It is a clear recognition that it is a total deficiency in the Bill because it is the nub of the whole debate and has been the subject of much debate for quite some time. But let us be quite clear, forthright and honest about the situation in relation to Exchequer funds. This has been quite clearly answered by me in this House and outside it. The Deputy says he is not being irresponsible in looking for Exchequer funds here. Is the Exchequer to be the bailer out of every commercial business that goes bang, this week, next week, last year or whenever? We must remember that we are talking about a commercial enterprise where people book holidays and pay their money, to travel agents and tour operators and their plane tickets and hotels are booked in return. It is a purely commercial situation. When one operator collapses is the Exchequer to be called in at any particular time to bail them out because people have lost money?
The Deputy knows as well as I do what the situation is. While I recognise and share the concern of the Deputy opposite for the people who have lost their hard earned savings in this type of situation — many families have been disappointed and I know them as well because they are in my own town — and also share the same concern for the staff who lost their jobs in the situation, let us not try to hide behind a smokescreen. Let us be factual and approach the thing in a serious, responsible manner. I suggest that the Deputy is purely and simply exercising political expediency by rushing in a Bill here that has been taken from a British Bill, that has been edited to some extent, poorly edited when one goes down through the various sections of the Bill which I hope to comment on in the course of my deliberations. It is purely a political exercise and, I would suggest, an abuse of Private Members' Time, to bring in a Bill that is so deficient and contradictory in many forms and which would serve one purpose only, to solve a problem. The Deputy knows that restrospective legislation is frowned upon, not alone by this Parliament but indeed by every other House of Parliament, except for very obvious, specific reasons. I suggest that the Deputy's approach to the whole situation is totally dishonest. I do not wish to decry the Deputy's efforts but I am forthright, I am straight and I say what I mean. The provisions of this Bill are incompatible. How would one reconcile the exhaustion of the proposed fund to compensate clients of Bray Travel with providing protection for future holidaymakers against further failures in the trade? The wording of the Bill does in itself suggest that there is some other fund there, a reserve fund. This is why I say it is taken purely and simply from a British Bill, but in Britain other measures are in existence. Quite clearly this Bill has been rushed in here and it has not been fully thought out at all.
I have already explained that Exchequer involvement in compensating Bray Travel clients is out of the question and have given cogent reasons in justification for that line. The present measure has the effect of raising expectations among people who, having striven hard to save for a holiday, had their efforts frustrated and lost substantial moneys in the process. It must be obvious that such expectations are not going to be fully realised and the sponsor's effort in that respect must be deplored.
I believe the bill to follow very closely the lines of the UK Air Travel Reserve Fund Act of 1975. I do not accept that the slavish application of British legislation here is necessarily the right course of action; we have an Irish situation and we should try to bring some originality into the way we deal with it.
The trade here has operated regulation-free for a long number of years. Other countries, I would say Germany off the top of my head, still operate regulation-free. One would have thought that this problem only originated in the last year or two, hearing Deputy Hegarty refer to the measures taken under the Air Travel Reserve Fund Act of 1975. I do not play cheap politics in this House but when I see people coming in with a rushed Bill like this it behoves me to ask who were in power here when the largest collapse in Britain occurred at a time when it was necessary to rush in that legislation in a very different set of circumstances. But I do not play politics with this type of situation.
As I already said, the trade has operated regulation-free for a long number of years. That period would have been better used if the professionalism and concern for the customer which the trade has endeavoured to project in its glossy publications had been matched by concrete and effective actions to protect the consumer. Unfortunately, such measures as were instituted by the trade proved inadequate to deal with a major collapse.
The recent collapse of Bray Travel Limited has highlighted the need for effective protection of the travelling public and I am satisfied that this requires the establishment of a scheme on the basis of law. As I indicated in the Dáil on 18 December 1980, the day of the Bray collapse, and more recently in response to a number of Parliamentary Questions, my Department has been looking at what can be done by way of legislation. The preparation of an outline scheme is, as I told this House not very long ago, well advanced and I will be seeking Government approval at an early date for the introduction of a package of appropriate legislative measures.
The basic feature of the Bill being presented here is the provision for the establishment of a travel fund to guarantee customers against loss arising from the failure of travel organisers. The establishment of such a fund would provide some measure of protection to customers of the travel trade and the Bill under preparation in my Department will incorporate a provision along somewhat similar lines. However, a fund of the kind involved, while providing a safeguard against losses, would not in any way minimise the risk of future failures in the trade. In the wake of the Bray Travel collapse I believe that the public interest requires a broader approach involving not only guarantees to the public against possible financial loss but measures designed specifically to govern and regulate the trade itself with the objective of putting the trade on a proper footing for the future.
It is important in this regard to be aware of the present structure and condition of the Irish travel trade. There are at present some 200 agencies involved, of whom about 20 are major tour organisers. Bray Travel came within the latter category and it is to that category that my Department have been paying most attention since it is through these operators that the great bulk of moneys paid for holidays flows. While I would not wish to generalise as far as the Irish scene is concerned, I think that I can fairly say that it is a common feature of the travel trade both here in Ireland and elsewhere to rely quite heavily on credit. This applies particularly in the valley season when operators have to book aircraft seats, hotel space and other elements of holiday packages for the following peak. Receipts from clients are subsequently used to discharge these credits. In circumstances where bookings fail to materialise for whatever reason, a tour organiser can find himself in a very tight cashflow situation, with consequential risks for the viability of his entire operation. A further complicating factor can be the degree of cut-throat competition between operators and a tendency on the part of some organisers to plan capacity out of all proportion to the demands of the market. Like any other market, the Irish travel scene suffers from these drawbacks, though the degree of the problem naturally varies from operator to operator. These problems have been known to us all in a general way for some time past.
The collapse of Bray Travel has highlighted the need for early action which, in my view, must go much further than the measures proposed in the present Bill. The establishment in isolation of a travel reserve fund to be raised by means of a levy, which the trade would simply pass on to the public, would in no way help to improve the financial state of the trade or raise the fitness criteria or qualifications of new entrants. I do not think it is sufficient simply to provide protection for the public by means of a levy that in the final analysis the public themselves would have to bear. The time has come to subject the trade to the rigours and discipline of licensing and bonding arrangements. The philosophy underlying the measures being prepared in my Department will be aimed at protecting the public by improving the calibre of the trade itself, guaranteeing customers against loss by bonding. Creation of a reserve fund can, in my view, form only one part of an integrated package of measures and I would over a period see that fund operating as a back-up to the organiser's bond and not as a subsidy, as envisaged in this Bill. It will be clear to the House, therefore, that there is a radical difference between the philosophy underlying the present proposal and the broader measures which I will shortly be bringing before the House.
This Bill provides for application of the benefits incorporated therein to contracts performed on or after 1 December 1980. Clients of Bray Travel Limited who lost moneys would, therefore, be entitled to re-imbursement of such losses from the proceeds of the fund to be established under this Bill. This would be likely to raise a number of complications. Firstly, it would take some time to build up the fund to a level that could be regarded as adequate to deal with the failure of a major tour organiser. Retrospective application of the benefits to Bray Travel clients could be expected to exhaust or make serious inroads into the level of the fund and leave little funds available to protect future travellers. Holidaymakers paying into the fund would want to do so to protect their moneys and would, in my view, be strongly critical of the use of their contributions to compensate clients of a previous failure in the trade. This is a serious point to which the sponsors of this Bill have not addressed sufficient thought. The suggestion has been made that the Exchequer should come to the rescue in this situation and the actions taken in the UK in the wake of the Courtline collapse and more recently here in the case of the Irish Trust Bank have been cited as precedents. There were particular circumstances involved in these cases. In the case of the collapse of the Irish Trust Bank the question of credibility in Irish banking institutions was a major consideration in the Government's decision to refund creditors. The measures in question were exceptional and it was made clear at the time that the Government's action did not alter the legal position which is that the Central Bank are not liable as a result of the insolvency of a licensed bank. In the case of Courtline, the UK Government floated an Exchequer loan of £15 million to compensate persons who lost money with Courtline. That decision was taken in the light of a parliamentary statement made by a UK Minister shortly prior to the collapse of Courtline in which the public were told not to have any qualms about booking with Courtline. The loan in question has since been fully repaid to the UK Government. It is quite clear in the Courtline situation that the Minister responsible had stood up in the House of Parliament one month earlier and told the general public. That inferred clear implication for the British Government and they accepted those responsibilities. The situation here is totally different.