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Civil Aviation Bill

That relates to the question of people losing very substantial amounts indeed. My noble friend will recognise that when the situation has implications for third parties and other people, of course we have laws which state that if you or your company go bankrupt we want to define the nature of the obligations obtaining to others and those who are first-line creditors. But this is about individual choice and the individual cost which has to be borne if things go wrong. I am not seeking in any way, shape or form to be harsh on airline passengers—of course not. I concede that the beauty of the scheme put forward by my noble friend is its simplicity. But, equally, issues of principle are at stake. I reiterate that the Government are concerned about the compulsory element, which is obviously the crucial part of the concept of the levy. Even when he is at his most trenchant, my noble friend is always fair. He recognises that the levy would reduce but not eliminate the difference in protection given to package and independent travellers. It would be a partial solution. There would still be a two-tier system as people who assembled their own packages would have cover for their flight but not for loss of accommodation or car hire. So it is not quite the perfect solution it might appear to be at first sight. I recognise that there are problems where travellers are operating with imperfect knowledge and assume that they are protected when they are not. My noble friend was rather dismissive about those who pay by credit card. However, the obvious point is that if two or three people pay for their holiday with a single credit card transaction, normally the cost per person would be somewhere around £1 per package. So the protection offered when people operate privately in such a way is not too far from that offered under the compulsory scheme my noble friend wishes to introduce. My honourable friend the Minister for Aviation recently held meetings with the airlines to discuss how they can make sure that their Internet customers are informed about financial protection. Underlying my noble friend’s amendment is the point that imperfect knowledge has unfortunate consequences. The Government’s argument against the compulsion principle is that the travelling public would be better served if they had full information about the necessity of protection. We have been discussing the questions of how passengers can be better informed and how airlines can improve their efforts to repatriate passengers in the event of insolvency. We are making good progress with regard to information. As to repatriation, British Airways and BMI, as IATA members, will continue their long-standing practice of assisting passengers in the event of the failure of a network carrier. Members of the European Low Fares Airline Association have established a voluntary repatriation scheme whereby they offer passengers left stranded by any failed airline passage back to the UK for a nominal repatriation fee similar to the one that the majority—not all, as I freely recognise—of EU Jet passengers enjoyed this summer. We recognise that improvements can be made to the level of repatriation support and the industry’s commitment to it. The association has agreed that repatriation offers should be open for a period of at least two weeks and that seats would be bookable, subject to availability, on the route in question. We have addressed this issue since Ministers decided in October last year that despite those aspects of the levy which we found attractive, there were countervailing arguments of substance. My noble friend Lord Faulkner mentioned the system of bonds. We asked the CAA to review whether it could be replaced with a less burdensome means of meeting tour operators’ obligations to package holiday makers. Terms of reference for the review were published by the CAA last month and the aim is to identify solutions within about six months. The CAA is writing to key stakeholders this week to seek their views on a number of these issues. We are not standing idly by in the light of the position we adopted in October last year. We are taking measures to ensure that the situation improves. Therefore, the salience of the necessity of the levy reduces. I recognise that all Members of the Committee, some with considerable brevity, have indicated their support for my noble friend, so I am not assuming that my persuasive talents will shortly evince from him a speech of confession that he has been ill-advised all along and that he is not going to pursue this issue further. I ask him to withdraw his amendment. Amendment No. 40, in the name of the noble Lord, Lord Hanningfield, but to which the noble Baroness, Lady Hanham, spoke, would compare the number of leisure air holidaymakers having statutory financial protection in the ATOL scheme with the total number of UK travellers in a 12-month period. The Office for National Statistics publishes annual information on the total number of people departing from the UK by air, and the Civil Aviation Authority regularly publishes statistics on the number of people protected under the ATOL scheme. The Civil Aviation Authority, on behalf of the trustees of the Air Travel Trust, also publishes an annual report detailing the number of people reimbursed or repatriated by the Air Travel Trust. The amendment would oblige the Secretary of State to publish a one-off report, 12 months from the date of the passing of the Act, containing three pieces of information which are already in the public domain. I do not see a great deal of point in putting an obligation on the Secretary of State to produce such a report when these reputable organisations, including the Office for National Statistics—with its enhanced reputation as result of changes in its status in recent weeks—already produce reliable statistics. I hope that the noble Baroness will not press the amendment. I return to more general issues. My noble friend Lord Faulkner will recognise that I indicated the Government’s position during the debate at Second Reading. I recognised then that there was a case on both sides. He has deployed his arguments very effectively this afternoon, but I hope he will recognise that, having taken a decision, we are now acting on it with dispatch to make it realisable and effective, and to improve the previous situation. I hope he feels that his amendment has at least helped to catalyse the general position that work needed to be done in this area. That work is being done.