Future of the Coach Industry

Matt Rodda Excerpts

Thursday 10th December 2020 Westminster Hall

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to serve under your chairship, Dr Huq. I thank colleagues for taking part in the debate. It has been heartening to see how much interest there is in this key sector, especially at a time when Government support seems to be somewhat lacking. I extend a special thanks to my hon. Friend the Member for Easington (Grahame Morris) for his work in securing the debate and to all those who have facilitated it.

Coach firms, a huge number of which are small, family-owned businesses, are great contributors to local economies. They play a crucial and unfortunately somewhat overlooked role in our national transport network. In normal times, coaches and their drivers travel hundreds of thousands of miles every day, and for a huge variety of journeys. They take thousands of school children to school every day, who would otherwise have no reliable means of getting to their place of education. They make educational trips possible and they help sports teams to compete across the country. When our railway networks are delayed, they take passengers to their destination.

As has been said by a number of hon. Members, coaches play a crucial part in the tourism and cultural industries. In fact, as the experts at the Confederation of Passenger Transport have calculated, over 23 million people visit UK attractions every year by coach, generating nearly 10% of the tourism sector’s total contribution to the economy. That point was well made by a number of colleagues on the Government Benches. That is to say nothing of the economic boost provided by the tens of thousands of people employed by coach firms, the multiplier effect, the supply chains or the thousands of people who travel by coach because other forms of transport are not available to them.

In the very near term, the Christmas travel period could shine a further light on the importance of coaches. Labour has warned of the potential dangers posed by travel chaos as people use our road and rail networks over the festive period. Indeed, we have asked the Government to take special care at this time and to pay more attention to the potential difficulties during the pandemic.

It is clear that the coach sector is incredibly important in the immediate context and in the longer term for our economy as we transition away from the coronavirus pandemic and return to some form of normality. Sadly, it is equally clear that there has been a lack of adequate support over the last year, which has threatened the viability of many wonderful family firms. The furlough scheme, as we have heard, has often been the only source of support for many companies until recently, with industry experts estimating that 80% of coach companies were unable to access the coronavirus business interruption loan scheme or other business support over the summer.

The Government have argued, somewhat misguidedly, that schools returning has provided companies with business, but many firms run home-to-school journeys at a loss in the absence of other work, as we have heard. Many difficulties, as hon. Members have said, arise from coach financing. Companies have rightly been incentivised to purchase newer, more efficient vehicles, which are greener and better for the environment. Some firms have been able to negotiate payment holidays during the crisis, but they will soon come to an end. As my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare) said, in some cases, companies may be just months away from going out of business.

Despite that, there has been no sector-specific support for the coach industry, unlike other parts of the transport sector, such as bus, rail or light rail operators. I am afraid to say that industry experts estimate that four in 10 companies could go bust, which would mean the loss of 27,000 jobs across the country. Some firms have seen a drop in income of up to 90% this year, so it is not surprising that they are facing such financial difficulties.

Even in the context of good news about vaccines, it is clear that social distancing measures will continue for some months, which means that coach companies will be simply unable to operate at their normal capacity, as several hon. Members mentioned. Coach firms have historically been very responsible borrowers, and they have been profitable businesses. They simply need short-term help to tide them through the crisis.

I will refer to some of the comments made to me by companies. Acklams Coaches is a small business in Hull that my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) introduced me to. It said:

“Until the pandemic we were a growing business and had invested in new environmentally friendly vehicles but to date our income has dropped by 70% with all our leisure work having stopped. We employ 110 staff, which has already reduced during the pandemic and we are now having to look to offer reduced hours, which means more staff are having to leave.”

Berrys Coaches in Taunton said:

“It feels like the coach industry has been the forgotten sector.”

Time and again in the debate, we have heard similar stories from hon. Members from across the country.

That is why we are calling on the Government to explain why they have excluded coach companies from the sector-specific rescue packages arranged for bus, rail and light rail. Indeed, what plans do the Minister and the Government have in place to tackle the looming financial crisis that has been eloquently talked about this afternoon by many hon. Members from both sides of the Chamber?

I urge the Minister to address three critical points in her closing remarks. First, the Government must publish a plan to tackle the looming financial crisis for coach firms to protect jobs and the viability of those wonderful family businesses in future. Secondly, I hope that she will explain why the Government have not committed to providing targeted support for coach companies, despite that being accessible to other parts of the economy. Thirdly, I hope that she will outline what steps the Government are willing to take to protect the tourism and cultural industries so that they can reopen safely as we transition out of the pandemic. The Government must now provide clarity and act with swiftness after months of inaction, otherwise we could face the loss of thousands of small businesses and thousands of jobs.