[Sir Edward Leigh in the Chair]

Part of the debate – in Westminster Hall at 2:52 pm on 10th November 2020.

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Photo of Emma Hardy Emma Hardy Shadow Minister (Education) 2:52 pm, 10th November 2020

It is a pleasure to serve under your chairmanship, Sir Edward, and I congratulate Elliot Colburn on securing this important debate. I want to focus my remarks on the coach industry, because its members feel badly let down. They tell me that that is partly because politicians do not understand their industry.

I will start by quoting Kevin Mayne, from Maynes Coaches, a family firm in Scotland, who says:

“We take children to school, grieving individuals to funerals, vulnerable people to disabled care facilities and turn up in high risk situations with shiny shoes to keep the nation moving. We are waiting at the station when the train stops and a rail replacement is called upon, we are behind the NHS when the country stops moving and we are truly at the heart of national transport.

The Coach Industry has always been there for the nation. When the train stops, you get a coach to take you where you need to go—whether it be a job interview, school play or a hospital appointment. When planes are grounded, it’s a coach and a driver who are sent out to keep the people moving forward to their next destination. If everything in the city grinds to a halt and there needs to be an evacuation—we help. Trust me, I have been there personally.”

The situation for coach companies is deeply worrying. They are all SMEs, the majority family-run businesses. Last week, I met Alan Acklam from Acklams Coaches, who spelt out the crisis the industry faces. These were all viable businesses, and they will be again, because after this pandemic people will want to go to concerts and on holiday and start enjoying life again. But right now, tens of thousands of jobs are at stake as a result of coach operators struggling to secure business as the coronavirus pandemic goes on. They have seen a 90% drop in income for 2020. In 2019, there were 23 million visits made by coach, but that number has fallen to virtually nothing.

There has been no sector-specific support for coach companies, unlike bus, rail and light rail operators. For some companies, the furlough scheme has been the only source of support until this point. The industry experts estimate that four companies in 10 could go bust and 27,000 jobs could be lost if no support is made available. Furlough has helped, but many coaches have fixed costs. One owner told me that

“fixed costs will kill the industry prior to the furlough ending”.

That is partly because coach companies have tried to do the right thing. Many have upgraded their fleets to improve air quality and reduce emissions, and have taken out finance agreements to do that. Now the coaches sit idle and the repayments are due.

One coach operator told me that the cost per day for his coaches was £220. The coaches are now in negative equity because the market is flooded as businesses try to sell them. Some firms have been able to negotiate finance payment holidays, but those are coming to an end and there is no sign of them being renewed. Only 20% of companies have been able to access coronavirus business interruption loans, and only 15% have been able to access small business support.

I was contacted by the owner of a family company in Dorset, who sent me a heartbreaking email about the problems he faces. I will quote from that, because it is better than anything I could say to the Minister. It says that the company was

“told yesterday that we’ve been refused a CBIL loan from our own business bank (Lloyds Bank). We have a BBL and it was going to be paid as part of the CBIL funds. We weren’t refused due to bad credit or not being a profitable company. It was because the banks don’t know when our industry will return to any form of normality, they’re classing us as maximum risk for any form of lending. They can’t see the industry recovering over the next 12 months, so won’t lend us any money. This is what I was told by them over the phone, and to be honest, I can’t believe it, I really can’t!

I felt very ill last night when my bank said they can’t see us returning soon. I didn’t realise they were experts in when things will return to some form of normality. Lloyds have also put a 5-year payment plan on the application. Rishi Sunak MP said he was extending payments up to 10 years to help us out. Lloyds said they hadn’t had that information and have to base it on 5 years. If it was for 10 years, the application may have gone through?

The coach operators appreciate the furlough, but as I said before that is for the employees’
benefit, not for the business itself. Furlough till March is great but the finance houses will not extend holidays for the coach payments. Once January comes I will need to find over £12,000 a month for coach finance payments with an income of absolutely nothing. My staff will be made redundant just after Christmas if funding does not arrive soon. Coach operators are completely left on their own at the moment and have been for 8 months.

I have £26,700 left to get me through to March. I’m applying to Iwoca loans, but the rates are higher than Lloyds and they are saying it is only over 5 years and not 10 years. I have a wife, a 5-year-old and a 9-year-old to support. Come early next year, we will be forced out of our home as the money will run out and the coach finance, like others, is secured against our family home. I haven’t been scared up until now, but I’m scared now.”

The only business that coaches have is school transport, but most companies subsidise that with other jobs. At the moment, that service is being operated at a loss. The industry needs help. I am grateful that the Chancellor told me that the relevant Minister will meet me and representatives from the industry, but I will be even more grateful when the relevant Minister actually puts a date in the diary for that meeting.

Will the Minister please comment on what sector-specific support coaches will get? Will the Department look at classifying coach operators as either tourism or essential travel so that they can access some of the grants that are already available? What conversations are being had by the Department with the high street banks about their criteria for lending coronavirus interruption loans to the industry? What support can the Government give the industry in securing extended finance payment holidays? Have the Government considered retrospective low-emission-based grants for coach companies that have made a large investment in greener travel? Has any consideration been given to topping up the costs of school transport during this time?

Coaches are not just for displaying dubious political slogans during referendums and elections. Our country needs them, and now the industry needs us. I look forward to working with the Government to get it the support it needs.