subsequently in last week’s Second Reading debate on this Bill. There is a determination across the House to get these matters right and a recognition that the protections that these measures offer travellers are important. Furthermore, as the Opposition spokesman made clear a moment or two ago, there is a recognition that we need to maintain the fitness for purpose of these arrangements to take account of changing circumstances in the travel market. We must remember the context in which we are considering the amendment. The whole House shares the view that it is right for ATOL to continue and to respond to changing market conditions, and that the Government must do their part by ensuring that the necessary framework is in place. In respect of the amendment, I can go even further.

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

I will happily give way, after I have made this telling and interesting point. I said to Labour Members not long ago that I understand that it is now de rigeur for parties from across the House to work together. That has become immensely fashionable recently; frankly, however, it has been my practice forever. I feel as though the world is catching up with me, and that is a great place to be.

Photo of Julian Knight Julian Knight Conservative, Solihull

The Labour spokesman suggested earlier that there might be some rowing back of holidaymakers’ rights after we leave the EU, but is that not quite wrong? The UK has led the charge in the EU for holidaymakers’ rights. Will the Minister reassure the House yet again that we will protect holidaymakers’ rights post Brexit?

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

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 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 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. Because that is not our responsibility—we do not have the power that the amendment suggests that we should have—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.

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

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.

Photo of Vicky Ford Vicky Ford Conservative, Chelmsford 4:45 pm, 11th July 2017

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—

Photo of Lindsay Hoyle Lindsay Hoyle Chairman of Ways and Means, Chair, Panel of Chairs

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.

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

I am extremely grateful, Mr Hoyle.

I will address my hon. Friend’s remarks later in my brief speech. She is right, of course, that it is too early to know how the package travel directive will lead to changes in purchasing behaviour across borders. That was a point that the hon. Member for Kingston upon Hull East made, too. We hope—

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

I think this might make the hon. Gentleman’s point even better than it would be otherwise. I described earlier the desire of the Europeans essentially to—I hate to use this word, because it is so often a loaded term when it emanates from the EU, but I will—harmonise arrangements across Europe, but he is right to say, as is my hon. Friend Vicky Ford, that we do not know.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

That is the precise reason we need a review.

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

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 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, 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—

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

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.

Photo of Vicky Ford Vicky Ford Conservative, Chelmsford

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?

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

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 that 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.

Photo of Julian Knight Julian Knight Conservative, Solihull

My right hon. Friend has been most generous in taking interventions. He mentioned that ATOL was last reformed in 2012. Is not the truth that the process will not end with Brexit or with the Bill? It is an ongoing process of reform and renewal.

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

That is true and in a sense it is more catalysed by the changing character of communications and the way in which people organise and book their holidays than it is by our relationship with the continental countries of Europe. It is affected by both, but my hon. Friend is right to say that even if we were not leaving the European Union—and, my goodness, I am glad we are —we would still need to reflect on and consider changes that take account of the changing patterns of the way in which people organise and book their holidays. Indeed, he is right that the process of reflection, consultation, impact assessment and review needs to be a continual one.

Last year we consulted on the changes to the Civil Aviation Act 1982 that we are discussing today. We are about to launch a series of consultations on the detailed regulations that will follow, including on this particular issue. Each stage of the work will be the subject of impact assessments and consultations, so we will both consult and publish impact assessments on each stage of the changes that I have described and which will be drawn to the House’s attention by various hon. Members—

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

I see another hon. Friend who wishes to do so.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

I always hesitate to stop the Minister in full flow because he is such a joy to hear. Surely his commitment is the key point, because the Government consulted in 2012 and have committed to consulting in bringing in this legislation and aligning ATOL with the European directive. That needs to continue, because we will not transpose it into law until next year.

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

That is also true, and it is certainly true that we cannot be premature about imagining, or speculating about, the outcome of that process; but I think we can offer some certainty about our determination to consult on the arrangements in respect of this particular set of regulations—partly, of course, because they exist irrespective of the European Union. ATOL’s coincidental genesis with our entry to the European Union is just that, a coincidence. ATOL, I guess, would have existed regardless of our relationship with the European Union. Indeed, the regulatory and legislative framework that underpins it is domestic. So the domestic legislation that gave life to ATOL, and continues to do so, was very much at the behest of this Parliament, and of successive Governments—of all parties, by the way—who have continued to support that scheme.

Photo of Anna Soubry Anna Soubry Conservative, Broxtowe

This is a fascinating topic. Are we seeing an example of what happens when EU regulation is really rather good, and we accept that and transpose it into our law? Does my right hon. Friend not agree that there are many who supported our leaving the EU on the basis of some, I think, fanciful notion—I am sorry, Mr Hoyle, but I think this is an important point—that we would be stripping away all this sort of regulation and entirely doing our own thing? This proposal, however, seems to be rather a good idea.

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

In the darkest recesses of the darkest places there is occasionally a glimmer of light, and so it is with the European Union. One would not want to claim that every single aspect of every single thing that has been done over all the years of its existence has been malevolent. There is the odd measure which may be said to have shed just a glimmer of light, and in that sense, my right hon. Friend may be right.

Let me move on. During an evidence session earlier this year, Richard Moriarty of the Civil Aviation Authority told the Committee considering the Vehicle, Technology and Aviation Bill that he hoped the Government

“will follow the practice that they have followed today: consult with us, consult the industry, do the impact assessment, and so on.” ––[Official Report, Vehicle Technology and Aviation Public Bill Committee, 14 March 2017;
c. 65, Q150.]

For the reasons that I have given, the current process is one from which I will not deviate. We will ensure that any changes that are made after the passing of the Bill, or as a consequence of it, will be subject to that rigorous and transparent process; but I want to go even further in satisfying the hon. Member for Kingston upon Hull East, because even that is not enough for me.

The hon. Gentleman will be aware of the Air Travel Insolvency Protection Advisory Committee, or ATIPAC, as it is commonly known. Earlier, I described darkness and glimmers of light in respect of the European Union. So it is with Labour Governments. It is a great mistake in politics to demonise one’s political opponents, because Governments of all colours do some things well and some things less well. All Governments introduce legislation that they subsequently regret, and omit to introduce legislation that they should. In grown-up politics and proper political debate—and this is a mature Parliament that is capable of such debate—we should freely acknowledge that.

In 2000, a Labour Government set up ATIPAC. Its purpose was to provide advice for the Civil Aviation Authority, the Air Travel Trust and the Secretary of State for Transport on policies that should be pursued to protect customers. It consists of representatives of industry, consumers, the CAA and Trading Standards, which means that it is well placed to provide an informed and independent review of policies. That committee already submits a substantial report to the Secretary of State each year. I have a copy of such a report, for the consideration and, I hope, education and enjoyment of any Member who may wish to cast an eye over it. The report includes drawing the Secretary of State’s attention to any concerns on which ATIPAC’s view is that further action is necessary to maintain strong consumer protection. This includes advice on changes in the market and, where appropriate, their potential impact on consumers and the financial protection arrangements.

I am sure—absolutely confident—that the committee is already minded to keep a close eye on the impact of the directive on UK consumers. However, in light of this amendment, the brief debate we have enjoyed and the responsible stance taken by those on the Opposition Benches—

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

I am moving to my exciting peroration, but I will give way.

Photo of Julian Knight Julian Knight Conservative, Solihull

Is my right hon. Friend saying that the industry experts—the people who really know—are saying in effect that this amendment is superfluous and is unnecessary?

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

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.

Photo of Vicky Ford Vicky Ford Conservative, Chelmsford

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?

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

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, My 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.

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

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

Photo of Vicky Ford Vicky Ford Conservative, Chelmsford

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?

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

That is a perfect cue for what I was about to say. Knowing that the hon. Member for Kingston upon Hull East is a reasonable and sensible man, and knowing that the shadow Secretary of State has some experience in this field, having debated these matters with me on more than one occasion, I cannot believe that a responsible Opposition would, in the light of the pledges I have made today, on the record, push these matters to a vote.

I will ask the committee—which is already there to do as the hon. Member for Kingston upon Hull East has asked and is already producing the annual report that the amendment requests—to deliver the very assurance that he has requested. Those experts—for that is what they are—submit their report to the Secretary of State within four months of the end of each financial year. However, I am going to go even further. I am determined that the hon. Gentleman will be so captivated, encouraged and illuminated—not surprised; I would not go that far, because he knows what a good bloke I am—by the offers that I have made that he really will not want to push this matter to a vote. I am going to go further. The committee, which does indeed publish an annual report, can, as necessary, report more frequently if circumstances require. Should it believe that it needed to do so because of this legislative change, we would, ironically, have less scrutiny, fewer reports and less analysis if we were to pass the amendment than is the case now.

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

There are those on my side of the House who take a less generous view than I do of the Labour party. However, I know that what I have just described is not the intention of Her Majesty’s Opposition. They do not want to have less scrutiny, less analysis, less certainty or less clarity. They want the same degree of clarity that I seek. I am prepared to acknowledge that. However, the effect of their amendment might be to leave us in a worse position than we are in at present, and that surely cannot be right.

Photo of Nadine Dorries Nadine Dorries Conservative, Mid Bedfordshire

I apologise for intervening so soon after arriving in the Chamber. Does my right hon. Friend not agree that most of these issues will be taken care of in the great repeal Bill anyway?

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

That is of course right; the committee will look at all those matters in that context. I said that earlier. I have also said, however, that I want to go further and to ensure that this stands proud as an example of analysis. Of course the great repeal Bill and our relationship with the European Union are bound to be the context in which the committee considers these matters; I guess that that is true. However, these ATOL arrangements predate our relationship with the European Union, or, if they came into force at the same time, it was a coincidence. Given that they are framed in domestic legislation rather than European legislation, I believe that ATOL would have existed regardless of our association with the European Union.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

Just for clarity, when I intervened on the Opposition Front-Bench spokesman, he was making a point about insolvency, but the generous offer that my right hon. Friend just made would clearly cover insolvency as well.

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

Generosity needs to be reciprocal. It is not for me to say how the Opposition will conduct their affairs, but surely they will recognise that we are going as far as it is possible to go to ensure that the process is reviewed in precisely the way that the hon. Member for Kingston upon Hull East described. He says that we cannot be absolutely certain how things will pan out in practice, and I agree. The spirit of his amendment seems to be the right one, so I have made it clear that I will facilitate just such an analysis of the impact of the changes. The point is that it is not as if the mechanisms do not exist for us to do that, and they do not merely rely on the legislative strength of the Small Business, Enterprise and Employment Act 2015, which says that there must five-yearly reviews. Issues will go to the committee responsible for overseeing such matters, which was set up by a previous Labour Government, and we will insist that the impact is reviewed—more than once a year if necessary.

Photo of Jeremy Quin Jeremy Quin Conservative, Horsham

May I ask my right hon. Friend for more clarity on that? Can the committee review things as often as it wants? I am sure that the committee will have been taking this debate seriously and that this particular part of it will be receiving attention. Can he confirm that he will be encouraging the committee to take its responsibility to review the proposal very seriously?

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

As you know, Mr Hoyle, it is not my habit to speak at length in this House. I like to abbreviate my remarks to a sufficient degree to make my point, but not to exaggerate the arguments. In the light of that intervention, however, I am inclined to go into rather more detail about the ATIPAC report, which is the document submitted to the Secretary of State in the way that I have described and then made public. The latest report states:

The Committee’s role is to provide informed advice to the Government and the regulatory authorities on financial protection for consumers in the event of a holiday company’s insolvency. Its Constitution sets out the role and membership of the Committee, and can be reviewed in Appendix 4.”

I will not go into the details of appendix 4.

Go on!

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

Well, okay. I am being persuaded to do so by popular demand and acclamation.

Photo of Lindsay Hoyle Lindsay Hoyle Chairman of Ways and Means, Chair, Panel of Chairs

Order. The Minister says “by popular demand”, but those Members were not here when he first started. He has had to wait until now.

Start again!

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

I have drawn them to the Committee by the power of my oratory and my performance. They are like moths to a flame.

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

So, appendix 4, to which I referred—

Give way!

Photo of Simon Hoare Simon Hoare Conservative, North Dorset

May I say to my right hon. Friend, with the seriousness and candour that the moment demands, that he is a bright flame on a dull and grey afternoon to which the moths of Parliament are being drawn?

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

I do not know whether anyone else wants to—

Photo of Lindsay Hoyle Lindsay Hoyle Chairman of Ways and Means, Chair, Panel of Chairs

Order. The danger is that someone might blow out that light. Come on, Minister.

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

I just wondered whether anyone else wanted to intervene in a similar vein.

Hurrah!

Photo of Mims Davies Mims Davies Conservative, Eastleigh

I thank the Minister for giving way. It has been announced today that easyJet is to fly for the first time from Southampton airport, which is in my constituency. It is fantastic news, and I am heading off in about 10 minutes—[Laughter.] Like me, is the Minister wary of committing the Government to something that may adversely impact the industry during the Brexit process? I say that on what is a positive day for my constituency.

Photo of John Hayes John Hayes Minister of State (Department for Transport) 5:15 pm, 11th July 2017

There is no wish to do that on either side of the House. There is general agreement on both sides of the House that the measure must act in the interests of both consumers and businesses. It is certainly in the mutual interest of the travel industry and of those who use it that these protections are in place, which is precisely why Governments of all colours and persuasions have continued to invest in and support ATOL over the years, and it is why I said earlier, before a number of Members entered the Chamber, that there is general cross-party agreement among all contributors to these discussions that it is necessary to reform ATOL to take account of the changing way in which people book their holidays online and in other ways. People plan holidays rather differently from how they once did.

Photo of Victoria Atkins Victoria Atkins Conservative, Louth and Horncastle

My right hon. Friend and Lincolnshire neighbour, as a Transport Minister, has been diligent in attending to the concerns of my constituents about the infamous Bull Ring bottleneck in Horncastle, where the A153 and A158 cross. Has he paid the same diligence, care and attention to this Bill, such that he is able to reassure the Committee that the amendment is not to be passed and that we must keep the Bill as it is?

Photo of Lindsay Hoyle Lindsay Hoyle Chairman of Ways and Means, Chair, Panel of Chairs

I have been quite generous to Members coming in late and intervening. If you are going to intervene, let us have short interventions.

Photo of Lindsay Hoyle Lindsay Hoyle Chairman of Ways and Means, Chair, Panel of Chairs

Mr Hoare, I assure you that I do not need any advice. I remind the Minister that there are others who wish to speak, including on his own Benches.

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

Then I will draw my remarks to a gradual conclusion. I have already brought my introductory remarks to their conclusion, and I am now moving to the main thrust of my response to the hon. Member for Kingston upon Hull East.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Infrastructure and Energy)

Far be it from me to prevent the Minister from continuing to drag things out. I apologise, but I do not have one of the intervention sheets that have been circulated. A few interventions ago, Ms Dorries suggested that the great repeal Bill will account for this amendment. Can the Minister explain how the yet-to-be-published great repeal Bill will supersede or take account of it?

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

What I actually said is that the Air Travel Insolvency Protection Advisory Committee, which is missioned to consider these matters in the way I described, will doubtless take account of the contextual changes associated with our independence from the European Union, and I use the word “independence” advisedly. It is inconceivable that the committee would not make reference to that in its annual report, but I also said that I would write to draw the committee’s attention to the specificity of the measures we are bringing before the House to ensure that it carries out the very kind of report and review called for by the amendment.

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

I really must press on.

Appendix 4 of the annual report is categorical about the committee’s constitutional role, and it sets out the committee’s membership, which includes the Association of British Travel Agents, the Association of Independent Tour Operators, the Association of Airline Consolidators, the Board of Airline Representatives in the UK and the Travel Trust Association. The committee also includes up to 10 independent members, of whom one will be the chair. Of course, as I set out earlier, the committee’s independence and expertise mean that it is in a perfect place to do the very work that the hon. Member for Kingston upon Hull East perfectly properly recommended to the House and that the amendment seeks to achieve.

Therefore, in the light of the fact that the Government have already obliged in law to review legislation within five years and have set up the independent panel of experts to report; that I have committed to seek guidance on the important issues the hon. Gentleman raises and to write to that committee asking it to review the legislation; and that the committee will report more often than annually as necessary, it would be extraordinary if the Labour party pushed this matter to the vote. It would be unreasonable for it to do so, but in the end that is a matter for it, not for me.

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

Last week, there was uncharacteristic consensus in welcoming the Second Reading of this Bill, as it is perfectly desirable and sensible to update the ATOL scheme to ensure more protection for travellers when they go on holiday and to align it with the latest EU directive. However, there undoubtedly are a number of questions that will arise in relation to this scheme once the UK leaves the EU. We need cast-iron guarantees that the rights of and protections for travellers will not be diminished after Brexit.

On Second Reading, the Minister was clear in saying that he wished to protect passengers, but we lack the detail on that. We do not know when the UK will develop its own system of passenger rights and compensation in the aviation sector after Brexit, how similar it will be to current arrangements or how it will affect EU airlines and passengers. Scottish National party Members fully support the Government’s reviewing the impact of provisions under this amendment; surely it is right that they review the impact of the provisions to ensure that UK consumers are protected and are not disadvantaged by using EU-based companies. When we leave the EU, passenger rights must not be affected, and consumers and companies based in the UK and/or the EU need clarity on what their obligations are in respect of the ATOL scheme.

We have heard today that this will all be taken care of in the great repeal Bill, and I am sure we all hope it will. Last week, the Minister said he was keen to protect consumers, and I am optimistic that that will be in evidence today. His reasons for resisting reviewing the impact of provisions under this amendment do not seem clear. Periodic reviews still make sense; having a review within one year will inform the impact of the provisions and will still be helpful. The Minister is an eminent and sensible man, but I am at a loss here: if ATIPAC already carries out yearly reviews, why resist this? The reviews we are talking about merely write into legislation something that it appears is already happening. What has the Minister to lose? The committee provides advice, we are told, and this amendment writes into legislation—

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

This is very simple: if something is already happening—if it is already in law—one does not have to legislate for it again.

Photo of Lindsay Hoyle Lindsay Hoyle Chairman of Ways and Means, Chair, Panel of Chairs

Order. That is not a word we would use, and I am sure the hon. Lady can think of something much more pleasant. The Minister is a nice man, after all, and I do not believe he would mislead the House.

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

The Minister is an eminently sensible man, but the point is that I can only wonder why he is resisting yearly reviews which he has told us already happen. If they already happen, why not write them into this piece of legislation, if for no other reason than to reassure passengers as we face a post-Brexit world? I know he is an honourable man, and I urge him to reconsider and accept the amendment.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

The Minister is a terribly generous chap, but his attempts to pacify the Opposition with his promise of a letter to ATIPAC simply are not enough. That does not cut the mustard, so we will push the amendment to a vote.

Question put, That the amendment be made.

The House divided:

Ayes 271, Noes 305.

Division number 5

See full list of votes (From The Public Whip)

Aye

No

Question accordingly negatived.

Clause 1 ordered to stand part of the Bill.

Clause 2

Air Travel Trust

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

I beg to move amendment 1, page 2, line 10, at end insert—

‘(8) Regulations under subsection (6) may not be laid before Parliament until the Secretary of State has published an assessment of their impact and has launched a consultation on the proposed amendments to the definition of “Air Travel Trust.””

This amendment requires the Secretary of State to undertake an impact assessment and launch a consultation before bringing forward any regulations to amend the definition of Air Travel Trust under this Act.

Photo of Lindsay Hoyle Lindsay Hoyle Chairman of Ways and Means, Chair, Panel of Chairs

With this it will be convenient to discuss the following:

Amendment 3, page 2, line 10, at end insert —

‘(8) Before laying regulations under subsection (6), the Secretary of State must publish a full impact assessment and consult on the proposals.”

This amendment would require the Government to undertake a full impact assessment and consultation before bringing forward regulations to create any new air travel trusts through an affirmative resolution.

Clause stand part.

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

Amendment 1, which stands in my name and that of my hon. Friend Alan Brown, would require the Government to undertake a full impact assessment and consultation before introducing any regulations to amend the definition of air travel trust under the Bill. Clause 2 requires that—[Interruption.]

Photo of Lindsay Hoyle Lindsay Hoyle Chairman of Ways and Means, Chair, Panel of Chairs

Order. There is a lot of conversation. I really am struggling to hear, and I am not sure whether the mic is picking up this speech. Would hon. Members please have their conversations when they have left the Chamber?

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

Clause 2 requires only that the Secretary of State has an affirmative resolution from each House of Parliament, but that is not enough. The Government should be required to conduct a proper consultation and assess the potential impact of any proposed changes to the ATOL scheme and air travel trust that they intend to introduce through secondary legislation. Any proposals must be fully transparent, and consumers and businesses alike must be formally consulted in the process to allow for proper scrutiny. We trust that the Minister will accept that and our reasons for tabling the amendment.

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

I can satisfy the hon. Lady entirely. I fully intend to ensure exactly what she asked for: full consultation and a comprehensive impact assessment in respect of any regulations to be made under these measures. On that basis, I hope she will withdraw the amendment. If she does not, she will look rather daft.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

We will press amendment 3 to a Division. We seek a commitment that the Minister gave in the Vehicle Technology and Aviation Bill Committee—that the Government would conduct a thorough impact assessment and consultation before implementing the power. Clause 2 relates to the Air Travel Trust, which is the legal vehicle that holds the money that is then used to refund consumers under ATOL protections. It gives the Secretary of State the power to define separate trust arrangements to reflect different market models, prefiguring some of the changes in the package holiday market mentioned by the Minister.

Amendment 3 would require the Government to undertake a full and proper review, and public consultation, before introducing any of the changes that would be enabled under the powers in clause 2. Unlike clause 1, clause 2 does not seem directly relevant to harmonising EU and UK regulations. Instead, it is a dormant power that the Government will retain in order to make considerable changes to ATOL, and particularly to the Air Travel Trust. That is where Brexit comes in because, were such changes to happen, they would most likely be in the event of the UK leaving the European Union.

During one of the VTAB Committee evidence sessions, Richard Moriarty of the Civil Aviation Authority—a trustee of the current Air Travel Trust—said that he recognised the possible merits of separating the trust to reflect the variations of products in the market. However, he explained that we simply are not there yet, and that it would be wrong for the Government to use the Bill as a means of making wholesale changes without due consultation. The Minister made it clear in a letter to my hon. Friend Andy McDonald that changes would be made only through the affirmative procedure, yet the Bill does not account for any further consultation as part of this measure.

The Government’s impact assessment explicitly states that it

“does not consider proposals for ATOL reform, beyond what is required” in the package travel directive. It would therefore be rather inappropriate for the Minister to go beyond that, without providing assurances that proper consultation and scrutiny will take place if the Government are minded to go beyond changes that were already envisaged.

During the VTAB evidence session, Mr Moriarty said that he hoped the Government would

“follow the practice that they have followed today: consult with us, consult the industry, do the impact assessment, and so on.”

Amendment 3 simply says that. It is fair and reasonable and would guarantee scrutiny of further changes that may come down the track regarding ATOL protection.

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

In the light of the Minister’s assurances to the House, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 3, page 2, line 10, at end insert —

“(8) Before laying regulations under subsection (6), the Secretary of State must publish a full impact assessment and consult on the proposals.” —(Karl Turner.)

This amendment would require the Government to undertake a full impact assessment and consultation before bringing forward regulations to create any new air travel trusts through an affirmative resolution.

Question put, That the amendment be made.

The House divided:

Ayes 274, Noes 307.

Division number 6

See full list of votes (From The Public Whip)

Aye

No

Question accordingly negatived.

Clause 2 ordered to stand part of the Bill.

Clauses 3 and 4 ordered to stand part of the Bill.

New Clause 1