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Air Travel Organisers’ Licensing

On the last point, to the best of my knowledge, there are no figures, and I suspect that, by their nature, it would be difficult to find any accurate figures. However, there is one benefit. The hon. Gentleman talks about the north Atlantic route, on which the two main carriers are British Airways and Virgin. At the moment, they have both voluntarily signed up, so their passengers have the protections. They have done that simply because they want to give such protection to their customers, and I pay tribute to them for doing so voluntarily.

As the hon. Gentleman rightly says, the start of the advertising campaign is intended to coincide with the Boxing day bank holiday. He and I are familiar with the huge number of adverts that traditionally emanate immediately after breakfast on that day.

On whether the CAA will consult the industry, I have no doubt that it will. The CAA wants a focused system of advertising that gets across the message. It is open, as the Government are, to views, opinions and recommendations that will help it come up with the most informative and best advertising, and with maximum coverage for their message.

I am not sure that I altogether have the same faith as the hon. Gentleman in human nature. Although, to the best of my knowledge, no figures can prove or disprove this, I suspect that significantly more people do not bother to get health insurance to go across the Atlantic than either of us might think, particularly those who go for only a short period and try to wing it, believing that nothing will happen to them. However, that is a slightly different point.

Let me now move on to the European angle that the report covered. The Committee called for a clearer distinction between the consumer protection and the repatriation functions of ATOL. Much depends, however, on what happens at the European level with the planned reforms of the package travel directive. The ATOL scheme implements in part the PTD requirement for insolvency protection for consumers. We expect the Commission to announce its reform proposals in spring 2013, and the Government will consult on what position the UK should take. The form of the Commission’s proposals will help determine how we implement further changes to the ATOL scheme, so we will not consult on the new ATOL regulations until the Commission has announced its proposals, because, as both the hon.

Lady and the hon. Member for Poplar and Limehouse will accept, it would be rather pointless to put the cart before the horse.

The scheme is financed by the Air Travel Trust Fund. For historic reasons, the ATTF has a deficit and requires a commercial borrowing facility, backed by my Department, of up to £20 million. The introduction of the ATOL protection contribution and the increased number of protected passengers have, thanks to our recent reforms, brought more money into the fund, and the deficit now is on track to being eliminated in the next year or so. That presents an opportunity to reform the finances of the ATOL scheme.

The Government will consider broader changes to the scheme and invite comments on its funding and management to ensure its continued effectiveness. Our aim is to ensure that the scheme is equitable for consumers, the travel industry and the taxpayer.

The hon. Lady raised a number of matters during her contribution. On some, for the reasons that she is aware of and that I am acutely aware of, I will have to write to her to give her the answers. She asked whether airlines and tour operators based in other countries will be covered by the scheme. All sales of package holidays in the EU are covered by the protections in the PTD, but under EU law we cannot require airlines or tour operators established in a European economic area state, other than in the UK, to have an ATOL licence to protect sales of flight plus holidays. That is why we want to examine the Commission’s proposed reforms to the PTD before consulting on any new ATOL regulations, as that might extend protection to all or some flight plus type holidays. We want to understand the impact on UK airlines and other businesses as part of that consultation, and, as I say, we will engage in that once the Commission has published its proposals.

The hon. Lady also asked about the discussions on travel insurance between the EU and the Government. All I can say is that they are ongoing. The most appropriate time to discuss them is within the whole consultation process on the PTD in due course next year.

In conclusion, as might be clear by now, ATOL reform is not a simple process, but at each step of the way, the Government have acted to create an effective and financially self-sustaining scheme. To ensure effective protection for travellers and holidaymakers, the Government have increased the extent of coverage, improved consumer clarity and moved to bring more holidays into the scope of the ATOL scheme. We shall keep the principle of effective protection in mind as we consider further changes to the ATOL scheme in the near future.

Once again, I thank the Transport Committee for its constructive comments and I am glad to have had the opportunity to debate this important issue. Again, I offer my sincere and deepest apologies to the members of the Committee for the position that I put them in at the beginning of the debate.