My Lords, this updating of the 1992 legislation is welcome, as things have undoubtedly moved on a great deal since then. We now use computers and we travel a great deal more, particularly taking short breaks. The Minister has outlined how important holidays are to the UK public, so I welcome the fact that the definition of a package is to be expanded. Of course, we were prompted to do this by an EU directive, and we have only until 1 July to deal with it. The impact assessment makes it clear
that these regulations—and the Minister said as much just now—do not go beyond EU requirements; rather, the EU directive has in effect been simply copied over.
When we discussed this issue last year, in the wake of the Monarch Airlines insolvency, the Minister at the time, the noble Lord, Lord Callanan, made it a point of great pride that we in the UK had the first laws to protect the purchasers of package holidays and that our laws go beyond the protections available in other countries. Given that, my first question is whether this a conscious change of policy by the Government in terms of consumer law. The Monarch situation revealed again the differing levels of protection available to travellers, depending on how they purchase their holiday and the unfairness that existed between different sorts of purchase. It demonstrated that nowadays, relatively few people buy traditional packages for their holidays, although I read recently that declining public economic confidence has started to reverse that trend. People are now looking for more security and are therefore more likely to buy a package. So it is to be welcomed that these regulations are specifically designed to cover other sorts of arrangements.
Just when I thought I had got my head around linked travel arrangements and what they mean, I find that there are two other categories as well. When we discussed this last year, the noble Lord, Lord Callanan, made it clear that the idea of a linked travel arrangement was still in the process of being divined. Looking at the categories, I see that there are prearranged packages, which is the traditional arrangement we are all used to, and dynamic packages, which have the features of a package but allow the consumer to pick and mix, to customise the content of their package, buying from one trader. As a further option, travellers can put together the components of a package themselves—one assumes online—based on specific offers from more than one trader. The Explanatory Memorandum says that, although this has elements of from more than one trader, it comes from a single point of sale. My second question to the Minister is this: what does a “single point of sale” mean?
Last night, I happened to be organising a weekend away. I booked my flight on a holiday package website and then up popped the offer of a car hire. But as I dealt with the car hire, I found myself on a separate website, although it had come to me via the first one. I am interested in how this option differs from other options. I quite understand that, if you walk into Trailfinders, you can buy a variety of things from one point of sale. But what is a “single point of sale” when you are dealing with this on the computer?
Apparently, in addition and separate to the two forms of dynamic package and the simple prearranged package, there are also linked travel arrangements. These are the combination of at least two different travel services for the same holiday but, unlike packages, they involve separate selection and payment for each services and separate contracts. Those are created with a trader and, according to the explanation, a linked travel arrangement is created where the,
“trader facilitates either … the selection and payment of two or more services for the same trip, under separate contracts with individual providers, upon a single contact with a point of sale, or
… the separate selection and payment of two or more travel services for the same trip through targeted linked booking processes within 24 hours without transferring the travellers’ payment details. Conversely, if the traveller’s payment details, name and email address are transferred then this would count as a package”.
I understand the last sentence, but I got lost halfway through the rest of it.
The point I am making is that this is hugely complex. How is a person purchasing their holiday to know that it is linked by a trader rather than a link inspired by Google? I get extremely worried when I visit a restaurant, for example, and am then asked to rate it. I have not told anyone I am going there—I have simply carried my phone there—yet, somehow, Big Brother knows I have been there. We are all susceptible to having things promoted to us as a result of our choices, using the computer or simply carrying around a phone. This is so complex that publicity will be essential. It will affect a whole new cohort of traders—the Explanatory Memorandum estimates a one-off cost of £620 million to the industry and an annual cost of £48 million. This is a significant new thing for the industry. So my question is: how are the Government planning to raise awareness within the travel industry?
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Secondly, the phrase “ATOL-protected” is publicly well understood. It might sometimes be slightly misunderstood, but the public understand that the phrase “ATOL-protected” is going to give them some level of financial protection. It is a sort of gold star insurance for the more cautious traveller. How are the Government planning to explain these more complex regulations to the general public? The Minister talked about levels of compensation, but how will it be clear to members of the public that they have gone into one form of dynamic package rather than a linked travel arrangement, or vice versa? It is so complicated. It is ironic that we are planning to introduce this now, as we are about to leave the EU. It involves a big benefit for the travel industry, as it involves mutual recognition of insolvency rules. Traders have only to comply with the insolvency regime in the member state where they are established, instead of a multiplicity of regimes.
Finally, I ask the Minister an associated question. When you cancel a flight, very often you have to stand the loss—you might be lucky enough to have insurance; you might have bought a flexible enough flight at a greater price, whatever. But I understand that, when you cancel that flight, part of what you paid is taxation. Whatever the circumstances of your cancellation, you are entitled to a refund of that taxation. It is often a relatively small amount of money in relation to the flight, but this is not always the case. Am I right about that? If so, what has been done, and what are the Government planning to do, in relation to general consumer law—in relation to travel, and to air travel in particular—to make travellers more aware of that right?
I conclude by saying that this is good for consumers—it will encourage travel and will, therefore, be good for the travel industry—but it introduces complex new definitions. If consumers are to benefit, rather than to be hoodwinked, or lulled into a false sense of security, we need a big government information campaign.