Oral Answers to Questions

Andy McDonald Excerpts

Thursday 18th July 2019 Commons Chamber

[Andy McDonald (Middlesbrough) (Lab)]

The best way of decarbonising road transport is to ensure that more people use public transport. It was therefore alarming to hear the Secretary of State tell the Select Committee on Transport yesterday that he thought that automated vehicles were the answer and that any modal shift should be incremental. Incremental? There is a climate emergency now and an incremental response will not cut it. Does not this show that the Secretary of State is not taking the climate crisis seriously?

[Michael Ellis]

That is quite wrong. The fact is that my right hon. Friend the Secretary of State has been in charge of a record investment in rail. That form of public transport has seen huge sums of investment. In fact, we have invested across the board. The hon. Gentleman talks about the climate. This Government are doing more on that issue than countries around the world, and certainly far more than Labour ever did when it was in power. We are taking a multifaceted approach, and automated vehicles, public transport, electric vehicles and rail are also important in this regard. Rail investment from this Government beats them all.

[Andy McDonald]

I was delighted to hear that Andy Burnham has secured the recommendation of Transport for Greater Manchester to franchise bus services. Contrary to the nonsense spouted from the Government Benches, this has been done at the earliest possible moment following the passing of the necessary secondary legislation, and Liverpool will be next. Modal shift from car to bus will make an enormous contribution to reducing carbon emissions. Why, then, does the Secretary of State—perhaps as a parting gift—not do what a Labour Government will do and give every local authority the power to re-regulate their buses?

[Michael Ellis]

Every local authority already has the power. Andy Burnham and Labour in his area had that power for three years, and they did nowt about it. It was this Secretary of State who pushed through the Bus Services Act 2017.

Oral Answers to Questions

Andy McDonald Excerpts

Thursday 13th June 2019 Commons Chamber

[Chris Grayling]

I am very much aware of the potential to expand services in the east midlands by bringing back into service some of the routes that no longer carry passengers. It is why the new franchisees in the east midlands will be looking at bringing back services on the Robin Hood line, and I am happy to commit to discuss with my hon. Friend in much more detail whether we can do something similar in future with the Ivanhoe line.

[Andy McDonald (Middlesbrough) (Lab)]

Thirty-three northern newspapers, including the Manchester Evening News, The Northern Echo, the Yorkshire Post, the Sheffield Star and the Liverpool Echo, are all supporting the Power Up The North campaign, demanding an end to underinvestment in the north. This Government have repeatedly broken their promises of investment in the north, with the region set to receive just a fraction of the investment to be made in London, and “northern powerhouse” has to be much more than a slogan. So will the Secretary of State take the opportunity to commit not only to electrifying the trans-Pennine route, but to matching Labour’s £10 billion-plus commitment to deliver a Crossrail for the north?

[Chris Grayling]

What I am not going to do is match Labour’s record of investment in the north, because it was lousy. The Labour Government spent nothing on trains, and did not upgrade railways in the north. We are upgrading roads in the north, and upgrading railways across the north. The trans-Pennine upgrade is the flagship—the largest investment programme on the railways in the next control period—and Labour Members have the brass neck to say that they are the ones with a plan. They did nothing; we are doing things.

--- Later in debate ---

[Chris Grayling]

I have not, but I would be happy to discuss the hon. Gentleman’s concept. I am very interested in what he says.

[Andy McDonald (Middlesbrough) (Lab)]

Bus services are in crisis. Since 2010, over 3,000 routes have been cut, fares have risen twice as fast as wages and bus use is in freefall. Last month, the cross-party Select Committee on Transport published a report on bus services in England outside London that recommended how to end this crisis, including allowing all local authorities to regulate or own their local bus services, providing concessions to young people and boosting funding. The report was led by the evidence. Will the Secretary of State listen to that evidence, accept the recommendations and make them Government policy?

East Midlands Rail Franchise

Andy McDonald Excerpts

Tuesday 7th May 2019 Commons Chamber

[Andy McDonald (Middlesbrough) (Lab)(Urgent Question)]

To ask the Secretary of State for Transport to update the House on the bidding process for the East Midlands rail franchise.

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

As has previously been confirmed in a written ministerial statement and at the Dispatch Box on several occasions, Abellio was awarded the contract after presenting the Department with a compliant bid, following a rigorous competition that was consistent with public procurement rules. Our assessment of bids has been comprehensive and fair and I have absolute confidence in the process. It was a fair, open competition and Abellio provided the best bid for passengers, in which it demonstrated that it would not only meet but exceed the Department’s specifications. The Department’s procurement process is absolutely clear: submitting a non-compliant bid that rejected the commercial terms on offer, as Stagecoach chose to do, can lead to disqualification.

We have a winner. Abellio won the competition with a compliant bid. We are currently in the standstill period, which is a standard part of procurement practice. Within that period, the Department is able to answer unsuccessful or disqualified bidders’ questions, enabling them fully to understand the details of the decision that has been made. Towards the end of the standstill period, the Department received a request for further information from one of the bidders and, in view of that, we decided to extend the period until tomorrow, 8 May. After that, we will be looking forward to the mobilisation from the successful bidder, which will lead to improved services for those who use the East Midlands franchise. Abellio will invest more than £600 million in trains and stations between August this year and 2027. Meanwhile, the Government will continue their £1.5 billion upgrade of the midland main line, which is the biggest upgrade since its completion in 1870. That is part of our £48 billion investment to modernise our railways over the next five years.

[Andy McDonald]

During Transport questions last Thursday, the shadow rail Minister, my hon. Friend the Member for York Central (Rachael Maskell), asked about the non-compliance of bidders for the East Midlands rail franchise. The Transport Secretary, who is not present, dismissed her questions as inaccurate and incorrect. However, according to a formal legal disclosure from the Department for Transport, which was published on 15 April and sent with the full authority of the Secretary of State,

“All bids contained some non-compliances.”

The ministerial code requires Ministers to make truthful and accurate statements to Parliament, so will the Transport Secretary now correct the record and rectify the inaccurate and incorrect statement that he made to the House last week?

Given that all bidders for East Midlands were non-compliant, will the Minister tell us how the non-compliances of the respective bidders were assessed? The Department has mandatory and discretionary levers over non- compliances in franchise bids. Can the Minister explain how the criteria were applied during the evaluation of bids for East Midlands?

The leak of the Stagecoach bid details to Abellio during the bidding casts further doubt on the integrity of the process. Why did it take months for the data-breach investigation to start and why was it so limited? Given last week’s cancellation of the ferry contracts and now this latest debacle, is there not serious doubt about the Transport Secretary’s ability to procure services? Will the Minister’s boss sign off the East Midlands franchise contract this week, in view of the serious concerns about the transparency of the process? Given the appalling record of defending legal challenges to failed procurement decisions—Eurotunnel and P&O being cases in point—what contingency plans are there to defend future legal action against the East Midlands award?

In 2012, rail franchising went into meltdown on the west coast main line. Seven years on, it has never been clearer that it is not working and will never work. It needs to end, and to end now.

[Andrew Jones]

Let me deal with the hon. Gentleman’s questions one at a time. In a complex procurement process such as this, or indeed in other complex public sector procurements, it is a matter of course that there may be small technical non-compliances. These could include, for example, incorrect font sizes or submitting bids in the wrong format—in docx rather than in PDF, or vice versa. This does not constitute a material non-compliance, which would affect the compliance of the bid as a whole. What would be a serious issue would be something like the reallocation of risk, or acceptance or non-acceptance of the commercial terms that have been offered. That is where the difference between material and non-material would come in.

We have been clear at the outset that non-compliance risks exclusion and Stagecoach chose to put in a materially non-compliant bid rejecting the commercial terms on offer. In doing so, it is responsible for its own disqualification.

On the bid leak, I am aware that an email was sent incorrectly by Network Rail, which was received by one of the bidders, but that has been investigated and it was proved in that investigation that the email was not opened and none of the information that was possibly within it was accessed, so it has not been material to this award.

The hon. Gentleman said that franchising is dead and buried. I could not disagree more. Franchising has been a significant part of the turnaround of our rail industry. It has led to more entrants into the market. It has led to investment from the private sector. It has led to over £10 billion of investment. It has led to a renewal of focus on customers in the rail sector. It has been an ingredient in the turnaround we have seen, with the more than doubling of passenger journeys on our railways over the past 20 and a bit years. So franchising has been a success. We of course need to evolve it because what we face now is how to take the process on to the next stages. That is the question that the Williams review has been tasked to solve.

Mr Williams is starting to give us some of his thinking. He has made speeches at various rail conferences. We look forward to receiving his report in the early summer, with a view to a White Paper in the autumn.

The comment from the hon. Gentleman was that the Secretary of State had misled the House. The Abellio bid was won in a competitive franchise process and it won with a compliant bid. The comments by the Secretary of State were, therefore, accurate. I am aware of the media story, but it is wrong. He does not need to correct the record. The Abellio bid was compliant and has been won in an open, fair and consistent way. We look forward to seeing the benefits of that for the passengers on the East Midlands network.

No-Deal Brexit: Cross-channel Freight

Andy McDonald Excerpts

Thursday 2nd May 2019 Commons Chamber

[Chris Grayling]

It is very much my hope that we do reach an agreement and that duty free will not be necessary, but I am sure that if it becomes necessary, my right hon. Friend will have that opportunity. None the less, he makes a good point. To Members across this House who complain about the money that we have rightly spent on an insurance policy against a no-deal outcome, I say that the way of preventing that money being spent would have been to vote for the deal. Opposition parties have systematically refused to accept that what is before this House, and what has been before this House, is a sensible deal to deliver a sensible future partnership with the European Union. It is just a shame that they have always been unwilling to accept that.

[Andy McDonald (Middlesbrough) (Lab)]

On 5 March, I told the Secretary of State that his settlement with Eurotunnel risked further litigation from other companies. I warned that taxpayers could face more compensation bills in the tens of millions of pounds, and I was dismissed. But I was right, and he was wrong. His Department is now facing legal action from P&O Ferries. This all flows from his decision to award a contract to Seaborne Freight—the ferry company with no ships.

The Secretary of State bypassed procurement processes to award contracts—rules that were put in place to prevent this sort of waste of public money—and awarded a contract that was in breach of UK and EU public procurement law. As a result, he made a potentially unlawful £33 million settlement with Eurotunnel, promoting P&O to take legal action. Who made the decision to bypass procurement rules? Was it the Secretary of State and does he accept responsibility? The Transport Secretary should have recognised that his Eurotunnel decision risked further litigation. Why did he dismiss my concerns, and was he poorly advised?

Yesterday, we discovered that the Department must pay around £43.8 million to cancel no longer needed ferry contracts. Given that the entire Brexit process has been characterised by uncertainty, why did the Transport Secretary not negotiate contracts that could be delayed if the Brexit date was delayed? If he had, he could have avoided this colossal waste of money. What is his estimate of the total cost to the public of his no-deal contracts? Every other week, MPs must debate the Transport Secretary’s latest costly blunder. I am afraid that this will continue for as long as the Secretary of State remains in post. This country can no longer afford the Secretary of State.

[Chris Grayling]

That is indicative of the fact that the Labour party and the hon. Gentleman do not believe in or support the need for this Government and this country making sure that, in all circumstances, the national health service receives the drugs that it needs. I am afraid that that is just irresponsibility on his side.

The hon. Gentleman raises various questions. He mentioned Seaborne Freight. The legal action with Eurotunnel had nothing to do with Seaborne Freight, because the contract with Seaborne Freight had been terminated several weeks before—after it had secured ships but when its principal financial backer withdrew. I did not bypass any processes. Things were done properly in accordance with Government procurement rules. They have been vetted and looked at by the National Audit Office, which has already provided one report on this. This was a collective decision by the Government to make sure that we could look after the interests of the national health service and that we took the right insurance policies in the event of a no-deal Brexit. We will continue to take the right decisions and the right insurance policies if there continues to be—I hope there will not be—a risk of a no-deal Brexit.

Oral Answers to Questions

Andy McDonald Excerpts

Thursday 2nd May 2019 Commons Chamber

[Chris Grayling]

I have said to all those who are commissioning new trains, particularly when my Department has a role in the procurement, that I expect manufacturers, when they deliver trains—this is an important point going back to what the hon. Member for Huddersfield (Mr Sheerman) said earlier—to leave a skills footprint and a technology footprint in the United Kingdom. One thing we can all do through the procurement process is to be absolutely insistent that that skills footprint is left behind. That does more than anything else to ensure that trains are and will be built in the United Kingdom.

[Andy McDonald (Middlesbrough) (Lab)]

The Secretary of State is in charge of the worst-performing Department when it comes to emissions. Transport emissions have risen since 2010. The Committee on Climate Change said that

“the fact is that we’re off track to meet our own emissions targets in the 2020s and 2030s.”

Is the Secretary of State content with this failure, or will he commit to honouring the UK’s own legal and international climate change commitments?

[Chris Grayling]

First of all, I am part of a Government who have presided over a fall in Britain’s carbon emissions. Indeed my hon. Friends who have spoken on this matter over the past two days have set out ways in which this Government are among the leaders in the world in seeking to reduce carbon emissions and to deliver actual results in doing so. Members should look at what we are doing in pushing for a transformation of other vehicle fleets on our roads and in getting hydrogen trains on to our rail network as quickly as possible. If they look at the work that my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) is doing to promote cycling and walking, they will see that we are spending more than previous Governments have done. There is, of course, much more to do, but we are working harder than any previous Government to deliver real change.

[Andy McDonald]

The Government contributed to the UN’s special report on 1.5°C, yet failed to take into account its contents when designating the airports national policy statement. Similarly, the Secretary of State admitted that the Paris agreement, ratified years ago by the UK and by almost every country in the world, was not considered when designating the ANPS. Given that the UK Government have now accepted that we are in a climate emergency, will he review the ANPS in the light of Paris, the Intergovernmental Panel on Climate Change report and the Committee on Climate Change advice—if yes, when?

[Chris Grayling]

When we prepared the ANPS and when the Airports Commission prepared its recommendations, it was done in the context of the recommendations of the Committee on Climate Change. We have continued to work with the Committee on Climate Change, and I am confident that we will deliver that expansion and continue to fulfil our obligations to reduce carbon emissions and move towards what was set out this morning.

East Midlands Rail Franchise

Andy McDonald Excerpts

Thursday 11th April 2019 Commons Chamber

[Andrew Jones]

There were a number of points in my right hon. Friend’s question. As soon as the decision was taken on this franchise, all the bidders were notified. That is entirely standard. He has a great track record of delivering improvements across our rail network. Bidders were notified, of course, across all competitions, so that they did not incur extra costs. These things are expensive to operate, so this was awarded in a fair and consistent way.

Obviously, the contract to deliver the rolling stock will be between the successful bidder and its rolling stock provider, but we expect to see significant improvement in the rolling stock, and the feedback I have had from passengers along the line and from colleagues who serve along the line is that they are looking forward to seeing the benefits that those will bring.

[Andy McDonald (Middlesbrough) (Lab)]

Clearly, the franchise system is in complete disarray. It seems that Stagecoach boss Martin Griffiths and Richard Branson have been taken completely by surprise by the announcement of the decision to disqualify Stagecoach from the discredited franchise process, seemingly for failing to provide sufficient commitments in terms of the pension scheme, bidders having been asked to bear full long-term funding risks on relevant sections of the railways pension scheme. Can the Minister inform the House about the pension commitments made by Abellio that warranted the award of the east midlands franchise and the extent to which any such commitments were distinct and more acceptable to the Department for Transport?

Is not this really payback for the east coast collapse, two years ago? The question on the airwaves today was whether this decision would propel Richard Branson back into his favourite hobby of suing Her Majesty’s Government over the awarding of contracts, which has served him so profitably over the years. What preparations has the Minister’s Department made in readiness for potential costly litigation flowing from this decision?

Why did the Department change the pension rules in the middle of the bids? On south eastern, that was only made clear after two rebids. Is not that moving the goalposts?

The real issue is that this Government, by sleight of hand, are trying to reduce their support for the railways pension scheme. They are trying to pass these costs on to the private sector. That is why both Stagecoach and Arriva defaulted on their bids for the east midlands franchise. The rail industry has a plan to reduce the deficits in its pension schemes, yet the Government have ignored that and are attempting to bulldoze through changes without consultation. That is reckless. It will concern rail workers and worsen the rail service for passengers. What discussions were there with the trade unions? Moreover, given that Keith Williams has been instructed to conduct a root-and-branch review of the operation of our railway, why has such a lengthy franchise been awarded before the Williams review reports later this year?

The announcement is accompanied by the decision to extend the franchise award on south eastern to Govia. How can it be right for that company to be given the nod to continue when it has delivered such a miserable service and completely failed its passengers? Is that not further reward for failure? Surely even this beleaguered Government can see what is staring them in the face: the franchise system is in total collapse. They need to respond to long-suffering passengers and do what the next Labour Government will do: bring track and train back together in state ownership—this state.

[Andrew Jones]

The hon. Gentleman asked a number of questions. Is the franchising system in disarray? Of course it is not. If we look at what has happened to our railways over the past 25 years, we see unprecedented passenger growth. We now have more people travelling on our railways and more services run on our railways, and at a greater level of safety than ever before. The franchising system has been a key ingredient in that delivery. Do I think the franchising system is over? Absolutely not. I think we need to look at how it will evolve in future, and that is what the Williams review is doing. Franchising has helped get the system from A to B, reversing years of decline. We now need to see what system we will have as we take it through to the next stage.

Stagecoach knew that its bid was non-compliant—it acknowledged that to the Department. The hon. Gentleman asked about litigation. The Government are completely confident that the bid was evaluated and decided fairly. It is business as usual in the awarding of a franchise on our rail network. He asked whether the decision on the east coast main line was payback. That question is absolute nonsense. This is an entirely separate matter. The bid was won on merit by the strongest bidder. It offered the best bid, with new trains and more services, including more Sunday services and more early and late services. It was won on merit. If a company chooses to bid non-compliantly, that is its fault.

With regard to passing the costs on to the private sector, that is also nonsense, because these are private sector pension schemes. The rail operating companies have a section of the rail pension scheme. Their trustees will meet the Pensions Regulator to discuss that. Is this a question of the Government seeking to remove responsibility? No, this is a private matter and the trustees will be dealing with that in their own way.

The hon. Gentleman asked whether I have met the trade unions. I have met the National Union of Rail, Maritime and Transport Workers and ASLEF, and on this occasion I have written to them to highlight the award today.

Oral Answers to Questions

Andy McDonald Excerpts

Thursday 21st March 2019 Commons Chamber

[Jesse Norman]

I am slightly surprised that the hon. Lady, as Chair of the Transport Committee, is not aware of the very considerable funding—hundreds of millions of pounds—and the very specific and close work we are doing with cities, many of them Labour cities constructively working with Government on reducing this problem. It is a complex and multifaceted issue, and we are taking it very seriously.

[Andy McDonald (Middlesbrough) (Lab)]

This week the chief executive of the Committee on Climate Change said that tackling climate change

“requires the strongest leadership in the heart of government.”

But with the Government set to miss their emission reduction targets, it is clear that the Transport Secretary has failed to provide the leadership required. I have a straightforward question for the Minister: do he and his boss believe in man-made climate change, and if so, why are they refusing to act?

[Jesse Norman]

I can tell the hon. Gentleman that I am very much persuaded that many of the effects of man have been deleterious to the environment in many different ways, including relating to climate. Of course I share his concerns, but I am surprised that the Labour party is not taking this issue more seriously. How can he make a speech that discusses wide-ranging issues and not merely fails to mention issues of diversity or disability but barely focuses on cycling and walking—a critical set of interventions in which we are investing heavily across the country?

[Andy McDonald]

The Minister said there was nothing about that in my speech. I will send him a copy. He needs to read it again, because it was there.

Talk comes cheap, and what matters are actions. The Transport Secretary and his team have totally undermined carbon reduction measures by slashing subsidies for electric vehicles, scrapping rail electrification, gutting local bus services, allowing fares to soar and underfunding cycling. Will the Minister give an unequivocal undertaking to reverse those damaging cuts and embark on a programme of rapid decarbonisation of transport, or alternatively, will this Government instead go down as the one who chose not to act to protect the planet for future generations?

[Jesse Norman]

Far from having failed to read the hon. Gentleman’s speech, I have scrutinised it with almost rabbinical closeness. It is a rather interesting mixture of the good, the incoherent and the baffling. I quite liked some of the stuff about land value capture— I thought that was sensible—but it misunderstands the nature of carbon budgets, the entire purpose of which is to allow the whole of Government to make decisions about how carbon budgets, which we are presently meeting, will be addressed. It is also incoherent in wishing to nationalise the rail service, while also somehow removing Whitehall from the process. I look forward to further details and updates for the House.

--- Later in debate ---

[Andrew Jones]

I will certainly make sure that officials are fully engaged on this issue.

[Andy McDonald (Middlesbrough) (Lab)]

On a point of order, Mr Speaker. It was said by the Minister, the hon. Member for Hereford and South Herefordshire (Jesse Norman), that I had made no mention of cycling in my speech to the Institute for Government yesterday. I made five mentions of it, and there were 300 words devoted to the subject. The Secretary of State then added that yesterday Labour announced hiking the cost of going on holiday. Mr Speaker, I do not want to stray into using unparliamentary language, but that is not true. I seek your guidance as to what we can do to ensure that Ministers come to the Dispatch Box to correct the record.

[Chris Grayling]

rose—

EU Exit Preparations: Ferry Contracts

Andy McDonald Excerpts

Tuesday 5th March 2019 Commons Chamber

[Andy McDonald (Middlesbrough) (Lab)]

Was the hon. Gentleman as surprised as I was to hear that no costs had been incurred in this? He has highlighted the £800,000 that was paid out to consultants, but there was also the cost of dredging the port. We were told by the permanent secretary that that was paid for by Seaborne, yet the contract was cancelled. Is the hon. Gentleman as surprised as I am that Seaborne bore the cost of that itself—or was it borne by someone else?

[Alan Brown]

I am actually very surprised at that. I put in a written parliamentary question asking how much the Department for Transport had paid towards the dredging of the port at Ramsgate, and the answer I was given was that it had paid nothing, so I shall be challenging that further. We need to get to the bottom of this, because we know full well that that operation was not done for nothing and that the Transport Secretary was lobbying Thanet Council to keep the port open because of his negotiations with Seaborne. There is more to run on this, and I thank the shadow Secretary of State for bringing it up.

Returning briefly to Eurotunnel, we know that the out- of-court settlement was effectively a Government cave-in. The thing about that Government cave-in is that we have learned that they are going to keep 10,000 documents secret for reasons of commercial confidentiality, which will make it much harder for us to get the bottom of this. We know that they had no confidence in their own position because they settled out of court.

We also need to understand why the Health Secretary came to the Dispatch Box yesterday to tell us that this was such an important contract as it would keep medicines coming into the UK. He said that that was why the Government had negotiated the £33 million settlement with Eurotunnel. He suggested that it was not about compensation but about vital services and improvements. I repeat that we need clarity on this. If that £33 million was related to the provision of vital services, why did Eurotunnel take the Government to court? Why was Eurotunnel not identified as a reputable provider before, when the Government were looking at Seaborne Freight? How much of that £33 million compensation for Eurotunnel has gone forever? What services are we going to see? What updates will the House be given on the progress of those vital services that the Government have procured?

The Transport Secretary has been lax on updating the House from start to finish. We had one ministerial statement at the outset, which he thought would head off the bad press about Seaborne Freight. We have subsequently had to table three urgent questions, and we are now having this emergency debate. And of course, he has sometimes not even turned up to the Dispatch Box. The fact that he is unwilling to come to the Dispatch Box, state his case clearly and leave himself open to questions from Members says everything about his confidence in his own competence.

A procurement matter that I touched on yesterday is that it looks as though Bechtel is going to sue the Government over the HS2 tendering process, so will the Secretary of State identify what other departmental risks exist in relation to procurement? What review of the procurement process has he instigated? Who is heading up the review and when will it report on this matter? It is quite clear that some sort of procurement review is absolutely vital.

I will finish by again describing the Transport Secretary’s litany of failures. We heard about the near £600 million cost of privatising the probation service following his time at the Ministry of Justice.

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[Chris Grayling]

I can absolutely confirm that, and I think it is absolutely right and proper that we took the steps necessary to ensure that continuity of supply. We did so with a collective decision across the Government, taken by Cabinet Committees.

[Andy McDonald]

Does the Secretary of State not understand and accept that today he is laying bare the advice that he received—and that he acted in contravention of that advice and he lost? We are not asking for an absence of preparation for contingencies; we are asking for a modicum of competence, and he has singularly failed.

[Chris Grayling]

We did not receive legal advice saying, “Do not do this.” We received legal advice saying that there was a risk in taking the approach, and we judged collectively across the Government that it was a necessary risk to take in the national interest.

--- Later in debate ---

[Andy McDonald (Middlesbrough) (Lab)]

It is good to see the Transport Secretary finally in his place today, after I tried and failed to bring him to the House yesterday. Instead he sent the Health Secretary as his human shield, but that came as no surprise, considering how the Transport Secretary has made a habit of treating this House with disdain. Perhaps he will reflect upon that.

I thank the hon. Member for Kilmarnock and Loudoun (Alan Brown) for securing this debate. Understandably, the Health Secretary was not able to answer the questions put to him yesterday, so I am going to have another go at getting some answers out of the Transport Secretary, but I am not holding my breath. In the papers filed at court in the weeks before the case was due to be heard, the Government lawyers described Eurotunnel’s case as “embarrassing”. They were bullish and confident, yet in the early hours of the morning of 1 March a settlement was reached between the Government and the company. This sequence of events raises many still unanswered questions.

[Joanna Cherry]

Does the hon. Gentleman agree that there is at least an apparent conflict between the reported out-of-court settlement of £33 million and the Secretary of State’s claim that the £33 million is to pay for “improved security”, and that we ought to be trying to get to the bottom of whether that is accurate?

[Andy McDonald]

The hon. and learned Lady makes an important point on an issue to which I will be returning in a few minutes.

[Alan Brown]

I tried to intervene on the Transport Secretary on this point. Was the hon. Gentleman as surprised as I was that only after an out-of-court settlement with Eurotunnel had been agreed was this suddenly all about medicines? We had all the other urgent questions and medicines were never mentioned, yet we come to the Eurotunnel settlement and suddenly this is a health-led initiative. Does he share my surprise?

[Andy McDonald]

Yes, I was greatly surprised, but the hon. Gentleman has to concede that there had to be some justification for bringing the wrong Secretary of State to the Dispatch Box, and if a hook could be found to hang that on, that was as good as any. It was a nice try, but it failed totally.

[Mr Jim Cunningham (Coventry South) (Lab)]

Has my hon. Friend noticed that every time the Government get something wrong through their incompetence, the excuse is that it is “in the national interest”, yet when Labour Governments make mistakes it is a different thing altogether?

[Andy McDonald]

My hon. Friend makes a pertinent point. I am just astonished that people can hide behind what they perceive as being the national interest; I fail to see how it is in the national interest to pour millions of pounds of taxpayers’ money down the drain. I do not call that being in the national interest at all.

[Neil Gray (Airdrie and Shotts) (SNP)]

I understand that the hon. Gentleman is about to turn to some of the questions he would like the Secretary of State to answer, but does he agree that one of them should be about the due diligence process that was carried out? The company that carried out that due diligence says that it could not ask the normal questions of Seaborne Freight because it was such a new entity. So how could the Government be in any way confident in their risk aversion in awarding that contract to Seaborne in the first place?

[Andy McDonald]

That is a very good question, and I have raised the point myself. Those who were inquiring into the bona fides of these companies were restricted in the scope they were given. Why on earth they did not look into the track record of the individuals concerned at Seaborne is beyond me, as these things are well known. A mere cursory search of Google tells us about the track record of Ben Sharp in his dealings in the Gulf, but seemingly that was not considered. The hon. Gentleman makes the point well.

Let me return to the settlement that was achieved on 1 March. I want to know why the Department for Transport was so confident about winning the case only a week before. What brought the sudden change in strategy towards the legal challenge? The Department clearly thought it could win. Who intervened? What was the view taken by other Departments—the Department of Health and Social Care Health, the Treasury and Downing Street? Why did they take a different view from the Department for Transport? Why did the Government not settle earlier? Why did they leave it so late? Why did they continue to employ Monckton Chambers and a QC and two barristers, who do not come cheap? How much was spent on this case, both on Government legal fees and Eurotunnel’s fees? Will the Secretary of State say who made the decision to settle with Eurotunnel over the £33 million provision of emergency medical supplies in the event of no deal?

[Chris Grayling]

I will give a very specific answer to that question: a Cabinet Committee.

[Andy McDonald]

I am grateful for that clarification that it took a Cabinet Committee to make such a mess of things. Can the Secretary of State specifically say what is in this standard settlement—or are there other clauses within it? Ordinarily, when such cases are settled, they are done by reference to a consent order, in which there would be a paragraph dealing with the sum of money to be paid. In these circumstances, it may say “£33 million” and it may say the date upon which that sum is to be paid. It may also say that the costs are to follow the event. So we want to know the answers to those questions.

[Joanna Cherry]

Does the hon. Gentleman agree that it would be highly unusual in an out-of-court settlement for the party settling to stipulate how the party receiving the settlement would spend the money?

[Andy McDonald]

I absolutely agree with the hon. and learned Lady on that. Having been in practice for the thick end of 30 years, I have never entered into a settlement where the defendant has told me what I am going to spend the money on. That is absolutely ludicrous, so we need to know the answers.

[Sir Edward Leigh (Gainsborough) (Con)]

Earlier, the hon. Gentleman said that the Secretary of State was being used as a human shield. Is he aware that many Conservative Members have considerable sympathy with the Secretary of State? We believe he has been urging his colleagues for the past two years to undertake contingency planning for no deal but was frustrated by other people, perhaps in the Cabinet, who did not want to do that. If mistakes are to be made because these decisions have been taken at the last moment, it is not the fault of the Secretary of State, but he is too much of a gentleman to argue that in his own defence.

[Andy McDonald]

I am grateful to the right hon. Gentleman for that revealing clarification about the obvious chaos that the Government are in over these important issues. They do not speak with a concerted and singular voice, and people are falling out with each other left, right and centre. That comes as no surprise to me whatsoever.

[Peter Grant (Glenrothes) (SNP)]

The hon. Gentleman clearly has a lot more experience than I do in matters of collective responsibility. Let us take the previous intervention at its word. If a Secretary of State is clear that the collective responsibility of the Government is preventing him or her from doing the job properly, is not the only honourable course of action for that Secretary of State to resign? So what the right hon. Member for Gainsborough (Sir Edward Leigh) has done by speaking in his defence is say that the Secretary of State should not resign now, as he should have resigned months ago.

[Andy McDonald]

That is a fair observation. We have heard that the Secretary of State was prevented from undertaking contingency planning in the first place because of disputes in the Government and that it took the Government to make a collective decision because nobody could come forward to take a decision on this settlement themselves. That really does characterise a Government in chaos and meltdown. Can the Secretary of State say which Departments contributed towards the £33 million? Yesterday, the Health and Social Care Secretary did not know whether his Department had contributed, so will the Transport Secretary please clarify which Department or Departments paid that bill?

[Charlie Elphicke]

Although I do not agree with the action that Eurotunnel took, it has to be said that this £33 million is clearly being invested in border infrastructure. I would like to see and have been calling for similar investment in Dover. Does it not occur to the hon. Gentleman that this money could have been very well spent as “no regrets” spending to improve our border security and trading links?

[Andy McDonald]

I say gently to the hon. Gentleman that that is a ridiculous proposition. Is he saying for a single second that this is wise investment and that it takes a court case for people to come to the right conclusion about investing in our border provision? Is he really suggesting that that is the way to drive public policy? Is he suggesting that we drive Government policy through the litigation process, whereby a claimant puts a case to the Government to say, “This is what you should be doing.”? He cannot possibly sustain that as an argument.

[Charlie Elphicke]

rose—

--- Later in debate ---

[Andy McDonald]

I know the hon. Gentleman wants to get to his feet to retract that comment, so I will let him intervene again.

[Charlie Elphicke]

The hon. Gentleman is making a facile point. My point is simply that the Secretary of State, confronted with opportunism, has made the best of a bad job to make sure that the investment is used to the good of the country, not to fatten the profits of Eurotunnel. In a difficult situation, he has done the right thing, trying to act in the national interest while being consistently undermined by the Labour party, the Scots Nats party, the TIGgers and everyone on the Opposition Benches, who have been continually trying to undermine this country’s leaving the European Union.

[Andy McDonald]

If the hon. Gentleman really thinks that expending £33 million when the Government did not want to or need to is a sensible way forward and a sign of success, I really do not want to see what failure looks like. That is outrageous. Saying that £33 million was the maximum amount to be paid implies that payment was conditional on particular outcomes being achieved. There is a lack of clarity on whether the Government can claw back money from Eurotunnel if it is not used on Brexit preparations. So do such provisions exist?

On that point, was the permanent secretary at the DFT correct to say of the Seaborne contract award:

“I am confident that our process was lawful, and obviously the Department and I acted on legal advice in determining how to take that process forward”?

Has the Secretary of State’s Department therefore thrown £33 million of public money down the drain by not contesting Eurotunnel in the courts? Or is it the case that because of the Prime Minister’s catastrophic Brexit negotiating tactics, which have brought us right up to the cliff edge with 24 days to go before we leave with a default no-deal Brexit, the Government’s failure to plan for such a devastating outcome has meant that they have given themselves no option but to pay out this money to Eurotunnel? Surely nothing says more about the shameful and destructive Conservative party than how, in the year 2019, a UK Government are having to make such costly decisions about prioritising medicines over food supplies. This disaster is only of the Conservatives’ own making.

The Secretary of State for Health and Social Care was wrong to claim that yesterday’s urgent question was not related to Seaborne even though the legal action was brought about in response to the award of a contract to Seaborne Freight. He did not explain why, if it was not related, as he stated, an agreement was reached with Eurotunnel now rather than in November or December. It is one way or the other.

[Chris Grayling]

rose—

[Andy McDonald]

I am happy to take an intervention. Hopefully the Secretary of State can come to the Dispatch Box and correct his human-shield colleague, because the urgent question was directly related to the Seaborne contract.

[Chris Grayling]

Once again, the hon. Gentleman has conveniently forgotten that 90% of these contracts for the things on which the NHS is depending are with DFDS and Brittany Ferries. I wish that at some point he would be frank with the House and explain the full gamut of what we are talking about.

[Andy McDonald]

That is not the first time the Secretary of State has put up this false argument, as if 10% of the goods flowing into this country through these ports and by this method are somehow irrelevant and unimportant. It is a ludicrous proposition. If damage was caused to 10% of the trade coming in, we would be in an incredibly difficult position.

[Chris Grayling]

rose—

[Andy McDonald]

No, I have already let the Secretary of State intervene on this point. [Hon. Members: “Oh!”] Come on then, get it over with!

[Chris Grayling]

The hon. Gentleman cannot add up. This contract brought 8% of the equivalent, in total, with DFDS and Brittany Ferries, and the contingency buffer was made up by Seaborne on the basis of buying tickets in advance that we would not pay for unless the ship sailed.

[Andy McDonald]

I cannot add up? I really think that is pot calling kettle. The Secretary of State has not been able to count for years; he is costing us a fortune.

Andrew Dean from law firm Clifford Chance warns that this may not be the end of the matter. Mr Dean, who used to advise the DFT and is a procurement specialist, says it is quite likely that the Eurotunnel deal will be challenged. What contingency planning has been done in relation to such a challenge, and what public funds, if any, have been allocated as part of such plans? The Secretary of State talks about having received legal advice and listened to it; perhaps he could tell the House what advice he has received about the risk of yet further satellite litigation because of the deal he has done.

The Government talk about the UK maritime industry being market-led. Is it not the case that the Secretary of State’s blundering interventions have directly undermined the industry? He promised to ensure continuity of supply for six months in the event of a no-deal Brexit. Key to that was not increasing traffic around Dover, yet the Eurotunnel/Getlink route still goes through the same bottleneck road network on either side of the channel.

The Secretary of State appears to be puzzled by the anger of the House. Allow me to explain why Members and the public are so furious: this latest fiasco would be enough to warrant the resignation of the Secretary of State even if it were an isolated incident, but it is not a one-off; rather, it is the latest costly error in a series of blunders—blunders that could have been avoided were a different, more competent Secretary of State in post.

[Alison Thewliss (Glasgow Central) (SNP)]

The hon. Gentleman is making a really good point, but my constituents are also very cross about the sheer waste of money in all this, and at a time when we are told that we do not have any money for anything else.

[Andy McDonald]

The hon. Lady makes a valid point. An awful lot of people are looking at these eye-watering sums and thinking about what else could benefit from such interventions. That really makes my point for me: the Transport Secretary’s record is that of a departmental wrecking ball. Almost every decision he made as Secretary of State for Justice was damaging and eventually reversed, at significant cost to the taxpayer. As Secretary of State for Transport, he has repeatedly thrown our transport networks into chaos, wasting obscene amounts of public money. A £2 billion bail-out for Virgin Trains on the east coast line; his failure to prepare airports for drone attacks; his awarding of contracts to Carillion when the company was on the verge of collapse; the rail timetabling chaos; the privatisation of probation services; the banning of books from prisons—the list goes on and on.

Research into the total cost of the Secretary of State’s mistakes, both in his current role and at the Ministry of Justice, found that he has cost the taxpayer £2.7 billion. That money could have paid for the annual salaries of 118,000 nurses or 94,000 secondary school teachers. Instead, it has been squandered. He has even wasted more money than the Prime Minister offered as a Brexit bribe to towns. Shamefully, all this has been allowed by the Prime Minister, who keeps him in post because she is short of allies in the Cabinet. The country is being made to pay a heavy price for her political weakness. This would be unacceptable at any time—

[Chris Grayling]

This is really poor.

[Andy McDonald]

The right hon. Gentleman says, “This is really poor” from a sedentary position, and I agree with him: this is really, really poor. It would be unacceptable at any time, but it is especially outrageous following the years of austerity and neglect that have left our towns and communities hollowed out and our public services in crisis.

[Joanna Cherry]

The hon. Gentleman is giving an excellent speech. Does he agree that if the SNP Government in Edinburgh or the Labour Government in Cardiff were guilty of this sort of profligacy with public money, we would never hear the end of it from Conservative Members?

[Andy McDonald]

The hon. and learned Lady is exactly right: it is one rule for the Tory party and another for everyone else. [Interruption.] No, it is not a funny issue. The right hon. and hon. Members on the Government Front Bench would condemn such waste, and with some justification; they really cannot complain when other people hold them to account for their continuous errors and wastefulness.

There are now 8 million working-age adults in poverty, while child poverty has grown to more than 4 million and rising; councils have had their funding slashed by half; violent crime is rising; and school budgets are seeing cuts for the first time in 20 years. In my constituency and many others throughout the country, there is appalling poverty and people are struggling. We are told that there is not the money to properly fund our schools, hospitals or social care services, yet the Prime Minister always finds the money to indulge the Secretary of State’s latest blunder. A further £1.9 billion has been spent on planning for a damaging no deal. For some, it seems, austerity is over. It is one rule for Tory Ministers and another rule for the rest of us. This cannot be allowed to continue. On behalf of the country, I implore the Secretary of State to resign.

[Charlie Elphicke (Dover) (Con)]

I congratulate the hon. Member for Kilmarnock and Loudoun (Alan Brown) on securing this debate. He has been far more efficient and effective than the official Opposition, who did not seek this opportunity.

It seems to me, representing one of the channel ports as I do, that the issue is that the people of Britain voted to leave the European Union. Some 17.4 million people voted to leave and we need to make a success of it. They voted to leave because they believed in Britain and in the kind of land of opportunity that we could build. They believed in the kind of future that we could make outside the European Union. That vote needs to be respected.

Having backed remain myself, after the vote I listened to my constituents, who said, “Let’s leave,” and I spent time on contingency planning. Two years ago, I set out a detailed report about how we needed to be ready on day one, deal or no deal; how we could overhaul our entire customs systems, our road infrastructure and our border infrastructure; and how that investment would be no-regret spending because a more efficient border system would provide economic growth. That is not just my case; it is what Jon Thompson, head of Her Majesty’s Revenue and Customs, said in evidence to the Treasury Committee when I raised the possibility of a single Department for borders. That is why I say that it is no-regret spending to invest in our borders, our border security and our border systems.

The shadow Secretary of State rejects as absurd the view that we should make such an investment. No doubt it would not be made by a Labour Government—they did not make it last time, so they would not do it now. They are not serious about border security, and they have a leader who believes that every single migrant should be allowed to wander into the country.

[Andy McDonald]

In case the hon. Gentleman wants to cite my words accurately, I said that the litigation route was a peculiar way of going about investing in infrastructure. Waiting until somebody sues us before we decide what to do—surely to goodness, that is not the way we should go about business when developing policy in this country.

[Charlie Elphicke]

The Labour party failed completely to invest in many things, including border infrastructure, when it was last in power, and it has not been serious about border security and border control ever since.

--- Later in debate ---

[Lilian Greenwood (Nottingham South) (Lab)]

Shortly after the Secretary of State awarded contracts to ferry operators as part of his no-deal contingency planning, the Transport Committee, which I chair, received two submissions to our inquiry into freight and Brexit alleging that the Secretary of State had acted illegally in doing so. Although it has already been published, I would like to make the House aware of the written evidence submitted by Dr Albert Sanchez-Graells. He is a reader in economic law at the University of Bristol Law School, a former member of the European Commission stakeholder expert group on public procurement, a member of the European Procurement Law Group and a member of the Procurement Lawyers Association Brexit working group, so one would think that he probably knows what he is talking about.

Dr Sanchez-Graells was clear in his evidence to our Committee that

“The award of three contracts for ‘additional shipping freight capacity’ in the context of the Government’s ‘No-Deal’ preparations raises important illegality concerns.”

He said that, under regulation 32(2) of the Public Contracts Regulations 2015,

“‘extreme urgency’ only exists where an unforeseeable event renders impossible the observance of the time-limits laid down for calls for tenders.”

He said that the award of the three contracts for additional capacity seems “likely” to be in breach of that regulation,

“as there was time to comply with the 60 calendar days’ time limit required by alternative, transparent competitive procedures with negotiation.”

He went on to say:

“Even if it was accepted that there was no time for alternative competitive procedures… the award to Seaborne Freight (UK) Ltd still raises issues of potential illegality. The Secretary of State for Transport has justified the award as an act of support for a new British start-up business. This fact, coupled with…the lack of readiness of the port infrastructure…undercuts the rationale of the extreme urgency of the procurement and heightens the likely illegality of the award.”

We now know that the Department faced a legal challenge from Eurotunnel and that settling the case has cost UK taxpayers at least £33 million.

I am afraid that the Secretary of State has shown a repeated failure to operate in an open and transparent manner. He avoided questions in the House yesterday, but as I said, that does not mean that these questions go away. I understand why he is not in his place. However, I expect to receive written answers to these questions, as I assume that the Under-Secretary of State for Transport, the hon. Member for Harrogate and Knaresborough (Andrew Jones), who is sitting on the Front Bench, does not intend to respond to them this afternoon.

These are the questions that I want to raise. It is reported in The Times today that the Secretary of State wanted to fight Eurotunnel’s legal action over the award of contracts to ferry firms but was overruled. Is that true? What legal advice did the Government receive on the likely success of Eurotunnel’s action? How was the sum of £33 million arrived at? Is the fact that the Secretary of State was overruled an indication that he does not enjoy the confidence of the Prime Minister or his Cabinet colleagues? I believe he mentioned that it was decided by a Cabinet working group.

When the Secretary of State was not here yesterday, we had the rather ludicrous spectacle of the Secretary of State for Health trying to cover for him and explain. He said that

“the purpose of the decision is to ensure that unhindered flow of medicines.”—[Official Report, 4 March 2019; Vol. 655, c. 700.]

However, he failed to answer the question from my hon. Friend the Member for Batley and Spen (Tracy Brabin) about how much of the £33 million being paid to Eurotunnel is being contributed by the Department of Health and Social Care. We still need an answer to that question, and I expect to receive one.

I will not be surprised if my Committee has additional questions. The hon. Member for Bexhill and Battle (Huw Merriman), who unfortunately is not able to be here for this debate, has described the level of this settlement as “absolutely outrageous”, so I am sure he will share my wish to understand how it was arrived at. How much of Eurotunnel’s £33 million settlement will be spent on border measures in Calais, rather than in the UK? Is it right that the UK taxpayer will be paying for these measures, rather than Eurotunnel or the French Government?

[Andy McDonald]

Does my hon. Friend share my concern that the settlement may amount to an entirely fresh procurement process, and if that has not been done correctly, there is a real risk of yet further litigation and cost to the taxpayer?

[Lilian Greenwood]

My hon. Friend raises an important point. We would like to receive further information about the basis on which this settlement was reached and the legal risks that it entails.

Finally, I return to the question I asked yesterday, to which I received nothing but bluster. If there is a Brexit deal, or if indeed there were no Brexit, how much of the taxpayers’ £33 million do the Government expect to recover from Eurotunnel? I take it from the Secretary of State’s earlier response that the answer is none. I would be grateful if we received answers from him to those questions.

It is essential that the Department for Transport is subject to proper scrutiny and held properly accountable for its waste of public money. It is very disappointing that the Secretary of State once again had to be dragged to the Chamber. At least on this occasion he was here, but we still do not have proper answers on these important matters, which the public deserve.

--- Later in debate ---

[Joanna Cherry]

I am grateful to the hon. Gentleman for that, because he actually reinforces the point that I sought to make. The National Audit Office has that information, and the House of Commons has had it today and yesterday, but my point is that on repeated occasions when I asked a number of Ministers from different Departments what the explanation was for this urgent need to tender non-competitively, not once did any of them mention what we are told was a collective decision to do it for a particular purpose. I therefore question whether that explanation has been invented after the fact.

[Andy McDonald]

The hon. and learned Lady is doing a brilliant job of exposing the facade that has been put up to excuse this reprehensible behaviour, but is the bottom line not that the Government knew that they were in breach of their own procurement rules and that Eurotunnel was going to win? That is why they settled the case.

[Joanna Cherry]

That is the bottom line. The hon. Gentleman is absolutely right.

I am going to draw to a conclusion, because I know that others want to speak. The history of this whole event, which the Government now say that they all knew about as it was a collective decision, has been one of evasion and obfuscation. I and others are left with the inevitable conclusion that they are trying to cover up a monumental error of staggering negligence in their preparations for a no-deal Brexit, which is costing the British taxpayer a lot of money. I would like to point out that Scottish taxpayers did not even vote for all this nonsense in the first place, and their representatives in this House have, apart from the Scottish Tories, done their best to try to get a no-deal Brexit off the table.

I came to the House this afternoon planning to ask for the resignation of the Secretary of State for Transport. That has been asked for by others already. But now that we know that this was a collective decision and that the Government are taking collective responsibility for it, let me say that in any normal, healthy and functioning democracy this scandal would bring the Government down.

--- Later in debate ---

[Drew Hendry]

My hon. Friend, who, along with other colleagues here, has been at this since the beginning, has made the point that the Transport Secretary takes no responsibility. He is willing to accept none of the criticism. I would say that he is Teflon, but the public know that he is not, because all this sticks to him. However, he has not had his just deserts: either being sacked from his job, which should have happened, or resigning from it.

[Andy McDonald]

The point about the Transport Secretary’s intervention in his other lives is well illustrated by his attitude to judicial review. He did not like people taking the Government to court, so he made it more difficult for them to do so. Is that not consistent with his attitude to this matter?

[Drew Hendry]

I agree with the shadow Transport Secretary. It is indicative of the way in which the Transport Secretary has performed throughout his ministerial career, and, indeed, it is now indicative of the Government themselves.

The Government’s settlement with Eurotunnel confirms what everyone except, it seems, the Transport Secretary knew: that flouting EU law on the basis of so-called unforeseen events was a completely untenable position. The only development that was foreseeable was that he would make a hash of anything that he touched. He now even has his own website, tracking how much money he is costing the taxpayer. That becomes a great deal less humorous when we see the amount: £2.7 billion as of this morning, although—as we know from the Transport Secretary—that may have gone up while I have been speaking.

Before the Government’s settlement last week, Eurotunnel said:

“It appears …that the secretary of state is seeking to maintain extensive claims to confidentiality in relation to large numbers of disclosed documents and appears to intend that large parts, if not all, of the trial should be held in private.”

Moreover, we have again seen a failure to disclose answers to the questions asked in the Chamber.

Let me end by asking some more questions. The Transport Secretary says that there has been a changed assumption. No, there has not; there has been complacency and arrogance. There was an urgent question about this issue yesterday, following a weekend of silence from the Transport Secretary. Why did he duck it, and send the Health Secretary to answer it in his place? Has he any shred of respect for the principle of ministerial accountability?

The question remains why Eurotunnel was overlooked in this first place. As I have said, the secrecy is of real concern. How much documentation is still hidden from public view? If the no-deal contract is not invoked, how much money will still be paid to Eurotunnel? With engineering firm Bechtel set to sue the Government over the HS2 tender process, what other departmental procedural risks still exist? Is it not the case that any other individual working on a business deal would have been sacked by now for wasting the amount of money the Secretary of State has wasted to date? What message does that send to the public? The message it sends is that failure, waste, ignorance, complacency, arrogance and contempt for the public are to be rewarded by the Tories.

Oral Answers to Questions

Andy McDonald Excerpts

Thursday 14th February 2019 Commons Chamber

[Ms Ghani]

I can. My hon. Friend is a great champion of the port of Immingham and I know I have an open invitation from him to visit it. I have indeed discussed that port with ABP and it has confirmed that ports across the country are looking forward to the extra business and trade that will come their way post Brexit.

[Andy McDonald (Middlesbrough) (Lab)]

On 8 January, the Secretary of State told the House that no public money was used in the Seaborne Freight contract, yet the National Audit Office says that £800,000 of taxpayers’ money was spent on consultants. The Prime Minister says that things are hunky-dory, but it has been revealed that the Department bypassed its own procurement rules to award a high-risk contract to Seaborne. Will the Minister acknowledge that the Secretary of State has, however inadvertently, misled the House and has not followed his Department’s procurement processes?

[Ms Ghani]

That is such a ridiculous statement to make. It is just inaccurate. There are complaints when due diligence is not done and complaints when due diligence is done. When funding is allocated and spent within the Department, due diligence is carried out for a variety of reasons. What is interesting is that the Labour party is against business, against us helping our port sector and against Brexit. It would be interesting to know what it actually stands for.

[Andy McDonald]

Poor, very poor. The Secretary of State is, presumably, simply never wrong, but what about the timetabling mess on the trains, the east coast bail out, multiple transport and justice contracts to Carillion, the book ban on prisoners, court fees that push the innocent to plead guilty, and the catastrophic privatisation of probation and prisons? His ongoing presence in the Government makes an international laughing stock of us all. Quite simply, the country cannot afford him. So I ask in all sincerity: will he please step down before he does any further damage?

[Ms Ghani]

I am not quite sure what show we are on, but this is Transport questions and the hon. Gentleman attacking an individual because he has nothing left to say is absolutely embarrassing. We have record investment in our infrastructure. I believe that under the Labour Government infrastructure investment in our country dropped from seventh to 33rd. Labour is not a party for our country. May I just reflect on ports? Our ports are doing a fantastic job trading, they do the majority of trade outside the EU and they will continue to do really good trade post Brexit.

Seaborne Freight

Andy McDonald Excerpts

Monday 11th February 2019 Commons Chamber

[Andy McDonald (Middlesbrough) (Lab)(Urgent Question)]

To ask the Secretary of State for Transport if he will make a statement on the cancellation of a contract with Seaborne Freight as part of the Government’s contingency planning for a no-deal Brexit.

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

In December, following a collective Government decision and a procurement process involving my Department and the Treasury, we contracted with three shipping companies to provide additional ferry capacity as part of contingency planning for a potential no-deal EU exit.

Let me make it absolutely clear that in the event of a no-deal Brexit, the Government’s priority will be to ensure the smooth operation of both the port of Dover and the channel tunnel, and we are introducing measures at the UK end to contribute to that. However, any sensible Government plan for all eventualities. That is why we agreed contracts worth around £100 million, with the bulk of the award—£89 million—going to DFDS and Brittany Ferries to provide services across seven separate routes. Built into those agreements are options to add capacity on two other routes from those companies, should they be required. That capacity could be needed to guarantee the smooth flow of some key goods into the UK, particularly for the NHS. It is worth my reminding the House that, in the event of no deal and constriction on the short strait, the capacity would be sold on to hauliers carrying priority goods.

In addition to the £89 million-worth of contracts with DFDS and Brittany Ferries, the Department entered into a £13.8 million contract with Seaborne Freight to provide ferry services from the port of Ramsgate to Ostend. At the time of the award, we were fully aware of Seaborne’s status as a start-up business and the need for it to secure vessels and port user agreements to deliver a service. However, the shorter distance between the two ports meant that the route could provide us with shorter journey times and lower cost, making it a potentially attractive part of the package.

Seaborne’s proposition to the Department was backed by Arklow Shipping, Ireland’s biggest and one of Europe’s largest shipping companies. For commercial reasons, I have not been able to name Arklow Shipping or mention its involvement to date, but its support for the proposition from the outset and the assurances received by the Department provided confidence in the viability of the deal. Arklow confirmed to me that it intended to finance the purchase of ships and would be a major shareholder in Seaborne. It also confirmed to me its view that the Seaborne plans were “both viable and deliverable”. Those assurances included clear evidence about the availability of suitable vessels from the continent and about the formal steps that Seaborne, via Arklow, had taken to secure the vessels. However, releasing that information into the public domain could have driven up the cost of the vessels significantly and might even have resulted in their being removed from the market, where supply is extremely scarce. I have therefore had to refrain from saying anything publicly about this to date.

My Department monitored closely Seaborne’s progress towards meeting its contractual commitments. By last week, the company had secured firm options on ships to operate on the route, had reached provisional agreement with Ostend and was close to doing so with Ramsgate. However, late last week, despite previous assurances, Arklow Shipping suddenly and unexpectedly withdrew its backing from Seaborne. In the light of this, and after very careful assessment, I took the decision to terminate this contract. My Department concluded that there were now too many major commercial issues to be resolved to enable Seaborne to establish alternative arrangements and finance in the time needed to bring ferries and ports into operation.

As I have repeatedly made clear, not a penny of taxpayers’ money has gone, or will go, to Seaborne. The contracts we agreed with the three ferry companies are essentially a commitment to block-book tickets on additional sailings after the UK leaves the European Union. So actually we have taken a responsible decision to make sure that taxpayers’ money is properly protected.

I can confirm that the contracts with DFDS and Brittany Ferries remain on track and will provide us with valuable additional freight capacity into the UK in the event of disruption following EU exit. We also have contractual options to replace the Seaborne capacity with additional capacity on routes in the North sea, and this is an option we will be discussing across the Government in the coming days.

While the focus of this Government is to secure a deal with the European Union, as a responsible Government we will continue to make proportionate contingency plans for a range of scenarios. That is the right thing to do.

[Andy McDonald (Middlesbrough) (Lab)]

What began as a debacle has now descended into a Whitehall farce. This Minister is rewriting the textbook for ministerial incompetence in office. I repeatedly warned the Secretary of State that this was the wrong decision at the time, as did industry, yet he chose to ignore those warnings. He told the House last month that this procurement was done properly. It has since emerged that the Department for Transport took shortcuts on the Seaborne Freight procurement. The deal was signed off by a sub-group of a sub-group and the main form of oversight, the procurement assurance board, never looked at it.

The Secretary of State points the finger at Arklow for the contract cancellation. Is it really a good time to further insult the Irish, and is the Arklow angle not a distraction from his decision? He has produced a letter from the company more than a month after the contract was signed; it does not prove anything regarding due diligence. He told this House that the Seaborne contract award was

“responsible stewardship of public money.”—[Official Report, 8 January 2019; Vol. 652, c. 191.]

Sadly, the exact opposite is true, yet again.

The Secretary of State’s decision to award the contract to Seaborne led Ramsgate port owner Thanet Council’s budget deficit to grow by nearly £2 million in the last year. His personal intervention to halt the budget vote last Thursday has compounded those losses. Two days later, he pulls the plug on Seaborne, leaving the council high and dry with mounting losses. What is more, taxpayers face a legal bill of nearly £1 million to fight Eurotunnel following his decision. So can he say how much cancelling the contract will cost the taxpayer and specifically the costs incurred in his own Department? He simply cannot keep blaming others for his own mistakes. This disastrous decision sits squarely with him and his office. Is this Transport Secretary’s approach to transport and wider Brexit contingency planning not off the Richter scale of incompetence? And for the good of the nation and the sake of some semblance of faith being restored to this shambolic Government, should he not now, at long last, do the decent thing and go?

[Chris Grayling]

I have to say that the hon. Gentleman brings new meaning to the term “utter hogwash”. First, he clearly was not listening when I said that we have spent no money on this contract. My Department is doing a lot of work on no-deal Brexit preparations, as are other parts of Whitehall—that is the prudent thing to do—but we have not spent any money on this contract. The contract was in fact assured jointly by my officials and officials in the Treasury.

The hon. Gentleman says the letter is worth nothing, but let me just quote from the letter, from the managing director of Arklow Shipping, one of Europe’s biggest shipping companies with operations in Rotterdam and Ireland, which covers chartering, technical and crewing, and finance. He said:

“Arklow Shipping has been working with Seaborne for twelve months in connection with Seaborne’s proposals to develop new freight services between the UK and continental Europe. Arklow Shipping is therefore familiar with Seaborne’s agreement with Her Majesty’s Government to provide additional freight capacity in the event of the UK’s departure from the European Union on a no deal basis.

3. In support of the current proposals to develop the shipping route between Ramsgate and Ostend, Arklow Shipping intends to provide equity finance for the purchase of both vessels and an equity stake within Seaborne which will be the operating entity of this project.

4. Seaborne is a firm that brings together experienced and capable shipping professionals. I consider that Seaborne’s plans to deliver a new service to facilitate trade following from the UK’s departure from the EU are both viable and deliverable. I will be working closely with the team at Seaborne to ensure that they have appropriate support from Arklow Shipping to deliver on their commitments to Her Majesty’s Government.”

Enough said.