As everyone has today, I congratulate my hon. Friend the Member for Birmingham, Yardley (John Hemming) on leading the debate in the wake of a very significant number of signatures on the e-petition.
It is interesting that this was an issue in Parliament long before I was born—I do not know whether that is a good or a bad thing, but it has clearly been an issue for many decades. I have listened with great interest to the points that have been made. There have been a variety of speeches, coming, in a number of cases, from slightly different perspectives. I agree with the hon. Member for Chesterfield (Toby Perkins) that it has been a very good debate, which on the whole, has been fairly consensual; there is a reasonable amount of agreement across the Chamber. As a constituency MP, constituents have been getting in touch with me about the subject, and I have a personal interest, as my children are heading rapidly towards school age. Along with a lot of other people, this issue is close to my heart as well.
I would like to put my comments into context at the start and make it clear that the Government do not regulate the price at which goods or services are offered for sale. We have heard from a number of Members that most people would agree that that is the way it should be. We feel that it is a commercial matter for the businesses concerned and that the Government should not intervene. It is not for the Government to dictate to any particular market how it should charge for its services, or to intervene unless there is evidence of market distortion or market failure. That is when Ministers and the Government would get involved.
As we have heard today, and as I hope hon. Members would agree, the UK holiday sector is one of the most competitive markets in the UK, if not Europe. That has made the sector not only one of the most responsive to consumer demands and preferences, but one of the most innovative. It has driven change very much over the years. It is not so long ago—only a few decades—that only the wealthy could contemplate having a holiday abroad, and even holidaying in the UK, which was more popular and much more affordable, was certainly not the norm for many people. That was the situation not that long ago. With the development of cheaper package holidays and so on, far more people have found that they can afford a foreign holiday, but the sector has developed rapidly over the past few decades and expanded in many respects.
An almost endless variety of offers are available for people, which meets the demand from consumers for more choice, flexibility, value and so on. The dynamism and innovation that is shown in this diverse sector is evidence of keen and persistent competition in the market, so the Government feel that there is no market
failure and therefore no reason for the Government to intervene to impose price limits. I got the feeling today from colleagues across the House that most would agree on that point.
As the hon. Member for East Hampshire (Damian Hinds) said in his confession, prices charged across the year reflect demand, availability and the need to attract consumers in a competitive market. It is common to all competitive markets—it is especially acute in fluctuating markets, such as the travel sector—that prices rise and fall according to demand and supply. That is the way in which markets work in general. When demand is high and supply is limited, prices invariably increase to the point at which demand moderates. It is the level of demand that dictates the prices in a competitive market, so if demand increases, so do prices.
Demand appears to remain high in the travel and holiday market, despite the economic difficulties that many people are facing—it has been a very difficult time for many across the economy over recent years. The industry reports that the holiday market is buoyant and consumers are prepared to pay the prices being asked for the services on offer. If people were not prepared to pay the prices being asked, demand would drop and prices would come down, so it is being driven by the fact that people are prepared to pay the prices that holiday companies are demanding.