Biel Barceló at the meeting of the Balearic parliament's tourism committee. | Miquel A. Cañellas

Balearic tourism minister Biel Barceló told the parliamentary tourism committee today that the collapse of the Low Cost Travel Group was the consequence of "(financial) speculation" and "bad practice" and accused the company of having continued to sell holiday packages when it was fully aware of its financial situation.

Barceló was appearing before the committee to face questioning over the failure of the online travel agency, which is said to have debts of some 50 million euros and which, via its Spanish operation, left some eighty people at its Palma centre out of work. The minister added that the redundancy procedure for these employees has yet to be started. He said that the Balearic government was insisting that it is commenced in order that employees can receive what is owed to them.

After the company announced that it was ceasing trading on 15 July, over 30,000 tourists in the Balearics were affected. Barceló explained that there have so far been 2,487 claims made with the regional government.

On a separate issue - the anticipated legislation regarding holiday rentals - Barceló announced that because of the complexity of the issue, the draft of the legislation will not be available in September. The parliamentary process will begin, though, before the end of the year.

The minister said that there need to be guarantees of land and environmental sustainability, for which consideration has to be given to there being a ceiling on the number of holiday rentals.

The Partido Popular and El Pi both urged the government to present the draft as soon as possible. Josep Melia of El Pi said that there has to be an opportunity to make proposals for what he accepted is a complex matter. Alvaró Gijón of the PP suggested that the government still has no idea what regulation it wants, observing that holiday rentals are a reality whether the government likes it or not.

On the tourist tax and registration for its charging, Barceló also said today that the government is "undertaking a search" to identify businesses which did not register by 31 July. He indicated that the government was still in the phase of registration but that penalties will be issued in the next phase. "The government will not tolerate situations in which people try to escape."