Coach operators call for emergency 20p per litre diesel rebate
The UK coach industry has urged the Government to introduce an emergency diesel rebate of 20p per litre. Coach UK says soaring fuel prices threaten the future of operators and vital passenger transport services.
The industry body has called on the Chief Secretary to the Treasury to provide urgent financial relief. It warns that many of the UK’s 2,500 coach businesses are struggling to absorb rising fuel costs. Around 85% of these businesses are family-owned.
Without support, operators may have to cut services or reconsider whether some contracts remain viable. The potential impact extends to home-to-school transport, educational trips, community groups, sports clubs and tourism.
Coach fuel costs rise by 46%
A survey of Coach UK members found that operators have faced a median increase of 46% in fuel costs since hostilities began in Iran in February. Diesel prices for coach operators have typically risen from £1.12 to £1.61 per litre.
Fuel ranks as the second-largest operating expense for coach businesses, behind payroll. It accounts for almost a third of their overall costs, leaving operators particularly exposed to sudden price increases.
The pressure is especially acute for services operating under fixed-price contracts. These include home-to-school transport agreements with local authorities, where operators cannot easily pass higher fuel costs on to customers.
Coach operators transport around 600,000 children to school across the UK every day. However, rising diesel prices threaten the financial viability of these essential services.
Coach UK’s survey highlights the potential scale of the problem. If high fuel prices continue beyond December, 41% of respondents say they will withdraw from home-to-school contracts. A further 18% say they may have to consider closing their businesses altogether.
Such decisions could affect families, schools and local communities. They could also reduce transport options for groups that rely on coaches for affordable travel.
Industry proposes £52.2m diesel rebate
Coach UK has proposed a targeted diesel rebate to help operators recover part of their rising fuel costs. The organisation estimates that the scheme would cost £52.2 million over 12 months.
It also suggests that the Treasury could partly fund the measure through additional VAT revenue generated as motorists pay more for fuel.
The proposed rebate aims to provide temporary relief rather than a permanent subsidy. Coach operators generally receive no public subsidy for their services, despite supporting a wide range of passenger transport needs.
Graham Vidler, Chief Executive of the Confederation of Passenger Transport, said the industry faced an unprecedented challenge.
“Coach operators provide a hidden backbone of transport in the UK. They’re entrepreneurial businesses which are used to navigating bumps in the road. This year’s surge in the price of fuel, though, is posing a threat to the entire industry.
“In the usual course of events, coach operators get no public subsidy. We are asking, as a last resort, for short-term support from the Government to keep coaches on the road. A 20 pence per litre emergency rebate on fuel duty would be a modest cost to the Treasury and would safeguard vital services.
“If operators are simply left to sink or swim, they will be forced to cut back. The impact will be felt by parents, sports teams, community groups and by the visitor economy across the country.”
Coach industry highlights wider economic impact
The coach sector supports 81,000 jobs and generates £6.4 billion in economic value through employment. It also plays a significant role in supporting businesses and destinations across the UK.
According to a study by KPMG, coach passengers spend £8.3 billion each year at destinations around the country. Any reduction in coach services could therefore affect tourism, hospitality and other local businesses.
The industry delivers around 450 million passenger journeys annually. That equates to approximately 40% of the number of journeys made by rail.
Coach UK has also compared the proposed rebate with public spending on rail operations. It estimates that the £52 million annual cost would amount to less than two days of operational subsidy for the rail network.
The organisation puts annual rail operational subsidies at £11.9 billion, equivalent to around £33 million per day.
These figures form part of the industry’s argument for targeted support during the current fuel price crisis. Coach UK says a temporary rebate could help businesses maintain services while easing pressure on operators with limited scope to increase fares or renegotiate contracts.
Government support could protect essential services
The call for a diesel rebate highlights the vulnerability of coach operators to rapid changes in fuel prices. Businesses working under fixed-price agreements face particular difficulties because their costs can rise faster than their revenue.
If operators withdraw from contracts or close, local authorities, schools and community organisations may struggle to find replacement transport. The wider effects could also reach sports, tourism and regional economies.
Coach UK is part of the Confederation of Passenger Transport, which represents operators running more than 10,000 vehicles.
The organisation is asking the Government to introduce short-term relief before rising fuel costs force further decisions on services and business viability. It argues that a targeted 20p-per-litre rebate would help protect the coach network and the communities that depend on it.
The Government’s response will be important for operators facing sustained cost pressures, particularly those providing essential transport under fixed-price contracts.
