TRAVEL TRADE REGISTRATION (Hansard, 18 June 1969)

§ Mr. Edward Milne (Blyth)

I beg to move, That leave be given to bring in a Bill to register certain sections of the travel trade and to introduce a code of conduct for the travel trade. I introduced a similar Bill on 30th May, 1962. I now seek to show greater necessity for this type of Bill than even at that time, despite repeated efforts of the trade to put its house in order.

On that occasion, I stated: The Association of British Travel Agents and its code of conduct, the integrity, competence and high standard of service given by the profession will be the background to the standard needed in this flourishing industry".—[OFFICIAL REPORT, May, 1962; Vol. 660, c. 1365.] There is little time to give figures, but everyone is aware of the mushroom-like growth of the travel trade in the past seven years. Despite the passage of time the fact must be faced that A.B.T.A. is still on trial. It has not yet demonstrated that it can and will deal with the problems of the future.

Arising from the efforts to introduce legislation to deal with the travel industry, and encouraged and assisted by the Board of Trade, A.B.T.A. introduced its "Operation Stabiliser" on 1st April, 1966, as a safeguard to holiday-makers faced with the loss of holidays and holiday money arising from liquidations and bankruptcies, but it still did not deal with many of the other problems arising in the travel trade.

From that date, many non-A.B.T.A. travel agents all over the country had the greatest difficulty in continuing to earn their livelihood, despite the fact that they had been long established and had given excellent service to the public. A leader in The Times on 13th August, 1964 said: A trade association exists, first and foremost, to advance the commercial interests of its members, make it a closed shop, and its primary interest may diverge sharply from the public or of newcomers to the business. The Minister of State, Board of Trade, in reply to an Adjournment debate raised by my hon. Friend the Member for Glasgow, Provan (Mr. Hugh D. Brown) on 14th June, 1966, said: 486 I am aware that the introduction of 'Operation Stabiliser' has caused some disquiet, particularly among travel agents who are not members of A.B.T.A."—[OFFICIAL REPORT, 14th June, 1966; Vol. 729, c. 1425.] My hon. Friend repeated the assurance that he would not hesitate to act should it show signs of developing in an undesirable way.

I again introduced a Bill similar to the Bill which I seek to introduce today on 1st February, 1967. That was a day which you, Mr. Speaker, will recollect as the first of our morning sittings and the very first item of business in that experimental period. The Bill was given leave to be brought in by a substantial majority of the House, but was vigorously opposed by the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) who, unfortunately, is today otherwise engaged, but I have given him notice of my intention to raise this matter.

On that occasion, the hon. Member said that the travel trade had been flogged to death with a good deal of exaggeration. He added that he knew something about the travel business, since he had an interest in it, and he referred to the rescue fund that had been set up for holiday makers by A.B.T.A., which at that time stood in the region of £100,000. At the beginning of this year the director general of A.B.T.A. stated that the payments from the common fund in 1967 had been made good and that no claims on the fund had been made in 1968. Nevertheless, he stated that the fund was still insufficient to meet the liabilities which are likely to be incurred in the event of a major failure in the height of the holiday season.

It is felt that there are imminent failures on the way to the knowledge of the travel trade and that liquidations are still proceeding. The figures I have mentioned have to be contrasted with a similar fund set up by the Danish Travel Trade, following the collapse of several large Scandinavian travel companies. The figure planned by the Danish travel agents is in the region of £500,000—a substantial increase on the amount felt to be needed by our own travel agencies.

The events of the past weekend have placed the travel trade and its major organisation at the cross roads. We read in the Travel Trade Gazette that the 487 Secretary-General of A.B.T.A. and his assistant are no longer in their posts.

In the same journal there is talk of the reasons for this crisis in A.B.T.A., including the expensive failure of the Economist Intelligence Unit Report, commissioned by the Association, and the lack of guidance given to A.B.T.A. members after the British Eagle failure.

One instance of the dangers inherent in the fact that A.B.T.A. is the only voice of the travel industry which is recognised by the Government, can be given by briefly citing a case being examined in conjunction with my hon. Friend the Member for Ilford, South (Mr. Arnold Shaw), where a travel agent in Jersey, whose name was circulated by A.B.T.A. on its special list at the end of 1967, found himself out of business, and an agency with a turnover of about £70,000 a year was closed down. The Board of Trade have since written to me saying that this was based on incorrect information. In fairness to all concerned, an inquiry or legislation is needed on this matter.

My Bill would also deal with holiday camps, into which a close inquiry is needed. Holiday camps are very helpful indeed to our balance of payments, to which reference was made at Question Time today, and proper supervision of them is necessary to give this country prestige abroad, as many foreign nationals are working within the travel industry.

As long ago as January, 1963, the Association of National Tourist Office Representatives in Great Britain supported a Bill of this kind as beneficial, not only to holiday makers in Britain, but to holidaymakers throughout the continent. The Bill would seek to give unshakable guarantees to the travelling public and to such parties with whom they contract. It would seek to provide indemnity for any failure on the part of a travel agent to produce the service and amenities for which he had contracted.

Knowing the tolerance and interest that the House takes in this subject, I ask, with confidence, for leave to be given to bring in the Bill.

§ Mr. Arthur Jones (Northants, South)

I followed with great interest the submission of the hon. Member for Blyth 488 (Mr. Milne). I know and, indeed, recognise the interest that he has brought to this subject over a long period. We all admire his sense of purpose and tenacity, but I hope to show briefly that these excellent attributes are misdirected and that much of what he seeks is already in operation.

The hon. Gentleman and I had the opportunity of debating the issues which lie at the root of his advocacy in September, 1967, at a weekend study course at Merton College, Oxford, organised by the Institute of Travel Agents. I was invited as a shareholder and director of a firm of travel agents. Clearly, my advocacy on that occasion did not achieve its purpose.

In his submission, the hon. Gentleman has extended the scope of his proposed Bill to include holiday camps. But I think that this matter is adequately dealt with, certainly concerning the points that he mentioned, in Part III, Clause 17, of the Development of Tourism Bill, which is going through the House, and is likely to reach its Report stage in the near future.

The two issues with which we are concerned essentially, as heretofore, are the proper conduct of their business by tour operators and travel agents and provision against the loss of public money. The introduction of "Operation Stabiliser" in October, 1965, to which the hon. Gentleman has referred, is the key to the method by which A.B.T.A. hoped to achieve its objectives, and I think it has. "Operation Stabiliser" introduced this condition: Tour operators who are members of A.B.T.A. shall appoint as agents and pay commission only to travel agents who are also members of A.B.T.A. and, secondly, travel agents who are members of A.B.T.A. shall sell tours and holidays as defined above only on behalf of tour operators who are members of A.B.T.A.". Membership of A.B.T.A. must inevitably, to some extent, be selective, because it calls for knowledge and experience, but it is in no way intended to be restrictive, as the hon. Gentleman implied. It wills the means, and its success during the past four years clearly shows that it is able to secure the protection of the public. It is unfortunate that the hon. Gentleman should say that A.B.T.A. is still untried, because there is substantial evidence of success in what it is trying to do.

489 The hon. Gentleman made reference to his Adjournment debate on 13th December, 1965. The right hon. Member for Barnsley (Mr. Mason), who was then Minister of State, Board of Trade, said: … we are now proposing to await some experience of how the travel trade and its structure are in practice being affected by the introduction of the A.B.T.A. 'Stabiliser Operation' … we do not feel that we should be justified in urging A.B.T.A. to reconsider its scheme."—[OFFICIAL REPORT, 13th December, 1965; Vol 722, c, 1053.] That, I understand, is the position today. A.B.T.A. has not been asked to amend its scheme in any way by the Board of Trade.

This brings me to the second and equally important part of A.B.T.A.'s policy, namely, financial protection for the public. The Association introduced accountancy rules in October, 1964, followed by the establishment of a common fund in February, 1965. This immediately followed the attempt by my hon. and learned Friend the Member for Surrey, East (Mr. Doughty), who failed in his efforts to secure a Travel Agents Bill which, at that time, had the support of A.B.T. A.

Members of A.B.T.A. subscribed to this common fund on the basis of their turnover. With a turnover up to £100,000, £12 10s. per annum; over £1,800,000, £125 per annum. These regulations produced about £30,000 a year with an agreed responsibility for a further call of a similar amount in the event of additional demands arising against the fund.

Costs against the common fund to date have been of a substantial character. Two tour operators were involved in August and September, 1967, totalling over £30,000, of which £4,700 had been recovered. There were also two retail agents, involving a total sum of just over £1,500.

Mr. Dennis Walsh, the Chairman of the Association of British Travel Agents, in a message to its members in April this year, said: Since the Common Fund was established four years ago it has been the proud boast of our Association that no client of ours would lose an overseas holiday or be stranded abroad through the financial failure of an A.B.T.A. member. We believed that we had a moral 490 obligation to provide protection in this way to the members of the public who trust us with their holiday money. We also realised that such an assurance had a hard commercial value in building up public good will and confidence in our industry. I think that it was a little unfair or ungenerous of the hon. Member for Blyth to refer to a leader in The Times as far back as 1964, because circumstances have changed so much since that time.

The fund now stands at £40,000, and annual contributions due on 31st July this year will bring the total to £70,000, against which there is a demand, due to the failure of Wrights Holidays Ltd., of Birmingham, which occurred in February this year, for an estimated £30,000. Surely A.B.T.A. is to be congratulated on its achievements over the past four to five years, in which it is recognised—certainly by myself—what an important part the hon. Member for Blyth has played.

Since 1962, the travel trade turnover, excluding insurance and freight, has risen from under £150 million to over £300 million for 1968. The measures taken by A.B.T.A. have, surely, in the main, given the hon. Gentleman what he wants. I see no point of substance which justifies a Bill such as he proposes, and I must, therefore, oppose it.