Your Consumer Travel Rights & The EU Referendum

I want to share with you some key information about the forthcoming EU Referendum and Travel Consumer Rights.

As some of you may be aware, I have already spoken widely in the press, on the radio and TV on this subject matter.

Our country is faced with the single most important choice in several generations.

As I write this, I despair at not only the level of the intelligence and respect within the overall debate, but also in how polarised this debate has become.

This vote is about our society and how we live and work and interact with the world beyond our shores; whatever about the ‘artificiality’ of this forthcoming vote, it will ultimately require a wholesale examination and respect for Consumer opinion and concerns and the need to place those at the heart of all future policy making.

For generations, many people, politicians, civil servants, campaigners, consumers, victims and survivors have struggled and argued for better rights and a recognition that they exist within a world dominated by economic power and the agenda of money.

It is staggering that at this stage of the Campaign, paused quite correctly following the murder of Jo Cox MP, that amongst the managed debate topics on what constitutes the European Union and its benefits, one topic has been absent in any discussion and that is Consumer Rights.

Although this site is dedicated to the Travel Consumer, we must remember that Consumer Rights is not just limited to the holidays we take, but to everything that we purchase and consume.

In the absence of any Consumer Rights information, I am re-producing our information and research which we have gathered the last two months, in order to present to you, the current arguments and possibilities that arise, purely from a Travel Consumer perspective.

There are many who have insisted that we take a balanced approach to this debate and we believe that we have dutifully complied, but, it should be remembered by all, that in order to present that ‘balance’ you have to present alternate facts, points of view and possibilities.

We have been repeatedly asked to state our definitive point of view on in or out and we have resisted, despite the fact that we strongly advocate Consumer possibilities in Westminster, Europe and within the broader International Community, on the basis that we have wanted to wait to hear all the arguments.

However, On the evening of Sunday 19 June 2016, we shall present our definitive opinion and recommendation to Consumers on what we think they should consider when they come to vote on Thursday 23 June 2016.

I shall begin by presenting some statistics.

Several months ago we spoke to our panel of Travel Consumers (2,500 – these are people who have expressed a strong interest in travel related issues and we consult with them on a wide range of issues)

Some Statistics:

We began by asking them how they intended to vote in the forthcoming EU Referendum:

  1. 48% indicated they would vote Leave;
  2. 41% indicated that they would vote to stay in the EU;
  3. 11% indicated ‘don’t know’ ‘not vote’ ‘unsure’;

As we have seen throughout the EU Referendum Campaign, those positions have changed repeatedly and we would simply comment that it would appear that the ‘don’t knows’ may hold the key to the outcome.

We considered however that it was important to explore further how people understood the effect of the vote on their Travel Consumer Rights. We decided to take this approach because we felt several months ago, that the EU Referendum debate would fail to deliver on fact and we wanted to understand how Consumers would react to new information.

Therefore, to those stating an intention to vote leave, we asked the following questions: 

Were they aware that a ‘brexit’ could mean they could pay more for air fares or lose valuable Travel Consumer Rights (we listed a number of key areas that could potentially be affected)? 

    1. 51% said ‘Yes’;
    2. 49% said ‘No’.

In truth, we were surprised by the high number of those indicating ‘Yes’ because this potentially indicated that they were ‘informed consumers’ or perhaps that they believed that such Rights would be re-captured by a newly independent Westminster parliament.

That said, nearly 50% who initially indicated an intention to vote leave were clearly not aware that they could potentially lose some of those Travel Rights.

With this new-found information, we then asked the same ‘vote leave’ group a final question: 

Now that you are aware that a potential ‘brexit could affects your rights, would this change your mind on how you vote? 

    1. 23% said, ‘Yes’, they would vote to stay;
    2. 34% said, ‘No’, but they indicated that they do now have concerns about their Consumer Rights;
    3. 42% said, ‘No’, this knowledge will have no impact on them.

It was interesting to see how many would change their vote, but it was even more interesting to read that 34% who indicated that they would not change their vote, presumably for other ‘weightier’ reasons, now had concerns about their Consumer Rights. We did not expect this and therefore were unable to explore this further, but, out of all the returns on this part of the survey, this was the most interesting and it confirmed what we believed then and believe now; Consumer Rights information is the poor relation in this debate and is presently leading to Citizens not being presented with facts that could inform them differently about their choice. 

Current Travel Consumer Regulations:

We then decided to deal with and look at the current EU Regulation that affects Travel.

We must put this into context. Prior to 1990, there was no real Consumer Protection for holidaymakers.

When Industry and indeed some politicians speak of Consumer Protections, they simply refer to Consumer Financial Protection. Whilst this form of protection is valuable, it does not reveal the whole picture of what needs to be protected.

We say every part of the Consumer/Travel Industry transaction needs to be protected; in 1990 the first of Travel Consumer protections was introduced – The Package Travel Directive.

It is important to understand how Europe works and how its laws are made. Through me, this Organisation fully engages with the law making Consultation and process in Brussels, which is ably supported by the Civil Servants and Politicians of each Member State right up to the final decision to pass EU Legislation.

So, to summarise:

Regulations = Laws that are applied automatically across all Member States – there is no need for further legislation by any Member States Parliament;

Directives = These set out goals to be achieved in Law – Member States create laws to deliver those goals.

In each scenario, there is an exhaustive roadmap in which a wide cohort is consulted, along with Member State governments and these governments vote to accept or reject a particular law.

You may ask, why do we have to create so many laws – the answer is simple; the EU – at the request of its Members is tasked to create a ‘Single Market’. This is a Market with no trade barriers and is also designed to make sure that we as Consumers receive a good standard or product and rights associated with that product.

The EU Commission made this statement on what the ‘Single Market’ means to Consumers:

“The single market is not exclusively an economic project - its aim is also to improve human health, the environment and the safety of Europeans”.

You may also find helpful the range of Radio 4 Programmes that examine and discuss the nature of the EU and in particular how laws are made.

Listed below are the current EU Regulations that provide a wide range of Travel Rights:

  1. Package Travel Directive (1990)Package Travel Regulations 1992 -> New Directive now published but question mark over new Regulations due to be implemented in 2018?
  2. EC Regulation 261/2004 – Air Passenger Rights – About to be amended (Montreal Conv?);
  3. EU Regulation 1177/2010 – Sea/Inland Waterways Rights;
  4. EC Regulation 1371/2007 – Rail Passenger Rights – Approaching full implementation (Delay Repay)?
  5. EU Regulation 181/2011 – Coach Passenger Rights;
  6. EC Regulation 216/2008 – Common Rules on Civil Aviation;
  7. EU Regulation 376/2014 – Reporting Civil Aviation incidents;
  8. EC Regulation 1406/2002 – Creation of EMSA -protection of Consumers;
  9. EC Regulation 1107/2006 – Persons of a Reduced Mobility Rights when travelling by air;
  10. EC Directive 2005/29 – Unfair Commercial Practices – Unfair Trading Regulations 2008?
  11. EU Directive 2011/83 – Consumer Rights – Consumer Rights Act 2015.
  12. Here you can find a list and links to all EU Laws that affect Consumers in the ‘Single Market’, including, Food Information, ADR, EU Small Claims Procedure, Cross Border Consumer Protection Cooperation, Food Allergen Labelling, Energy etc

The key questions here are; in the event of an Independent ‘Brexit’ and a potential loss of access to the ‘Single Market’: 

  1. How would the government make up for the automatic loss of the Regulations as they do not sit on the UK Statute books?
  2. How would the government deal with the Consumer Laws imported by Directive – would they be repealed, amended, updated?
  3. How would the government deal with the enforcement Rights attached to any remaining laws?

How has being part of the EU made travelling easier for the Brits?

I will now deal with some key issues and areas under this question.

Remember, prior to 1990, UK Consumers had no protection in travel other than what was offered to them in contract or anything they were able to secure if they raised a case before a Judge at the local County Court.

These are the benefits since 1990:

  • It began with Package Travel Directive in 1990;
  • Prior to that, all Consumer Complaints dealt with under Common Law and in the local County Court, or
  • They were not dealt with at all because of the difficulty of dealing with their complaints within a Foreign Jurisdiction;
    • The development of the Single Market has made the difference;
    • First via the Package Travel Directive (along with a wide range of other Consumer Products/Services);
    • Consumer Financial Protection;
    • Land, Sea, Air – Rights to Care, Service, Disability, Compensation, Refunds;
  • Passing through Airports:
  • The EU Channel – no customs;
  • The EU Channel – Passports (some areas Schengen);
    • Visa-free Travel within EU/EEA;
    • Virtually unrestricted carriage of cigarettes/alcohol for personal use;
    • Open Skies – greater competition – lower fares;
    • Roaming Charges – EC Regulations 531/2012 amended by 2015/2120 – available to all EU Citizens by June 2017;
    • EU Small Claims via your local Court up to €2,000;
    • The latest help for Consumers comes via the EU proposal to create Regulation to enable cross border cooperation for the enforcement of Consumer Protection Laws.

The goals and benefits expressed here represent the delivery of the ‘Single Market’ to Consumers.

It is important to remember that the Lisbon Treaty (Note: Part 1 – Articles 4 & 6), expanded the EU Commissions competency, that is to say that Member States agreed that the Commission will act on their behalf to expand this Market through the creation of laws and conditions to make it work. In addition, the Lisbon Treaty is supported by the Charter of Fundamental Rights of the European Union which provides at Article 38 that all ‘policies shall ensure a high level of Consumer protection’.

Tourism was one such competency and this was to meet the goal of creating a high quality Tourism product throughout Europe; it was agreed that Tourism is one of the major industries of the EU and it should be designed not only to serve the best interests of the Industry but of EU Citizens and to attract inbound tourism to benefit all our economies by setting an European Standard in the delivery of the Tourism product.

Insofar as UK holidaymakers are concerned, it has delivered higher Rights to information, quality, safety and standards and has also delivered a cheaper product and opened up new areas in Europe for Tourism.

It also enables UK Consumers to deal directly with a Travel Company when things go wrong whilst they are travelling and to receive the correct level of assistance and possibly a right to compensation.

How will British Consumers be affected if we leave the EU – what does it mean for the Rights they are now have?

This is the most difficult area to answer definitively because we do not have all the answers.

    • There are however three potential scenarios: 
      • Vote to Remain – No changes to Consumer Rights – Full engagement; Politicians, Campaigners & Consumers can influence development of Rights; 
      • The Full Norway Option – No changes to Consumer Rights – but no engagement – Politicians, Campaigners & Consumers cannot influence changes to those Rights; 
      • A Full Independent ‘Brexit’ – 2 options: 
  • Completely Independent?
  • The automatic loss of EU Regulation unless adopted into UK Law;
  • Directives/Regulation? Could continue but subject to UK Parliament.
  • Question? How does Parliament replace these Rights?
  • Semi-Independent – not Norway?
  • EEA mid-way option?
  • Choices will have to be made!
  • If not adopting all Consumer Rights, how will Consumers be protected?
  • The key point here is how far into the Single Market we will gain access into and what will we be obligated to incorporate into law in order to get some access to that market?

I then tried to balance this analysis by looking at the potential benefits from a totally independent ‘brexit’:

  • So I asked: what would a totally independent ‘Brexit’ look like for Consumer Rights and their travelling experience?
  • I based my analysis on 3 indicators:
    • The desire to make our own laws;
    • Potential Market or Political realities;
    • The ‘So What’ Strategy. 

Leave:

Downside:

Weaker £ means it would be cheaper to come to the UK and this would help the economy through the difficult times

A weaker £ would mean that it would be more expensive for Consumers to holiday abroad

A weaker £ and less travelling abroad would potentially see more Consumers staying at home

More staycations and a greater influx of non-UK tourists could make holidaying in the UK more expensive

A weaker £ could see a benefit for UK transport through the extra demand on staycations

Less demand or a different regulatory or market regime could see transport leaving the UK becoming more expensive

Duty-free' could be restored!

Any benefit from a restored 'Duty-free' could be off-set by duty payable at your destination

We could charge for entry visas thereby raising money for the UK

Visa charges could put people off and could be counter-productive with perhaps UK citizens being charged more for their destination visas

Parliament would be free and galvanised to make stronger laws or to ensure their strong maintenance on Consumer Rights given that powers would be ‘restored’ to Westminster

Parliament may be too occupied with the after-effects of a Brexit and such goals could be put on ice or considerably delayed

The UK may feel freer to offer stronger Foreign Travel Advisories to aid its citizens abroad

The pressure of trying to establish trade treaties may have an impact against advisories that should be robust

Restoration of full customs checks could bring financial benefits to the UK as well as check the flow of contraband

UK citizens would perhaps find limits to what they could bring home - an end to the booze cruise?

The UK could redefine its Ports Security Laws to beef up security

There are already laws in the control of the UK - Single Consolidated Directive - likely no difference as they would end up mirroring our neighbours laws for cooperation

They could get rid of the Air Passenger Duty thereby off-setting any rises in travel costs

Likely they won't because it's a useful excise revenue.

They could counter the Single Market by offering an attractive business proposition for Travel Companies to base themselves in the UK

Unlikely to succeed because there would be 27 countries in the Single Market competing to offer better terms - UK Consumers would end up likely buying from a Single Market based service

They could offer a gold plated Consumer Financial Protection scheme for holidays thereby attracting money into the UK

Very likely to be countered by a pan-European scheme that would compete via the trading rules of the Single Market

The UK could offer a comprehensive ADR scheme for all European claims

The problem with ADR is that it can be restrictive - it would have a problem competing with a simple judicial scheme which can be brought in your home country

What is the potential cost of a ‘brexit’ on a family holiday?

This again is a difficult analysis because on the one-hand there are those who would point to the fall in the price of oil, but for many holidays already bought, prices were fixed some 12-18 months before that purchase. Nonetheless, I have factored in that issue and then considered the effect of exchange rates, different ‘competition’ models taking advantage of the UK market, visa charges, increases in holiday costs due to currency fluctuations, a change in the limit to a surcharge you would have to pay post booking and considered that overall, a 10% increase would be a reasonable assessment of where costs would lay:

  • I then examined the average Cost of a Holiday?
  • Average cost per person - £850;
  • Family (2 Adults/2 Children) less a free child place = £2550;
  • Assume my estimate of 10% extra charge = £255;
  • Then there is a need to consider the spending money that our family may take with them. I have assumed that they take an average of £1,000 spending money – I have again assumed a higher currency costs & cost of living at their destination and settled this also at 10% = a further £100;
    • This means that our family will have to account for £1,100 for spending money;
  • Potentially means that their holiday will cost an extra £355;
  • We should also factor in the ‘what if’, If the holiday goes wrong – there will potentially be no laws to protect them = additional losses and difficulty potentially to pursue compensation.

All too often commentators forget that they are dealing with ordinary working people often with a limited income; all too often politicians and commentators claim that they are acting in the interests of working people.

These are people who work hard for 50 weeks of the year for that precious 2 weeks; in some cases, people save for 2/3 years before they travel or take out loans they can ill afford! 

  • In short:
  • Consumers currently have a great deal of Travel Freedoms & Rights
  • They are currently being asked between choosing:
    • No change to those Rights or
    • Uncertainty as to the Future of those Rights;
  • Travel Consumer Rights is but one aspect of the decision that Consumers/Citizens will have to make;
  • Politicians have failed to set out what they will do – no matter which side of the fence they sit on!
  • We have asked each side what they intend to do to preserve these important Rights:

 

To date, no response has been received from any of the Campaigns.

Would you still be able to use your European Health Insurance Card (EHIC) card abroad?

This is an important question because it is a benefit that we all enjoy should we need medical treatment when we are travelling in EU countries. Here are the key points:

  • The card is a scheme created by the EEA (European Economic Area) and is co-joined by the EU;
  • The EEA is made up of EU & non-EU Member States;
  • The EEA incorporate the 4 EU freedoms – Movement – Goods, Services, Persons & Capital;
  • Excludes responsibility for: Agriculture, Fishing, Customs, Common Trade Policy, Foreign & Security, Justice, Home affairs, Taxation, Economics, Monetary Unions;
  • To operate in the EEA it appears you have to adopt the 4 EU Freedoms;
  • EHIC entitles people to free or low cost treatment in the EEA area;
  • Unlikely to change unless through negotiation, we refuse to accept the Free Movement of Persons;
  • In that case I am assuming that UK Consumers would be faced in having to purchase a more comprehensive Travel Insurance police to adapt to different market areas and I suspect that this would mean a higher cost for this product.

Conclusion:

As you can see, this is a complex area and one in which each of the Campaigns should have engaged in.

But remember, Travel is not the only Consumer product and there is a raft of Consumer protections out there for each and every product and area.

I hope this guide will help you set the issues in context, no matter which way you intend to vote.

We shall state our position on 19 June when we are confident that no further information is forthcoming to help Travel Consumers.

Tags: EU Referendum European EU Regulation EU Commission EU Parliament Consumer Rights

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