My Lords, Amendment 3 would insert a new clause to deal with the potential impact of leaving the EU on consumer protection under the ATOL scheme. It asks the Secretary of State to carry out an assessment and to lay a report before Parliament within 12 months of this Act passing. The key question is whether consumer rights and protection in this respect will be reduced on leaving the EU. The Minister made much of the fact that the UK was ahead of the game many years ago when it set up the ATOL scheme. He said that in some respects the rest of the EU was catching up with us with the 2015 EU package travel directive.
The Bill is designed to bring us in line with the rest of the EU—an organisation we are about to leave. It is obviously of considerable importance that we understand the potential impact of the various stages of the Brexit process. As I understand it, the Government are no longer suggesting that we can get everything sorted by
March 2019, so I assume there will be a transition period. But we will not be members of the EU at that stage, according to statements made by several Ministers. Instead, we will be mirroring EU membership to a greater or lesser extent. Since so much of the legislative structure surrounding aviation and the relevant international agreements are not specifically part of EU membership—but we are nevertheless signed up as members of the EU—there seems to be a particular danger that the aviation sector will be at the sharp edge of decision-making. Certainly, the sector feels that it is important that it is at the leading edge of decision-making. There is uncertainty associated with that, of course.
If the worst happens—not the scenario I have just outlined but the worst—and we crash out of the EU without a deal, what will happen to the additional rights and safeguards conferred by the Bill? I expect that the Minister will say that they will remain as they will be enshrined in UK law. However, if we crash out without a deal, all bets are off. We will no longer be obliged to mirror EU consumer protections. Some Ministers have spoken in terms which suggest that the more bargain-basement approach to international trade might be the preferred option.
As marketing methods and IT develop, this is an increasingly complex area. Today’s discussion has already reflected that. The Monarch case illustrates that complexity, with only about 14% of people covered by ATOL. People can sit next to each other on the same plane and stay at the same hotel but be entitled to different compensation or no compensation, according to their method of payment. Did they pay for it as a package holiday—a single entity? Did they pay for it as separate parts? Did they pay by credit card or PayPal, in which case they would get protection? In some ways, I gather, this can be enhanced protection. If they paid by debit card, they would not get that protection—they would not get compensation. It is worth noting that there is often a superficial financial incentive to pay by debit card because many websites now charge for paying by credit card.
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I welcome the extension of the concept of protection to linked travel arrangements, whatever they may be, but I want to emphasise the Minister’s earlier point in my own way. When an advert for a hotel pops up on your screen after you have booked your flight, how are you to know whether that is a linked travel arrangement or simply a Google advert? I have spoken to people about this issue and they have given me examples of where they thought they were booking on one website but ended up on a different website, because it is so easy to slip from one facet to another.
It is essential that the Government ensure that the industry has to make it very clear—not just in the small print but at the point of decision-making—exactly what your rights are and what you are buying, according to the method of payment. I appreciate that the question of debit and credit cards is covered in other legislation, but do not believe that that would stop the industry making this clear. It should not stop the Government using this opportunity to make the consumer’s rights clear to the public, in every case. It is also important
that the public are informed of whether or not it is a linked travel arrangement. I suggest to the Minister we need a consumer campaign on this—we need consumer information.
There is little that is more precious to us than our family holiday. It is a very significant chunk of our annual spending. We look forward to it and we anticipate the relaxation, and after it is over we have—we hope—happy memories, but certainly long-standing memories of time together with friends and family. Holidays are of huge importance to consumers and it is important that they are absolutely clear what their rights and protections are in this complex area. Therefore, it is important also that they know how their rights and protections will be affected by the final scenarios for exiting the EU.
The aviation and package tourism industry is a massive part of our economy. We believe it is important that the Government do not just consider the impact of Brexit on that industry—I am sure the Minister considers it every day—but that consumers are made aware of what the Government believe that impact will be. It is important that the Government produce a report to be discussed by this Parliament.