Comment: Some detail to fill the Atol reform plans void

Comment: Some detail to fill the Atol reform plans void

 We learned something of the government’s intentions with the proposed flight-plus Atol this week - though not much - when the civil servant responsible for drafting the regulatory changes and pending consultation, Department for Transport head of aviation policy implementation Kate Jennings, appeared at an Abta law seminar.

We learned rather more of the tensions over flight plus in the trade, which have become more raw - certainly in public - as the changes move nearer. The ridiculous four-month hiatus between the DfT announcement and a sight of the detailed proposals might have been designed to foment this tension. That is certainly what is has done. Nature abhors a vacuum and various folk have filled it.

‘The devil is in the detail’, of course, and that is what Jennings would not - could not - discuss. She hoped the consultation document would have appeared already - it is obviously completed, but awaits ministerial sign off. It should be out in June. Till then we’re in the dark.

So what did we learn? The consultation will clarify the position on liability for VAT - “there is nothing in the proposals that would make flight plus Atol holders liable” and “will include paragraphs on that”. Whether we get the signed declaration from Customs and Revenue that some appear to want is another matter. It seems unlikely.

The DfT holds the same view as the CAA - not a surprise - that flight plus is merely “a sticking plaster” and more change must follow. But fundamentally this must wait for Brussels, so we’re talking 2015 at best.

The government is upfront about one of the two core reasons for the plaster - its desire to get the Air Travel Trust fund off its books - no dissembling there. The other remains the need to protect consumers - who “pay upfront for services they do not receive for months and might be stranded overseas” - hence repatriation and refunds.

The consultation will not be on the principles of consumer protection, Atol funding, regulation or flight plus - “we‘ve already consulted on the principles” - but on the detail of implementation. My guess is the civil servants who scour the industry submissions in late September will strike through anything that strays from this.

However, it is hard to see the DfT hitting the deadline it has set for implementation even by ignoring much of what some industry figures appear set on submitting. When asked about the promised January start date for flight plus, Jennings’ reply was interesting. “It’s our intention the legislation be in place in January,” she said. An intention is not the same thing as an occurrence.

I intended to write a comment on fight plus on Tuesday, but here we are. Having the legislation in place is not the same as having it in operation, either.  Two of the most striking contributions on the issue came from others at the Abta seminar, one of them not in the same session and not even on the same day.

Speaking alongside Jennings, Thomas Cook director of government affairs Andy Cooper said: “We do not want means of avoidance . . . We like anti-avoidance measures - strong and effective measures.” So the big two want enforcement and, in Air Travel Trust fund terms, they pay the piper.

Addressing the seminar the following day, lawyer Peter Stewart of Field Fisher Waterhouse, raised an argument that initially surprised me. “You would think the sole reason for these regulations was to deal with people acting as agents for the consumer,” he said, and went on to demolish any legal basis for a challenge to this way of doing business.

The proposals do not appear set up to do this and, if they were, would almost certainly fail for the reasons Stewart outlined. Rather, it appears the DfT has simply acknowledged the fact that retailers can and do work in this way, that more may do so as a result of the changes and that they will have to comply with existing consumer protection laws.

As a rehearsal of a future argument before a judge it was masterful, however, and included the kernel of an argument that might promise a repeat of the hours of fun we have all had with “what constitutes a package”. At one point, Stewart suggested “[travel] web companies are not really travel companies at all, they are more like search engines”.

Ah, what constitutes a travel company? The possibilities - does it matter how the firm describes itself? What if a firm is an Abta member but only an affiliate marketer of travel supplied by others? The lawyers have seen the future and it’s contentious.

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