My Lords, I beg to move that the Committee considers the draft Package Travel and Linked Travel Arrangements Regulations 2018, which were laid before the House on 16 April. The purpose of the draft regulations is to update and replace existing legislation by implementing the requirements set out by the 2015 European package travel directive. It may be helpful to give some background on consumer protection and the importance of consumer rights before I explain the changes in detail.
In this country, we have a long history of delivering high standards and strong protection for consumers. That history extends into our time as a member of the EU, where we have been influential in developing the EU’s consumer protections. Indeed, the current framework reflects UK priorities. But in some areas, the UK has chosen to go further, providing additional protection for British consumers. For instance, through the Consumer Rights Act, we regulated for the supply of digital content, ensuring that there are clear rights for people buying things such as movies and music online. As e-commerce continues to grow, those protections give shoppers the peace of mind that they need to make a purchase, which is crucial to our prosperity. Household expenditure accounts for around 60% of the UK’s economy, more than a trillion pounds a year. Package holidays form an important part of households’ expenditure. Each household spends an average of £1,200 a year on package holidays, around one-third of their total spending on recreation and culture.
Our recently published impact assessment shows that the new rules we are proposing will protect an extra 10 million UK package holiday trips, bringing those who mix and match their holidays in line with those who opt for traditional prearranged combinations. Last summer we consulted on the idea of a light-touch approach to implementation of these proposals. We published the Government’s response to the consultation and the impact assessment last month. The EU’s deadline for transposing the requirements of the EU package travel directive into UK law was this January, with a further six months for these requirements to be brought into force. The travel industry is aware that we are copying out the directive, which has been in the public domain since 2015. We recognise the concerns raised that the Government are late in implementing the regulations. Therefore, we have engaged intensively in advance of laying the regulations to help the industry adjust, and will continue to work with businesses on implementation after the regulations come into force.
Package travel regulations have provided protection to travellers for many years, but they were introduced in 1992, and much has changed since then. Technical innovations have opened up new ways of buying and selling holidays. This has provided increased choice and flexibility in the travel market, allowing consumers to mix and match components of a holiday to suit their particular needs However, such rapid change has left new methods of packaging holidays outside the scope of the current regulations. The 2018 package travel regulations will address this gap. We are ensuring that people who book package holidays through travel
sites online enjoy the same rights as those who book with a traditional travel agent. The draft regulations will introduce a broader definition of package holidays to capture modern booking models.
The regulations will also introduce a new concept of linked travel arrangements, or LTAs. These provide some level of protection for looser combinations of travel services than exist in a package holiday, so they have fewer requirements. We are also making it a requirement that package travellers are given clearer information on what they are agreeing to and what their rights are. In addition, we have strengthened the insolvency protection so that consumers can get their money back or be returned home if the company that arranged a package goes bust.
The United Kingdom is required to designate central contact points to supervise UK-established package organisers that are selling into other EU member states. After careful consideration, we have agreed that from July, the Civil Aviation Authority will take on that role. With regard to the enforcement of the regulations, the arrangements will be as before, with the responsibilities being taken on by either the Civil Aviation Authority or trading standards.
The department’s impact assessment, which was published alongside the regulations, estimates a net cost to business of around £100 million a year. However, these changes will level the regulatory environment for all businesses selling travel packages. Businesses which have been providing packages not previously covered will now be subject to the full range of protections under the 2018 package travel regulations, including the organiser taking on liability for all the services provided under the contract and providing cover against insolvency.
All these measures will help to ensure that on the day we leave the EU, we will maintain our high standards of consumer protection, delivering the stability and continuity that consumers need. It is also our objective to have effective protection in place for consumers purchasing goods and services cross-border in the future. The way that consumer protection will apply when buying across borders is still a matter for negotiation, but we are determined to co-operate closely with our EU partners on matters of consumer protection.
The regulations will enhance protections for consumers when buying package holidays either through the traditional method or online, and they have been welcomed as a positive step by the travel industry. Throughout the consultation process and the development of policy, we have sought to strike a balance between increased protection for consumers and minimised burdens on businesses. I commend the regulations to the Committee.