Campaigners for a £1 holidaymaker levy have been forced to admit defeat after the House of Lords voted against including it in the Civil Aviation Bill.
Despite support from Conservative peers and widespread lobbying from the industry, an amendment for the levy was defeated by just four votes.
There is now no chance a consumer-paid levy can be added to the Civil Aviation Bill before it becomes law later this year, much to the anger of the Association of British Travel Agents, the Association of Independent Tour Operators and the Federation of Tour Operators.
AITO director Noel Josephides said: “We are very disappointed. The Government should be ashamed of the way this has been handled. It has not won any favours with the travel industry and based much of its argument against the levy on misinformation.”
He added: “It also claimed a levy would unfairly help those holidaymakers who book with financially-questionable companies. That is insulting to the industry. AITO has no confidence in this Government understanding our industry.”
Midconsort Travel Group chief executive Charles Eftichiou said the setback will only add to agents’ confusion about consumer protection and bonding.
“We are very disappointed. We must now wait until there is an outcry when an operator or airline goes bust,” he said.
Federation of Tour Operators director-general Andy Cooper said the Government would continue to be lobbied on the issue. “It is the end of the road regarding the Civil Aviation Bill. But the issue is not dead.
“We must keep reminding the Government and keep educating our politicians about this issue,” Cooper added.
Josephides said the £1 levy would have saved operators a lot of money but experts say the competition among companies offering bonds in the last year has pushed the cost of bonding down to well below £1 per head.
Chris Photi, a bonding expert at White Hart Associates, said: “The Government is trying to sell this on the basis it would be cheaper for bonding costs, but if you actually work it out, they are not much more than a pound anyway.”
James Greenstreet, director of bonding company Bastion Surety, welcomed the ruling. “The £1 levy is fundamentally flawed for managing risk in the market. We feel strongly that the levy is totally the wrong way to go about this.”
The CAA is to publish its report on the replenishment of the Air Travel Trust fund and the reform of ATOL bonding regulations next week. The report was requested by the Government when the £1 levy proposal was omitted from the Civil Aviation Bill last year.
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