Future of the Coach Industry

Debate between Grahame Morris and Rupa Huq

Thursday 10th December 2020 Westminster Hall

[Grahame Morris]

I believe there is specific support in Scotland and Wales as well. We are calling for the Minister to act and provide some sector-specific support to the coach industry in England. We are not asking for special treatment; we are asking for parity and an equal chance for the sector to survive, with support that recognises the specific impact that covid has had on the sector.

The coach sector was the first hit, the hardest-hit, and will be the last to recover. The fall in demand and income has been absolutely catastrophic—in excess of 90%. Unlike some other industries that have had the opportunity to diversify or even continue operating during covid, the coach industry has experienced a near total shutdown. Even if venues were open, such as concert venues, shows and sporting events, or holidays were still taking place, the social distancing requirements would make such coach trips unviable.

The industry needs support and the Government excluded coach companies from the rates relief support by failing to recognise them as part of tourism, leisure and hospitality or essential travel. I expect many in the industry would agree with Jade Cooper-Greaves of Henry Cooper Coaches in Annitsford. When she was interviewed by the BBC, she said:

“I have never written a job down in my diary that wouldn’t be classed as tourism, leisure, hospitality or essential travel.”

The lack of sector-specific support is crippling and the Government are failing to recognise the scale of the crisis.

In a letter on 23 November, the Minister responsible, who sits in the other place, said:

“We continue to work closely with representatives from the coach sector, including the Confederation of Passenger Transport, and with other Government Departments to understand the ongoing, specific and unique risks and issues the sector faces and how those could be addressed.”

There are many and obvious risks and challenges facing the sector.

It is not true that the sector has had support. Certainly, there has been the furlough scheme, which assisted with the employees—the drivers and so on. That was welcome, but it did not help operators with ongoing business costs, loan payments or vehicle leasing fees. And the coronavirus business loan interruption scheme has failed the industry, with the majority of the businesses in it—80%—unable to access that support.

Let us look at some other sectors. Arts, culture and heritage received £1.57 billion. I am not against that; I am simply pointing out the inconsistency. There has been a bail-out for buses and trams—£700 million. Rail—£4.5 billion, and actually it is even more than that when we take into account the emergency measures. For the voluntary and charitable sector—£750 million. Eat out to help out is estimated at £500 million. For the sports bail-out for rugby union, horse racing, women’s football and the lower tiers of National League football—£300 million.

The Chancellor said that he did not want to pick winners and losers, but that is precisely what the Government are doing by offering sector-specific support to some sectors and not to others. Let me be clear—I do not begrudge any of the sectors that I have mentioned the support that the Government have given them. But there is no transparency as to why some sectors are favoured and others ignored.

Sports are struggling without crowds, but it is the coach sector that transports those crowds. Arts, heritage and culture, hard-pressed though they are, have had some retail opportunities during covid, and in some cases are able to open now, with restrictions, in certain areas. Eat out to help out was an untargeted scheme that benefited large chains with large floor space that could accommodate more customers. Again, that support targeted businesses that were able to continue trading through covid, perhaps via takeaways or with limited capacity.

We must question the value of these bail-outs, particularly those to the bus operators, which have received £700 million. As public subsidised companies, it would be reasonable to expect them to understand the plight of the coach sector. Instead, many of these bus companies are taking the last remaining contracts, which are often travel-to-school contracts, from the coach companies. I am aware that subsidised bus operators in my own region are undercutting coach companies on already undervalued home-to-school transport contracts.

I have coach operators who rent vehicles from Arriva Bus and Coach Ltd. When they asked for a rent holiday, they were refused, even though they had no business. They were forced to return the coaches because they were unable to maintain payments of up to £20,000 a month, having no work and now also being hit with early termination fees of £80,000. I must ask the Minister—is that fair?

With all due respect, if the Minister cannot grasp the scale of the challenge after nine months, I must question their interest or competence in this matter. Indeed, I challenge the Minister. The industry is warning that, without urgent support, four in 10 companies could go bust, with a loss of 27,000 jobs, and that is not counting those jobs in the supply chain and the service sector that rely on the coach industry. We risk losing companies of good standing, and coach operators risk losing their homes due to the personal guarantees they gave on their vehicles. We cannot abandon good businesses that invest in our economy. The Government must explain why they are excluding coach companies from the sector-specific support that they have provided to other sectors.

[Dr Rupa Huq (in the Chair)]

This is a popular debate. I think that I have counted 13 bodies, with 37 minutes available; the time for the debate has been slightly stretched, because of the earlier votes in the main Chamber. I am not proposing to have a formal time limit; if everyone sticks to two and a half minutes each, we will get everyone in.