No-Deal Brexit: Cross-channel Freight

Alan Brown Excerpts

Thursday 2nd May 2019 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Urgent Question): To ask the Secretary of State for Transport if he will make a statement on the no-deal Brexit preparations for cross-channel ferry and freight services.

[The Secretary of State for Transport (Chris Grayling)]

The Government are now reviewing our contingency planning for a no-deal EU exit, in the wake of recent developments. No decisions have yet been taken for the preparations for the new EU exit date of 31 October, although of course many of the preparations that were made for 29 March are still in place. The planning assumptions that underpinned the original maritime freight capacity activity will need reviewing in the light of the article 50 extension, to understand whether they are still valid. A collective view will then be taken across the Government as to the necessary contingency plans that will need to be implemented, and that will include working closely with the Department of Health and Social Care and the Department for Environment, Food and Rural Affairs to understand the needs of their supply chains.

In December, we entered into contracts with ferry operators to provide additional capacity into the UK as part of no-deal planning. Those contracts were scheduled to run up until September, and were an essential insurance policy to ensure the continued supply of category 1 goods—primarily medicines and medical devices for the NHS—in the event of a no-deal Brexit. As I have indicated to the House previously, we took that step because of a change to the modelling carried out across the Government that indicated that flows across the short straits could fall significantly, and crucially for significantly longer than had previously been proposed by our analysts. It would have been irresponsible for the Government not to act, as no deal was and remains the legal default. It was an insurance policy, and insurance policies are a prudent investment, whether or not they are actually used.

Following the article 50 extension until 31 October, the Government have now decided to terminate the contracts with Brittany Ferries and DFDS with immediate effect, to minimise the cost to taxpayers. The termination of those contracts costs £43.8 million, which is lower than the National Audit Office’s estimate of the total termination costs, and I should say that it represents around 1% of the overall £4 billion package of no-deal EU exit preparations that the Government have wisely undertaken to ensure that we are ready for all eventualities.

[Alan Brown]

Thank you for granting the urgent question, Mr Speaker.

I wonder whether we will ever get to the bottom of this whole mess. Truthfully, the Secretary of State’s statement does not give us any more clarification on what the Government are doing in respect of no-deal preparations. We were told that the initial contracts were part of emergency procurement for the unforeseen scenario of a no-deal Brexit, despite our having been told that the Government had prepared. We were then expected to believe the logic behind handing an emergency service contract to a company with no ships and no financial backing.

In response to an urgent question, the Secretary of State for Health and Social Care advised us that the contracts were needed for shipments of priority goods such as medicines, and the Transport Secretary has repeated that in his statement today. If that was the case, why did the contracts kick in automatically on 29 March, rather than being linked to an actual no-deal scenario, whenever that might occur? What exactly did the contracts procure? Why has it taken a month for the latest contracts to be reviewed and cancelled, at a cost of £43 million? What are the Government doing in respect of the next possible no-deal Brexit date of 31 October? If the previous contracts had to be entered into in December for a March kick-in date, it is clear that planning needs to happen now. It is obvious that the Government should be working on preparations right now.

In the emergency debate on the contracts, I asked about the possibility of further legal action and the Secretary of State assured me that there would be none. “A hae ma doots” is what I said at the time, so it comes as no surprise that we now learn that P&O Ferries is suing the Government. When did the Secretary of State find out about P&O’s intentions? Where has that case got to—is it going to go through the courts, or will there be a cave-in and another £33 million settlement?

I know that Governments do not normally publish legal advice, but with this turn of events we are clearly in exceptional circumstances, so will the Government provide or publish the legal advice that they have had over this period? What independent reviews are the Government undertaking to understand the blunders that have happened and to learn lessons so that this does not happen again?

The Secretary of State repeated what the Under-Secretary of State for Transport, the hon. Member for Wealden (Ms Ghani) said earlier in Transport questions: that the £43 million cost of cancelling the ferry contracts is only 1% of the Brexit preparation costs, as if it does not matter. In actual fact, overall the ferry contracts will probably cost up to £120 million, depending on the P&O settlement, so when will somebody become accountable for this waste of money? It is not a negligible amount of money; it is a lot of money.

Many people ask me why the Secretary of State is still in post after all his blunders. I cannot answer that, but I can ask that he does the right thing, finally takes responsibility and steps aside.

[Chris Grayling]

As usual, we have the customary stream of nonsense from the hon. Gentleman. This issue has been scrutinised, and will continue to be scrutinised, by members of the National Audit Office, who are the appropriate people to do so. I will not comment on ongoing legal matters, except to say that the Government vigorously disagree with P&O and will defend themselves to the hilt. I really do not think that he listened to what I said today, or that he has listened for the past few times that I have talked about this in the House. The fact is that he has disagreed all along with the steps that we have taken. Let me read to him a small excerpt from a letter that I received last month. It said that my officials

“have also asked that critical exports should be given priority access to the additional ferry capacity secured by the UK Government where this is not required for essential supplies.”

That request, clearly recognising the need for that capacity, came from the Cabinet Minister in the SNP Scottish Government.