The UK Government is opposed to European Commission proposals for cross-border protection of holidays under the Package Travel Directive (PTD).
Department for Transport (DfT) head of aviation policy Kate Jennings said the government is committed to a single market in services “but does not feel it would work for the PTD”.
Jennings told an Abta Travel Law Seminar in London yesterday that current EC proposals to revise the Directive were “problematic”.
She said: “Where a [travel] business trades across borders it may require the UK scheme to repatriate and refund EU citizens from any state to any state.
“It’s not clear what the Directive means by ‘establishment’ [in ‘place of establishment’] – it is potentially confusing and widens the breadth and nature of risk.”
Jennings said: “It appears to encourage business migration and ‘protection shopping’ for schemes that do not meet the expectations of UK consumers.”
She added: “We have strong views on the place of establishment. We think some other states have not thought it through to the same level of detail we have, but they are starting to.”
Jennings said the place of establishment of a business was one of “three areas of difficulty” with the current proposals and identified the others as the scope of protection and extent of insolvency provision.
She said: “Whatever the final scope it needs to be clear. Businesses need to know what they are selling and consumers need to know what they are buying. The existing proposals do not quite do that.”
On insolvency provision, she said: “We need an effective scheme, not one that pays out in any circumstances.”
Jennings added: “The directive needs to be future proofed to avoid methods for circumvention.”
And on UK plans for Atol reform and the DfT call for evidence last year, she said: “It made sense to wait until we define what happens next.”
However, Jennings said: “Some things have not changed. We need robust consumer financial protection. We need clarity. We need to reduce the government’s financial exposure [to failures] – the industry should support its own risks.”
Jennings said the DfT would publish a response to the call for evidence on Atol reform and the Department for Business respond on a call for evidence on the PTD proposals before the summer recess at Westminster.
She added: “We anticipate the PTD will be agreed by 2015. Once it is agreed the DfT will consult on the options for implementation and on Atol reform. There will be one consultation.”
The government expects implementation of both by early 2017.