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Air Travel Trust

Vehicle Technology and Aviation Bill – in a Public Bill Committee at 2:00 pm on 21st March 2017.

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Photo of Richard Burden Richard Burden Shadow Minister (Transport) 2:00 pm, 21st March 2017

I beg to move amendment 23, in clause 19, page 14, line 5, after “unless” insert “a full impact assessment and consultation is published and a”

This amendment requires 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.

The clause relates to the Air Travel Trust, which is the legal vehicle that holds the money that is then used to refund consumers under ATOL protection. It would give the Secretary of State the power to define separate trust arrangements to reflect different market models, prefiguring some of the changes in the holiday package market, referred to by the Minister.

Amendment 23, following a theme, would require the Government to undertake a full and proper review and public consultation before bringing in any of the changes that would be enabled under the powers in clause 19.

Unlike clause 18, as discussed with the previous amendment, clause 19 does not seem directly relevant to harmonising EU and UK regulations. Instead, it is a dormant power that the Government will hold in order to make considerable changes to ATOL, in particular to the Air Travel Trust. That is where Brexit perhaps does come in, because were such changes to happen, they would most likely be in the event of leaving the European Union.

During one of our evidence sessions, we heard from Richard Moriarty of the CAA, a trustee of the current Air Travel Trust. He recognised the possible merit of separating up the trust to reflect variations of products and changes in the market, so I do not rule out further reforms having potential merit. The point is that we are simply not there yet, and I think it would be wrong of the Government to use this Bill as a way of giving themselves the power to make wholesale changes without due consultation. Granted, the Minister has made it clear in a letter to the shadow Secretary of State for Transport, my hon. Friend the Member for Middlesbrough, that changes will be made only by affirmative resolution—I welcome that—but the Bill still does not allow for any further consultation as part of the measure.

The impact assessment that the Government have undertaken for the Bill 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 Ministers to go beyond that without providing assurances at this stage that proper consultation and scrutiny will take place if they are minded to go beyond the changes currently envisaged.

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

“follow the practice that they have followed today”—

I think he meant through the Bill—

“consult with” regulators,

“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.]

This amendment is purely saying that. It is fair and reasonable and guarantees scrutiny of further changes that may come down the track in relation to ATOL protection.

Before I call the Minister, I point out—to save people’s blushes, I will not mention any names—that it has been suggested a number of times that phones should be switched off. Even text messages and emails should not be making what I would describe as a pinging noise. That is not acceptable and is unfair to other hon. Members.

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

Quite right, Ms Ryan. I am going to ensure that I do not ping, and that my Parliamentary Private Secretary does not ping on my behalf.

This morning we had a long discussion as well as a debate about the areas that the hon. Member for Birmingham, Northfield has once again this afternoon articulated: consultation, continuing consideration, dialogue and a willingness to listen and to change where necessary. Those themes have percolated throughout our consideration so far and seem to me to be part of the critique, led by the hon. Gentleman, that the Committee has offered of the Bill.

As with the preceding amendment, I start by saying that I fully endorse, and indeed support, this amendment’s purpose. It is absolutely right that the Bill, throughout its content, requires detailed further consideration as its measures find their effect. When we introduce reforms of this kind, of course it is important that they are reviewed, but I agree that although that might be regarded as axiomatic by some, it can never be said too often. The hon. Gentleman is right to emphasise it in articulating the amendment’s purpose.

We need carefully to craft our policies and regulatory framework. Doing so is the key to good governance. With respect to this clause, I can explain that I have no plans to change the current air travel deed. The system works well. The changes that we are introducing in the Bill are very much built on those elements of the system that we know are effective, time honoured and well tested. I feel that as Mr Gray has benefited from the wisdom of Edmund Burke, you should be able to also, Ms Ryan. Burke said:

“A disposition to preserve, and an ability to improve, taken together, would be my standard of a statesman.”

Even I would not claim to be a statesman, but I am more than happy to pay tribute to the statesmanlike way in which the hon. Gentleman has debated the Bill so far, and to his additional emphasis on those elements that I set out as necessary to ensure that we continue consultation and review the effects of what we do.

In the light of responses to our consultation last year, however, the Government propose to take the power to establish trusts, with the flexibility to make separate provision for different types of risks and different business models. That is very much in tune with what I said earlier about the evolving character of the market. It is an important change that needs to be reflected in an amended though not radically different regulatory regime. That regime should build on, in Burke’s terms, what we should preserve, but equally be fit for purpose in that it responds to changing conditions. An example would be the new, looser type of package arrangements called linked travel arrangements. We do not know how the industry will react to the innovation, or whether riskier products will result, requiring us to separate the trust arrangements. At our evidence session, Richard Moriarty from the Civil Aviation Authority said:

“it would be prudent and sensible for Government to have the flexibility to respond to that”—[Official Report, Vehicle Technology and Aviation Public Bill Committee, 14 March 2017; c. 65, Q150]

By “that” he meant those kinds of emerging trend changes.

With regard to consultation, I am content—indeed, more than that, I am enthusiastic—to give the hon. Gentleman a commitment that the Government will conduct a thorough impact assessment and consultation before implementing the powers. That is a binding assurance, and I am more than happy to support that in writing. It seems absolutely right to consider those matters in that way.

We have a good track record—I would never want to say that it speaks for itself, because then I would have no need to speak to it—and we can be proud of the fact that we have gone about the review thoroughly and diligently. I have already drawn attention to the workshops, the roundtable discussions, the extensive consultation and the response to it. By way of amplification of what I said earlier, we have also, against the background of the changes made in 2012 and as part of the consultation, asked again how the changes made affected business and changed practice, and whether they were right. It is important for the Government to ask such questions, to be self-analytical and, where necessary, self-critical. Moreover, the Civil Aviation Act 1982 places a requirement on the Government and the Civil Aviation Authority to consult under section 71A, so as well as my commitment there is a good legislative foundation on which it is built.

We also want to discover whether what we changed in 2012 better reflects market practice. Therefore, in our call for evidence on our long-term review of the ATOL scheme, when we consulted on the changes to be given life by the Bill, we were prepared to learn from any criticisms or suggested further changes that resulted. Each stage of the work has been subject to impact assessments and consultations, and the Civil Aviation Authority and the Association of British Travel Agents have commended the Government’s approach to reform, highlighting the diligence to which I have drawn the Committee’s attention.

At last week’s evidence session, Richard 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.”––[Official Report, Vehicle Technology and Aviation Public Bill Committee, 14 March 2017; c. 65, Q150.]

The hon. Gentleman also mentioned that in his speech.

For those reasons, I am confident that the current process works and I do not intend to deviate from it. Given the need to react quickly to reflect consumers’ interests, it is unnecessary to bind the Government’s hands as described, potentially fettering our ability to act rapidly in the light of the circumstances of a dynamic market. That is particularly so when we are midway through an extensive process of consultation and engagement, which has been commended by those involved, such as Richard Moriarty and others.

The hon. Gentleman is absolutely right to raise the issue again. It is vital for me to give those assurances, which I am prepared to support further should he wish me to. Let me put the Opposition’s critique of the Bill—indeed, that of the whole Committee—in a three-pronged way: first, that we need to continue dialogue; secondly, that we need to maintain parliamentary involvement in that process as appropriate through the scrutiny of regulation and so on; and thirdly, that we need to review progress. The three prongs of the Opposition’s case all seem to make sense, so I am as one with him on those. We can always have discussions about how things are done, but the principles are entirely sound. On that basis, I hope he will withdraw his amendment.

Photo of Richard Burden Richard Burden Shadow Minister (Transport) 2:15 pm, 21st March 2017

I thank the Minister for that response and for his kind words. He has responded to our debates in a thoroughly statesmanlike and quick-witted way—rarely have I seen such a well-timed point of order as I saw this morning, when I managed to get myself stuck in an electric vehicle when I should have been piloting an aircraft. He has also approached the Bill with a great degree of confidence in his position, which has allowed him to compromise. That is an important sign of confidence and strength. He knows that compromising and giving assurances when they are requested, and when they are appropriate, do not weaken his position, and I thank him for that.

He is absolutely right about our three-pronged approach to the Bill: seeking dialogue and consultation, the right kind of scrutiny and a willingness to review. Given what he said about the amendment, he has demonstrated that he is prepared to apply those three prongs in future.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

On the three-pronged approach, can I say that on the Labour Benches we do support Trident?

I think that may be out of scope.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

I am waiting for an intervention from the Scottish National party. The Minister has made some good points. I hope he will put that assurance in writing. It is easy for us to hear that and to read it in Hansard, but if he puts it in a letter to members of the Committee, it will be in the public domain, which would be helpful. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 ordered to stand part of the Bill.

Clause 20