Legislating for the Withdrawal Agreement

Debate between Mike Hill and Alex Sobel

Monday 10th September 2018 Commons Chamber

[Mike Hill (Hartlepool) (Lab)]

It is a privilege, as a north-east MP myself, to follow the hon. Member for North East Somerset (Mr Rees-Mogg).

I voted to trigger article 50 in accordance with the will of my constituents. Forgotten communities, worries about immigration, promises of more cash for the NHS—whatever their reason, the people of Hartlepool voted for Brexit by the highest margin in the north-east. They are a tenacious and aspirational people who, despite having benefited from millions of pounds of EU investment over the years, somehow lost faith in Europe. Instead, they put their faith and hopes in a future outside the EU—one that gives the UK autonomy and the freedom to trade with the rest of the world and to award contracts to local businesses without forced competition. They wanted financial security, prospects for their children and the right to self-determination without interference from EU laws. They wanted all that, and quickly. My constituents are level-headed. They expected some difficulties along the line, and they knew that negotiations had to happen; what they did not expect, and rightly should not have had to expect, was that six months before leaving the EU, we would face a hard Brexit.

Negotiations are negotiations. People should not go in there empty-handed and expecting nothing. They should fight for what is right by the people. They should not promise jam tomorrow to those whose jobs and livelihoods depend on a well-managed outcome. They should not ask people to have blind faith in the future if they have nothing credible or tangible to show them that such faith will be rewarded in the long run. My constituents want proper checks and balances to be put before them. They want to see that all the right mechanisms are in place and that the negotiations will have outcomes that will protect them. That is why I am not against the idea of putting the final deal to them. No deal will cast the people of Hartlepool and the UK into darkness. It will cast them adrift. It will leave them rudderless and with no faith in those whose job is to chart their future.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

My very good friend and I have slightly different views on this issue, but at a conference on Saturday, I spoke about the north-south divide and the left-behind communities in our cities and towns. How can we have a Brexit that would cause those left-behind communities to be even more left behind? Manufacturing plants would have to close, because we would have no customs arrangements to meet their requirements. Does my hon. Friend not agree that we need a deal that will keep jobs in the north?

[Mike Hill]

I absolutely agree, especially as my coastal community feels that it is one of the forgotten communities.

I am on record as saying that in the north-east, Hartlepool will be the true barometer for change. On that basis, I say no to a second referendum, but I also say no to no deal, and I expect to see true leadership from now on.

Transport Secretary: East Coast Franchise

Debate between Mike Hill and Alex Sobel

Wednesday 23rd May 2018 Commons Chamber

[Alex Sobel (Leeds North West) (Lab/Co-op)]

One of the firmest ideological principles held by Conservative Members, as we have just heard from the hon. Member for Spelthorne (Kwasi Kwarteng), is their insistence on the superiority of the private over the public with regard to the ownership of capital. The continued failure of the rail franchising framework to harness the power of the private sector ought to give them pause for thought on this matter. Much has been said about the £1 billion surplus that was poured back into the Treasury when the east coast main line was run in the public interest prior to Virgin-Stagecoach, but less has been said about how East Coast achieved what private companies could not.

[Mike Hill (Hartlepool) (Lab)]

Does my hon. Friend agree that improved transport links are vital to the success of the so-called northern powerhouse? As such, does he agree that this east coast fiasco means that we can now show that only a publicly owned company model can deliver that agenda?

[Alex Sobel]

I thank my hon. Friend for his comments. I often stand at King’s Cross waiting for my train home and see the words “Train cancelled” above me. I look wistfully at platform nine and three quarters, hoping that I may be able to go through the wall and travel home on the Hogwarts Express. Although the Minister for Magic, Cornelius Fudge, was a very inept Minister, he at least managed to run the Hogwarts Express successfully—unlike the Secretary of State. I completely agree with my hon. Friend’s point.

I would like to turn to the remarkable East Coast Rewards loyalty scheme that was made available to customers from 2011 until it was scrapped by Virgin Trains East Coast. I extend my thanks to the individuals behind the “Save East Coast Rewards” campaign, who kindly provided my office with a collection of documents obtained through freedom of information requests, including financial reports and business plans produced while East Coast was under public control. The documents disclose the business thinking behind the creation of East Coast’s generous loyalty scheme. There is a sharp focus on understanding and exploiting the unique market characteristics of the east coast main line, to compete with fierce competition from road and air.

The scheme had the following benefits. Frequent business travellers who spent £1,800 over three months would receive six first-class return tickets, lounge access for them and a guest, 20% off advance fares from the East Coast website and a quarter of a bottle of wine, which I am sure Conservative Members would enjoy. That was a bold and competitive offer, and it brought business back from air travel and road on to the railways. For less frequent business and leisure travellers, a spend of just £255 through the East Coast website entitled them to a free standard-class ticket anywhere on the network, so they could enjoy Yorkshire, the north-east or Scotland completely free.

After Virgin took over the franchise, it decided to roll out the Nectar point scheme. Subsequently, an £1,800 spend over three months would award business travellers £18-worth of Nectar points, instead of six first-class tickets. A £255 spend would get someone £2.50-worth of Nectar points, instead of one standard ticket under the public East Coast. It appears that Virgin Trains simply pushed the Nectar reward scheme on to East Coast, without paying any attention to what was already on offer, demonstrating a lack of understanding of the loyalty market, what East Coast had to offer and competition from air travel.

Financial reports from East Coast show that, in 2013-14, East Coast Rewards had more than 380,000 members, who accounted for 50% of expenditure. In subsequent reports, the reward scheme is shown to be ever growing, with more than 600,000 members, before being folded when Virgin-Stagecoach came in. The reward scheme was increasingly central to the surplus that East Coast provided back to the Treasury.

The remarkable thing is that a not-for-dividend subsidiary rail operator appears to have understood far better than Virgin-Stagecoach how to run a viable rewards scheme that succeeded in exploiting the market characteristics of the east coast main line—its status as an artery route and its discretionary travel base of leisure travellers, with competition from road and business air travel—to successfully run a rail franchise. Virgin’s inability or unwillingness to recognise the viability and popularity of the reward scheme it inherited from East Coast seems at odds with the belief that private interests are best placed to organise business profitably.

East Coast was an example of a rail operator that was not responsible to shareholders or profits and was not contorted into complementing the brand identity of Virgin. We had a well-run and well-liked organisation that understood its market position and its strengths and weaknesses and improved the service while pouring money back into the public purse. We need to return to that situation, not as a last resort but as a default position, using the best ownership model for rail travellers, whether as directly operated rail or a co-operative, which would have strong employee and consumer interest. We on the east coast deserve the best railway, which we have not had under Virgin-Stagecoach but did have under the public East Coast.