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Civil Aviation Bill

Amendment No. 40 tabled in my name is included in this group. I do not have much to add to what has already been said. However, we ought to know now that Air Travel Trust is approximately £10 million in deficit and is paying out over £300,000 in interest each year. So there is no argument that if it is to continue, it needs to be replenished, and there is a power for the CAA to raise a levy to do that. As the noble Lord, Lord Bradshaw, has pointed out, the clauses will give the Secretary of State the power to make regulations requiring air travel organisations to make contributions to the fund through the CAA, but that is no longer the whole story. If the Bill does only that, it will miss the opportunity to reform a system that no longer reflects the reality of the modern travel world. When ATOL was first established, it covered nearly all leisure air travellers. However, changes in the industry and the way people now make individual arrangements have resulted in a sharp decline in the traditional package holiday that ATOL and the ATTF were designed to insure. So over the intervening years the number of holidaymakers now covered by ATOL has fallen dramatically and is projected to decrease to just 26 per cent by 2007. Put another way, it means that some 84 million trips are made by people travelling without insurance of any kind, although many of them believe that they are in fact insured under this system. By introducing a power for the CAA to raise a levy to replenish the fund, we are probably just maintaining a system that has already lost its relevance for vast numbers of the travelling public, and will continue to do so unabated. All it will achieve is to perpetuate the prevailing misconceptions over the status of our holiday insurance. Unfortunately, as is often the case, the reality of the limited applicability of ATOL is realised only when it is far too late; that is, when people are left stranded in foreign parts, which we have already discussed. The current system has produced an uneven playing field between tour operators and airlines. It creates an incentive for tour operators to de-package their business, which further threatens the viability of the ATOL system. This will continue unless the Government intend to remove all protection. We should consider this alternative carefully; after all, people are already responsible for insuring their homes and their lives. Why should package holidays and air travel be any different? By being devil’s advocate I would say that by removing this artificial protection we could end the confusion that results in so much misery when people realise too late that they are not covered by ATOL and are left stranded abroad without insurance. Either we disband the system altogether—and I am aware that that could be problematic in light of the EU package travel directive—or we pick up the advice of the CAA and introduce what I am prepared to accept would be a £1 levy to start with, although all levies magically increase, which would extend the insurance to all air travellers. As the Bill stands, its provisions fail to address the realities of the problem. Instead they offer a perverse logic, one that would perpetuate a system that is no longer relevant for the vast majority of travellers that it was designed to protect. It is high time that the system was either reformed or dismantled, and at the very least the public should be made aware of its limitations.