§ 2.36 p.m.
§ Lord Graham of EdmontonMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied that the Association of British Travel Agents (ABTA) employs adequate procedures to enable it to monitor the financial soundness of its members, and what steps ABTA takes to protect British holidaymakers in the event of a member becoming insolvent or in the event of a member collapsing and the directors of that company continuing to trade through other companies with ABTA membership.
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)My Lords, the Association of British Travel Agents is an independent trade association and its arrangements are not a matter for the Government, provided that they do not infringe any statutory provisions. British holidaymakers flying abroad on 2 package holidays are protected. First, tour operators are licensed by the Civil Aviation Authority and individually monitored. Secondly, under the bonding system backed up by the Air Travel Trust, holidaymakers get their money back in the event of a tour operator failing and those abroad are repatriated free of charge.
§ Lord Graham of EdmontonMy Lords, I am grateful to the Minister for that reply. Bearing in mind that the average family package holiday represents a considerable investment and that that family relies upon the protection of the CAA and ABTA, will the Minister urge both the CAA and ABTA urgently to examine their practices as regards liaison in order to root out any dubious practices? Can the noble Lord tell us how often and how regularly the Government meet either ABTA or the CAA in order to examine and improve the practices in the travel industry?
§ Lord Lucas of ChilworthMy Lords, the Government are satisfied that, so far as the CAA is concerned, the present arrangements are adequate for protecting people flying overseas on package holidays. The answer to the noble Lord's second supplementary question is: from time to time. Thirdly, perhaps I may advise your Lordships that the Director of Fair Trading is, with ABTA and the CAA, examining the provisions in relation to holidaymakers.
§ Lord UnderhillMy Lords, is it not a fact that the final report of the Air Travel Reserve Fund Agency, published as recently as only June this year, commented that there were five failures in the previous 12 months involving the large figure of 65,000 holidaymakers? Is it also not a fact that the final report of that agency soundly criticised the CAA, which is the body which monitors these matters? Are the Government thoroughly satisfied with the position and has the Air Transport Users Committee been consulted on this matter?
§ Lord Lucas of ChilworthMy Lords, the Civil Aviation Authority is looking into current practices and although there are some legal problems it is taking steps to discourage particularly the practice of subcontracting under an ATOL licence.
§ Lord Graham of EdmontonMy Lords, is the Minister concerned, as I am, that the public very heavily rely upon travel agents who represent their integrity by displaying the ABTA or ATOL sign? Will the Minister ask the CAA more carefully to monitor circumstances in which either one or other of those symbols is withdrawn so that the CAA is satisfied that the practices carried out by the travel agent are proper?
§ Lord Lucas of ChilworthMy Lords, as I have already suggested, the CAA is looking into its practices, including the practice of monitoring. If the ABTA sign is fraudulently displayed, there may well be an offence under the Trade Descriptions Act, and it would of course fall to the relevant trading standards officers to investigate that and take whatever action is necessary.
§ Lord MellishMy Lords, following what the noble Lord the Minister has said, can we take it for granted that, as the law now stands, it is not possible for an unscrupulous firm to set up as a so-called travel agent and, if I may use the term, take people for a ride—in other words, take their money in phoney circumstances? Can I take it that the law is strong enought to stop that? That is what we are concerned about; at least I am.
§ Lord Lucas of ChilworthMy Lords, the ABTA arrangement, with the two safeguards that I have mentioned, is sufficient to provide cover for most package holidaymakers. If, however, a travel agent sets up in business and sells non-ABTA tours, there is nothing illegal in that. The whole object of the ABTA system, backed as it is by the CAA's ATOL system, is to provide protection for those who choose to buy their holidays through those agencies. However, equally, it is for the customer to decide whether he wants to buy a holiday from another source.
§ Lord Graham of EdmontonMy Lords, I am grateful to the Minister for all that he has said. However, in view of what my noble friend Lord Mellish has said, my concern is not so much travel agents who set up without the symbol, but travel agents who are given the symbol, then have it withdrawn, but continue to practise. In my view, in those circumstances there is some deceit. Can the Minister tell the House whether he will draw that in particular to the attention of the CAA?
§ Lord Lucas of ChilworthMy Lords, I am quite sure that the interesting exchange that we have had this afternoon on this whole business will come to the attention of all the relevant authorities.
Lord Bruce of DoningtonMy Lords, will the noble Lord give the House an assurance that the relevant sections of the Insolvency Act which ought to cover cases of this kind, and particularly that mentioned in the last part of the Question, will be rigorously applied?
§ Lord Lucas of ChilworthMy Lords, as soon as all the relevant parts of the Insolvency Act come into force of course they will be rigorously applied. The noble Lord will remember that the Secretary of State 4 has power to make representation to the courts for the disqualification of a director who has been behaving fraudulently.