Lord Mitchell
Member of the House of Lords · Labour · United Kingdom
“In those days, no one quite understood the long-term dangers of radiation, and protection was rudimentary. For him, it was fatal. In 1998, he was diagnosed with acute myeloid leukaemia, which he knew was terminal. He told me, in his usual blunt way, “I know how this story ends and it is not pretty.”
“My Lords, on 9 October 2000, my parents-in-law, Jack and Ruth Lowy, committed joint suicide. He was dying and she had decided to accompany him on this last journey. Jack was born in Bratislava in what was then Czechoslovakia. The family were Jewish and following the events in Munich in 1938, they fled to Philadelphia.”
“My wife in particular sensed that they would carry out their wishes. After all, they were both intelligent people who had carefully thought this through. There was no one to support Jack and no one on hand to help Ruth in what must have been hell for her.”
“I cannot be certain about my mother-in-law’s motivation to join him, but they both knew that his own suicide at home could well run the risk of her being charged with committing a crime as an accomplice. What I do know is that had this Bill been law, she probably would have chosen life.”
“I always felt that the issue of antisemitism on campus did not emanate solely from the students. It also came from the laissez-faire attitude of the faculty.”
“We kept the brief tight, with no references to the Middle East; we judged that there was nothing we could do or say that could make any difference. Where we could definitely make a difference was through reference to our common UK experiences and our heritage. I think we made progress.”
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“In business, the CEO generally takes what they believe is the correct course of action; you make an executive decision and you live and die by the outcome. Often you do not have to persuade your colleagues to back you. The buck stops with you. If you get it right, you get the glory, and if you get it wrong—well, as the CEO of Citibank saw yesterday, you have to fall on your sword. Business is not about 100% success; it is about getting it right more often than getting it wrong. However, politics is a different game. You have to be seen to be infallible. You have to be collegiate—or pretend to be collegiate—you have to take the team with you and you have to live for the moment. In a 24/7 world it is always tomorrow’s headline that matters.”
“We see how a decision to instigate this cull has been taken against the advice of some of the leading scientists of the country. The cull must be the wrong decision, but why do decisions of this nature happen? Why do the politicians so frequently get it wrong? In my opinion, it happens because politicians live in a different world and march to a different drumbeat. It is this disconnect between politicians and scientists that I would like to address today. I am a businessman by background. Indeed, they describe me as a serial entrepreneur—I think that that is a compliment but I am never too sure. Businessmen in general make for lousy politicians and the reasons are not difficult to see.”
“I shall be referring to that 2004 report tomorrow in the debate on Antarctica, in which several noble Lords speaking today will also be speaking—it is a busy two days. However, to my mind today’s report follows on from the initial recommendation that we made back in 2004. I am no longer a member of the Select Committee on Science and Technology. Obviously I did not sit on this investigation but, when I read the report, the word “frustration” screams through, barely concealed—the lament of scientists at not being appreciated by politicians and not being listened to, in some cases until it is too late. Not much has changed. Luckily for us, but unluckily for the badger population of this country—I too will succumb to the temptation—we have a very topical example in front of us today of politicians versus scientists.”
“I will make a plea to the Minister that may sound strange coming from a shadow Minister. The SEIS is a very good scheme. Please leave it in place, and please market the programme seriously so that more potential angels are attracted to invest. The programmes introduced by the Government have been woeful in their level of success. For the most part they have been ill thought through and incompetently implemented. My advice to the Government is to think deeper about projects to help SMEs, to put much more effort into marketing them and, most of all, to give them time to develop.”
“One government initiative that I fully support is the seed enterprise investment scheme introduced by the Chancellor this time last year. I am contemplating investing in various start-up companies, using this structure. It is very tax efficient. However, it seems almost like a state secret. No one I know, and perhaps very few of your Lordships, has ever heard of it. Why has it not been marketed and why does it last for only one year? Schemes of this nature need time to bear fruit. Pulling up the project by its roots after one year to examine whether it is growing is hardly the way to develop a policy geared to providing new investment in new companies. We need business angels to help fund exciting businesses, particularly in my area, which is technology. Using the tax system to help angel investment is an excellent idea.”
“This is a £1.2 billion pot, of which £700 million is supposedly committed to mid-sized companies. It aims to promote alternative and non-traditional channels of finance. I am told by people who are in the know that little has happened. There is also the regional growth fund. Out of £1.4 billion earmarked for this project, only £60 million has been received by business. “Glacial” is a word I used to describe the fund. The enterprise guarantee scheme is also a flagship project. Again, I would like to know how it is progressing. There is also the export enterprise finance guarantee scheme that was launched to fund exports and is directed at SMEs. It is all good stuff, but by June of this year it had allocated only £3 million—or so I am told.”
“The suspicion is strong, however, that instead of befitting small and medium-sized business as intended, the banks are directing these funds either to the more highly profitable consumer sector or else towards bolstering their own balance sheets. The business growth fund owes its genesis to Project Merlin, which as the Minister will know was an undertaking written in blood by the banks to benefit British industry. But what do we see? We see the fund in many instances investing in companies not by funding investment or cash flow but, perversely, by cashing out managers and shareholders. The word on the street is that the business growth fund is a total failure. I would like to hear the Minister’s view on this. I come to the business finance partnership.”
“Without credit, businessmen simply cannot expand their businesses and cannot employ more people. I had guessed that by this stage of the debate every aspect of what UKTI does would have been covered, so I am going to stay away from it, at least directly, and talk about other agencies which the Government have to promote SMEs. The Government have been almost manic in introducing new programmes supposedly to help SMEs, but the results have been somewhat anaemic. The fact is that announcing a programme is one thing, making it work is something else. Not surprisingly, the Government have chosen the high street banks to deliver many of their programmes.”
“My Lords, my noble friend Lady Liddell has done us a great service in securing this debate. We must thank her for that as well as the very impressive speech that she has just made. The contribution made by speakers from all parties is tribute to the importance of SMEs in the national economy. It is no surprise that my party fundamentally disagrees with this Government’s economic policy, most particularly their refusal to moderate austerity and revert to a growth-based strategy. Yesterday, George Osborne said that there is no alternative. Today, David Cameron says that the economy is slowly healing. However, this morning, the IMF says that our economy is contracting and today’s trade figures are appalling. I wonder what planet these people live on. In the SME world which I inhabit, the effect of austerity has been devastating.”
“My Lords, last week the Government announced a new partnership to help SMEs. It is hard to credit it, but their partner of choice is Barclays Bank, the number one casino bank. The Minister listed a whole load of programmes which the Government have announced, and indeed they have, but the fact is that very little of it is getting through to the SMEs themselves. When are this Government going to make sure that these programmes are much more effective?”
“We have connections with all countries in the region. The Government could set up a fund so that UK universities could take the lead and promote three-way joint projects. It would not need massive publicity and it may not lead to peace, but it would certainly improve the climate. Fanciful? Perhaps. Impossible? Maybe. But in this world if you do not try, you get nowhere—and if it were to succeed, what a coup it would be.”
“I invite noble Lords to imagine Israelis and Arabs working on joint projects on subjects that matter to them, such as water, which other noble Lords mentioned. Crops could be developed that grow in saline water and all sorts of diseases could be prevented. The opportunities are many, but the political situation does not let it happen. It needs a breakthrough. So I have an out of the box request for the Minister to think about. I am not sure that I will get an answer today, but perhaps he will mull it over. Just as I and many others have initiated bilateral scientific co-operation between British and Israeli universities, why does this country not go one step further? Why do we not have a three-way programme, with British, Israeli and Arab universities working together? We in Britain are in a prime position to do this.”
“I know Israel well and I have worked closely with its scientists. They love their subject and they love international collaboration. From time to time I have posed an out of the box and totally impossible question: “If you had the opportunity, how would you view working with scientists in neighbouring countries?”. Everyone I spoke to was very excited, but they knew it could never happen—yet it does happen. I saw it at CERN, where Israeli scientists were working with their Muslim equivalents. I saw it at Haifa University, where 20% of the students are Arab. I have seen it in Britain, where Jewish and Muslim students, often from Israel and Arab countries, simply get on with it. The science comes first; it is the politicians who get in the way.”
“Just like people in Singapore, Malaysia or China, Israelis look at you blankly when you talk about a double-dip recession. In the area of information technology, Microsoft, Intel, Cisco and Motorola all have major development plants in Israel. Apple has just agreed to follow, and Israel will be a major partner in its development. At CERN in Switzerland, Israeli scientists have been at the forefront, and 11 of them have worked with colleagues to confirm the existence of the Higgs boson. Using solar energy, Israelis are converting greenhouse gases into fuel. In medical research, they are dramatically improving the diagnosis of blood infection as well as using extreme cold to destroy diseased tissue. I love the fact that Israel was the only country to end the 20th century with more trees than it started it with.”
“My noble friend Lord Turnberg, who is in his place, and his wife Lady Turnberg, created the Dr Daniel Turnberg UK/Middle East Travel Fellowship in honour of their late son. Under this project, early-career biomedical researchers from Israel, Egypt, Jordan, Lebanon, Palestine and the UK have worked together and obtained great results. One day, Arab students will go to Israel and vice versa. Once upon a time, if you thought about Israel’s economy, you thought about oranges. Today Israel is about science and technology. It is a high-tech powerhouse. When it comes to cutting-edge research and development, it is second only to Silicon Valley. Nowhere in Europe even gets close. Technology fuels Israel’s economy. Last year it recorded GNP growth of 4.5%.”
“Partnerships have been established with, among others, Cancer UK Oxford, Cambridge, Edinburgh, UCL, Durham, Warwick and Imperial. Among the subjects in question are: motor driven transcription factors in injured nerves; switchable nanomaterials for catalysis and sensing; the electrical double layer in pure ionic liquid next to an electrified metal surface; and the interplay between algorithms and randomness. Noble Lords will get my drift. It is cutting edge science, with Israel and the UK in partnership, and the eventual winners being mankind itself. There are, of course, other initiatives. The British and the Israeli Governments have entered into an agreement to promote closer understanding between universities in a whole host of subjects.”
“When there was much talk in this country of an academic boycott of Israeli universities, I took all the actions noble Lords might have expected. I spoke in your Lordships’ House, wrote letters to the press and mustered as much support as I could, and I think we won. Even though the calls for a boycott continue, the intensity is not as great. But for me it was not enough. I wanted to do something more to demonstrate that academic boycotts are not only wrong in principle but wrong in purpose. So I initiated a project called Making Connections, which has been a huge success. We raised initial funding to enable Weizmann scientists and UK scientists to collaborate on frontline projects designed to advance scientific learning.”
“My noble friend Lady Blackstone referred to the FCO report, entitled Children in Military Custody , on the treatment of Palestinian children under Israeli military law. Where are similar reports about children in military custody in Iran, Syria, China, the Democratic Republic of the Congo, or any other despotic region we could mention? That will never happen. But in democratic Israel, even painful investigations are allowed to take place. In 2007 I was chairman of an organisation called Weizmann UK and today I am proud to sit as a member of its executive council. Weizmann is not a university as such but a science institute working solely on basic science. It is a powerhouse in Israel providing one-third of the PhDs in science in that country. Three years ago it achieved its first Nobel prize.”
“We have witnessed great hope but also great abuse of human life and human rights. When Arabs are slaughtering Arabs, should we not ask ourselves why this very evening there will be no protests outside the Syrian embassy in London? Why have there been no calls for Iranian universities to be boycotted? How was it that Bahrain was allowed to play host to Formula 1 motor racing? When such atrocities are taking place, where are the predictable protesters? Where is the Socialist Workers Party? Where is the Palestinian Solidarity Council? Where are the demands for further debates in Parliament? Where is the normal righteous indignation? When Israel transgresses, the whole world goes crazy. It takes only a minor incident on the West Bank or Gaza for the rent-a-mob crowd to be up in arms. Hypocrisy is the only word that comes to mind.”
“Last year we witnessed another massacre about to happen. The forces of Colonel Gadaffi were marching on Benghazi determined to liquidate that city. Thankfully, due to prompt and effective military intervention by our Government, together with France and the United States, this carnage was prevented. Two years ago people in Bahrain demonstrated against their Government. As my noble friend Lord Watson mentioned, young doctors who treated the wounded demonstrators were arrested and given long jail sentences. In Iran three years ago a general election was held. The Government ignored the result and massive protests occurred resulting in many deaths. The Middle East has been on fire with revolution. This Arab spring is still burning, but the costs in human life have been massive.”
“My Lords, I must say to the noble Lord, Lord Hylton, that, as a member of the Jewish diaspora, I have absolutely no influence whatever over the settlers; nor would they ever listen to me. I thank the Minister for what he had to say today. It was a tour de force on the situation in the Middle East, and as we come to the tail end of this debate, it has been very inspiring. The headlines today say it all: “Another massacre in Syria”. My notes say that 15,000 people have been killed in Syria; the Minister says that it is 17,000. When this butchery is over and the facts become known, none of us will be surprised to learn that the real number is significantly higher than that reported. Certainly President Bashar al-Assad will have managed to outdo his father when it comes to slaughtering his own people.”
“My Lords, I shall be 70 on my next birthday and this is my first time at the Dispatch Box—all of which goes to show that in your Lordships’ House anything is possible. SMEs, very surprisingly, have been doing well recently in the area of exports. In particular, 27% of total exports to the European Union now come from this sector. However, I believe that we can do very much better. What plans do the Government have to encourage even more small companies to export?”
“These payday loan companies can say what they like but the fact is this is gross usury, which affects people who are in dire financial straits, juggling credit cards, payday loans and anything else they can in order to survive from month to month. It is true that this is a vital service and that some people depend on it. Nobody can say that we have to get rid of it. The loan shark alternative is absolutely horrible. However, these companies have to be capped and need to be controlled. We plan to introduce an amendment to that effect.”
“Payplan says that 47% of people who take out payday loans have six or more facilities at the same time and that 86% of these people use them to pay for basics such as food and transport and not for luxuries or short-term loans for Christmas presents. Three organisations—Consumer Focus, Citizens Advice and the financial services panel—all want the FCA to have specific powers to control these loans. Ministers have said that this is all being reviewed, perhaps by the OFT. However, I have the feeling that this issue has been kicked into the long grass. I suspect that nothing will happen in this regard unless we up the ante.”
“The company absolutely hates the fact that it has to display the APR rate on its website. It does so but says that it is not an interest charge and has nothing whatever to do with interest. However, for me, there is a clear definition of “interest”. If you take out a loan for £100 and repay £110 in a year’s time, the £10 difference is interest. That is very clear. That is the case whether you borrow for a day or 50 years—on a pro rata basis and an annualised basis, that is what an interest rate is. However, this company does everything it can to say that this is not an interest rate. Payday loan operators say that 95% of their customers are happy. I suppose that if you were starving hungry and somebody came along with a really sexy website, you would feel happy if it enabled you to get some food. However, it is not like that.”
“In 2011, payday loans equalling £1.7 billion were taken out, 4 million people in this country used them and interest rates varied from 440% to 16,500%—the mind boggles. It is rumoured that Wonga made £160 million profit and is going for an IPO of over £1 billion. You have to talk about Wonga as it is the market leader. I take my hat off to Wonga; it is a brilliant business. Its website is phenomenal—my background also lies in IT—and I have gone on to it and attempted to take out a loan. I assure your Lordships that I stopped at the final moment although I went through the process. A clock appears on the website telling you how many minutes it will take for the money to reach your bank account. The process is so easy; it is an availability issue. If you borrow £300, 21 days later you will have to repay £360.”
“They have become even more respectable recently; they do not even call themselves payday loans but talk about “short-term financial availability”. Well, they can call it what they like, but it is loan sharking dressed in silk. It used to be shameful to borrow money in this way. People had to do it, but they kept it quiet. Now it is encouraged; you see it advertised on buses, TV and in sports sponsorship—it is everywhere, and it is very slick. The advertising is amazing, and they have managed to introduce an almost blokey image. “Short of a few quid, need £300? Don’t worry about it—go on the website and it’s in your account in 15 minutes”. These companies have cutesy names such as Uncle Buck, KwikCash and, of course, Wonga.”
“Consumer financing at 4,200% is detrimental to consumers, any way you look at it. We believe that that amendment, which was defeated in the other place, should be introduced. We have a terrible economy, with many people unemployed and people and their families in terrible situations. It is not surprising that loan sharking is back on the agenda. At its most extreme, it is about monstrous interest rates and baseball bats if payment is not made. The other week I watched “Godfather II” again and, believe me, it is very pertinent. But of course now it has gone respectable, and people talk about payday loans instead of loan sharking. Many high streets in this country have shops offering nothing but payday loans.”
“I understand how you use public relations and advertising. My experience was in industrial not consumer finance; my customers were corporations, not desperate borrowers. But the calculations are the same, and I cannot be fooled by the hype that you see all the time on this issue. I have to declare an interest. I formed an equipment-leasing company in 1992 called Syscap, in which I had a majority shareholding. I have sold most of that shareholding but still retain 8%. In the other place there was an amendment to cap the level of interest charged by payday loan companies. In Clause 22, it was suggested that the Financial Conduct Authority should be able to make rules and apply sanctions or rules when credit is offered that the FCA judges causes consumer detriment.”
“We get a very strong hint of some amazing debates with contributions that he will make in future. This Second Reading is, correctly, about structure, governance and regulation. We got it wrong; it needs to be restructured, making sure that power and responsibility reside where they are most effective. But enough people have spoken about that today, and I am not going to do so. I am going to talk about an issue about which I feel most passionately, and which I have spoken about before in your Lordships’ House—the issue of payday loans, which was also mentioned by the noble Lords, Lord Naseby and Lord Northbrook. My background for 40 years was in equipment leasing. I understand compound interest—it runs through my blood—and I understand about rolling over compound interest commitments.”
“My Lords, I suppose this late in the debate it is stating the obvious to say that this Financial Services Bill is probably the most important Bill that is to go through in this Parliament. The stakes are high—it goes to the heart of our economy and our well-being, and we have to get it absolutely right. I stand in wonder at the depth of expertise of Members who have spoken in this debate, including ex-Chancellors, Treasury Ministers, civil servants and economists. I cannot help but wonder whether an elected House of Lords would be able to bring the same degree of heavyweight knowledge and practical expertise—but I guess that is a debate for another time. Now we are joined by another heavyweight, the noble Lord, Lord O’Donnell, who made a superb maiden speech.”
“In thanking the noble Lord, Lord Sacks, for initiating this debate, I remind him that the second bus is less crowded, has more seating and is a much more pleasant experience. For my community—the Jewish community—Her Majesty’s reign has been a golden era. There are fewer than 300,000 Jews in the UK but we are prominent in many aspects of our national life, from the professions to the arts, science, academia, business, philanthropy and, yes, even politics. In this House alone, 10% of the Members are of the Jewish faith. Indeed, the leader of my own political party has a Jewish background and—who knows?—in the next few years we could have our first Jewish Prime Minister since Disraeli. All this has happened because this country is so tolerant and welcoming and so encouraging of its minority faiths to succeed.”
“I shall rapidly give a few statistics before I finish. A survey was conducted of 20,000 people: 81 per cent of the women were earning an income; 84 per cent were saving money; 92 per cent had gained skills; 97 per cent fully understood hygiene; 93 per cent family planning; and 95 per cent nutrition. Many of those women are now involved in their community. The amazing statistic is that 12 per cent of them are running for political office in their communities. Women for Women International is a highly inspirational organisation. It is no-nonsense, it is doing good, and I love being a bag carrier.”
“Women will come in for a year's training and learn about their civil rights, inheritance, hygiene, safe sex, nutrition and even stress management. Most of all, they learn about setting up small businesses. That is where the economic side comes in. Some of them are given micro-loans; some are not. We saw an example in Bosnia where women had set up chicken farms or were growing tomatoes. In Kosovo, we saw an amazing woman who was in beekeeping. With a small loan, she had set up three hives and had expanded the business to the extent that there were now 50 hives. Her family was enjoying €5,000 a year by way of income. Not only that, that woman was now teaching other women how to keep bees. In Rwanda, we visited co-operatives. I was weeding in a maize field under the blazing sun just outside Kigali.”
“Its mission is to make women who have been through the most terrible experiences contributors to society—and economic contributors. It does that in two ways, which is unique. First, it has set up a mechanism of sister to sister relationships. A sister will be a woman living in the western world who contributes $30 a month to another person, a sister, in Afghanistan, Bosnia, or wherever it happens to be. The money goes directly to those women. In addition, the sisters have to write to each other. I must say that I was a bit sceptical about all that, but when I have seen sisters meeting sisters, as we did in Rwanda, the tremendous empathy between those two sets of women was magnificent. The charity also does training on the job.”
“I want to mention a particular woman, Zainab Salbi. Her father was Saddam Hussein’s private pilot, and when she was in her teenage years, her mother, seeing the writing on the wall, got her out to live in the United States. As Zainab was growing up and she saw what was happening in Bosnia, she went to Sarajevo and saw all the activities taking place there. This was in the country of ethnic cleansing and war by rape. As a result, Women for Women International has been set up; today, it has a budget of $30 million and 320,000 women have been through its programme. The organisation operates in post-conflict zones in eight countries: Afghanistan, Iraq, Bosnia, Kosovo, Rwanda, Southern Sudan, the Democratic Republic of the Congo, and Nigeria. It does amazing work in some very dangerous places.”
“You visit a country such as that with your heart sinking—worried that it will be absolutely ghastly. Actually, it is a very uplifting country. It seems to have got itself together and is moving forward with a vision—perhaps the subject of another debate. It is a country with hope but, of course, with terrible memories. I have visited Bosnia, Kosovo and Rwanda. In Rwanda, it can be argued that 1 million people would not have died had the United Nations taken action, with 5,000 troops who were close to stopping it happen. You can go to Bosnia and Srebrenica and see that 9,000 men might not have been killed, again had the United Nations not stood by. I have to say that a lot of people like the United Nations; I have mixed feelings about it. Anyway, we are not talking about the UN, but about women.”
“My Lords, I, too, thank the noble Baroness, Lady Verma. It has been a stunning debate so far, and she deserves every credit for introducing it. I want to talk about an organisation called Women for Women International. Here, I have to declare an interest because my wife sits on the international board. Indeed, I go with her to several countries and I am the unpaid bag carrier. The noble Baroness, Lady Hayman, who is not in her place, told us about Nepal, from which she has just returned. We returned from Rwanda last month. That visit was a very moving experience, certainly for me. There were 20 women and me, and I managed to survive the experience—in fact, it was very rewarding. We all know about Rwanda, where there was a genocide in which 1 million people were hacked to death in 90 days.”
“To ask Her Majesty’s Government what assessment they have made of whether British consumers buying low-cost flights on the internet have access to the information they require.”
“Who else levies administrative charges, and what serious business charges credit and debit card fees when you have no option but to use those cards? Mr O’Leary, in his blunt way, makes his case very strongly: “If you don’t like it, don’t fly with us”. However, that is not good enough. When he said that he would charge £1 for usage of the lavatories, even though he meant it as a joke, most people believed him. There are those who will argue caveat emptor: it is the buyer’s risk. However, I contend that the Government have a duty to ensure, first, that these airlines set all their costs to the default zero position on their websites; and, secondly, that their advertising highlights the average real fare, not the base fare, as well as the voluntary charges that we are all forced to pay.”
“To be fair, and for comparative purposes, I also booked a flight on easyJet, this time from Gatwick to Rome on the same day. Its headline price is £66.99 and it levies an administration charge of £9. Using a credit card, as you must, costs another £5. Insurance costs £9.53, taking one piece of luggage costs £15—this time for a 20 kilo bag—and priority boarding is £10.50. This comes to £112.02, an uplift from the headline price of 67.2 per cent—considerably more than Ryanair. However, in easyJet’s defence, the headline price is cheaper. It seems as though I am doing something of a hatchet job on Ryanair as well as easyJet. In truth, this is the case. They deserve it; they force unfair charges on the public.”
“I would be interested if the Minister has any idea how many people ask for tax refunds from Ryanair on no-show flights. Could it be expressed as a percentage? My bet is that it is precious few. This prompts another question. If I am a no-show and if I have not applied for my tax refund, where does the £35.18 tax go? If I have not taken the flight, it would seem to me that no tax should be due. It must go to somebody. Does it go to HMRC? It should not because the Revenue is not due to receive tax for flights not taken. Does it stay with Ryanair, perhaps in some suspense account? I do not know the answers, but I know that when I cancel a flight with British Airways the tax is refunded to my credit card immediately, and that when I attempt to cancel with Ryanair it is not. I simply want to know where the tax money goes, or maybe does not go.”
“This prompts a question that I would like to pose to the Minister or even to Ryanair itself. What happens to the tax for those who are no-shows? I have talked about the airport tax and I have also mentioned the EU 261 levy and the ETS levy. This comes to £35.18. Where does it go? Ryanair says that you can write for a tax refund, which it will send you, minus its ubiquitous £6 administration charge. There is a slight problem, however, in that you have to write to Dublin. You incur a UK tax charge that is levied by HMRC on a flight that originates in the UK, but if you do not take that flight you have to apply in writing for your tax refund to a company headquartered in a foreign country and on your refund entitlement it levies an administration fee.”
“You can bet your boots that Ryanair will do everything it can to resist this development, not when it has such a nice little earner. Once again, it is gross to net. There are a few other little gems about Ryanair’s terms and conditions. It charges £20 for an infant under two. All other airlines allow babies and toddlers on for free, especially since they do not take up a seat, but I guess a toddler weighs the same as a piece of baggage, so it makes sense to charge for it. One thing has always puzzled me about Ryanair. How do you cancel a flight? I have looked all over its website and you cannot cancel a Ryanair flight. You can choose another date, for a fee of course. You can even change the name of the passenger, for a much bigger fee, but you cannot cancel.”
“If you exceed your weight by even one kilo it will cost you £20. It is little wonder that people approach the check-in scales in such a state of panic. Finally there is payment. Using a debit card or credit card costs another £6. It is Ryanair Catch-22 all over again: you have to use a debit or credit card, you have no option, but it charges you. So that is it: £86.41 becomes £136.89, but it does not stop there. Two years ago some Mexican friends visited us. They arrived at Stansted and they committed Michael O’Leary’s mortal sin. They had not printed out their boarding cards. They did not know that they had to. They had to go to another queue to get their boarding cards and were fined £60 each. The cost to Ryanair is zero. The most modern airlines now send boarding passes to your smart phone.”
“Ryanair could have given you a yes or no option, but after its incessant haranguing and playing to my insecurities about falling ill abroad I gave in and this time selected minimum travel insurance. That came to £6.99. Then there is priority boarding. I always choose it, but I do not know why. It costs £5 and you are supposed to be boarded ahead of the milling masses, but lots of people now chose it and there is not much that is priority about it. If you have to take a bus to board the plane it makes no difference anyway. But £5 here and £5 there—it is all gross to net. I took priority boarding. I also chose to be notified by SMS text, this time for £1.50. There are no costs associated with SMS text. I then went totally berserk. I decided to check in a piece of luggage: 15 kilos for £25.”
“I have no idea what these are, but I will show your Lordships why they are important. We come to the add-ons beyond the headline price. There is something called online check-in. This costs £6 and I presume that it is for using the internet. This is typical Ryanair Catch-22. It charges you for using the internet, but you can only book using the internet. Insurance—how Ryanair loves travel insurance—in itself is a rip-off, but it gets worse. You might have thought that the default position for insurance would be negative. You go to a pop-up menu of countries of residence and nestling snugly between Latvia and Lithuania you will locate “don’t cover me”. It is easy to make a mistake.”
“Every time you make a mistake or click the wrong click it is going to cost you money. Of course, if you use their sites all day long you will get the hang of it, but for the occasional user it is a hazardous and expensive obstacle course. Let me deal with Ryanair first. I booked a flight the other day from Stansted to Perugia for 30 July this year. The headline price was £86.41. The final price was £136.89. This is a 58.42 per cent uplift for practically no extra cost to them. Within the headline price is a series of costs that I cannot understand. Taxes at £33.17 are clear enough. I will come back to those later, but be prepared for a bit of a shock on this one. There are two levies that leave me bemused: the EU 261 levy and the ETS levy. The former is £2 and the latter 25p.”
“I am going to say less than complimentary things about the budget airlines and Ryanair in particular, but I must say one thing in their favour. Their punctuality is the best. You can almost set your watch by their arrivals and departures. This is much better than other airlines. I am sure that most of your Lordships have used the budget airlines. When you sit down at the computer to make your booking you need a quiet room, a wet towel wrapped around your head and indulgent family members who are not bothered by constant swearing. I spend a good deal of my time in front of my computer—my career was in IT— and I like to think that I am pretty adept at ploughing my way through the most complicated of websites, but the budget airline websites have me beaten. Much that is within their sites is designed to trap you.”
“The budget airlines in this country are brilliant at extracting the maximum amount of revenue from the poor old traveller and my speech today addresses what I believe is another example of rip-off Britain, or should I more accurately say rip-off Ireland? I must declare a regrettable interest. I use Ryanair quite frequently, not because I want to and not because it is the cheapest—it is not—but because it is the most convenient. We have a house in Umbria in Italy and Ryanair flies to Perugia just 40 minutes away from where we live. Indeed, it is the only airline to fly to Perugia from the UK, so I have no option but to drive to Stansted, disengage my brain and all my other senses, only to re-engage when I am drinking my welcome cappuccino at Perugia airport.”