HL Deb 19 April 1975 vol 360 cc1024-33

3.8 p.m.


My Lords, I beg to move that this Report be now received.

Moved, That the Report be now received.—(Lord Beswick.)


My Lords, in Committee the noble Lord was so good as to undertake to return to two points which were raised. Perhaps it would be for the convenience of the House if I briefly referred to them at this stage. In Committee, I raised the desirability of excluding from the Bill overseas flights carrying passengers to accommodation on board a British ship. The noble Lord, Lord Beswick, has subsequently confirmed that, in fact, such flights fall within the scope of the Bill. But under Clause 4 the Secretary of State will have power to make regulations to establish the level of contributions. I would ask for two points to be borne in mind when the regulations are applied so far as British companies involved in air travel are concerned.

The first point is one which I mentioned in Committee; namely, that the degree of risk is that much less when passengers are on board a British ship under the British flag. However, the level of expenses per traveller carried will be far heavier for a shipping company than for companies which are involved solely in providing air travel. Even the educational cruises, which I mentioned in Committee, will cost adults per day at least double the en pension terms which one could expect from a reasonably priced package holiday. Of course, there are reasons for this, the main one being that all the facilities are provided on board a ship. However, this means that shipping lines will be asked to contribute at a far higher rate of expenses per traveller accommodated, and I hope that this factor will be considered when the level of contributions in the Regulations is being made.

The other point is that in Committee the noble Lord also undertook to clarify the advertising methods which the Government will employ in order to let the travelling public know exactly who is and who is not covered by the Bill. The noble Lord has been good enough to send to me an outline of the steps which the Department of Trade intend to take, including a statement, Press briefings and general publicity. I understand that the publicity will include two leaflets, one of which will deal with the timing of the Act and the protection which it affords. May I ask the noble Lord this question? In that leaflet, which will be distributed through members of the Association of British Travel Agents, will there be a definite undertaking that the Bill guarantees the liabilities to travellers of companies which fall within the scope of the Bill? I realise that if there is a financial collapse, the liabilities of an air travel organiser will be a first charge on bonding and on the company's remaining assets. However, I am sure that the noble Lord will understand the anxiety of travel agents, who are the people who will have to pass on the advertising information, that they should be able to give a definite assurance to those who are covered by the Bill that so far as air travel organisers are concerned, in the final analysis their money is guaranteed.

3.12 p.m.


My Lords, I am obliged to the noble Lord. As he has said, when we were looking at the Bill at Committee stage I undertook to look into the matters which he has now raised. I was asked in the first place whether those who travel from this country by air to join a British ship for the remainder of their holiday were within the scheme. The answer that I gave to him then was that I thought they were, and I now confirm that they are within the scheme. The noble Lord asked me whether it would be possible to treat differently those operators who have this particular category of holiday. I did not have notice of that aspect, and I cannot readily see how one can say that their expenses are higher than those of another kind of operator. Nevertheless, the noble Lord has put his questions, and before the Regulations are made I will certainly see that consideration is given to them. As the noble Lord knows, the Regulations will have to be laid before this House. If, therefore, he wishes to do so, he will have another opportunity to raise the matter then.

May I make one further point about this matter? The noble Lord has not asked that those holidaymakers who use this kind of holiday should not be covered. Judging by what the noble Lord has said, I understand that the shipping companies have not said that their customers should be excluded from the scheme. Therefore it seems to me a little difficult to agree that they should be excluded from contributions to the Reserve Fund which would provide the back-up for this scheme. However, the noble Lord asked whether we would give consideration to the two points which he made on this matter, and I will certainly see that they are looked at. No doubt he will return to them when the Regulations come before the House.

On the question of publicity, I was asked by one or two noble Lords at Committee stage what would be done about publicising the benefits of this scheme. If I may be allowed to say so, I thought that that was particularly interesting, because throughout Committee stage I was told that we did not need a scheme; but when we came to the end and everyone agreed that we were going to have a scheme, they wanted to make absolutely certain that the prospective beneficiaries would realise what they were enjoying. I gather that the following steps will be taken when the Bill becomes an Act. The Department of Trade will publish two leaflets. The first will look to the future and will advise travellers on the protection provided by the Reserve Fund and what they should do to ensure that they are covered. The second leaflet will look back and advise those who lost money last year how they should make their claims. These will be distributed through the Association of British Travel Agents as well as through other travel agents outside ABTA. The leaflets will also be available through citizens' advice bureaux, local authorities' trading standards officers, libraries and other sources. There will be some advertising in the travel trade Press which will be aimed at non-ABTA travel agents and will offer them copies of the leaflets.

It is intended to provide a comprehensive Press briefing, especially for travel and consumer affairs writers and comparable radio and television programmes. Also, there is a need to provide information upon which air travel organisers are licensed by the CAA. This is a point which I raised at Committee stage. I confirm that the CAA publishes lists which are sent to ABTA members and also to non-ABTA travel agents who ask for them. These lists will also be available at the offices I mentioned above and will be published in Trade and Industry, together with amendments.

Looking to the future, I think it is probable that references to the Reserve Fund will appear in much holiday literature, such as tour operators' brochures, passport offices, exchange control literature and banks' overseas travel literature for customers. We have had discussions with ABTA and I expect that ABTA itself will provide considerable additional publicity which will be aimed at both the public and its own members who will be advising travellers.

I understand that ABTA have been in discussion with the noble Lord and have raised a point about a particular leaflet. They asked whether the word should should not be replaced by the word "will". The fact of the matter is that it is stated in the leaflet that three points must be satisfied. If the booking includes an overseas flight, if the booking is with a tour operator or ABC operator who holds an air travel operator's licence, and if the flight is one for which the organiser needs to hold an air travel operator's licence, then the prospective holidaymaker would be covered. The noble Lord has asked why the word should not he "will". This leaflet has been drafted with legal advice, and I am told that this is as far as one can go.

The fact of the matter is that if a holidaymaker goes into a shop in the High Street, chooses a holiday and pays a deposit or the full amount, when that travel agent hands over the money and puts the booking in the hands of the operator that holidaymaker should be covered if these matters are satisfied. If, however, the man in the High Street who is running the shop is not reliable and goes off with the money that afternoon, the holidaymaker would not be covered. If the noble Lord presses me and asks why he is not covered, I can only say that if he were to be covered we should need another Bill, and then I should again have to go through all the criticism that I have already had on this Bill that we are trying to police everything and everybody.

I do not think that that should be done. It is unnecessary. Most of the travel agents are members of the Association of British Travel Agents and have their own insurance scheme, which is the kind of action that the noble Lord likes us for. Of course, it would cover the case of a defaulting travel agent if he was a member of the Association. However. as he might not be a member of the Association, the leaflet goes as far as it can by saying that holidaymakers should be covered if these points are considered. In the light of those explanations, I hope that the noble Lord will be satisfied and that the House can accept the Report stage.


My Lords, will the noble Lord consider one point which arises out of this matter? If somebody goes into what the noble Lord called a shop in the High Street which is filled with holiday travel brochures and holds itself out as an agent, is it not also held out as an agent by the travel organisation which provides the brochures, which uses it as an agent, which accepts its money and which sends it tickets? Are these people to be allowed to carry on in business if they are not authorised agents? Is it really proper that this should be done, and will the noble Lord bear in mind that, in spite of all the references to the Association of British Travel Agents, there are very few people who have been in another place for some time who have not been constantly engaged in a long battle to try to recover for their constituents money which has been paid on a contract and which has become lost for some reason or other?

Does he not know that a considerable number of travel agents give a fair service when a tour operates, but who have a standard rule never to repay money in any circumstances whatever so long as they hold it, who use arbitration clauses which conflict with their insurance, so that the unfortunate traveller is sometimes worse off when he has insurance because he never knows who to sue? He is held up time after time and there is a steady process—of which I could give evidence on oath, if necessary—of attempting to defeat legitimate claims and not repay the money. Is the noble Lord satisfied that under the new scheme fuller protection will be available in this respect to the person who has paid money and who has not had a tour?


My Lords, this is a Report stage and not a Committee stage, but with the leave of the House possibly I can answer my noble friend. The answer is that this is a Bill which deals with the travel business from the point of view of the air travel operators. It does not purport to be a Bill dealing with travel agents. If we wanted such a Bill we should have to start again.

On Question, Report received.

Then, Standing Order No. 44 having been suspended (pursuant to Resolution):


My Lords, I beg to move that this Bill he now read a third time.

Moved, that the Bill be now read 3a.— (Lord Beswick.)


My Lords, on Third Reading can the noble Lord say, if this Bill does not protect people from unauthorised agencies or from the shop in the High Street, whether it contains provisions which will protect a person who deals with the head office or branch office of a well-known travel agent and help in recovering money he has paid for a contract that failed, either because of the illness or death of the traveller, or because of frustration due to outside circumstances? What is the method of protecting the purchaser, through travel agents who are members of ABTA, and of ensuring the return of money when a contract has failed?


My Lords, I am not sure that I can answer the noble Lord, although I shall be happy to discuss this with him. I will write to him, if he will be good enough to give me the details of any cases he has in mind. I can only say that we are here dealing with an area which has been fully discussed, and the area which he is now moving on to is quite different and I am not certain that the Bill deals with it. I think I know why the noble Lord has raised this matter. It is certainly true that some would hold that the man in the High Street, to whom I referred, is acting as the agent of an operator and therefore, having been appointed as an agent, the operator has liability for his actions. However, this is a matter which is being tested in the courts and I cannot say what might be the outcome there. May I suggest to my noble friend that he should discuss his concern with me and I will see whether I can help him.

On Question, Bill read 3a, with the Amendment.


My Lords, I beg to move that this Bill do now pass, but before we do pass it I should like to say a few words about the Committee stage and the one Amendment which we made then. I was sorry about the circumstances of the Division which forced that Amendment through. In Committee, noble Lords opposite were kind enough to thank me for being helpful, and certainly I found that the Opposition generally were most constructive and very agreeable during the course of the Committee stage; but there was the one Amendment. I understood the intention of that Amendment, which was twofold. First, it was intended to reduce the impact of the levy at the outset; and secondly, it was also intended to put back the date of the first contribution.

As to the impact, I thought with respect—and it was the view of many non-committed noble Lords in the House—that I met every point that had been made. No contribution would be made until the operative date. On the other hand, the cover would be provided prior to the operative date for the traveller, and provided out of Government funds. The three-monthly as against the six-monthly payment which was suggested in the Amendment would not reduce the total liability, but the Government had agreed to halve the liability in that first year by a 1 per cent. levy, instead of a 2 per cent. levy.

Then there was the question of the first payment, and the noble Lord made a very good case there that it would give further time for the operators to accumulate the necessary funds out of their bookings before the liability to pay the first contribution was reached. I thought it was a reasonable point and I undertook to look at it, but all that was ignored. The troops had been assembled; we watched them come in, completely innocent of any facts, and the troops being there the order to march had to be given. It is not unknown on this side of the House for a Division to be called when we have people here on a Whip. But there is a difference between this side and the other side. We can afford the luxury of a Division without doing any damage, because we can never exert our will over that of Members opposite. We have a built-in minority; they have an unrepresentative majority. The consequence was that a quite unnecessary Amendment was put into this Bill.

I give the assurance to the noble Lord that the point he made about the first contribution being made on 1st September will be covered in another place. All that has happened as a result of that Amendment is that a lot of officials have been put to trouble. There has to be a reprint—an absolute waste of money, time and effort and for no constructive benefit at all. I suggest to the noble Lord that there are occasions when strength should be used wisely. Having said that, I hope the Bill will now pass. I beg to move.

Moved, That the Bill do now pass.—(Lord Beswick.)


My Lords, I have a feeling somehow that the noble Lord, Lord Beswick, feels that he has been criticised heavily over this Bill. The workload of the noble Lord is, perhaps, as much as a Minister can reasonably put up with at a time. Of course, the noble Lord has to deal with the Policyholders Protection Bill tomorrow and it is only fair to remind him that it is on that Bill that he has received widespread criticism from all sides of the House. The Committee stage of this Bill went through in 2½ hours, and there was only one Amendment. May I just say to him in a rather more constructive manner that it is absolutely true, as he has said, that he did everything he possibly could, and could not have been more helpful in trying to meet me on the first half of the Amendment; namely, the coming into effect of the first payment of the contribution. If by any mischance the Amendment were not to be made, I know those who pay this particular levy will be most grateful if the Secretary of State, when he is making regulations, would look at the sort of date being suggested.

My Lords, the problem to which the noble Lord did not address himself when speaking just now was that, through no fault of his, he was not able to meet me on the second half of the Amendment. With great respect, he did not touch at all upon the frequency of payments in subsequent years; so there is a difference between us on this Amendment, and the problem of the amount of extra work to which people have been put was not in fact required for no reason at all. I think that this Bill, when it becomes law, which it obviously will do very soon indeed, will be an important safeguard to air travellers. May I make it clear that I now support the Motion, That the Bill do now pass.


My Lords, before the noble Lord sits down, may I point out that the second part of the Amendment says, No such sum shall be payable before 1st September. That point I have agreed to meet.


My Lords, I apologise. For second "then, read "first ".


My Lords, does not the noble Lord think that probably there is a remedy for the situation? Originally it was suggested that the 1 per cent. levy should be paid on a certain date. The result of the Amendment of the Opposition is that that levy shall not be paid until a later date. Therefore, is a 1 per cent. levy sufficient to meet the possible demands made? Would it not be possible to increase the levy from 1 per cent. to 2 per cent. as a result of the Amendment, so that all demands could be fully met?


My Lords, speaking again with the permission of the House, I will see whether the point of the noble Lord, Lord Leatherland, can be considered.

On Question, Bill passed and returned to the Commons.