HL Deb 16 July 1975 vol 362 cc1303-7

5.5 p.m.

The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick) rose to move, That the draft Civil Aviation (Air Travel Organisers' Licensing) (Reserve Fund) Regulations 1975, laid before the House on 30th June, be approved. The noble Lord said: My Lords, these Regulations are made under Section 4 of the Air Travel Reserve Fund Act, which provides the enabling power for the Civil Aviation Authority to require air travel organisers to make contributions to the Reserve Fund which will be held and managed by the Air Travel Reserve Fund Agency.

The Regulations impose on air travel organisers the requirement to pay contributions as a condition of obtaining an air travel organiser's licence. During the discussions on the Committee stage of the Bill, noble Lords opposite were concerned in particular about two aspects of the levy, and they introduced an Amendment—which, as I am sure the noble Lord, Lord Belstead, will not mind my reminding him, I said was an unnecessary Amendment to press to a Division—to deal with the levy, the starting date for payment and the period for which payments should be made. The Commons reasons for not accepting this Amendment indicate that, in the interests of flexibility, the times and manner in which the contributions are raid should be determined by Regulations. That is what we are doing. An undertaking was given that the contributions would not have to be paid before 1st September, and the Regulations provide for this. The travel trade will therefore have had ample notice of the timing of the introduction of the levy.

It was also stated that discussions would take place with the trade about the periods of payment. Following these discussions, the Association of British Travel Agents has undertaken to change its articles of association so that a member failing to pay his contribution by the due date will be subject to penalties and ultimately to expulsion from the Association. The ABC Operators' Council has also agreed to amend its rules. In the light of these undertakings, the Government are prepared to agree that, for an experimental period, payment of the levy should be on a quarterly basis, and the position will be reviewed after the experiment has been in operation for a year.

The Regulations state that the period of contributions shall not exceed six months, but the CAA will specify in the licences which it issues that contribution periods will be three months after the initial contribution period of one month; that is, the month of September. However, the payment period can be altered to six months if circumstances make this necessary. Quarterly payment periods will start on 1st October, 1st January, 1st April and 1st July so as to coincide with the renewal dates of the air travel organisers' licences, which run from 1st October or 1st April.

The Regulations prescribe that contributions will be 1 per cent. of turnover in respect of relevant business from 1st September 1975, and 2 per cent. from 1st April 1976. Provisional payments will be based on an estimate of the contributions due in respect of the period to which the payment relates. The CAA will require licence-holders to put forward estimates of their overseas turnover, subject to licence, and will base the provisional payment on these. The final decision on estimated turnover rests with the CAA, because some licence-holders may well pitch their forecasts of turnover unrealistically low in order to avoid making a large provisional payment. Some agents may do this, but of course I am not suggesting that all them will. Contributions, as opposed to the provisional payments, will be based on the turnover actually achieved by the licence-holder during each contribution period. No provisional payments will be required in respect of the first contribution period, which will be the month of September.

If the CAA were to collect a separate payment in advance of this period, it would have been necessary for the Regulations to come into operation at an earlier date to enable the Authority to do the necessary work before the 1st September. The first payment, which will be the provisional payment in respect of the second contribution period, will not therefore be required before mid-September. This will give the travel trade a reasonable period in which to make arrangements for their initial payment. The CAA also have a great deal of work to do in order to vary the existing licences, provide contributions to be made and to prescribe the period of the contributions. It is therefore important that Regulations should come into operation as soon as possible and I commend the draft Regulations to your Lordships. I beg to move.

Moved, That the draft Civil Aviation (Air Travel Organisers' Licensing) (Reserve Fund) Regulations 1975, laid before the House on 30th June, be approved.—(Lord Beswick.)

5.11 p.m.


My Lords, I welcome the Government's acceptance of the desirability of having quarterly payments from air travel organisers to the fund and, as the noble Lord, Lord Beswick, explained, that the first contribution period will start as from 1st September, the actual first payment being made in the middle of that month. Both these provisions will greatly assist the firms responsible for paying into the fund. I am grateful to the noble Lord for having listened carefully to what was said on this subject in this House.

The noble Lord referred to the alteration which ABTA have made in the articles of association. I realise that if the system is going to be one of quarterly payments the Government have been concerned all along about the possibility of any default in payments to be made at the height of the holiday season on 1st July. I am glad that the Government feel that, at any rate for the one year experimental period, the change in the articles of association which the Association of British Travel Agents have made should get this new quarterly payment system off to a good start.

There is one small point to which I would draw the noble Lord's attention. At the end of each contribution period the holder of a licence must furnish duly audited particulars of turnover. As the system develops, and possibly after the first year, I wonder whether the Department of Trade would look again at the frequency of the requirement for the production of auditors' certificates. In particular, perhaps two auditors' certificates for the year might be found sufficient. This may not be the case; I simply put it forward as being something which I think the Department could reasonably keep an eye on during the first experimental year. With that single caveat I welcome these Regulations which meet points on the Bill raised in this House.


My Lords, I am glad to say that we will watch how this works out in the experimental period. I would make the point, which no doubt the noble Lord, Lord Belstead, has already appreciated, that the difficulty of presenting an auditors' report at the end of each three months springs from the demand made by the Opposition that there should be quarterly rather than six-monthly payments. The whole of this will be a matter for reconsideration at the end of the year's experimental period. Although I do not say that it will be the case, it may well be that both the travel organisers and the Government would be of one mind that six-monthly rather than three-monthly periods of payment would be better from everyone's point of view. I would certainly give the assurance that the point made by the noble Lord will be watched.

On Question, Motion agreed to.