[Dr Rupa Huq in the Chair]
I beg to move,
That this House has considered the future of the coach industry.
It is a pleasure to serve under your chairmanship, Dr Huq. I record my thanks to the Backbench Business Committee and my good and honourable Friend the Member for Gateshead (Ian Mearns) for allocating time for this important debate. I thank my own trade union, Unite the union, for providing background information and briefing.
I particularly thank my constituents, Jillian Nicholson and Michael Pearson of TM Coach Travel and Northeast Coachways. The coach industry could not have two better advocates. For nine months they have asked for nothing more than fairness and justice, and a chance to survive covid, so that theirs and other small and medium-sized coach companies, often decades-old family businesses, can return to work post-covid.
The industry has a simple message to Government, and it has been delivered thousands of times in postcards from the edge. It reads, “Wish you could hear.” The Government are running out of time to listen and act. Coach operators are already going bust; employees, drivers and mechanics are being made redundant; and, the sector is losing capacity. That capacity will be vital to the recovery of the coach industry and to the whole economy, and to thousands, potentially millions, of jobs, supported by UK leisure and tourism.
Coach companies are the backbone and the supply chain for UK leisure and tourism. According to the Confederation of Passenger Transport, more than 23 million visits were made by coach in 2019, contributing £14 million to the UK tourism economy. The sector has more than 2,500 coach operators, directly employing some 42,000 people. Of course, there is then the ripple effect. Vehicle maintenance and upkeep supports an army of mechanics and garages involved in servicing and repairing vehicles.
The argument today is simple: the Government should stand by British businesses—companies that support our economy and do the right thing. The most responsible coach companies have invested in the newest clean fleets in our economy and are implementing the Government’s zero carbon climate change policy. However, ironically, they are facing the greatest loss, having to manage higher debt levels at a time when they have no income and the industry is shut down.
It is not a crisis of their own making. The number of Members of Parliament here who are concerned about this issue is worthy of note. Several who were hoping to speak have had to leave, unfortunately, because of delays to the votes and speaking in the main Chamber. This is an important issue that affects every constituency.
I put my name down for the debate, but unfortunately I was not called. Is the hon. Gentleman aware that in Northern Ireland, the Department of Enterprise, Trade and Investment has a bespoke package of grants of £8,000 paid for the first bus and £4,450 for the second, up to a total of £100,000? That underlines the importance that the Northern Ireland Assembly has put on the bus sector, including Giles Tours and Billy Brown’s and others in my constituency. Does he feel that the Northern Ireland example might be one for the Minister to replicate here?
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.
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.
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.
I recently had the pleasure of speaking to Roderick Thompson from Regent Travel in Hartlepool, a family-run independent travel agent with over 30 years’ experience in the travel business. He told me not only that covid-19 has impacted his business and the travel industry as a whole, but that for many of his regulars the potential demise of the coach tour industry would have a devastating effect. He told me that many of his customers prefer to pay cash and were not used to the world of computers. When holidays got cancelled due to the pandemic, he and his staff spent most of their time recovering deposits for them.
That brought into sharp focus the magnitude of the hit the coach industry is taking. The Confederation of Passenger Transport UK has warned that, without urgent support from the Government, thousands of family businesses are at risk because, despite mothballing coaches and furloughing staff, they still face costs averaging £1,900 a day.
The owners of another local family business wrote to me recently. Paul’s Travel has been operating for 18 years in the minibus trade. In their own words, they sit between taxi companies and large coach companies. They, too, have suffered similar experiences, with private hire down and the number of regular weekly contracts down from 16 to two. They also rely on the hospitality and leisure industry. They are hanging on by the skin of their teeth.
I have chosen to highlight the plight of two local Hartlepool companies, but it must be recognised that on a national scale coach travel is a major player in the leisure industry. It directly employs 42,000 people, with thousands more jobs dependent on the sector. Without Government support, those jobs will simply go.
I thank my hon. Friend the Member for Easington (Grahame Morris) for securing this debate and giving an excellent speech. The coach industry is a vital part of our society, which we take for granted. We have probably not appreciated until now its full value and its true worth to our communities and our enjoyment. For many working-class kids of my generation, the highlight of the summer holidays was a day trip to Blackpool or north Wales on what we called charas, which was our take on charabanc—a coach. Of course, they have changed a lot since then. We have all experienced it over the years.
I want to draw the attention of the House to something that people probably forget—the role that the coach industry played at the beginning of the pandemic. Given that so much has happened since, it is easy to forget that when British nationals came home from China in February and March, it was coaches that transported them from London to the Wirral. We all have coach companies, or involvement with coach companies, in our constituencies. They are very much part of the community.
My area has a number of such businesses. I have spoken recently to Anthony’s Travel, which is a local company, and to Richard Bamber, who is one of the partners there. He told me just how much they are feeling the pinch. They also feel excluded, particularly when the Government are making decisions about what sector they fall into. These local businesses form part of the backbone of our communities, but it seems that the coach industry falls into a grey area between the transport and leisure sectors, and no one in Government seems to be brave enough to make a decision when it comes to defining it.
As my hon. Friend the Member for Easington mentioned, the Government have just tried to ignore the points and arguments that are continually being put across. They then try to cover that by saying, “We are helping industry. We are providing support.” But they will not answer the actual points, and they need to do that. It is about time that they came clean and said what they are doing and what they intend to do.
There are potentially 27,000 jobs being lost. The Government may have taken the view that something will be needed well after the pandemic. They may have thought, “Well, it’s a bit tough if people lose their jobs and industries go bust, but someone will come along after it.” It is probably going to be the bigger companies. That is not the point; the point is that these companies are trusted local companies that are very much involved in their community and really want to serve their community. We want them to survive. They are trusted companies.
These companies provide improvements and help to vast areas of the economy. Just take coastal towns, which are suffering at the moment, and how much they rely on coaches to bring tourists and day trippers to them. These are really important businesses.
I have little time left—I am going to stick to your advice, Dr Huq—so I will just say this. We have to have proper support for the coach industry, and particularly for those local businesses that we all have in our constituencies. They are a vital part of our communities. We must have that support given to them.
I thank the hon. Member for Easington (Grahame Morris). I agree with everything he said—that avoids some degree of repetition.
I want to talk about the impact on the sector in my own constituency. Every July, coach drivers from across the country travel to Blackpool for the coach driver of the year awards, parking their luxury vehicles on the comedy carpet outside the tower. This year, they could not do that. Instead they came as part of a blockade along the M55 for the Honk for Hope campaign.
This is not about one single bus company in my constituency—although Members are right to support companies in their areas. It is about the existential threat to the private sector economy in my constituency. If people travel the Blackpool coast from south to north, they pass hotel after hotel after hotel, each of which depends on coach visitors coming to the resort. Those hotels have seen their business collapse: there were 80% fewer bookings even before the most recent lockdown, and they are now at crisis levels. I know of one coach company that brings 120,000 people a year to Blackpool, putting £30 million into the local economy. That is replicated up and down the coast. I have had hotel after hotel after hotel coming to me and saying, “We don’t know how we are possibly going to survive.”
This is not just a summer-only phenomenon; it is a year-round part of our local economy. We have the tinsel and turkey season right now, but it simply is not happening, because the hotels are closed. Even if the hotels were open, the coaches could not come, because they cannot make a profit, as a result of the social distancing rules that are part and parcel of what has to happen at the moment. We have just missed the illuminations season, which is three weeks solid—particularly in the half-term—of coaches coming in, driving through the lights and, yet again, putting money into not just local hotels but the small cafés, the restaurants, the entertainment venues and the piers. Every single part of our private sector economy in Blackpool is affected not just by the loss of visitors, but by the loss of the coach visitors, who underpin it and have done for decades. As the hon. Member for Halton (Derek Twigg) pointed out, they are part of what Blackpool is.
I therefore urge my hon. Friend the Minister to listen to this sector carefully. There has been a glut of coaches coming on to the market that are second-hand; many existing companies are struggling to make the finance payments. I know that she is the Decarbonisation Minister, so she ought to be enthusiastic about ensuring that we have more and more Euro 6 coaches throughout the network. Here is a chance to “build back better”, to support the finance payments for these firms and to allow companies to use Government subsidy to improve their fleets as part of the decarbonisation strategy. Then it will not just be this sector that survives—Blackpool as a coastal resort might have a chance as well.
It is a pleasure to serve under your chairship, Dr Huq. I am grateful to my hon. Friend the Member for Easington (Grahame Morris) for securing this debate and for the really strong case that he made. Coach companies, operators and staff up and down the country will be relieved to hear their concerns played out so strongly. Two companies—Skills and Hammonds—are in my constituency; I have worked with them throughout the pandemic, and I hope to be a voice for them here today.
The coach industry is worth £14 billion to the tourism industry. Some 600,000 children regularly rely on a coach to get them to and from school. During the pandemic, the coach industry has stepped up to provide 50,000 more spaces to make sure that travel can be done safely. It is not a question of whether we can afford to support the coach industry, but what support we can get to it and how quickly we can do that. Some of the schemes the Government have done so well during the pandemic simply have not fitted the coach industry. It is hard to do these things, but there is an obligation to fill the gap. We must understand that the coach industry is distinct from the bus industry, and the support must be distinct too. I know that Scotland has announced support recently, as has Wales, and it is now time for England to do the same. [Interruption.] The fact that Northern Ireland has also announced support is news to me.
Coach businesses have big overheads. Fleet insurance, liability insurance and rent can be more than five grand a month before companies have even thought about vehicles or maintenance. Despite being such an integral part of the tourism sector, these businesses have been unable to access support packages. For example, local authorities have decided on a case-by-case basis whether coach operators ought to fall within the leisure and tourism elements of support. We need formal recognition from the Government that coach operators are clearly part of the leisure and tourism sector, so that they can consistently get the support that is supposed to be there for them and so that we can end the postcode lottery. As colleagues have said, the Government could also, at a minimum, encourage the extension of finance holidays by another year to ensure that no coaches are repossessed over this winter. The point about underwriting loans was very well made too.
With the vaccine, we have had a glimpse of the future and of getting to a semblance of normality, but if we want normality—day trips, tours, and children going back to school and back on school trips properly—we need to make sure there is still a coach industry to do those things. The industry is fundamentally healthy and profitable, but it has been hit hard by circumstances well outside of its control. The Government must put in place short-term aid to ensure that the long-term future of the sector is sustainable.
Golden Boy Coaches in my constituency is a family business. It has been run not for decades but for generations. The owners have never darkened my door before. They have got on with their lives and grown their business. They have provided services to generations of my constituents. Such businesses are part of our communities, as we have heard so eloquently from many other speakers. Now they face a lifetime’s work—generations’ work—going under because high maintenance levels, high debt levels and the high costs of compliance do not sit easily with no customers. No business sits easily with high fixed costs.
We have to get the economy moving again. Coach providers do the school run in the morning and in the evening, and the only reason that those two activities paid was because the providers did things in between. After the school run in the morning, they did trips to matinees and racecourses, and after the evening school run they went to the theatres and restaurants. These companies are absolutely on their knees. Golden Boy has a future, but that future does not look rosy. It could be a very small future without more Government intervention.
We in this place are excellent at spending money—we are brilliant at it. We are great at borrowing it; the Chancellor is fantastic at borrowing it, and we are really good at spending it for him, but we do not want to spend money that has already been spent. Money was spent on giving rate relief to the supermarkets, but well over £1 billion of it has come back. As far as the Chancellor was concerned, it had gone out of the door. He has got it back, but he did not expect to see it back, so I say to the Minister: can we not use some of that money—that £1 billion—to throw a lifeline to coach companies?
As I said at the start of my very brief speech, coach operators are the people we never heard from, who got on with their businesses, built their businesses and employed our constituents. They never troubled us, and now they need us, so we need to be there for them.
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.
Like my hon. Friend the Member for Broxbourne (Sir Charles Walker), I have coach companies in my constituency that have never darkened my doorstep; they have just got on with their business. However, they have contacted me recently about an issue that nobody has raised so far: whether they should be compliant with the public service vehicles accessibility regulations.
To be PSVAR-compliant suggests that there is a distinction between making coaches available for disabled people and retrofitting those coaches to make them suitable for taking disabled people, but that is a false distinction, and I was pleased that, as a result of covid, Baroness Vere extended the time that coaches had to be compliant.
The reason I say that that is a false distinction is that in the home-to-school business, coach companies receive—in advance of setting off in the morning—a passenger list that identifies the people who are getting on the coach. It identifies the people who need disability assistance in order to make that coach ride. Many companies tell me that, in 20 or 30 years of being in business, they have received no requests for assistance for people with a disability. I wonder whether we can change the PSVAR rules, because I am absolutely behind ensuring we have coaches that are available for disabled people. If a list is provided in advance that makes it clear who is disabled and who is not, companies are prepared to put on coaches to pick up those people. This is an important issue. Many transport providers have been taken by surprise at the news that home-to-school service providers will have to comply with these regulations, as they previously thought the service would be exempt. The source of that confusion links back to the existence of pre-known passenger lists. I will leave this important issue on the table for the Minister to pick up.
Many of my colleagues have referred more generally to the situation of companies in their areas. Representing a coastal area, I think it is particularly important, as my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) said, that we get these coach companies back up and running, and visiting our towns and resorts again as soon as possible.
Rather than dwelling on the general points, as others have done, I will read a quote from one company in my area that sums up the impact on a well-run family business that—this is similar to what my hon. Friend the Member for Broxbourne (Sir Charles Walker) said—has never darkened the door of its MP previously. Mr Radley, based in Barton, writes:
“As you know, we have had zero income for months now during the lockdown period. After you visited us in the summer, we cautiously reopened on 8 September. Since that date, we have managed to operate just a handful of day excursions and two five-day tours. The average load on these occasions has been 18 passengers.”
That emphasises the fact that, even if we can get these coach companies up and running, social distancing means that their load is only a third or a quarter of normal, which is simply not viable. Mr Radley goes on to say:
“Never in our previous 29-year trading history have we feared for our future existence as we do right now.”
That sums up the impact on individuals.
I am sure that we will shortly hear from the Minister about the success that the Government have had in ploughing money into furloughs, bounce back loans and so on, all of which the companies we represent have taken advantage of and are grateful for, but the fact is that they do not want to hear a repeat of what we have done; they want to hear what we will do to maintain their viability over the next year or two.
Despite the fact that the Cleethorpes constituency is very dependent on the hospitality sector, my constituents have overwhelmingly supported the restrictions that the Government have put in place. In the recent lockdown, the infection rate in my area has gone down from 650 to about 120 per 100,000, so there is recognition that lockdowns have worked. However, if a democratically accountable Government decree that someone cannot go about their law-abiding business, they must act and support those people.
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.
It is a pleasure to be able to speak in the debate, which I congratulate the hon. Member for Easington (Grahame Morris) on securing. I speak on behalf of all the Devon MPs who were unfortunately unable to get on to the call list.
The Government understand the importance of the tourism sector, which is valued at £106 billion, the hospitality sector, which is valued at £130 billion, and the leisure sector, which is valued at £200 billion, so they must surely understand the value that coach companies and services play in those sectors in their supporting role. That is what I want to speak about today. Coach companies, in all our constituencies across the whole country, play an integral role in supporting those sectors, and if we wish our economy to bounce back in the coming years, it will be essential to support businesses that play a supporting role to those major parts of our economy.
I hope that the Government will look very carefully not at what they have already done, but at what they can do in future. There is no doubt that the Government have been extraordinarily generous in their support schemes to businesses across the country, from the grant schemes to everything else, but loans alone will not secure the future of businesses. We need a forward-looking approach to ensure that they have the economic breathing space to thrive in the months to come.
I hope that the Government will look at the CPT’s requests of extending finance holidays by 12 months, ensuring that greater access to support packages is made available to the tourism and hospitality sector, providing an aid-to-trade grant to operators to help boost the return of the coach sector towards tourism—hopefully working with VisitBritain to encourage a new era of domestic tourism would achieve that—and topping up the home-to-school payments to meet the true cost of the work for so many of the coach companies that have struggled over the years.
I am very fortunate in my constituency to have AB Coaches, Tally Ho and Millmans, all of which have struggled through the last seven months. I hope that in looking at how we can support them now we might also look at historical issues that have blighted the sector. Let us see if a suspension of fuel duty for two years to allow companies to reinvest that money into an environmentally friendly new fleet of vehicles would be beneficial. Let us look at ways in which we can rework the working time directives to allow people to work more hours, and to go out there for business and opportunities. I want to see us stand up for businesses that are here today so that they are there tomorrow, and I hope that the Government will act on that.
It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend the Member for Easington (Grahame Morris) for securing this important debate.
Three months: that is how long a family-run business in my constituency has left before it goes bust. For the benefit of the Government, who have shown little interest in the plight of small, family-run businesses so far, I will explain what that means. It means that more than 30 people will lose their jobs, livelihoods and sense of purpose. It means that vital transport for key workers and schoolchildren in the constituency will be cut off. It means that finances will go unpaid and the debt crisis will rise.
I have not one but two family-run coach companies in my constituency of Erith and Thamesmead: Phoenix Tours and Abbey Travel. If answers are not provided today on how the Government plan to support the coach industry, the consequences for my constituents will be devastating. Phoenix Tours revealed that it has sadly already laid of six members of staff during the pandemic, and is struggling to keep up with its monthly outgoings. Its future continues to look bleak. The business was unable to access any form of Government grants, as it is not considered to be in the retail, leisure or hospitality industries. It has taken advantage of the bounce back loan scheme, but this loan was used in a mere month due to the huge costs of its outgoings—costs that have only increased due to insurance providers forcing prices for coach companies during the pandemic. I therefore ask the Minister, given that most of our towns and cities are staring tier 3 restrictions in the face, what measures will the Government put in place to ensure that the coach industry receives a respite from the insurance and finance payments?
Abbey Travel has also laid off 50% of its staff, after 99% of its bookings were cancelled. It lost £400,000 of bookings from Thomas Cook alone. I also know that it is not through irresponsible decision making that these companies have lost all of their business and are now struggling financially. This point has been echoed by many Members today. In fact, both companies have acted with the utmost social responsibility in the past few years, investing millions back into their businesses to ensure that their vehicles are environmentally friendly and accessible for disabled people. The Government have relied on businesses to take action to help us achieve environmental targets. Now, when businesses are on the brink of collapse, the Government really need to take time to support them.
It is with great sadness that I am taking part in this debate. I have heard from constituents about the huge struggles they have faced this year—both professional and personal. I need a commitment from the Minister that she will call on insurance providers to act responsibly to support coach companies during this time. I need a commitment that she will call on her own Government Department to set out a plan to address the needs of coach companies in my constituency of Erith and Thamesmead.
I absolutely welcome the unprecedented level of support that the Government have put into supporting businesses. However, it is clear from this debate that the coach sector has fallen through the cracks and needs further support. Businesses such as Masons Coaches in Cheddington and Countrywide Coaches in Princes Risborough in my constituency are losing frightening amounts of money every single month, and they need support. We can be in no doubt that UK coach operators are facing the very real prospect of going bust all over our country.
First and foremost, we need recognition that the coach sector is an integral part of the leisure sector. Home-to-school transport is an important part of its business, but until it gets the recognition that it is part of the leisure sector, too many businesses will go under. Indeed, one business in my constituency is operating home-to-school transport, but without any of its other usual activities it is still losing in excess of £30,000 a month. That is just not sustainable.
I was struck by recent survey data completed across the sector, which shows that there has been a 90% reduction in operational mileage from April 2020 to October 2020, compared to the same period last year—2019 saw UK coaches cover some 130 million miles in this country, whereas in 2020 the figure was 13 million miles. There has been an 80% reduction in vehicle hires—equivalent to 3.6 million days in 2019, down to 758,000 in 2020. The numbers speak for themselves.
We cannot presume that carrying on with just saying that home-to-school transport is enough will be the answer for our coach sector. We need a whole-Government approach, because this is not just a problem for the Department for Transport. We need to bring in the Department for Digital, Culture, Media and Sport, the Department for Business, Energy and Industrial Strategy and the Treasury to ensure that our coach sector gets the support it needs.
I particularly add my voice to those calls to give those businesses the support they need on vehicle finance. They are all debt-leveraged up to their eyeballs, but many are also indebted, as my hon. Friend the Member for Henley (John Howell) said, because they have taken on considerable debts to meet the PSV requirements. They need support on that and support in grants, and then we will have a healthy coach sector to return to after this crisis.
Many thanks to the hon. Member for Easington (Grahame Morris) for securing the debate on what is clearly an important matter across these islands.
I have spoken in defence of the coach sector numerous times in debates in the main Chamber, in relation both to the economy and to tourism. If we have heard nothing else today, we know that coaches have sadly fallen between two stools when it comes to highlighting the support required. Early-day motions have been raised, yet here we are still talking. The point for the Minister is that this is not just the abstract hobbyhorse of a few Members; this is a grave and immediate threat to a major element of the economy across these islands.
Many coach operators are family enterprises, which has been touched on already, reinvesting their profit in their fleets, businesses and employees. They are wealth-creating enterprises that have paid significant sums into the Exchequer, while never burdening the taxpayer for any financial assistance, prior to the covid pandemic, making them something of an outlier when compared with air travel, rail or buses.
Coach is a vital element of national infrastructure; it is no exaggeration to say that. It is unlike any other element of mass public transportation, such as rail, which cannot survive in normal times without public subsidy, or air, which fills its aircraft with fuel and in so doing leaves not one single penny with the Exchequer. Coach will fill its buses with £540 of diesel, and leave 66%, or £360, with the Exchequer every time they are filled up. The coach industry is surely entitled to a wee bit back in these times of extremis.
As the CPT has warned, the collapse in the coach and tourism sector will wipe 10% off the value of UK tourism, but by guaranteeing loans and covering the interest costs for 12 months, the UK Government could, at a stroke, help operators secure finance holiday extensions that would provide the industry with the breathing space until the return of business in the spring, just a few months away. Many hon. Members of all parties in the Chamber, and others besides, have been making that point to Government for many months.
With every passing month, disaster looms ever closer. I am grateful that businesses in my Angus constituency, such as JP Mini Coaches in Forfar, Black’s of Brechin or Wisharts in Friockheim, will now be benefiting from £6 million of specific support from colleagues in the Scottish Government, recognising as they do that they cannot delay any longer while waiting for the UK Government to act.
The UK Government must accept that that is not a good look. To stand by and not give any support for the English sector, while the devolved Administrations are supporting coach companies in Wales, Northern Ireland and Scotland, is not a good look. It is important for the whole of these islands, because English companies cannot fail for the interests of the Welsh, Northern Irish and Scottish tourist sectors. It is a self-fulfilling multiplier.
Finally, I say to the Minister that there is no room in the summing up for listening to what we have done before. What we need is something new, and we need it very urgently.
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.
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.
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.
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.
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.
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.
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.
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.
I am very grateful to the Minister for giving way; she is being very generous. I am conscious—indeed, concerned—that she seems to be getting to the end of her summing-up, and I am also very conscious that the CPT and many of its members are watching this debate. It would be very helpful if we could get clarity on whether the Government will support the English sector with money that will provide consequentials for the devolved Administrations.
I thank the hon. Gentleman very much indeed, and if the CPT is watching this debate, I want to say to it that we are grateful for its work. We work closely together, so it will know that my colleagues have had a number of discussions with people in the sector and with the CPT itself, and we will continue to have those discussions. We keep under close review all the measures we provide, not just for this sector but across the economy.
I do not mean to eat into the time left for the hon. Member for Easington, but I just want to make the point about the economic viability of these businesses. The fact is that if we support them now, it will pay dividends long into the future. I appreciate the level of support that has been given, which really makes a huge difference to all those sectors that pay so much into the Treasury, but action now will help us to bounce back quicker.
My hon. Friend makes that point incredibly well, and it is the thinking behind all the support that has been given, is being given now and that will be given in the future, because we want all these businesses to come back in the future. Also, we absolutely want them to come back in a green and decarbonised way. Many Members referred to that point, which is at the heart of the Government’s agenda in the transport sector more broadly. However, I will come to my concluding remarks and allow the hon. Member for Easington to come in.
This has been a year like no other, and I thank all the transport workers in the coach sector, who have shown remarkable resilience over the last 10 months, and I hope and believe—as I am sure that everybody does—that 2021 will be different from 2020. I am encouraged by developments in the production of vaccines against covid-19. There are no certainties associated with that process, but it seems that there may be some light at the end of the tunnel.
In the meantime, I assure anybody who is watching this debate, and of course people in the Chamber, that we will continue to work with the coach sector. We will continue those conversations; this is not the end of them. We want to understand and provide the best available support that is necessary.
As we have discussed, we have an ambitious and achievable long-term environmental plan to deliver on greening our transport sector and reducing and removing vehicle emissions, and the coach industry is a very important part of that plan.
I want to reassure coach operators and their employees, and all hon. Members present here in Westminster Hall today, that we remain committed to safeguarding the future of the coach industry. I know that the concerns that have been raised today are being heard by Ministers, by the Chancellor and by Members across Government.
We have had an excellent debate. I thank my hon. Friend the Member for Reading East (Matt Rodda), who is on Labour’s Front Bench, for his intelligent and thoughtful exposition of the arguments; the hon. Member for Angus (Dave Doogan), who is on the Front Bench for the Scottish National party; and indeed the Minister, for listening to the points that were put. On occasions today, the debate was a bit like that quiz game, “Fifteen To One”, or maybe it was even 20 to 1, because the Chamber has been at one in putting forward the arguments in support of this sector. All the sector is asking for is fairness, consistency, some sector-specific support, a chance to survive this winter and an opportunity to get back in business in the spring. After nine months, the coach industry needs hope.
For many people who are watching the debate today, this is the final opportunity. They will have been listening the Minister’s response, so I implore the Government to take this opportunity to save this vital industry and deliver some Christmas cheer to those hard-pressed community-based coach businesses.
Question put and agreed to.
That this House has considered the future of the coach industry.