Talking of saving up hard to take a holiday - I'd love to love to know how many people do this rather that whacking the cost on credit cards or taking out loans. Or do most people do a mixture of saving and borrowing? As dh and I do not have credit cards (mostly through choice) I do not know the answer to this.
Anyway, my point is, if you are on a modest income with little access to credit, the difference between a £500.00 holiday and a £2,000 holiday may be impossibly huge. If you don't have credit cards (because your credit rating is too low, your job is classed as casual or temporary or your income is not high enough) and can't take out loans based on the equity in your home (because you rent it), and don't have the sort of bank account that allows you overdrafts, your access to credit is severely cut. If you want to spread the cost of your holiday over many months (or years) you don't have nearly as many credit options open to you.
And if you have had to scrimp and save to afford a holiday and pay everything up front, arriving at your destination with just a minimal amount of spending money and nothing to fall back on, you may think that's just too big a risk for your family. What happens if there's an emergency? you may be faced with medical costs, garage costs or extra travel costs - things you can claim back eventually but may have to pay up front? No putting the costs on your credit card.
So I think custy's post about this law hitting familes on low incomes is spot on. Higher costing holidays in term time are much more viable if you have access to credit, even if it's just an emergency back up.
You may say you can find cheaper UK holidays when schools break up, but IME nearly all holiday prices, apart from a very few, go up a lot. Even an extra £200 could make a holiday a financial struggle at best, or an impossibility at worst, if you have no credit to fall back on.