Future of the Coach Industry

Alan Brown Excerpts

Thursday 10th December 2020 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is clear from the contributions so far that the hon. Members here feel that the UK Government have to date not really understood the importance of the coach industry to the wider travel and tourism industry, or that sector support is vital for the industry to survive. In response to a written question on sector funding, the Minister advised me that the Department of Education has provided more than £70 million to local transport authorities, as if that was somehow a silver bullet that would help coach companies survive. It is not.

I spoke to Milligan’s Coach Travel in my constituency, which confirmed that, while school transport is important—it could be argued that it is its bread and butter—it is only 20% of its trade, with the rest made up of its own day tours, holidays and theatre trips, private hire, tourism and cruise ships and football coach hire. I have enjoyed a football bus many a time myself, having run a sports club for 25 years.

The Confederation of Passenger Transport (Scotland) estimates that 80% of the coach industry’s income is derived from tourist-related activities. That market is decimated. Hotels all over the United Kingdom rely on bus tour companies bringing tourists and visitors to them. If the coach industry collapses, hotels the length and breadth of the UK will not open, so a lot more jobs are at stake than just those in the coach industry.

We have heard about the jobs that are at risk, but it is not just jobs. Many coach companies, as we know, are family-run businesses. It is estimated that 32% of operators have personal guarantees and stand to lose their homes if their businesses fail, so personal bankruptcies are a risk. Imagine the strain on people’s lives, and what they are trying to manage and weigh up. The stark reality is that coach businesses are facing a more than 90% drop in income for 2020, 40% of coach operators expect to reduce staff, and 7,100 coach industry professionals have already been made unemployed.

The good news in Scotland is that yesterday the Scottish Government announced a £6 million grant fund pot for the coach industry and £5 million for travel agents, which has been warmly received by the industries. Of course, if the UK Government step up and provide money for the coach industry as well, that will provide Barnett consequentials for Scotland, and we will be able to do even more to support this vital industry.

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[Rachel Maclean]

I thank the hon. Lady very much for those points. I recognised and heard the points that she and others raised. It is important to recognise the amount of support that has gone to those businesses, although I accept that many have not been able to access the support. However, a significant amount of support has been made available. On her point about the furlough scheme, she will know that the Chancellor extended it at a number of points when the public health situation required it. All the measures are kept under constant review.

We have had a number of schemes, including the coronavirus bounce back loan scheme. Of course, the Government have also extended guidance for local authorities on administering business rate relief. Eligible businesses will not have to pay business rates for the year 2020-21—that list of businesses could and does include coach operators—and it is for local authorities to determine which businesses are eligible.

[Alan Brown]

As the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) said in her intervention, the furlough scheme and the business rate relief are welcome, but the Confederation of Passenger Transport reckons that it costs something like £200 a day for a bus just to sit in a yard. Those are the kinds of overheads that we are talking about. Even businesses that have access to CBILS, which is a loan and a debt that must be repaid, are looking for grants. The CPT estimates that £50 a day per coach would be enough for those coach companies to survive. We are looking for responses to those asks.

[Rachel Maclean]

I recognise and understand the points that the hon. Gentleman has raised about the specific business conditions and challenges that coach companies face. As he will know, all the measures are kept under review by the Chancellor, responding to the evolving course of the pandemic across the country. I will come to the CPT later in my remarks.

The diversity of the coach industry is such that different operators have been eligible for different types of support. There was never going to be a one-size-fits-all package for the sector. My colleagues in Government have worked closely with coach operators to understand the issues that they have faced in accessing particular schemes, which hon. Members have mentioned, As a result of that, a support finder tool has been developed to help businesses quickly and easily determine what financial support is available to them.

We kept in mind throughout that the key to the recovery and the future of the coach industry is reopening business and generating demand across the economy. I know that all hon. Members will welcome the positive news about vaccines; mass immunisation means that we are getting ever closer to being able to lift the tough but necessary restrictions. That will create opportunities and further open up the economy, which will, in turn, help to generate demand.