The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)

My Lords, I welcome the chance to explain why these regulations are important, why an update to the current framework is necessary and how our approach safeguards holidaymakers while helping the travel industry to prosper. Travel is central to everyday life for millions across the United Kingdom. For many households, a holiday is the biggest non-essential purchase they will make each year. Holidays support well-being and create precious shared moments for family and friends, as well as offering opportunities to discover new places, food and culture in the UK and abroad. The sector is also a major contributor to the economy, accounting for around £58 billion of UK output and supporting more than 1 million jobs. Package holidays are a substantial part of that picture. In 2022 the UK package holiday market was worth around £11 billion, spanning high street agents, airlines, accommodation providers and small tourism firms across the country. Each year roughly 15 million to 20 million people in the UK take a package holiday, often choosing that option for its convenience and the additional protections it provides. The package travel regulations sit at the heart of those consumer protections, and these amendments are designed to help businesses to succeed while protecting holidaymakers. Put simply, the regulations are there to ensure that the package travel market functions properly. They reassure consumers, who often pay well in advance, sometimes many months before travelling, and they give traders a clear set of rules within which to operate. In practice, the framework provides insolvency protection if a firm fails, requires clear pre-contract information, sets out who is responsible when things do not go to plan and limits unexpected price increases after a booking is made. These protections are valued by travellers and reputable operators alike, but they are effective only when they are clear, well understood and proportionate. Experience has shown that some parts of the current regime are not delivering as intended—they can be confusing for consumers and unnecessarily complicated for businesses. Following extensive engagement with industry, consumer bodies and other stakeholders, the Government have identified a set of targeted, practical reforms that will better serve both travellers and traders. First, we will abolish the current category of linked travel arrangements. At present, LTAs sit somewhere between a package and a simple stand-alone booking and require businesses to put insolvency protection in place. However, the evidence is clear that this category is not meeting its original aim. Too often, consumers cannot tell whether protections apply and businesses are left uncertain about the precise obligations they must meet. That lack of clarity helps nobody. It can weaken confidence, drive up disputes and create avoidable costs, particularly for smaller operators. Under these reforms, where a consumer makes bookings that in practical terms look and feel like a package—for example, purchasing multiple travel services through the same trader during a single visit—they will receive package protections. This will bring consumer protections in line with how people reasonably understand their booking. Alongside that, we will ease requirements for businesses that do no more than facilitate a customer to make a second booking within 24 hours. That means, for instance, that domestic tourism businesses can signpost customers to one another without automatically triggering wider regulatory obligations, supporting partnership and growth, while consumers remain protected by wider consumer law. Secondly, reflecting the complex web of relationships involved in delivering a package holiday, we will make new provision to bring greater certainty about refunds and redress where organisers rely on third-party suppliers. Where services are cancelled, organisers will be entitled to receive funds from those third parties within 14 days, aligning organisers’ refund rights with those of consumers. We will also clarify the rules governing organisers’ ability to seek redress from third parties so that financial risk is shared more fairly across the supply chain. For consumers, removing the confusing linked travel arrangements category and setting out more clearly when package protections apply will make the rules easier to navigate. Greater clarity reduces uncertainty and disputes, helps people book with confidence and reinforces trust in the market. When consumers are treated fairly, they are more likely to return, supporting growth and, in turn, the wider economy. Consistent, high-quality protections encourage people to book with confidence, which in turn supports demand and rewards those businesses that comply with the rules. For businesses that sell packages, these proposals simplify compliance by removing unnecessary complications. At the same time, strengthening clarity around redress from third-party suppliers means that costs and liabilities can sit more appropriately with those responsible for failures. That will support better planning, healthier cash flow and more effective collaboration across the sector. Subject to parliamentary approval, the regulations will come into force in April 2027, giving the sector almost a year to prepare for and implement the new arrangements. To conclude, the package travel regulations support a relationship that is both complex and essential, between holidaymakers and the businesses that serve them. Consumers depend on firms to deliver trips that are frequently paid for long before departure and businesses depend on consumer confidence to invest and grow. These regulations make the relationship work by setting out clear rights and duties for both sides. The amendments preserve the central bargain: strong and trusted protections for consumers, alongside a regime that is practical, workable and proportionate for businesses. The reforms demonstrate the Government’s determination to uphold strong consumer protections while stripping away unnecessary red tape, helping travel businesses flourish and supporting growth in every part of the UK. I beg to move.