Grahame Morris MP made a pitch to the Backbench Business Committee this afternoon for a debate about the future of the coach industry.
Tens of thousands of jobs are at stake as coach operators struggle to secure business, as the impact of the coronavirus pandemic continues to be felt. Industry experts estimate that up to 4 in 10 companies could go bust and 27,000 jobs could be lost if no support is made available. This will hit communities hard, as many of these companies are family-owned small businesses.
Unlike bus and light rail operators, there has been no sector-specific support for coach companies. The furlough scheme has been the only source of support for some companies, with industry experts estimating that 80% of coach companies were unable to access the Coronavirus Business Loan Interruption Scheme.
Many of the difficulties arise from coach financing. Companies have been incentivised to purchase newer, cleaner vehicles in recent years, and most are bought using financing of some kind. Repayments have been due throughout the crisis, as demand for coach services has remained low.
The Government has argued that schools returning will provide coach companies with business, but many receive most of their income from summer trips, tourism, and sporting events. Over 23 million people visit UK attractions by coach every year, generating nearly 10 percent of the tourism sector’s total contribution to the economy.
There has been a lack of support for the coach industry, which is now entering its off-peak season. Unlike the train, bus or light rail sectors, the coach industry has received no direct support from the Government. No Government statement has been made in the House addressing the coach industry, yet the topic comes up frequently at transport departmental oral questions.
Revenues are cyclical around a peak in April – July. Many companies run break even for much of the year either side of the peak, and are likely to be operating at – or close to – a loss during the winter, even in normal times. Operators have seen a total loss of business during the initial coronavirus containment and delay phases.
There has been a mass cancellation of work throughout the remainder of the 2020 season; many coach operators are reporting a total wipe-out of their order book for the summer peak and most will ultimately be facing this at some stage. There is currently little to indicate that there will tourism in any meaningful quantity for the remainder of 2020 and into 2021.
The pandemic hit the industry at the worst possible time. The peak of the season was just about to commence, and the pandemic has spanned the entirety of the peak coach season (April – July), and beyond, taking it into a second winter. The coach industry is facing what is effectively at least an 18-month winter; Autumn 2019 – spring 2021.
The long-term viability of the coach industry is critical for the hundreds of thousands of jobs supported down the supply chain, for the wider British tourism economy and for enabling the public to visit family and friends, or children to go to school. This is to say nothing of rail replacement services, school trips or travel to sporting fixtures.
Some of these activities are curtailed at this time, causing the coach industry’s economic problems. If coach firms do not make it through this difficult period, many activities will be unable to continue when we eventually transition out of the coronavirus crisis.
Parliament must play a role in urging the Government’s development of a specific support package for the coach industry.