Future of the Coach Industry

Philip Hollobone Excerpts

Thursday 10th December 2020 Westminster Hall

[Mr Philip Hollobone (Kettering) (Con)]

It is a pleasure to serve under you today, Dr Huq.

I congratulate the hon. Member for Easington (Grahame Morris) on securing this debate on an issue that affects so many small businesses right across the country. In normal times, their industry is worth about £7 billion, and it is fundamentally a healthy and profitable industry. I could go down the list of all the things that it does, but I will not do so, for time’s sake.

Operators—small-scale entrepreneurs who spent years building up their businesses—are doing everything they can to stay afloat. However, bookings are not expected to return to pre-pandemic levels until the summer of 2021. Many operators face a drop in income of around 90%—for example, Jewels Tours faced a revenue shortfall of that amount. At the same time, their fixed outgoings remain the same: payments on vehicles, monthly maintenance and so on. The summer months provided some respite, but they could hardly be profitable, because of the social distancing requirements.

Those businesses have made significant investment in their infrastructure. They have high fixed costs in servicing their financial investment. For instance, over the past six years, Grange Travel has invested over £6 million in upgrading its fleet to satisfy regulatory demands. One operator applied through their bank for a coronavirus business interruption loan. Despite having an excellent credit score and the scheme being Government backed, they were declined, leading them to go to a broker and have a debenture attached to their business. As a result, they are having difficulty getting other finance. They now face a winter with hugely suppressed demand, the liability of a high fixed-cost base and little or no support outside the furlough scheme. They face going out of business. Yet this is a viable industry, which supports our own domestic hospitality and tourism sectors.

The key asks on behalf of this suffering industry, as voiced by businesses in my constituency, are as follows. First, the Government should stand as guarantor with finance companies. Secondly, they should come to an arrangement with the industry to provide further finance holidays. Thirdly, grants should be made available to the several thousand coach operators in England, as has been done for big players like National Express. This industry is fighting for its future. We must support it.