Future of the Coach Industry

Emma Hardy Excerpts

Thursday 10th December 2020 Westminster Hall

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

It is a pleasure to serve under your chairship, Dr Huq, and I thank my hon. Friend the Member for Easington (Grahame Morris) for securing the debate. I have to say that it is always a pleasure to follow the hon. Member for Broxbourne (Sir Charles Walker).

This is the third time that I have raised concerns about the coach industry, and I thank the Treasury Minister who met me and industry representatives last week. I hope the strength of feeling in the House today conveys the fact that that should be the start of the conversation, not the end.

In the brief time I have to make my remarks, it is important to myth-bust or fact-check some of the statements that the Government have been making with regards to the coach industry. We cannot address the problem properly unless we clearly and transparently understand the support that the industry has had and the difficulties that it is facing.

The first point I want to make is that the Secretary of State for Transport claimed in the House that additional financial support has been announced for school transport, and that this would benefit 30,000 idle coaches. That has proven not to be true. To give him the benefit of the doubt, that could have been his intention, but it has helped only 1,000 coaches—the rest of the money has been deployed to buses, which has not directly helped the industry.

My second point is that I was informed that the Chancellor stated at a roundtable meeting he had with the industry that the industry had benefitted from VAT cuts and deferment. Again, that could have been his intention, but passenger transport is free of VAT, so I cannot see how deferring VAT has helped the industry.

Thirdly, the Government claimed that grants for businesses in tier 3 would help, but they have not. Coach companies are not listed as businesses that have to close, so the only funding available to them is discretionary support, which, by its nature, is discretionary. That means there has been a postcode lottery around the country, with some councils choosing to support the coach industry, and some not. If the Minister wishes to ensure that operators have support, he needs to make that discretionary support a little less discretionary.

The Government’s fourth point is that coaches have had access to the coronavirus business interruption loans. Again, that is not completely accurate, because only 20% of coach companies have been able to access that money. I hear that that is partly because coach companies are seen as high risk, and partly because they are unable to provide the six-month business plans needed. In a previous debate in which I spoke about coach companies, I mentioned specific problems around Lloyds Bank refusing to lend money for coronavirus business interruption loans.

I will stop there, but I hope the Minister’s responses will not refer to not completely factual statements about the financial support for school transport, the VAT support, the grants for businesses or the coronavirus business interruption loans. Unless we are honest about the lack of support the industry has had, we cannot get an effective solution.

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[The Parliamentary Under-Secretary of State for Transport (Rachel Maclean)]

I congratulate the hon. Member for Easington (Grahame Morris) on securing this vital debate. I thank all hon. Members who have spoken. We have heard a vast number of contributions, including from my hon. Friends the Members for Gravesham (Adam Holloway), for Blackpool North and Cleveleys (Paul Maynard), for Broxbourne (Sir Charles Walker), for Henley (John Howell), for Cleethorpes (Martin Vickers), for Totnes (Anthony Mangnall) and for Buckingham (Greg Smith), and the hon. Members for Hartlepool (Mike Hill), for Halton (Derek Twigg), for Nottingham North (Alex Norris), for Kingston upon Hull West and Hessle (Emma Hardy), for Kilmarnock and Loudoun (Alan Brown), and for Erith and Thamesmead (Abena Oppong-Asare). I think it is crystal clear that there is a strength of feeling in the Chamber today from all parts of the country on this vital issue. We have heard many eloquently expressed, first-hand stories from Members explaining the impact of the pandemic on their constituents and the businesses they run.

I am delighted to have this opportunity to assure Members that the Government are absolutely committed to the future of the coach industry. Members have made clear to the Government—to me as a Minister and to other Ministers responsible for these decisions—the strength of feeling on this matter. We have heard it very clearly. Members have set out the vital role that coach companies play in their communities and constituencies. We have heard time and again that these are small, hard-working family businesses. As many Members said, these constituents had not darkened their doors—I did not want to use that phrase, but that is how Members described some of the people they talked about today. They are hard-working people who have not turned to their MPs before. Of course, as an MP myself, I recognise the strength of feeling on this issue.

I will come to the points that Members have raised. I want to respond to a specific point from my hon. Friend the Member for Henley about the public service vehicle accessibility regulations, which others also raised. I will ask my noble Friend in the other place to come back to him on that specific point. I want to reassure Members that all the proposals that have been presented on behalf of their constituents are being carefully considered by Ministers.

We have discussed at length the future of this industry. It is my belief that it continues to have an important role to play and I see no reason why it cannot have a bright and prosperous future. It is a resilient and diverse sector, and its contribution to our leisure, tourism, public and home-to-school transport systems is long standing and vital.

Normally, coach operators up and down the country are connecting people every day of the year. Members have referred to numerous small, family-run businesses in their constituencies. Whether it is a tour to Blackpool or a coach package ticket to the Glastonbury festival, coaches have played a huge part in opening up all parts of the UK and enriching all our lives.

Of course, 2020 has been very different. This year, the covid-19 pandemic and the necessary national and local restrictions to protect public health that have come with it, have taken many of these experiences away from us. With people necessarily spending so much of 2020 undertaking only essential journeys, demand for coach services has reduced dramatically.

I know that, as a result, this year has represented an unprecedented challenge for all coach operators. In these difficult times, the Government’s commitment to supporting businesses cannot be questioned. Many Members discussed this and recognised that fact. Since the onset of the pandemic in the spring, we have paid wages through the job retention scheme and supported the incomes of self-employed workers. We have also provided significant support in the form of loans and grants. Coach operators have been able to apply for the coronavirus business interruption loan scheme.

[Emma Hardy]

I want to reinforce a couple of points. First, coach companies are telling me there is a high chance that their businesses will end before the furlough scheme runs out. Although the scheme has been welcomed, it is not going to be the answer if the business no longer exists. Secondly, in contributions from Members across the Chamber, it was reiterated that only 20% of businesses were able to access the coronavirus business interruption loans. The majority of coach companies have not been able to access that fund.

[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.

[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.

[Emma Hardy]

The Minister is being very generous in giving way. She says that the industry is viable with a successful future—I am sure everyone in the Chamber agrees with that—but I really want her to take on board the point about the coach companies’ overhead costs. The cost of a new coach is about £250,000. The coach companies were told that those were the coaches that they needed to buy because they were greener and more environmentally friendly, and they still have those bills to pay. One way in which the Government could make a real difference to those companies would be by looking at their finance problems. Those are the kinds of answers that the industry wishes to hear. As so many hon. Members have said, those companies have, so far, fallen through gaps in the support that the Minister has mentioned. They need something else.

[Rachel Maclean]

I thank the hon. Lady for eloquently setting out the issues—I absolutely understand her points. I will speak a bit more about the way in which we are working with the coach sector.

Obviously, I agree with the hon. Member for Kingston upon Hull West and Hessle about wanting to get the coach sector back up and running. We believe that demand in the economy is what is needed to help the sector. When there have been safe and viable opportunities to create that demand, we have utilised them. In the autumn, the Government committed more than £70 million of funding to ensure that the coach industry could maximise the potential of the full return to education, and an additional £27 million has been allocated for the spring term. As more vehicles are needed compared with previous years, that funding has provided additional dedicated school and college capacity in our transport system, including coaches, to combat reduced demand on existing public transport.

As hon. Members will know, the Department for Digital, Culture, Media and Sport is the lead Department for tourism and leisure. It is now considering how the new global travel taskforce might help to remove barriers to international travel, and potential event opportunities for the coach sector. As many hon. Members have pointed out, that is one of the main sources of revenue for the sector.

Going forward, we will continue in the vein of our flexible and adaptable response to the pandemic, keeping all current support under review while exploring opportunities to aid long-term recovery. One of those opportunities was the student travel window; we worked with the Department for Education to encourage students to plan their return journeys from universities carefully and to buy tickets in advance.

I want to be clear with Members that this has been an unprecedented global crisis; none of us could have predicted the scale of the challenges. The Chancellor has stated that in his view it is not possible to preserve every job and every business, and I do not ever underestimate the impact on anybody of these types of circumstances, which have hit us all out of the blue. This is something that the Government take incredibly seriously and my ministerial colleagues have met individual coach operators and heard from them directly. We are well aware of the impact on the sector and on people’s jobs and businesses, which they have built up over many generations. We never underestimate the impact on our constituents’ lives and livelihoods.

We continue to work closely with the CPT. As many Members have said, this organisation has been very helpful in representing its members to Government, so we have a good understanding of the challenges that the industry faces.