§ Order for Second Reading read.
§ 11.5 a.m.
§ Mr. Charles Doughty (Surrey, East)
I beg to move, That the Bill be now read a Second time.
Before I refer to the Clauses of the Bill, I want to make a few general observations about the industry or trade to which it relates. It is one which has increased enormously in the years since the war. The reasons are not far to seek. The far greater world prosperity that has existed since the end of the Second World War and the increase in holidays with pay, and matters of that sort, have brought greater facilities for leisure and a greater desire for travel abroad and also in this country.
Nowadays—quite differently from the days before the war—approximately 5 million people from these islands take holidays abroad every year. A high proportion take two holidays abroad. In addition, about 2 million visitors from overseas come here every year as tourists, and sometimes as businessmen as well. This aspect of our national trade, as it can rightly be called, is supported by the Government of the day, and the British Travel Association properly receives a Government subsidy, because of the propaganda which it puts out in this country and abroad on behalf of our tourist attractions, so that we can bring tourists to this country and increase our overseas earnings. Touring is now the largest single item in international trading accounts. In 1963 the British Travel Association said that overseas visitors spent approximately £307 million in Great Britain. It is difficult to obtain an accurate figure, but I have no doubt that the 816 Association did its best, and that the figure is approximately accurate.
This large international business is handled not exclusively but to a large extent by travel agents. At this time of year, when the first touches of spring may be warming our hearts and making us look longingly at the advertisements in the newspapers, the Bill may have more topical interest. The advertisements in the newspapers and the excellent brochures put out by travel agents generally appear earlier in the year. Hon. Members may have noticed that they are usually to be seen about Christmas time and in January, when many families in these islands are planning their summer holidays. They also appear at other times of the year, when they are concerned with winter sports holidays, and holidays of that sort.
The general rule is that the would-be traveller pays his money, in whole or in part, before—and sometimes a long time before—he takes his holiday. In the vast majority of cases he pays his money, has his holiday, and all those concerned—himself, the travel agent and the people abroad—are satisfied. But it happens occasionally that the travel agent goes into bankruptcy or liquidation, and then, of course, the traveller is liable to lose his holiday, and is, to put it mildly, extremely disappointed.
With regard to bankruptcies, I can only refer hon. Members to two Written Answers in HANSARD of 4th March this year. The hon. Member for Nottingham, South (Mr. William Clark) asked the President of the Board of Tradewhat was the number of bankruptcies among estate agents and travel agents for each of the past five years.I will omit the Minister's Answer in respect of estate part in this Bill. The Minister replied:The number of bankruptcies of … travel agents for each of follows:
Year Travel Agents 1960 … … … … 3 1961 … … … … 2 1962 … … … … 5 1963 … … … … 5 1964 … … … … 1The figures for 1964 are provisional.In the second Written Answer which follows immediately the same hon. 817 Member, in answer to a Question askinghow many representations he"—the Minister—received from members of the public who had suffered loss of deposits paid to … travel agents in each of the past five yearswas told by the Minister:I cannot answer this Question precisely. The best estimate which I can give is about … (including representations to official receivers) 40 representations as regards travel agents for 1960–63. For 1964 the Board of Trade were made aware that rather more than 2,000 customers of travel agents lost their money."—[OFFICIAL REPORT, 4th March, 1965; Vol. 707, c. 279–80.]I do not propose to refer to the names of particular travel agents, since we are not discussing personalities in the Bill. I think that hon. Members on both sides of the House, and indeed, the public outside, are agreed that some method should be found to help those who suffer as a result of these insolvencies. There is another class of people who, by the ordinary ramifications of their business, receive money from their customers some time before they provide, or are expected to provide, what is paid for, who should, of course, be in a solvent position so that they can carry out the terms of the contract.
Indeed, the hon. Member for Blyth (Mr. Milne) introduced a Bill under the Ten-Minute Rule last year which had the same object in view. I do not propose to refer to that Bill, but I have examined it, and I am sure the hon. Gentleman will agree that, laudable as his intentions were, the Bill did not go far enough and, indeed, suffered a number of defects, particularly with regard to definitions. Under the Ten-Minute Rule, of course, the hon. Gentleman did not have the opportunity of explaining the alterations which he would have made and, not unnaturally, that type of Bill could not go through on the nod. I do not expect my Bill to go through on the nod, but I was fortunate to draw a good place in the Ballot for Private Members' Bills.
The drafting of a Bill to obtain this limited objective is not by any means easy, and I am very grateful for the assistance which I received in this respect. I believe that the Bill provides the answer to the problem of the insolvency of travel agents which has certainly occurred in the past and may well 818 occur in the future. I have endeavoured to provide fairness for all. I am not by any means hidebound in my approach to the matter, and I am certainly quite prepared to consider any reasonable representations—that is, if the Bill receives a Second Reading—and to consider any reasonable Amendments which may be proposed in Committee.
As in so many matters of grievance and complaint, it is easy enough to know what the grievance or complaint is, but it is not always easy to provide a Bill to deal with the exact grievance and complaint in a fair and equitable manner. I believe that this Bill certainly does that. The Bill is intended to help and to protect all travel agents, be they big, medium or small. It is not in any sense of the word a Bill which seeks unduly to help the small people or which puts an unfair burden on the big ones. It is intended to help all regardless of their size, turnover or location.
Hon. Members will see that, throughout the Bill, I have endeavoured to fall over backwards to put in safeguards at every stage so that in no sense of the word is this business handed over to a particular body over which the House or the Board of Trade has no control. I hope that we are not going to hear that the Bill is going to be a hardship to any particular type of travel agent. That is not true for a moment. It may, of course, stop from trading those who are financially dangerous to the public.
The Bill does not seek to go beyond the matters I have mentioned. It does not seek, for example, to penalise solvent travel agents who, perhaps, are too optimistic in their advertisements or who promise one thing and supply another. Where such cases occur it is, of course, a matter for the ordinary civil courts, though if a disappointed traveller were to bring an action and to succeed and the travel agent were then to become insolvent this would be a matter which would fall on the fund, to which I shall refer in a moment.
I now turn to the actual Bill before the House. If I do not go through it in chronological order it is because one has to explain how this kind of safeguard has to be implemented. First, we have to define what a travel agent is. Some people who may think that they are travel agents will not come within the definition while 819 others who may think that they are not travels agents will be caught by it. Then, having found out what the definition is, there must be registration, because, by reason of the fund to which I shall refer, we must know upon whom we have to place the levy, and, of course, in order to protect the fund and the public as well we have to exclude from trading those who clearly, owing to their financial position, should not be trading in this type of business, the sort of people who say, "We are going to try to get into this expanding business, if we succeed in it all well and good, but if we fail our liabilities will fall upon the fund". It would not be right to allow such people, who are going to become a liability, to register.
Clause 21 defines what a travel agent is. He is a person who isselling tickets or arranging reservations for or in respect of any transport service or procuring (whether as the agent of a transport operator or otherwise) transportation by any transport operator for any member of the public or booking, selling or procuring (whether as the agent of a person providing accommodation or otherwise) accommodation for any member of the public in conjunction with such transporation.There are certain exceptions. Operators who merely sell tickets for themselves or for another operator are excluded. For example, British Railways would not become a travel agent because it has offices where tickets are sold for journeys between London and Manchester, or London and Glasgow, or wherever a traveller wishes to go. If British Railways ran tours and provided accommodation it would become a travel agent. Coach operators who provide coach tours only in Great Britain are excluded. It was not considered necessary to bring them within the terms of the Bill.
Having defined what is a travel agent, I cannot give the House the exact number of them who would be affected under the definition. Probably the figure is somewhere between 1,500 and 2,000. I do not know whether the Board of Trade has any more detailed figures, but my information is that that would be approximately the number of people affected.
§ Mr. Peter Emery (Reading)
Can my hon. and learned Friend tell the House whether British Railways, which uses coaches in sidings for holiday purposes in 820 the form of caravans, would be considered to be operating a travel agency? Would this come under the previous explanation which he gave to the House?
§ Mr. Doughty
It would be a transport service in conjunction with accommodation and, therefore, British Railways would be a travel agency. We all know that British Railways provides tours, and I am sure that they are excellent ones. It would probably be a travel agent within the definition of this Bill. I might go a little further ahead and refer to the fact that there is power to make exemptions. I suppose that strictly speaking British Railways might be called "insolvent" and ought not therefore to trade. Provision is made in the Bill for just that kind of case.
There is to be a council set up under the Bill. This council will not consist exclusively of travel agents. It is set up under the provisions of Clause 1 and its constitution is defined in the First Schedule. I draw the attention of hon. Members to the fact that the council will not by any means consist exclusively of travel agents. In a number of professions and occupations, such as solicitors and accountants, which have organisations for purposes of disciplinary functions, and which stop people practising who are not qualified, those organisations are composed exclusively of members of the profession or occupation. That is not the case here.
In order that there should be no suggestion that the legislation will hand over control of the industry solely to members of it, the House will see that two persons are to be appointed to the council by the Board of Trade, one by the Secretary of State and one by the Secretary of State for Scotland. There are independent people who will be on the council to provide assistance and guidance. Five persons will be appointed by the Association of British Travel Agents and Institute of Travel Agents Limited, and one by the Institute of Travel Agents, the body dealing with what I would call the educational side of the travel industry.
Let me say at once that what has been thought to be a good working council is referred to in the Bill. If there is any other body which considers it should be represented on the council I am quite 821 prepared, between now and the Committee stage of the Bill—if a Second Reading is obtained today—to put down a suitable Amendment, so that it may be properly and truthfully stated that this body is fully representative of the members of the trade, big small and medium. There will, of course, be outside representatives as well.
§ Mr. Doughty
The Schedule states that one person shall be appointed by the Secretary of State and one by the Secretary of State for Scotland.
§ Mr. Doughty
The principal Secretary of State—the First Secretary of State. I could mention names, but unfortunately we are not allowed to mention names in the House of Commons.
§ Mr. Edward Milne (Blyth)
Will the hon. and learned Member clear up two points? First, there is the one which he has as yet failed to answer, which Secretary of State is referred to in the Schedue. Secondly, in relation to his offer to extend the constitution of the council to include representatives of other bodies, may I ask what representations he has had during the drafting of the Bill from bodies which wish to be represented on the council?
§ Mr. Doughty
The answer to the first part of the hon. Gentleman's question is the principal Secretary of State. The answer to the second part is that two other bodies have made representations, one of which is not affected by the Bill.
§ Mr. John Hall (Wycombe)
Just to clarify the point, is not it a fact that it is an axiom of the Parliamentary draftsmen that reference is never made to the specific office held by the Secretary of 822 State in such a Schedule as is in this Bill?
§ Mr. Doughty
One of the two bodies is not affected, and the other deals with coach tours in Great Britain.
§ Mr. Stanley Orme (Salford, West)
I see that the majority of the nominees on the council are to be appointed by the Association of British Travel Agents, and the Institute of Travel Agents. Is it intended by the hon. and learned Member that these bodies should have a voting majority?
§ Mr. Doughty
Certainly, why not? After all, this is to be a body to control the industry. As I said earlier, most organisations are controlled 100 per cent. by their members who may be appointed to a council or some such body. I have bent over backwards in my endeavours not to make this Bill in any sense an instrument to effect a "closed shop" and so there are a number of industries, bodies and independent persons represented on the council in order that there may be no criticism of the kind indicated by the hon. Member for Salford, West (Mr. Orme).
Provision for the registration of the council appears in Part II of the First Schedule. Financial particulars are called for because they are required in order to protect the fund. In the vast majority of cases registrations will be accepted and it is only where the council considers that a travel agent is likely shortly to make a call on the fund that a registration might be refused. There is a right of appeal to the High Court which is referred to in Clause 6(2). The test for registration will be contained in regulations to be approved by the Board of Trade with powers by this House to negative a Resolution. Here again, there is every form of safeguard with regard to regulations, registration, and appeals from withdrawal of registration. There will, of course, be an investigating body and a disciplinary body under the council with power to strike off travel agents who have been guilty of any financial offence. The Clause dealing with finance is Clause 11, which I have made the principal Clause of the Bill. It says:Before the expiration of the period of one year beginning with the appointed day, the Council shall draw up and submit to the Board of Trade a scheme providing for the establishment, maintenance and administration by the 823 Council of a fund out of which grants may, where the Council thinks fit, be made for the purpose of relieving or mitigating loss caused by the insolvency of any body corporate registered under this Act and the scheme may in particular include provisions—(a) requiring bodies corporate whose names are in the register to pay sums as contributions to the fund;and there are borrowing powers and power to insure.
If hon. Members say that this is merely a permissive Clause, I would point out that it might happen that in any year the number of insolvencies was so large that the fund would not be able to meet all the claims. I think that the council would wish to provide 100 per cent. indemnity in every case of insolvency. Again, neither the rates under the scheme nor any other matters will be laid down by the council of their own volition. It must be a scheme approved by the Board of Trade. Therefore, once again, we have a full check upon any proposals which the council may make.
Since the point has been raised, I would say that in the Bill originally—and it is in the Bill now—is Clause 14, which says that no person shall carry on business as a travel agent except as a body corporate, and the definition of that is contained in the definition Clause. This is put in because it was thought that nearly every travel agency is a limited company in some form or another, and limited companies are compelled to have accounts and deliver them to the Board of Trade from time to time. Representations have been made to me that this is a hardship on people who trade under a trade name or as a partnership. I say at once that shall undertake to put down Amendments in Committee, if that stage is reached, which will fully protect such persons. The House need have no fear that that will in any way affect those people who wish to trade in the ways which I have indicated.
§ Mr. Doughty
Certainly—under his own name, under a trade name or in a partnership. There is no wish here in any way to place any restrictions—other than the financial restriction upon those 824 financially insolvent—on those carrying on this trade of travel agents. It is the wish, I am sure, of all travel agents that this should take place, so that their own financial and trading reputation is enhanced. These are the principal provisions of the Bill. There are certain others which are more technical. I do not propose to weary the House with them at the moment.
I want to draw the attention of the House to the Written Answer given to the hon. Member for Blyth on 17th February of this year. He asked the President of the Board of Trade:what steps he will take to protect those who take holiday tours abroad against default by travel agencies.The answer from the Minister of State was:I am considering whether it is practicable, without restricting legitimate enterprise by new or small firms or materially increasing costs to the travelling public, to devise legislation which would give protection to tourists against the risk of financial default by tour organisers who provide inclusive holidays abroad. It is clear, however, that any such legislation could not affect holiday bookings for this coming summer. Members of the public who are thinking of taking an inclusive tour abroad would, therefore, be well advised, before committing themselves financially, to inquire of the travel firm concerned about the existence and nature of any arrangements which may be in force in respect of the tour to ensure that those who make it do not suffer financial loss if the tour or any material part of it is not in fact provided."—[OFFICIAL REPORT, 17th February, 1965; Vol. 706, c. 237–8.]I agree with every word of that answer. If the Bill is passed into law, the schemes will have to be approved by the Board of Trade and by the House. If it does not function this year, it will certainly be in force next year.
§ Sir Stephen McAdden (Southend, East)
I am anxious that the object of the Bill should be achieved. Is there anything in the Bill to restrict the operation of travel agencies which are continentally based, which operate holidays of various kinds and market them in this country? Will they be caught in any way by the Bill?
§ Mr. Doughty
If they have an office in this country and are carrying on business in this country, certainly they will. We cannot legislate for people who carry on business abroad and enter into contracts with tourists abroad.
825 As I said, I entirely agree with the answer given by the Minister of State to the Board of Trade, that we want to have legislation which does not restrict legitimate enterprise by new small firms, nor materially increase costs to the travelling public, and this does not. The Bill gives protection to the travelling public. I feel quite certain, because of the very few representations which I have received which are in any sense contrary to this Bill, that I can say that it has the support of the travel agencies of the country. If a Bill is brought in which affects a particular trade or industry, it is an important matter. I should be only too delighted, if the Bill is given a Second Reading, to co-operate with the President of the Board of Trade and his officials in improving the Bill. There is nothing so good that it cannot be improved. If the House is good enough to give the Bill a Second Reading, I will undertake full consultations with him to improve the Bill in every way.
I repeat, that it is my desire to make quite sure that the small, financially sound operator and the new small firms are fully protected, and it is also the desire of all travel agents. If the Bill is given a Second Reading, protection will come a good deal sooner than it would under any Government Bill. One knows that all Governments are short of time, and that time can seldom be found for this type of legislation. I ask the House to give the Bill a Second Reading arid have undertaken to listen to any representations from any quarter to improve it, by means of any Amendment which may seem necessary. Indeed, I have already undertaken to put one down myself.
§ 11.39 a.m.
§ Mr. H. Hynd (Accrington)
I applaud the desire of the hon. and learned Member for Surrey, East (Mr. Doughty) to do something to deal with the kind of incident which has happened once or twice in the past, but I cannot support the Bill because I do not believe that it will achieve the object which he has in view, at least not in a way which I would support. Before I go any further, I have a small interest to declare in this matter.
As a general protest, I would say that the Bill follows what is becoming too 826 much a pattern in many professions. Certain people who have got in on the ground floor promote legislation to set up a register and keep everybody else out, and that forms what is no more than a closed shop. Where is all the eloquence which we have heard from the other side of the House about free competition and the need for people not to be bound to join organisations? It seems to be entirely absent in this case.
The hon. and learned Member for Surrey, East rightly started by referring to Clause 14 where it is laid down that nobody will be allowed to continue in business as a travel agent unless he is on this register or is not removed from it. I repeat that that is nothing short of a closed shop. As for the proposed council, it has already been rightly pointed out that this gives a majority not just to nominees but to appointees by certain organisations of travel agents. Why is this? Two organisations are mentioned in the Bill but in fact they are one and the same.
The hon. and learned Member said that he did not propose to mention any body of travel agencies, but a body is mentioned in the Schedule and therefore we are bound to deal with it. He said that he was not hidebound and would accept representation by any other body. There is at least one other organised body of travel agents in the country and certainly that body, and other people in the business, should have representation on the council. It would be fair or much better from the administrative point of view if the Bill said that whoever claimed to be representative should nominate people to be selected by the Minister. That is the normal way of appointing to bodies of this kind and it would be much more satisfactory in this case.
What is the qualification for the register? The Bill says that it is financial, and only financial. This is the qualification laid down in Clause 5. A body corporate must satisfy the Councilthat it carries on, or intends to carry on, business as a travel agent and that it complies with the provisions of section 14(1) of this Act relating to share capital.But there are many other qualifications which would be equally important for people entering business in this way.
827 As for membership of the council, what about people who are not members of an association of British travel agents? Will they not have any representation at all? Are they not to be allowed to register and carry on business? This seems to me to be quite unsatisfactory.
§ Mr. John Hall
For my information, is the hon. Member referring to travel agents who are not members of any association at all? If they are members of an association, my hon. and learned Friend the Member for Surrey, East (Mr. Doughty) has already pointed out that he would be prepared to accept their representation on the council.
§ Mr. Hynd
I was pleased to hear the hon. and learned Member say that, but there is the additional point, as the hon. Member has just mentioned, that there may be perfectly reputable travel agents who are not members of an association. When we come to the definition of a travel agent in the Bill, how far does it go? What about the club secretary who organises a trip for a church organisation or any other kind of organised body? I should imagine, under the definition in the Bill, that as he has obtained the tickets and is making the reservations and so on, he would he, strictly speaking, a travel agent, and if he is not on the register he would not be allowed to do that. This is a point of detail, I admit, but one to be looked into.
§ Mr. Doughty
If the person concerned is a principal he acts as a principal. If he only hands the money over to the travel agent he is merely a collector.
§ Mr. Hynd
A great deal of this work is done direct. A lot of it goes on in clubs and in all kinds of organisations. A person can easily arrange through a railway for seats, or through an air company to charter a plane, without going direct to a travel agent. I assure the hon. and learned Member that a great deal of that is done.
The hon. and learned Member said that the heart of the Bill was the compensation fund proposed in Clause 11. I see the object which he has in view, but at least one organised body of travel agents already has an insurance fund covering their affiliated bodies and their clients. 828 This has not been done through an Act of Parliament at all. I do not think it is necessary to have an Act of Parliament to set up a compensation fund of this kind.
What is the object of the compensation fund? Is it only to deal with the public who have lost money by booking a tour? If so, the Bill may be misconceived in this respect. If it were intended to deal only with tour organisers it would be a different matter. There are two types of agents. One does a package booking. He provides the tickets and books the hotels and so on. He is the man against whom the public may need protection. But if he is only a person who provides the tickets, there is no danger of his defrauding the public in any way. Before a railway or an air company will supply tickets to a person of that sort it makes sure that he is a person of sufficient standing financially and otherwise that he will not be a bad debt to the company.
§ Mr. R. J. Maxwell-Hyslop (Tiverton)
When the hon. Member says that there are these two types of agents, will he also bear in mind a third category? There are those who act as agents for renting houses or villas in holiday resorts. They do not act as agents for transporting people to and from that holiday.
§ Mr. Hynd
I do not know whether they come under the Bill. It is for the hon. and learned Member for Surrey, East to explain that, and not for me.
I come now to what I regard as the fundamental part of the Bill and the greatest fault in it. I am sorry that the hon. and learned Member for Surrey, East did not mention it in any detail. I refer to the disciplinary court. This seems to me an extraordinary proposition coming from an hon. and learned Member connected with the legal profession. I can understand the first part being concerned with a closed shop, because the hon. and learned Member belongs to the closest shop in the country, but I cannot understand his proposing to set up a rival court. There are already too many of these connected with legislation of this kind in other professions. Clause 13 says that any travel agent who offends in the way set out in the Bill can first of all be taken before an ordinary magistrates' court.
§ Mr. Hynd
Oh, yes. Let the hon. and learned Member look at Clause 14(2) which says thatA person who contravenes this section shall be liable on conviction on indictment or on summary conviction to a fine, but a fine on summary conviction under this section shall not exceed one hundred pounds.If it is on indictment it might be more than £100, but having suffered this penalty in the criminal courts, what happens to him? He is brought before the disciplinary court set up under the Bill and that can fine him another £500. This is extraordinary.
§ Mr. Doughty
The hon. Member will be aware that every professional occupation has a disciplinary tribunal. If a person is convicted in the civil courts of a relevant offence, that can be brought up before the professional body and dealt with.
§ Mr. Hynd
The short answer is that when they start they have none. They acquire a great deal of "know how." Any hon. Member who deals with a certain office in the basement of this building will realise just how much "know how" they have to acquire, particularly if they are going to deal with hon. Members. It is rather like asking what qualifications an hon. Member must have. The answer is none. No professional training is required.
This is a serious business because we are here considering not only a double penalty but the fact that it is proposed to set up a court under a council which has a majority of organised travel agents on it and which will be able to impose fines of £500 in addition to the fines which have already been imposed in the courts. As I pointed out, the latter fines may be up to £100 and even more if it is an indictable offence.
I suggest that this is far too dangerous a power to give to a body of this kind. If the argument is that it has already been given to other professions, my 830 answer is that it has already been given too often. It is time it was stopped. I appreciate the offer of the hon. and learned Member for Surrey, East to accept Amendments to his Bill, but I am afraid that so many would be required that the Measure does not justify a Committee stage. It does not deserve a Second Reading.
§ 11.52 a.m.
§ Sir Douglas Glover (Ormskirk)
I congratulate my hon. and learned Friend the Member for Surrey, East (Mr. Doughty) on presenting the Bill and I hope that the House will give it a Second Reading.
I sympathise with a great deal of what the hon. Member for Accrington (Mr. H. Hynd) said in his interesting speech. I also noted with interest some of the more jocular remarks made by hon. Members opposite about competition and so on. I am a great believer in competition and, in the ordinary way, I would not like this sort of Measure because it is contrary to all my fundamental economic and business beliefs based on experience of busines over many years.
However, when we come to the question of travel and travel agents we are faced with a totally different aspect compared with any other facet of trade, commerce or industry. When I leave the House today I will get into a taxi in New Palace Yard and go to the West London Air Terminal. If the taxi driver wishes to go via Battersea Power Station I will know that I am being over-charged. It may need a great deal of courage these days to argue with a taxi driver, but the solution of the problem is entirely in my hands. [Interruption.] From the comments of hon. Members opposite perhaps I should say that I would be quite prepared to share my cab, but the same thing would apply. The solution is within the control of the customer.
A person can go into a restaurant and be brought a burnt offering that is called a steak. If he has the courage—and I admit that it needs a considerable amount of courage to do this—he can demand, "Send for the manager. I refuse to pay my bill. Sue me if you like. I am not satisfied with the service I am getting".
When one goes to a travel agent one is dealing with a totally different aspect 831 because in the travel business the customer pays his money before he gets a service. If the agent to whom he has paid his money—remembering that for many months in the year that agent holds very large sums indeed—goes bankrupt, it is not the ordinary supplier of that agent—who, over the years, may have made a considerable amount of profit—who is the creditor but the agent's customers.
Consider the hardship that that sort of thing brings to people's homes. When I think of this hardship I am inclined to suggest that my hon. and learned Friend might have called his Measure the "Retention of Matrimonial Tensions Bill". Consider what happens in any one of the 2,000 cases my hon. and learned Friend mentioned. Think of the husband suddenly reading in his Evening Standard on his way home from the office that the travel agent to whom he has paid his, say, £100 for his wife and kids to go over to the Continent for 10 days' holiday has gone for a burton. Imagine that chap's feelings as he walks up the garden path, opens the front door and knows that for his wife and children there will be no holiday this year. There is no more money available. This year's holiday has, like the travel agent, gone for a burton. He has no chance of redress. In the travel business the customer is in the weakest position and for that reason a Measure of this sort is necessary.
Although the hon. Member for Accrington made some rather rude remarks about organisations' courts, I assure him that it is not unusual that these should exist. Even in the great trade union movement similar powers are provided, and this applies to the great organisation of Lloyd's Underwriters.
§ Mr. H. Hynd
Would the hon. Gentleman be good enough to tell me one trade union with a court which is allowed by law to inflict these sort of fines?
§ Sir D. Glover
I do not know, but is the hon. Gentleman not aware that we will soon be having legislation over the Rookes v. Barnard case to protect people against similar occurrences?
However, I will not be diverted from the important point I was making. I was 832 about to say that even Lloyd's has an insurance fund so that if one of its members fails to meet his obligations the trade, from that fund, collectively ensures that there is no loss borne by the customer. I am sure that the whole House agrees that my hon. and learned Friend is trying to achieve something which all hon. Members should support and welcome.
I agree that there are certain points in the Bill which need clarifying. That can be done in Committee. The point made by the hon. Member for Accrington about whether a man in a firm organising a holiday trip for his colleagues in that firm would be covered by the Bill is an interesting one, and I imagine that he would. However, I am sure that my hon. and learned Friend would be prepared to consider this matter further and, if necessary, table an Amendment in Committee, perhaps to include the words "for profit" so that such a person would be removed from the provisions of the Bill. I suppose that people who organise tours for colleagues cannot be said to be working for profit but purely on a co-operative basis with their colleagues.
§ Mr. Maxwell-Hyslop
The hon. Member for Accrington (Mr. H. Hynd) will no doubt be aware that Clause 21 states that the services have got to be supplied to a member of the public. A secretary of a club or an organiser of any restricted body would probably be excluded, because he would not be a member of the public but a member of a restricted group.
§ Sir D. Glover
I do not want to get involved in what is a Committee point. As I said, I am sure that my hon. and learned Friend would be prepared to get this matter right in Committee.
§ Mr. Orme
Although it has been said that people who go in for this type of private venture and organise tours or trips within their own firms would be excluded from the provisions of the Bill because of the non-profit motive involved, surely they would not be excluded if they organised trips which then did not take place. In other words, on rare occasions these things do break down and people are stranded. This happens in non-profit-making organisations where, perhaps, one of the officers of the organisation is responsible for the thing breaking down.
§ Sir D. Glover
I entirely agree, but that is not the purpose of the Bill. The Measure is not designed to protect the hon. Gentleman and myself from the hon. Member for Accrington having fixed up a tour for the three of us to go somewhere and the hon. Member for Accrington then disappearing. Its purpose is to deal with people who are running organisations for profit as travel agents. We will get into difficulty if we try to think of the Bill as being something which can protect everyone from all the evils of this world in every category of our lives, for neither this Bill nor anything like it which set out to do that would ever reach the Statute Book.
§ Mr. H. Hynd
I trust that the hon. Gentleman is aware that the object of the Measure is, apparently, to protect the public and not the travel agents.
§ Sir D. Glover
I said that it was designed to deal with people who are running travel agencies for profit and as businesses and that it was not designed—and I do not think that my hon. and learned Friend ever intended it to be designed—to deal with the sort of case that has been raised.
I hope that before the Bill goes to Committee my hon. and learned Friend will reconsider Clause 14. I appreciate that, in the very nature of the business, it is quite likely for a keen young person with a couple of hundred pounds to be tempted to set up a travel agency, knowing that he does not need much capital and that he can draw it from his customers as he goes along. Without any ill-intent or intention to defraud, a young exuberant, ebullient person can easily be tempted to start up a business of this kind. Yet the record of the travel agents is magnificent. My hon. and learned Friend said that in the last five years there had been only 16 cases of difficulty in about 2,000 holiday travel firms which had helped 12 million or 15 million people to go overseas. It should go out from the House today that the standard of travel agents in this country is of a very high order and that we are trying to deal with a very small number who cause hardship.
Thus, there may be a better way of cracking the nut than that suggested in Clause 14. I do not want to see a closed 834 shop and I suggest that if a firm does not join the Association, it might have the alternative of being able to lodge a bond, which would be an equivalent safeguard for its customers, or take out compulsory insurance. If it is made compulsory for people to belong to an organisation, a great deal of freedom will be taken from the individual to whom it rightly belongs.
§ Mr. Doughty
There is no compulsion in the Bill to belong to any organisation but only to be registered with the Travel Agents Council, which cannot refuse registration except in very limited cases.
§ Sir D. Glover
I thank my hon. and learned Friend for that reassurance.
This is a valuable Bill designed to deal with only a very small minority of the many travel agents who help people to have enjoyable holidays as a result of the hard work and organisation which they put into their businesses. I hope that the House will give the Bill a fair wind. It is designed to do something which needs to be done, but we are dealing not with a vast problem, but with a gnat. I hope that the Bill will be given a Second Reading.
§ 12.3 p.m.
§ Mr. Carol Johnson (Lewisham, South)
I join with the hon. Member for Ormskirk (Sir D. Glover) in offering congratulations to the hon. and learned Member for Surrey, East (Mr. Doughty) on having introduced the Bill. Irrespective of their views, about it, all hon. Members will agree that it deals with a problem which arises from time to time, which has repercussions in the House and which affects the everyday lives of many people.
The Bill is designed to give a certain amount of status to travel agents and protection to the public, and it does this by ensuring that as far as possible holidaymakers who seek the help of travel agents in making their holiday arrangements shall have available to them organisations which to some extent are publicly accountable and which have adequate money resources.
The point which immediately occurs to me, as to others, is that the Bill does not deal or even touch on the subject of the competency or qualification of the travel agents who are to be accepted. This is a matter to which the hon. and learned Gentleman should give some 835 attention. We all know that in these days there is adequate opportunity to obtain technical qualifications in a business which increasingly requires them.
§ Mr. Doughty
I say at once that I entirely agree, but in the limited purview of a Private Member's Bill it would not have been possible to introduce Clauses defining examinations, years of study, entry and so on and providing what many hon. Members would undoubtedly have called a closed shop. It was for that reason that I brought forward the Bill with the strictly limited purpose of dealing with financial resources.
§ Mr. Johnson
I thank the hon. and learned Gentleman for that, but there are other criticisms and I believe, for reasons I shall give, that this is not the time to introduce a Bill of this kind.
I should begin by disclosing an interest, although it is not a financial interest. For most of my adult life I have been actively associated with the Workers' Travel Association, or Galleon Holidays. which, starting some 40 years ago in one room in Toynbee Hall with a capital of £100 borrowed from the trade unions, has now built up a business with a turnover of more than £2 million a year, and is run on co-operative lines and with a democratically elected management committee of whom I am one.
Of course, there are other well-known and reputable holiday and travel bodies of a somewhat similar character which I commend.
§ Sir D. Glover
The hon. Gentleman is obviously speaking with great authority. He said that he was sorry that the Bill did not say anything about the qualifications of travel agents. Will he tell the House what qualifications he has to be on this management committee?
§ Mr. Johnson
I do not have technical qualifications, but we have ensured that the staff of the W.T.A. acquire the qualifications which are available.
§ Mr. John Hall
Just for the information of the House, will the hon. Gentleman say whether the staff of the Workers' Travel Association, to whose work I pay tribute, are in fact members of the Institute of Travel Agents, or have taken professional examinations?
§ Mr. Johnson
We have a staff of nearly 200 and I could not answer for them all, but wherever possible they obtain the usual qualifications.
I wanted to make the point about comparable organisations, the Holiday Fellowship and the C.H.A., for example, which year by year give excellent service to many people and which are part of the pattern of holidaymaking for many people.
This brings me to one of my main criticisms against the Bill which is connected with the uncertainty raised by Clause 14. The hon. and learned Gentleman himself referred to this. It is the definition of the business of a travel agent for the purposes of the Bill. It is proposed in Clause 5 that the business of a travel agent may be carried on only by a body corporate having a paid up share capital of not less than a sum to be determined.
§ Mr. Doughty
I undertook when I opened the debate to put down the necessary Amendments, which would amount to a redrafting of Clause 14, and I repeat the undertaking that it would not necessarily have to be a body corporate with a share capital. Of course, there would have to be provision for people who undertook this kind of trade to have at any rate some financial status.
§ Mr. Johnson
I appreciate what the hon. and learned Gentleman has said and I noted his remarks when he referred to individuals and partnerships. I am trying to emphasise that there are other organisations and bodies which he must take into account.
I have a second and more serious criticism. Clause 21 makes certain that all travel agents as such are covered by the Bill, but tour organisers appear to be exempted.
§ Mr. Doughty
I am sorry to interrupt the hon. Gentleman again and I am very grateful to him for giving way. On the contrary, this definition has been most carefully drafted to include tour organisers who provide transport and accommodation. I do not think that it is any secret that the Bill has been gone through and gone through again to make certain that tour operators are included.
§ Mr. Johnson
This is a matter which will require more serious attention than 837 the hon. and learned Gentleman has so far given to it. A number of activities in regard to holiday arrangements are clearly excluded by this definition. These activities cover a number of the cases of complaint which have arisen in recent years. For instance, the organisation of British coach tours, to which the hon. and learned Gentleman referred, is excluded. The booking of accommodation, either in this country or abroad, without travel, is also exempted. The booking of accommodation in the United Kingdom, with or without road travel is excluded, though if rail or air tickets are sold with accommodation it is covered. I mention these activities to show that the question of defining the categories to be covered is very important and would require much serious consideration before the Bill could be approved by the House.
In view of complaints which have arisen in recent years, the trade as a whole has recognised that it ought to do something about it. In fact, the trade is engaged in doing something about it. This is why I doubt very much the wisdom of giving the Bill a Second Reading at present. The Association of British Travel Agents is now devising a series of rules which will give guarantees to holiday makers who suffer in the way indicated by the hon. and learned Gentleman. Reference has also been made to the Institute of Travel Agents, which has insurance cover.
§ Mr. Doughty
I apologise for interrupting the hon. Gentleman again. The rules of the Association of British Travel Agents apply only to its own members. The insurance cover of the Institute of Travel Agents is extremely limited.
§ Mr. Johnson
I accept that. As it is the purport of the Bill to give status to travel agents, I think the hon. and learned Gentleman will agree that it is desirable that travel agents as such should be members of a recognised trade body. No one suggests for a moment that they should be compelled to join but membership would be an assurance to the public, in that members of the public could turn to the trade organisation if they had a grievance against one of the members.
§ Mr. John Hall
I thank the hon. Gentleman for giving way yet again. It is not ray understanding that the purpose 838 of the Bill is to give status to travel agents. My hon. and learned Friend the Member for Surrey, East (Mr. Doughty) will correct me if I am wrong, but surely the purpose of the Bill is to give protection to the public.
§ Mr. Johnson
In fact, once travel agents were registered, they would be able to claim that they were registered travel agents. I suggest that that in itself would give them status. It is implicit in the Bill that that would be one of the results.
I come, lastly, to the constitution of the council. Despite what the hon. and learned Gentleman said in his opening remarks, it is obvious that the council will tend to be dominated by trade representatives. I concede that, in theory, outside people might be appointed, but as they are to represent these trade bodies inevitably they would tend to be trade representatives. It is clear from the suggested constitution of the council that trade representatives would be in a majority. In view of the quorum provision in respect of the investigating and disciplinary committees, matters of complaint could be dealt with solely by trade representatives. If a major feature of the Bill is to be that the public or consumer interest is to be protected, it is essential that in any organisation of this kind that interest should predominate. The hon. and learned Gentleman should look carefully at the provision with regard to the council and ensure that the public interest is adequately protected, if and when it becomes necessary to enforce the provisions of the Bill.
§ 12.15 p.m.
§ Mr. Peter Bessell (Bodmin)
On behalf of the Liberal Party, I give a very cordial welcome to the Bill and express the hope that it will receive a Second Reading. Not only the House but the public is very greatly indebted to the hon. and learned Member for Surrey, East (Mr. Doughty) for introducing a Measure which is designed primarily for the protection of the holidaymaker of limited income. In all our deliberations this morning, that should be the prime consideration before us.
The whole purpose of the Bill, as I understand it—indeed, it is stated in 839 line 3 of the Explanatory Memorandum—is to protect the public from conduct of the type of which many examples have occurred in the last few years, of travel agents who, having obtained money from people, have then defaulted and left many unhappy families without their annual holiday.
Travel agents can be divided into three or four categories. First, there is the bona fide travel agent or company which is a recognised and appointed representative of the big shipping lines, the airlines and other similar bodies. The integrity of such travel agents is not in question, and nothing in the Bill would in any way reflect upon their admirable record of service to the community as a whole.
§ Mr. Kenneth Lewis (Rutland and Stamford)
We must be careful, when dealing with a Bill such as this, not to assume that something that happens to be big is never suspect but that something which is smaller may be suspect. Therefore, I challenge what the hon. Gentleman has just said, that some of the greater airline and shipping companies should automatically be exempt from the Bill because they are not likely to be suspect. In fact, some of the airlines make losses and are viable only because they are backed by the Government.
§ Mr. Bessell
I accept that point, but I think the hon. Gentleman has misunderstood me. I am not suggesting that any one should be exempt from the Bill. Indeed, there is no provision in the Bill, so far as I can see, that any large corporate body should be exempt. My point was that it would be unfortunate if certain of the reputable travel agencies—Cooks, American Express, or similar bodies—were to feel that there was any reflection on their integrity, or, indeed, if the public were to become suspicious of their activities because of this Bill.
In the second category are the smaller travel agents, most of them corporate bodies, which are members of the Association of British Travel Agents and other bodies. They, too, are recognised as companies which are carrying on a legitimate trade and are providing a useful service to the public, although registration by these companies is entirely desirable, I think.
Then there is the charity organiser, to whom reference was made by the hon. 840 Member for Accrington (Mr. H. Hynd). There is no doubt that the hon. Gentleman has raised an entirely valid point. In Committee the Bill could be amended to cover the very reasonable objection raised by the hon. Gentleman, because it would be quite wrong if anything in the Bill penalised a person who represents a church organisation or similar body in arranging tours, when there can be no question of that person's integrity.
The final category is what I call the sweet shop operator, the kind of travel agent who sets himself up in business, puts a notice over his shop, advertises in the local or national Press that he will provide a holiday tour in Spain or some other country, collects money from the public, books, or does not, book hotel accommodation, and arranges airline journeys. Appalling examples have occurred of people, having paid their money, finding when they reach their destination that there is no accommodation or, what is even worse, no aircraft to carry them to the place where they were expecting to spend their holidays. The whole purpose of this Bill, as I understand it, is to prevent the growth of this kind of travel agent who puts a sign over his shop or an advertisement in a newspaper which is virtually nothing better than a licence to steal. I believe this is precisely the kind of person against whom the public have a right to be protected.
§ Mr. H. Hynd
Is the hon. Member overlooking the fact that Mr. Thomas Cook once started in a very small way?
§ Mr. Bessell
No, of course not. Mr. Thomas Cook, when he started his business long ago, was then in a unique position. The capital required to start a business 100 years ago was nothing like the amount of capital that is required to start a business today. If he accepted bookings and those bookings were fulfilled, that was because he was an honourable man. I do not question for a moment that the vast majority of small travel agents, as has already been said, are honest and that their integrity is not in doubt. Unfortunately, all too often we have to sacrifice to some extent in order to make sure that the dishonest man does not trade upon the reputation of those people whose honest trading has given the public a false confidence.
841 Looking over the figures for the past few years of the number of bankruptcies of travel agencies and the sums involved, I do not think any hon. Member can conceivably oppose a Bill of this kind, even though I agree that there are amendments needed. For example, in 1960 there were three bankruptcies involving a loss of £23,000 to the travelling public. In 1961 there were two bankruptcies involving a loss of £5,000. In 1962 there were five bankruptcies involving a loss of £45,000. In 1963 there were five bankruptcies involving a loss of £10,000 and for 1964 I have only a provisional figure which is in respect of one bankruptcy involving a loss to the travelling public of some £4,000.
§ Mr. Bessell
My understanding of the figures that I have mentioned this morning is that they are, in fact, losses to the travelling public.
Turning to the Bill itself, I think the idea of a council is right. As to the composition of the council, there will undoubtedly be argument, but, after all, it is not unknown for a professional body to set up a council, for Government bodies to be represented on that council, and for the council to exercise reasonable and rational control upon its members.
As to the registration of a travel agent by the council, one thing is quite certain: whoever may object to it in this House, no trade unionist can do so because it is the very essence of trade unionism that there shall be registration of the worker with his trade union. It is quite impossible for any hon. Member logically to oppose the registration of a man or a body who render service to the public with a council which is established for the protection of the public and, to a lesser extent, for the protection of the body concerned.
§ Mr. Orme
I cannot accept the hon. Gentleman's statement. There is no parallel whatsoever with the trade union movement here. The functions are entirely different. The services provided and the organisation are entirely 842 separate. If the hon. Member knew something about the trade union movement he would not make that comparison.
§ Mr. Bessell
As a trade union member, I think I can claim to have some knowledge of trade unionism. I believe there is a perfectly legitimate comparison here, because it is fair to say that the main purpose of trade unions is not openly to protect the worker; it is to protect the public vis-à-vis the industries concerned. I would be the first to concede that fact.
Here we have a situation where we are concerned to protect the public and I believe it is quite right that anybody who sets himself up in a business which involves taking money from the public and then uses that money to provide the public with a service should be required to register with a body which will give the protection which is afforded under this Bill. Otherwise, as I have said, there is a virtual licence to steal and there have already been disastrous examples of this happening.
I should now like to turn to Clause 4 which deals with registration. There is one point in this Clause which I find difficult to accept and I think hon. Members opposite will at least be in agreement with me here. Subsection (2) states:(2) The first registrar shall be appointed by the Board of Trade and each of his successors shall be appointed by the Council.I find that very difficult to understand. In a body of this sort the Board of Trade should have the right to appoint as the registrar an independent person. He should not be appointed by a council which, as has already been said, is dominated by one section of the travel agent business. If I may refer to a Bill which was introduced 12 or 18 months ago by another private Member, it is notable that in that Bill it was provided that the registrar should at all times be appointed by the Board of Trade, and I believe that was right. I should like to see that provision substituted for subsection (2) of this Clause.
Clause 7, too, requires some amendment. I believe it should be compulsory for any travel agent who is registered with the council to exhibit his certificate of registration on his business premises. This would be an immediate safeguard 843 for the public who would know, on entering the office, that the company or individual concerned was registered with the council.
Explanation is also needed about Clause 10. I am at a loss to understand why it is necessary to include paragraph (a) in subsection (1) requiring registered travel agents to provide figures and proper accounts. As the Bill is drafted, this applies only to corporate bodies. In fact, this requirement is already fully covered under the Companies Acts and there is no need whatsoever to repeat that provision. However, I understood the hon. and learned Member for Surrey, East to say that he proposes that there should be an amendment here so that this Clause will apply to individuals as well as to corporate bodies, in which case this Clause may need to remain, although it would have to be revised.
Clause 11 is, I believe, the most imaginative part of the Bill because it proposes to set up a fund which will give the protection which the public needs. If any travel agent who is registered with the council defaults and if the holidaymaker finds himself without his holiday he is able to claim compensation. This not only gives protection but ensures that ordinary members of the public who have suffered through the failure of travel agents will not be disappointed. This is an imaginative and very reassuring Clause.
Clause 14, which, as has been said, will be subject to some revision is, nevertheless, the "guts" of the Bill. I have some reservations about the penalties prescribed in it.
§ Mr. Bessell
But not in the sense which the hon. Member for Accrington has expressed. I believe that the fine of £100 laid down in subsection (2) of the Clause is totally inadequate and will not deter. I prefer Clause 9 of the Bill which was introduced last year by a Private Member which says:A person guilty of an offence under this Act shall be liable (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both.I do not think that a fine of £100 will deter anyone from carrying on the kind 844 of trading which we are seeking to prevent.
§ Mr. H. Hynd
The hon. Gentleman will notice that the maximum penalty of £100 can be imposed only in a magistrates' court. If the company concerned were unfortunate enough to be brought before the hon. and learned Member for Surrey, East it might cost it a lot more.
§ Mr. Bessell
I realise that the suggested penalty on summary conviction is £100 and that it would obviously be increased in the event of an indictment being drawn. However, I still think this is insufficient. I do not think that the penalty is sufficiently severe to deter people.
However, I agree with the hon. Member for Accrington that it is iniquitous—I will go as far as that—to suggest that the council should have the right to impose a fine of £500. I believe that any council, to be effective, must be able to exert disciplinary control of its members, just as the General Medical Council and the Law Society are able to strike off members and therefore prevent them from practising. It would be perfectly legitimate for a disciplinary council to be able to take that kind of action. However, I see no reason why it should be able to impose a fine on a person or corporate body who would clearly no longer be able to trade after they had been convicted of an offence.
I should like to see a tougher penalty laid down and the deterrent more effective. I should also like provision to be made under the Bill that the capital requirement of any travel agent is related to his turnover. This is important. If the Bill is loosely drawn, we will not give the adequate protection which is needed in spite of the compensation fund provided for in Clause 11. I feel that capital in the ratio of, perhaps, 5 to 1 related to turnover would be realistic. There should be some provision of this kind in the Bill.
I share the view of the hon. Member for Lewisham, South (Mr. Carol Johnson) that the technical ability of travel agents is important. I am sorry that it has not been found possible to include in the Bill provision to ensure that anyone who sets himself up as a travel agent shall have the necessary qualifications and experience before he can trade on his 845 own account or as a corporate body. The difficulty is that anyone—any hon. Member whose only experience of travel agents is that which he has had in a room below this Chamber—can set himself up as a travel agent provided he has sufficient capital and can obtain the Board of Trade's approval. He will then be accepted for registration by the proposed council. This is a real weakness and I hope that in Committee a suitable Amendment will be introduced to deal with the matter.
With these few reservations, may I from this bench give my support to the Bill. I hope that it will receive a Second Reading and will become part of our Statute law.
§ 12.35 p.m.
§ Mr. Edward Milne (Blyth)
I am sure that the hon. Member for Bodmin (Mr. Bessell) will excuse me if I do not follow him too closely in his remarks. However, we are glad to hear the conversion of members on the Liberal bench to the idea that legislation is required to deal with the problem of travel agents and travel agencies. In the two or three years in which we have been dealing with this problem we have not had the kind of support which he has indicated today. If he is a member of a trade union which is bound by rules similar to those contained in the Bill and which he has commended, the quicker he does something about it in his trade union the better.
We are grateful to the hon. and learned Member for Surrey, East (Mr. Doughty) for presenting the Bill and for giving us the first opportunity in a number of years of having a full-scale debate on this subject. I can remember, looking back over the years when this matter has occupied briefly the House's attention, that when there has been the opportunity of doing something about this matter in the way that the hon. and learned Member for Surrey, East has suggested, namely, to introduce a Bill and to let it go to a Committee for amendment, there were shouts of "Object" from hon. Members opposite. I am not at all certain that the hon. and learned Member for Surrey, East was not among the coterie who regularly did this in respect of Private Members' Bills on Fridays. If that had not happened, we might already have legislation on this subject on the Statute Book.
§ Mr. Doughty
The hon. Member knows perfectly well that, by the rules of the House, the only opportunity which hon. Members have of objecting to Bills is when the title is read at four o'clock on Fridays. I have pointed out that I will accept a large number of Amendments. In fact, I have offered some myself. That is quite different from hon. Members assuming that whoever presented the Bill in question would be reasonable and would accept Amendments.
§ Mr. Milne
The hon. and learned Member is a little adrift on this matter, because the appeal which he made was that we should accept the Bill in the form in which it is presented, and that there would be the opportunity of amending it in Committee. I will deal with that point later.
I welcome the reference which the hon. and learned Member made to the improved social conditions which are reflected in the rapidly rising numbers of holidaymakers dealt with by travel agents. It is said that one cannot hope to stay at home for one's holidays and still be able to keep up with the Joneses. The hon. Member for Bodmin stressed a little too much the inadequacies of the small travel agent. He is bound to know from his examination of some of the problems which have affected the trade in the last three or four years that some of the glossiest brochures and the most imposing façades on the outside of buildings have shielded some of the greatest heartbreaks.
I am sorry that the hon. Member for Ormskirk (Sir D. Glover) is no longer in his place, because he more than anyone else touched on the nub of the problem concerning the person who, when going home to his family, picks up an evening newspaper and discovers that the holiday hopes which they had entertained for, perhaps, five or six months beforehand have been shattered because of a failure by the trade to look after itself and failure, possibly, on the part of Parliament to introduce legislation to protect the holidaymaker.
In the last analysis, if we are to place legislation on the Statute Book, it must not be legislation of this type merely designed and accepted by the travel agents because public opinion has forced them along this road, but it must be seen to 847 be the protection for the holidaymaking public to which they are entitled. There is no other single commodity or service that a family purchases that has to be taken so much on trust, and once the purchase has been destroyed in that way, unlike most other commodities and services that we purchase, it cannot be replaced.
A destroyed holiday in July, even with reimbursement of money six months or a year later, is still a destroyed holiday. That is the kernel of the problem. This is more a consumer protection issue and this is where the hon. and learned Member for Surrey, East has gone adrift in the Bill. The need to deal with the problem arises more because of the need of consumer protection than to protect travel agents.
I agree that many of the restrictions which the Bill contemplates upon the trade are necessary, but they are of little or no interest to the holidaymaking public. I, at least, welcome, as I have already indicated, the conversion of the trade and of many hon. Members of this House to the idea of doing something about the problem with which we are confronted. I recall that in 1962 the then President of the Board of Trade, who is now a Member of another place, stated that the licensing or registration of travel agents was not for us in Britain.
We have been asked to keep out personalities, but in a highly personalised trade which advertises itself and its wares very often in terms of what the individual is able to offer to the public, since those days of direct opposition to registration and licensing we have moved through the period of the John Bloom washing-machine holiday, the door-to-door tally salesman who gives holidays on the "never-never" and the competitions on the packets of breakfast cereals that people buy to obtain for themselves the type of holiday they want.
I should like to make two or three points concerning the disciplinary procedures outlined in the Bill. The council is to be a weighted body with a majority of its members drawn from one source and who, in dealing with disciplinary procedures, can have—
§ Mr. Doughty rose848
§ Mr. Milne
I will give way presently. It is better for me to finish the point I am making.
Up to January 1964, it was the proud boast of the Association of British Travel Agents that in its 12 years of existence not one member had been expelled, despite the fact that during that period there were one or two cases that obviously required attention. There were subsequent expulsions, of course, after January, 1964, but that was the statement made by the then chairman of A.B.T.A. on the basis of its own activities.
Therefore, if we see some happenings in the travel trade, the Association of British Travel Agents was incapable until then of dealing with the bad elements in its midst. I am certain that in a Bill of this description we cannot afford to hand over entirely to any section of the travel trade full control in restricting or in taking action against any members who may step out of line.
§ Mr. Doughty
While not accepting anything that the hon. Member has said about the particular point, may I ask whether he would agree that if we are to have a disciplinary body which will inquire into allegations which, in this case, are financial, there must be a number of people upon it, even a predominant number, who understand business practice?
§ Mr. Milne
I fully accept that and I am not being critical of the Association of British Travel Agents in its general sense. It is an admirable body and I have paid tribute to it and its work in this House before. When paying tribute to an organisation, however, one must equally draw attention to its limitations, particularly as this morning we are being invited to give a Second Reading to a Bill that places full power in the hands of such an organisation, an organisation which, even on the broadest of figures, while it has a considerable section of the travel trade in its membership, is still very much short of a majority.
The latest figures which I have—and these are capable of correction because the travel trade is a fluid and changing one—
§ Mr. Bessell
Will the hon. Member give way? The constitution of the council as stated in Schedule 1 provides 849 for a total of 11 members, five of whom are to be appointed by the Association of British Travel Agents and Institute of Travel Agents Limited. They will not have a majority on the council.
§ Mr. Milne
If the hon. Member takes into account the other bodies and associations, he will get the type of majority to which I am referring. The point has already been made this morning and it was not challenged by the sponsor of the Bill.
As I have said, we are dealing with a rapidly-changing trade—
§ Mr. Doughty rose—
§ Mr. Milne
I will give way in a moment. I am sorry to interrupt the hon. and learned Member, but we must get the facts correct if we are to deal with the problem.
By the end of 1964, over 2,000 travel agencies were registered. There were reckoned to be at that time some 616 members of A.B.T.A. controlling some 1,250 outlets. The smaller travel trade association claimed about 240 members with 300 outlets. It was reckoned at the time that limited companies were registering in the travel business at the rate of about three per week, and that something like 100 agencies were going into liquidation each year. It is no use the hon. Member for Bodmin shaking his head. We listened carefully to the figures gave us on this matter, and we are prepared to make comparisons with him, if time and opportunity permit.
§ Mr. Bessell
I am grateful to the hon. Member for giving way a second time, but really I think he must read the Bill. Schedule 1, dealing with the constitution of the council, sets out quite clearly how the council is to be comprised and who shall be represented, and under that there is not a majority held by the Association of British Travel Agents, as he has said.
§ Mr. Milne
We have made this point perfectly clear in our answer to the last intervention. Unless we get an assurance to the contrary, then with the other two bodies mentioned as having representation on this council, outside the Board of Trade and the Secretaries of State, about whom there was much confusion earlier, what we can say and say quite definitely 850 —and I am not going to give way again on this point, and I am leaving it at the moment—is that A.B.T.A. and A.B.T.A. associates have on this council a majority —[HON. MEMBERS: "No."]—All right. We can leave that till later.
§ Mr. Milne
Just a moment, till we get round to the next point. I have given way a lot to the hon. and learned Member. It is no use his shaking his head and talking about being unfair. We have given way to him whenever he has asked and we will do so again, but he must learn to wait till the time is opportune.
We have been told by The Times in one of its editorials on this subject thatOne of the best remedies for the gulling of the public is educating the public.Now we come back to the point—and I will give way to the hon. and learned Member—of clarification on this question of the constitution of the council and the majority which, we have claimed, is inherent in the terms of the Bill.
§ Mr. Doughty
I am much obliged to the hon. Member, but I must check his arithmetic. The size of the council is 11 members, of whom five are appointed by the Association of British Travel Agents, with which the British Travel and Holidays Association has nothing whatever to do. [HON. MEMBERS: "Oh."] Nothing whatsoever. They have close relations, but one is a Government-subsidised body; it does not sell tickets or tours, but it encourages people to come to this country. It has nothing whatsoever to do with the Association of British Travel Agents, except, of course, that probably they are perfectly friendly. The Association of British Travel Agents, I have already said—I do not think the hon. Member could have heard me—or any other body which can fairly claim to represent travel agents can seek representation on the council.
§ Mr. Milne
I am rather surprised at the intervention of the hon. and learned Member for Surrey, East. He must try to remember that he is not in the law courts at the moment. If one looks at the composition of the council one is perfectly well aware that the British Travel and Holidays Association has nothing to do with A.B.T.A., and, indeed, we have never said it had. What 851 we said was that the Association of British Travel Agents and a body associated with it which is listed here as the Institute of Travel Agents comprise the majority on this council. That is the point. There is no use trying to drag in the question of the British Travel and Holidays Association on this particular matter, because the British Travel and Holidays Association, as one well knows, is a different body entirely, is a body, indeed, which receives close on £1½ million of its funds for its activities from the Board of Trade.
So on that point The Times was possibly right in saying that the best remedy for gulling the public is educating the public, and this is obviously what is needed in some ways.
In dealing with this Bill one must use some time dealing with the ability of the people named in the Bill to handle the problems with which they will be confronted and which will be presented to them. I want to look at one of the major happenings of last summer which affected in some way both the associations of travel agents in this country. Fiesta Tours hit the headlines in July of last year. They were reported to be members of the travel trade association and many members of A.B.T.A. were selling holidays on Fiesta Tours' behalf.
On this question of the educating of the public, surely both these travel trade organisations had some responsibility to the public prior to the Fiesta fiasco taking place. I myself had letters from constituents and others as early as the middle of May that year indicating disquiet about the activities of this particular firm.
At the end of July the Spanish National Tourist Office indicated that the troubles in this organisation were quite deep-rooted and had indeed taken place over quite a considerable time. In a Press release of 23rd July, 1964, the Spanish National Tourist Office pointed out that, according to its records, Fiesta Tours hadseveral times broken its contract with Viajes Barcelo to the point of having accumulated a debt of approximately two million pesetas which were paid with a delay of over eight monthsand for this reason they had broken off contracts between the two bodies concerned.
852 I am not going to deal at great length with this release except to point out that if we in this House are today being asked to give a Second Reading to a Bill which places tremendous powers not only over travel agents in this country but also over the destinies of the travelling public, then we must be prepared to pass them over to bodies which are better able to deal with problems of this description than both the travel agents' bodies have revealed they have been able to do over the last four or five years. It has taken a considerable time and it has taken a considerable effort on the part of those who realise the need for legislation of this description to convert not only large sections of the trade but indeed large sections of those on the benches opposite.
On the basis of disciplinary action I should like the hon. and learned Member for Surrey, East in his winding-up today—
§ Mr. Milne
We hope that we may get some clarification of the Clauses of the Bill regarding the happenings in the travel trade in recent months. We still find, as I said earlier, that liquidations in the trade are reckoned to be running at the rate of about 100 per year, which is about two per week, and is sufficient to cause disquiet among the travelling public.
§ Mr. John Hall
The hon. Gentleman referred to 100 liquidations a year. Does he mean liquidations as opposed to bankruptcies referred to by the Ministry? Can the hon. Gentleman say in how many of these cases the travel agent was not able to meet his debts?
§ Mr. Milne
We do not have all the details, but we know that in many cases amounts are still due to hoteliers on the Continent, to tour operators, and to firms with whom they have done business.
There is one illustration which I propose to give the House, because it is claimed that some of the leading figures in the travel trade have been or were associated with those firms. The head office of I.T.S. Agents Ltd., is at 5, Regency Parade, Swiss Cottage. From the information available—and it is sometimes difficult to obtain—one learns that over a period of time no fewer than seven firms which went into liquidation 853 had been operating from this address, and that in one or two instances at least the directors and principals of these firms had been associated with the travel trade industry.
§ Mr. John Hall
It is right to get this correct, because it is a serious state of affairs if the liquidations were due to companies being unable to meet their debts. Is it not a fact that many liquidations take place for other reasons, such as the winding up of a company which 854 no longer wants to continue in existence, or change of use, or any other reason which is normal and legitimate? Could it be that some of the liquidations to which the hon. Gentleman referred are in that category?
§ Notice taken that 40 Members were not present:
§ House counted, and 40 Members not being present, adjourned at seven minutes past One o'clock till Monday next.