Examination of Witnesses (Questions 96-99)
Mr Gareth Thomas, Mr Kevin Davis and Ms Berenice
Napier
18 OCTOBER 2007
Q96 Chairman: Welcome to you all, and thank
you for coming. As you know, we are considering the Commission's
proposal to replace the Directive relating to timeshare and related
holiday products. We have heard from representatives of industry,
and so your evidence about the Government's views on the Commission
proposals will help us put that evidence into context. I think
you are aware of the housekeeping points but, just for the record,
we have an hour until 11 o'clock. The session is open to the public
and it will be recorded for broadcasting or broadcasting. A transcript
is taken of your evidence and that is put on the public record
in printed form and on the parliamentary website. Your office
will be sent a copy of that evidence within a few days. If you
do have changes you wish to make for accuracy, please make sure
that is done as quickly as possible. If we do not get through
the full programme during the hour and/or you want to submit supplementary
evidence, that is always most welcome to the Committee. You are
very welcome to send in anything else that you feel you have somehow
glossed over or not got through to us at a later date. For the
record, could you start by stating your name, official title and
those of your officials and, if you wish, after that you are very
welcome to make a short opening statement. Otherwise we will go
straight on to the questions. Thank you once again for coming.
Mr Thomas: Baroness Thomas, thank you
very much. My name is Gareth Thomas. I am the Minister for Consumer
Affairs. Kevin Davis to my right is Senior Policy Adviser on Timeshares
within the Department of Business and Enterprise. On my left is
Berenice Napier, who is also a senior official working on timeshares
in the Department for business and enterprise. I do not plan to
make an opening statement and I am very happy to go straight into
your questions.
Q97Chairman: The first question concerns the
UK's role in reviewing the 1994 Timeshare Directive. Both the
Government's explanatory memorandum to Parliament and its recent
briefing to MPs highlighted lobbying by the UK Government as being
an important part of the process leading up to the publication
of the new Directive. Could you outline what has driven the Government
in this lobbying process, including the key issues on which you
have focused, and how successful you feel that the Government
has been so far? I ask that in the context of the fact that citizens
of the UK are very important in terms of this particular timeshare
proposal because so many of them are Britons.
Mr Thomas: Indeed, Baroness Thomas. We
think that the Directive has been a success to date. It has seen
the end of the worst excesses in the timeshare industry from the
Eighties and Nineties, which members of the Committee will be
very familiar with. What has happened since the Directive took
effect is that a number of new timeshare products have emerged
which are not currently covered by the existing Directive and,
unfortunately, a number of other products where rogues and criminals
are operating and where scams are taking place and which we want
to bring under the scope of a revised Timeshare Directive to try
and eliminate those practices. There are three particular areas,
if I may. Firstly, just around definitions, the current Timeshare
Directive in our view needs to be extended to include non-fixed
accommodation, so cruises, boats and yachts. We think the Directive
needs to be extended to cover holiday clubs. These are essentially
long-term discount opportunities that are touted at people in
similar situations to timeshares, while they are abroad, often
using very high-pressure techniques, and often involving substantial
sums of money—anything from £3,000 to £20,000
on occasion. Lastly, we want to bring resale contracts into the
process as well. How successful have we been? We were probably
the lead nation pushing for a revised Directive. The Commission
and indeed other Member States all accept that the definitions
need to be revised and indeed that holiday clubs and resale agents
need to be brought within the terms of the Directive. We are obviously
continuing to discuss the details of those areas but we think
we have been reasonably successful to date in making our case
for change. We are expecting an update at the next Competitiveness
Council and we hope that we will be able to complete agreement
next year on a revised Directive with a view to implementation
beginning in 2009.
Chairman: That was very concise. Thank you.
Q98 Baroness Morgan of Huyton: You
have partly covered the first question I was going to ask, which
was related to holiday clubs. A lot of the concern we have had
in the end has related to holiday clubs. I just want to push you
a little bit further on that. You are sure that we are right to
try cover that in the one Directive rather than to tackle it separately?
Mr Thomas: I think so. I think there
are a whole series of similarities between the way in which holiday
clubs are sold and the way in which timeshares are sold. They
often take place abroad. With holiday clubs we are seeing very
high-pressure sales techniques used, hugely exaggerated discounts
on occasion, and this was what we saw in the timeshare industry
during the Eighties and Nineties. The Directive has helped to
eliminate those and we think application of some of the particular
requirements under the Timeshare Directive will help to eliminate
the same practices under holiday clubs.
Q99 Baroness Morgan of Huyton: The
other thing I wanted to ask you was about the minimum period.
Obviously, at the moment the suggestion is that contracts of one
year and over would be covered by the Directive. At the moment
it is three years. One of the things that we were concerned about
was whether or not there should be any minimum period because,
in a sense, whatever period you set, there will then be a loophole
that people are going to use. Where is your thinking around that?
Mr Thomas: Our sense is that the risk
connected to any agreement that is less than 12 months will be
substantially less than agreements over the one-year period. We
also, frankly, have a concern that, if we were to have no minimum
period, you would catch things like package holidays under this
Directive, which we do not think would be appropriate as they
are a substantially different product and the levels of abuse
are simply not there in the same way. We think the extension down
from three years to one year is appropriate. There have been problems
with some of the so-called trial packs that have been on offer
and we think lowering it to one year will help to deal with those
particular problems but going below that I think would just be
a step too far.
|
