Civil Aviation Bill (Third Reading)
Lord Faulkner of Worcester:
My Lords, I too am delighted to add my voice in support of this amendment, which is an improvement on the one I moved in Committee. Indeed, our debate at this stage is a little like an action replay of the Committee stage where everyone who spoke, with the exception of my noble friend on the Front Bench, was strongly in support of the principle of the levy. The amendment of the noble Lord, Lord Bradshaw, is an improvement on mine because it is more flexible. It makes it clear that if the fund builds up and is not drawn on, there is no need to go on collecting the levy indefinitely, so allowing the fund to reach absurd proportions.
My Lords, I too am delighted to add my voice in support of this amendment, which is an improvement on the one I moved in Committee. Indeed, our debate at this stage is a little like an action replay of the Committee stage where everyone who spoke, with the exception of my noble friend on the Front Bench, was strongly in support of the principle of the levy. The amendment of the noble Lord, Lord Bradshaw, is an improvement on mine because it is more flexible. It makes it clear that if the fund builds up and is not drawn on, there is no need to go on collecting the levy indefinitely, so allowing the fund to reach absurd proportions.
This is the right thing to do because it would restore to some extent a measure of fair competition between the reputable travel trade, which is required to operate its own bonding and licensing regime, and the airline operators which offer their customers no such comparable protection. Like the noble Lord, Lord Bradshaw, my noble friend and the noble Baroness, Lady Hanham, I have struggled to understand the logic behind the Government's decision to oppose the CAA's proposal.
I checked to see how this issue was covered when the Civil Aviation Bill was debated in the other place. But this matter was not properly debated. Indeed, as the noble Lord, Lord Bradshaw, said, the most thoughtful contribution on the subject of a levy from the Commons came from the Select Committee, which produced a very powerful and unanimous report.
You cannot argue that this would place a regulatory burden on the travel business. The travel industry itself would save between £80 million and £100 million a year through switching from the existing bond to a levy. It would also add a financial dynamic to the marketplace as the cost of ATOL bonding places a huge burden on new travel companies that are trying to set up. Also, as the noble Baroness, Lady Hanham, pointed out, it would add almost nothing to the cost of air travel. Already the airlines are piling on to their passengers surcharge after surcharge.
At the weekend I did a little test purchasing on the internet. I investigated the cost of flights to and from Malaga with easyJet from Luton. The air fares for flights out and back next week came to £192.48 per person. On top of that "taxes and charges" were added, amounting to £9.50. The company then said, very kindly I thought:
"Great value travel insurance from Mondial has been added automatically to your basket for your convenience and peace of mind. We strongly advise you not to travel without travel insurance".
I think that this is called inertia selling. You have to remove the offer from your booking. How much was it? Was it £1? No, it was £10, which is £1 more than it was when I last looked at the site on 8 March. Then, when you come to pay, the great credit card scam slips in. I looked in vain for the suggested message which my noble friend Lord Davies said in his letter to me of 10 January, for which I thank him, the Government were encouraging UK airlines to incorporate in their booking process, making the point that payment by credit card would provide some financial protection. Not a word did I see on the easyJet booking page. Instead, it stated:
"Credit cards incur a percentage charge of 1.95% of the total amount payable, with a minimum charge of £4.95".
Even a debit card transaction carries a surcharge of £1 on the easyJet site.
Lord Berkeley:
My Lords, does my noble friend agree that the cost of booking by phone, where you have to hang on for two hours, is probably about equal to those charges?
Lord Faulkner of Worcester:
Or even more, my Lords. Indeed, other airline booking sites such as Ryanair have introduced the novelty of a charge of £5 for a bag weighing 20 kilograms on its flights, and again not a word about financial protection if you use a credit card to pay.
There is a huge problem of perception here, as other speakers have said. People book their cheap airline tickets in the belief that they are protected by some sort of fund which will bring them home if the airline collapses, as EUjet did last year. Back in 1997, the ATOL scheme protected almost every traveller—some 98 per cent. By the end of last year the proportion had fallen to a little over half. Only last week the travel trade press reported that some tour operators, those with their own airlines, are looking at ways of pulling out of the ATOL scheme following the judicial review decision in January. That is more bad news for consumer protection.
By continuing to resist the CAA proposal for the £1 levy, I am afraid that the Government are storing up huge problems for themselves. We have not had the last airline collapse, and I really do not want my noble friend to have to come before the House and explain why tens of thousands of British holiday-makers are stranded abroad because no fund was in place to bring them home when their airline went bust. It cannot make sense for the airlines to continue to exploit their passengers who fall for their insurance schemes and credit card rip-offs while at the same time deny reasonable protection to everyone who flies from a British airport with a simple £1 levy. I am very pleased indeed to support the amendment.
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Lord Faulkner of Worcester:
My Lords, I refer to a practical point. It is presumably the case that if the House carries the amendment tonight, it will have to be considered in the other place and the Government will have the opportunity to bring back to us an improved amendment, which I am sure, judging by the mood of this House, the whole House would be willing to accept.
© Lords Hansard 28 March 2006