Oral Answers to Questions

Chris Grayling Excerpts

Thursday 2nd May 2019 Commons Chamber

[John Grogan (Keighley) (Lab)]

2. What assessment he has made of the potential merits of restoring the rail link between Skipton and Colne.

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

An initial feasibility study carried out in partnership with Transport for the North was completed in December 2018. We are now working to assess the scheme to ensure that it can be affordable, will attract sufficient traffic and is part of the right long-term solution for the cross-Pennine rail routes. The results of that work, which we expect to receive later this year, will inform the decision about taking the scheme forward.

[John Grogan]

Does the Minister agree that restoring the line would have the advantage of providing an important new freight link across the Pennines, as well as a passenger link? Will he agree to publish the feasibility study, so that Network Rail’s £800 million cost estimate can be scrutinised and, probably, brought down considerably?

[Chris Grayling]

Of course if the scheme is to go forward, it has to be at an affordable price. It is part of the Government’s broader strategy to improve connections between east Lancashire and West Yorkshire, and I commend those Members who have made such a powerful case for the improvement of those routes—particularly my hon. Friend the Member for Pendle (Andrew Stephenson) and my hon. Friend the Member for Shipley (Philip Davies), at the other end in West Yorkshire, who has talked about the importance of those routes.

I also believe it is of fundamental importance that we have a proper freight route across the Pennines, as well as passenger services for local communities in those areas, so that we can provide shorter journey times from ports on the east and west coasts. That, to my mind, is the central part of this work.

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

3. What assessment he has made of the potential effect on (a) capacity and (b) ticket prices on the rail network at peak times in the event of the introduction of seating-only policies.

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[Mrs Pauline Latham (Mid Derbyshire) (Con)]

4. Where the trains for the new franchise for midland main line will be made; and what the timetable is for the delivery of those trains.

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

Brand-new trains capable of operating under electric and diesel power will be introduced into service on the midland main line from 2022. I hope and expect the first train to be tested in 2021. I must leave the announcement on the manufacture of the new trains to the operator, but my hon. Friend knows that I have signalled on many occasions since becoming Secretary of State how committed I am to seeing more trains manufactured in the United Kingdom.

[Mrs Latham]

How many new trains and carriages will be produced, and how many current ones will be refurbished?

[Chris Grayling]

The inter-city fleet will be entirely new, which will be a great bonus to travellers on that route. We expect to see more seats and a brand-new fleet of trains, which is really important as we go through the biggest upgrade to the midland main line since the Victorian age. I cannot immediately recall the operator’s plans for the route from Kettering—serving the constituency of my hon. Friend the Member for Kettering (Mr Hollobone)—but they will no doubt set out the detail of those trains, which will be new commuter electric services down from those stations, for local Members shortly.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

As the Secretary of State knows, we are a great manufacturing nation with the finest technology. Surely, after last night’s wonderful decision on climate change, we should think about how we can make more things in this country, without cheating the public. The Hitachi trains will not be made here, although they will be assembled here. When can we revive the train manufacturing sector in this country?

[Chris Grayling]

The more we build in this country, the more we invest in research and development. In the north-east, we are seeing more of Hitachi’s capabilities coming to the United Kingdom. The same applies to CAF in south Wales and, in particular, to the great success of Bombardier in Derby. Bombardier currently has a huge amount of work, and is delivering new trains throughout the network. However, I am with the hon. Gentleman: I want more to be done in the United Kingdom. As we move further into the 2020s, I am very committed to ensuring that as much as possible of the new rolling stock that we are expecting is built in the UK.

[Rachael Maskell (York Central) (Lab/Co-op)]

My question relates to fair and consistent treatment of bidders. Given that the Department has confirmed that all three bidders for the East Midlands franchise were non-compliant, why were only Stagecoach and Arriva disqualified from the competition?

[Chris Grayling]

Because it is not the case that all three bidders were non-compliant.

[Rachael Maskell]

Well, that is certainly not what the Secretary of State’s Department is saying. He withheld sensitive market information between 1 and 9 April when disqualifying Stagecoach from the South Eastern and West Coast Partnership competitions, thus demonstrating that his interference further discredits the franchising process. Have any of the bidders for the other rail franchise competitions submitted non-compliant bids, and have they been disqualified? If so, why has the information not been made public?

[Chris Grayling]

I am afraid that the hon. Lady’s question is based on a totally false premise. She is incorrectly accusing me of interference, and she is incorrectly making assertions about non-compliant bids that are simply inaccurate.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

5. What plans he has to minimise delays at UK ports after the UK leaves the EU.

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

Rail franchising has delivered substantial benefits to passengers and record levels of investment over the past 25 years, but it is time for a fresh approach and that is why we set up the Williams review, which will enable us to fundamentally realign the railway industry, with a renewed focus on the needs of passengers and freight customers across the country in the future.

[Mr Sweeney]

Well, the chair of that review has just said that the franchising system is not fit for purpose. In the light of that, does the Secretary of State not agree with Opposition Members that privatisation has been a litany of failure, that the fragmentation of the network has meant the coherence of the passenger-led system has been destroyed and that we need to have a reintegrated railway system under democratic control? Is that not the future for the railway system in this country?

[Chris Grayling]

The Labour party is very clear that it wants to recreate British Rail, and it has every right to argue for that—[Interruption.] Labour Members say no, but that is their policy. I remember the days of British Rail. It was a state-run railway on which routes were closed, services were cut and the trains were old and outdated. Today, we have a railway that carries twice as many passengers as it did in those days and has far more trains. The challenges that we face are challenges of success, not failure.

[Justine Greening (Putney) (Con)]

Of course, the Transport Secretary is right in many respects. In my own community, Putney station needs a second entrance to cope with the overcrowding, which is a sign of how important it is for commuters every day. Will he give us an update on this? He very helpfully visited the station last year, and he has described getting a second entrance as a second win. Will he update us on his discussions with Network Rail to help to move that project forward?

[Chris Grayling]

Since my right hon. Friend and I visited her station, I have discussed the issue with my Department and with Network Rail. In the past month, we have entered the new rail control investment period, which will involve £48 billion—a record level of investment in the railways—including a number of hundreds of millions of pounds to invest in stations and improvements. I absolutely accept, and I think we all believe, that particularly at busy stations in and around our commuter centres—which Putney certainly is—we will need such improvements. She knows that I am very sympathetic to what we need to do there.

[Martin Vickers (Cleethorpes) (Con)]

Does the Secretary of State agree that, when we embark on a new franchising system, one of the considerations needs to be the provision of services not just on the main arterial routes but on the secondary routes—such as a direct service from King’s Cross to Cleethorpes?

[Chris Grayling]

This is one of the things we need to achieve for the future. There is demand for extra services all round the country, and to release that demand, we need to continue to invest in capacity. That is what we are going to be doing in the next control period. We will also need to use smart technology such as digital signalling to increase the number of train paths, and we will of course need to expand the network, which is what the HS2 project is all about. I absolutely understand and share my hon. Friend’s ambition.

[Philip Davies (Shipley) (Con)]

7. What recent discussions he has had with Bradford Council on a Shipley eastern bypass.

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[Mrs Pauline Latham (Mid Derbyshire) (Con)]

T2. If he will make a statement on his departmental responsibilities.

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

The House will be aware that yesterday the High Court ruling on the proposed expansion of Heathrow found that my Department acted lawfully on all counts. It would be remiss of me not to take the opportunity to thank all those in my Department who worked on the case for their exemplary work, not only through the preparation period for the national policy statement but on the case itself. I also express my thanks to the business community, to the trade unions, including Unite in particular, and to the vast majority of Members of Parliament who have supported expansion. We must now get on with delivering that expansion for Britain, although always mindful that the expansion scheme must fit in with the UK’s climate change obligations.

[Mrs Latham]

With new fleets on order for London Underground, the midland main line and High Speed 2, what is the Secretary of State and his Department doing to ensure that rolling-stock manufacturers maximise the UK content on trains?

[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.

[Mr Philip Hollobone (Kettering) (Con)]

T3. The new east midlands train franchise is likely to increase capacity southwards from Kettering, but will it improve connectivity north on the midland main line? The previous Labour Government cut our half-hourly service northwards and it is about time that we had it back.

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[Ian Mearns (Gateshead) (Lab)]

Ministers will have seen the National Audit Office report on the sale of railway arches by Network Rail, which includes some criticism. It is of some concern that the impact on tenants was not an explicit sale objective and was considered only late in the sale process. Ministers were aware—we had meetings with the Minister responsible before the sale took place—but they seemed indifferent to the significant potential for massive rent rises for the businesses in the railway arches across the country. Given this NAO report and its criticism, what will Ministers now do to safeguard the interests of those businesses and to make sure that they are not subjected to massive rent rises by the new leaseholder management company?

[Chris Grayling]

When I took on this sale, I ensured—in the work we did to prepare for the sale and with potential buyers—that additional safeguards were put in place for those tenants. Whether the arches had remained in the public sector or been sold, it would always have been right to ensure that a market rent was charged. There is no expectation of rent increases out of line with market rents. In the public sector, it would not have been proper use of public money to provide subsidised rents for businesses.

[Mark Pritchard (The Wrekin) (Con)]

On airport security, given the stresses and strains on many police forces, not least the Met police and Sussex police, what further consideration has the Transport Secretary given to allowing the British Transport police to have responsibility for the security of British airports?

[Chris Grayling]

That suggestion has been put to me on a couple of occasions. At the moment, because of the nature of the threat around our airports and the fact that so much airport security—particularly at our principal airports—is done through the Metropolitan police, who co-ordinate anti-terror work nationally, I am not yet convinced that it would be the right thing to do, but I am always open to considering change if it will deliver improvement.

[Jessica Morden (Newport East) (Lab)]

Constituents have contacted me again this week to highlight the eye-watering increases in the cost of commuting by rail to Bristol, and how that is forcing them into their cars. After yesterday’s climate emergency debate, is it not time for Ministers to act on extortionate rail fares?

[Justine Greening (Putney) (Con)]

I was hugely concerned to see that, although the Secretary of State was sent a memo in November 2017 outlining how many millions of people would be affected by the third runway expansion at Heathrow—up to 13 million people were planned to be part of a publicity campaign letting them know what was going on, and 5 million people were to be leafleted directly—that campaign never took place because it was vetoed by officials at the Department. We effectively had a vote in this place when communities and the people who represent them were entirely unaware of the extent of extra noise from Heathrow. How can the Secretary of State be confident that there really is public support for this project when the public are wholly unaware of its impact on them?

[Chris Grayling]

I assure my right hon. Friend that nobody in my Department has vetoed any consultations. We have carried out all the consultations that we are statutorily obliged to carry out. Of course Heathrow airport is now also so obliged, and has been carrying out consultations itself, so we cannot veto it; this is part of a process. As I have said all along, a central part of the proposal is that Heathrow delivers a world-class package of support to affected communities, and that is central to what we will insist that it does. That is an absolute given and an absolute red line for the Government.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Is the ministerial team aware that an all-party group of Members of Parliament came together to secure the seatbelt legislation many years ago? After 13 failed attempts, we actually got it through on the 14th, and the number of lives saved and serious injuries prevented has been substantial. The Parliamentary Advisory Council for Transport Safety, which I chair and which is still a vigorous cross-party group, is concerned by the report today that seatbelt wearing is declining. A quarter of the people killed on the roads last year were not wearing their seatbelts. Could we make it an enforceable offence with three penalty points? Can we take action on this?

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[Thangam Debbonaire (Bristol West) (Lab)]

Now that this House has taken the lead in supporting Labour’s climate change emergency motion yesterday, does the Department for Transport not agree that it is time that we made sure that there can be no new roads without cycle lanes, unless there is a damned good reason why not, and no new housing without cycle locks and electric car charging points?

[Chris Grayling]

Of course we will continue to seek to expand the cycle network. Given the nature of the hon. Lady’s constituency, I hope she will welcome the commitment and the money that this Government are putting into MetroWest that will help to reduce congestion in the centre of Bristol, get people out of their cars and create a cleaner environment for people in her city.

[Mr Peter Bone (Wellingborough) (Con)]

You will recall, Mr Speaker, that I have moaned previously about the fact that there was a bridge knocked down in my constituency, near to the Corby constituency and right by a business development centre, leaving people stranded. Thanks to the efforts of a local community action group, ROAR—Reinstate Our Access Road—plus Councillor Gill Mercer, and, in particular, the intervention by the excellent Secretary of State, that bridge is now going to be rebuilt. Does the Secretary of State agree that local democracy, hard work and a Secretary of State can get things done?

[Chris Grayling]

I am very pleased that we managed to resolve the problem. My hon. Friend puts his finger on an important point. When the unexpected happens or an unintended consequence disrupts a community, the ministerial team and I will always try to do everything we can to ameliorate or change it.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

Yesterday’s judicial review on Heathrow was concerned only with the legality of the decision, not the merits of airport expansion. Given that this House has overwhelmingly affirmed that we face a climate emergency, surely a swift and easy way of meeting our obligations would be to cancel the third runway at Heathrow. Not only will it pollute my constituents’ lungs, but it is costing us the earth—literally.

[Chris Grayling]

I gently remind the hon. Lady that this Parliament voted with a majority of nearly 300 to designate the national policy statement because we recognise that we need to provide jobs for the future, economic opportunities, and indeed the wealth that will deliver the environmental technologies that will clean up this country and help to clean up the planet. As I said earlier, we have sought, and the Airports Commission has sought, to make sure that these expansion plans are consistent with those obligations. International aviation does present a challenge, but I do not believe that we are suddenly going to see it disappear in the future. International aviation is only likely to disappear if the cost of holidays and the cost of travel is put up by Labour.

[Martin Vickers (Cleethorpes) (Con)]

The Rail Minister will recall that on his recent visit to my constituency, Associated British Ports and the other business representatives present expressed concern about east-west capacity for freight haulage. The Secretary of State referred to this earlier. Will the Minister agree to meet me, ABP and other representatives to see how we can further increase capacity?

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[Chris Grayling]

I will indeed give that assurance. We continue with the biggest investment programme in the railways for decades and decades, and indeed the biggest investment programme in our roads for decades and decades—an investment programme that will help motorists, but which the Labour party wants to scale back, as part of its war on the motorist. I give a commitment that, as we seek to invest in the future of this country, we will do everything we can to minimise the disruption. I cannot promise that there will be none, but we will try to minimise it.

[Matt Rodda (Reading East) (Lab)]

On a point of order, Mr Speaker.

No-Deal Brexit: Cross-channel Freight

Chris Grayling 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.

[Sir Desmond Swayne (New Forest West) (Con)]

We would not have had to spend the money had the party of the hon. Member for Kilmarnock and Loudoun (Alan Brown) voted for the agreement. Is my right hon. Friend looking forward to the return of duty free on the ferries as much as I am?

[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.

[Mr Peter Bone (Wellingborough) (Con)]

I do not see how the House can blame the Secretary of State for believing the Prime Minister, when she said 108 times that we were going to leave on 29 March. When her withdrawal agreement was defeated three times in the House of Commons, it would have been negligent of the Secretary of State not to have planned for a no-deal Brexit. The one thing that is for sure is that the Secretary of State cannot be blamed; maybe the Prime Minister can. Does the Secretary of State agree that a lot of people are making political points based on no evidence whatever?

[Chris Grayling]

That is the central point. The process was carried out properly in the context of the legal advice that was available and the needs elsewhere in Government. My Department never needed any ferry capacity; it was procured because other Departments did. If further contracts are let, it will be because of other Departments’ needs for services such as the national health service. The Opposition seem more interested in trying to score political points than in supporting the securing of drug supplies for the national health service.

[Tom Brake (Carshalton and Wallington) (LD)]

On 11 February, the Secretary of State said in response to my question on ferry procurement:

“I have been absolutely clear that this procurement was dealt with very carefully by officials in my Department and in the Treasury”—[Official Report, 11 February 2019; Vol. 654, c. 623.]

Although the Secretary of State may believe that this matter was dealt with very carefully, I think the rest of the world believes otherwise—that, in fact, he has reached dizzying new heights of incompetence. His latest bungle has cost an extra £43 million, on top of the £2.7 billion he has cost us so far. If P&O wins its case, how much more is the Secretary of State going to cost the taxpayer, and will that be the point at which he finally accepts that he has no choice but to resign?

[Chris Grayling]

The right hon. Gentleman does not believe in Brexit and he clearly does not believe in no-deal preparations. He also clearly did not listen to me previously. I have set out exhaustively in this House why we took the decisions that we did and why we responded in the way we did to the legal advice we had. We simply took steps to ensure that we were ready for a no-deal Brexit—the responsible thing to do. He might not agree with it, but that is what we have done.

[Chris Davies (Brecon and Radnorshire) (Con)]

What steps is my right hon. Friend taking to reduce the amount that has to be paid to the ferry companies involved?

[Chris Grayling]

That is an important point. We have paid a reduced cancellation charge, as set out in the original contracts in the case that we did not need the ferries as a result of a change in circumstance. The change in circumstance, of course, is that the potential no-deal date has moved by seven months. Nobody seriously expects that we would be paying to have ships either sailing empty or moored at the quayside for that time, but the companies incur costs—by leasing extra ships and taking extra staff— that have to be met. At the start, we negotiated a cancellation level of payments, meaning that we did not have to pay the full amount in the contract and mitigated the cost to the taxpayer of the insurance policy that we took out.

[Jo Stevens (Cardiff Central) (Lab)]

The private sector has no faith in the Department for Transport’s ability to undertake procurement properly; confidence has been lost. Is the Secretary of State concerned that his own incompetence will reduce future private sector investment in the transport sector?

[Chris Grayling]

I do not know what the hon. Lady is talking about because she is not being specific. She says that the private sector has lost confidence in the Department’s procurement, but that tends only to be the case if people have not won a contract.

[John Howell (Henley) (Con)]

I have continually voted for the deal, as the Secretary of State knows. The insurance policy protects exports from and imports to the UK, so I fully accept what he is saying. Will he join me in trying to get a change to the procurement rules, so that they include a substantial element of alternative dispute resolution to make the whole thing cheaper and quicker?

[Chris Grayling]

I regret that any big company—particularly in the case of Eurotunnel—would take a decision to pursue a legal action at such a time, when the Government are seeking to operate in the national interest. But the law is the law, and we have to fulfil it. I agree with my hon. Friend that alternative dispute resolution is a good way of resolving such matters, when it can be delivered.

[Mr Kevan Jones (North Durham) (Lab)]

The criticism is not that preparations should not have been made; it is criticism of the way in which the contracts were awarded. The Secretary of State is doing his usual trick of standing back and saying that he is the innocent bystander in this situation. Is he actually saying that he just followed the advice of his officials and signed this off, or did he intervene and overrule, especially to ensure that Seaborne Freight were awarded a contract? Or is he just going to hide behind others and say, “It was somebody else’s fault, guv—not mine,” as he did with the train timetable idea?

--- Later in debate ---

[Chris Grayling]

I can categorically say that I did not intervene in any matters relating to the decisions to let these contracts, how they were let and what the recommendations were about letting them.

[Tom Pursglove (Corby) (Con)]

Does my right hon. Friend share my frustration with those in this House who, I think wrongly, rant that a no-deal Brexit would be catastrophic but then oppose every single step taken to try to mitigate any of the concerns that it might bring about?

[Chris Grayling]

The bit I do not understand is that Labour Members do not appear to understand insurance. When someone takes out a home insurance policy each year, they pay their money and they do not get it back. It costs them money, but they have the insurance to protect them against an unforeseen eventuality. We took out this insurance policy because of a change to the forecast that suggested that we might have a problem in dealing with the flow of drugs for the national health service. That was the responsible thing to do—to take out the insurance policy for the country. Labour Members might not want us to do that. They might not want to look after the interests of the national health service, but we will.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The Secretary of State calls it an insurance policy, but I do not know what part of an insurance policy involves paying £33 million in an out-of-court settlement to a company because of his own incompetence. That is not really a viable and prudent form of insurance policy. Is not the reality that the Government were never going to have no-deal in the first place and that this has been the mother of all smokescreens by the Government to raise the stakes in effectively playing poker with taxpayers’ money? It is a flagrant misuse of public funds, and he should at least have the grace to admit that.

[Chris Grayling]

I will not, because it is not true.

[Bob Blackman (Harrow East) (Con)]

Will my right hon. Friend confirm that the reality is that cancellation fees are a standard aspect of contracts that exist between the Government and private sector suppliers to cover the costs that are legitimately created when a contract occurs? In the event that cancellation takes place, it is perfectly reasonable for those costs to be covered; otherwise people would not contract with the Government.

[Chris Grayling]

My hon. Friend makes a very good point. It underlines one of the things that makes the business community much more concerned by a Corbyn Government than by Brexit, because Labour Members not only do not understand business—they hate business and do not believe that the Government should work with business. We hear time and again how dismissive they are of business, and this is just another example.

[Wayne David (Caerphilly) (Lab)]

Do the Government’s interesting U-turns reflect a change in their attitude and policy towards Brexit itself?

[Chris Grayling]

Our policy has been consistent from the start: we want to leave the European Union with a deal. We will continue to work to do so but will make appropriate plans for all eventualities.

[Tommy Sheppard (Edinburgh East) (SNP)]

We all knew that a no-deal exit might happen, but none of us could have said that it would definitely happen. So I do not know which is worse: whether the Secretary of State has overseen contracts that did not have the flexibility and caveats built into them to allow for that eventuality, or whether he refuses to admit that that was a mistake. Whatever it is, this combination of incompetence and arrogance is costing the taxpayer a lot of money. What assurances do we have that as we approach the October deadline and he begins over the summer to look at this process again, he will learn from the mistakes and not waste even more money?

[Chris Grayling]

That is precisely why these contracts had early cancellation provisions that enabled us to close the contracts down at a cost that was much lower than the full cost of the contracts.

[Mr Speaker]

Thank you. We come now to the business question, which is not as heavily subscribed as is often the case. Therefore, I think I can say with complete conviction that this session should finish no later than 1 o’clock and preferably long before then.

Heathrow Expansion

Chris Grayling Excerpts

Wednesday 1st May 2019 Written Statements

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

The Government welcome today’s judgments from the High Court in the judicial review of the airports national policy statement. Of 26 grounds, all were dismissed with 21 of the 26 not even held to be arguable. The positive outcome confirms my belief that Government undertook a robust process in coming to their decision to support a new northwest runway at Heathrow airport by 2030. This was one of the largest public law challenges of all time and I am pleased that the hard work of the independent Airports Commission and the Department has been shown in good light. In designating the airports national policy statement, this Government demonstrated their willingness to take difficult decisions, resolving an issue with which successive administrations had grappled for decades.

Heathrow expansion is more important than ever as we plan to exit the EU. Connectivity to our only aviation hub airport is vital to productivity, and expansion is critical if global Britain is to attract inward investment and increase trade with new and fast growing overseas markets. It would better connect the UK to the rest of world with an extra 16 million long-haul seats available by 2040. Heathrow expansion is a decision that benefits communities up and down the country—as well as the tens of thousands of local jobs it would create, expansion is expected to increase the number of domestic routes from our hub airport to 14; we have already seen the arrival of direct flights to Newquay, allowing easy access to the UK’s only hub airport from the southwest.

In addition to new international and domestic routes, we would expect there to be increased competition on existing routes, giving greater choice to passengers. Heathrow Airport Limited has also made good progress on its logistics hub proposals—these aim to leave a lasting skills legacy across the UK. Today’s decisions by the Court are another step towards realising these benefits.

This Government recognise that airport expansion cannot be at any cost. Expansion at Heathrow would only take place in compliance with air quality legal limits. For those communities impacted by the scheme, a world class package of mitigations would be provided and, despite the third runway, a future Heathrow would be quieter than it was in 2013 as new, quieter, planes come online and robust noise mitigations are rolled out. To get people to and from the expanded airport, Heathrow must ensure more people travel by public transport—supported by the expected development of western and southern rail links.

I want to address climate change where the UK continues to lead internationally. While international aviation emissions currently represent less than 2% of total global emissions, we recognise the challenge that decarbonisation of aviation represents. International aviation emissions are currently excluded from UK carbon budgets—this is consistent with the Paris agreement, which looks to the International Civil Aviation Organisation to provide leadership. The UK supports this approach and is continuing to lead negotiations on this issue. In coming to our decision to support expansion at Heathrow, the Airports Commission and the Department concluded that expansion is possible within the UK’s current climate change obligations and the Committee on Climate Change’s recommended limit for aviation emissions. We are clear that expansion would only take place if it would not materially impact the ability of Government to meet their carbon reduction targets now and in the future.

The Government are currently consulting on their aviation strategy Green Paper, which creates a plan for sustainable growth that benefits the whole of the UK to 2050 and beyond. In developing the strategy, we will carefully consider the Committee on Climate Change’s forthcoming advice on the implications of the Paris agreement for the UK’s long-term emissions reduction targets.

Next steps

Scarce taxpayers’ resources—on all sides—would be better spent elsewhere. If the Court grants permission for any appeals, we will seek to have them dealt with as quickly as possible. However, I urge all parties, particularly local authorities and community groups affected by the proposals, to move forward and engage closely with the planning process. As part of this, Heathrow Airport Limited has said it will undertake a consultation on its scheme masterplan in June. This will provide an opportunity for interested parties to give their views on the emerging scheme design. Heathrow would then apply for development consent which would be considered by the planning inspectorate, before a recommendation is made to Government.

Outside of the planning process, the Civil Aviation Authority will continue to work with industry and Heathrow to ensure expansion can be delivered in a timely, financeable and affordable manner that is in the best interests of the consumer.

This Government have taken the right decision, endorsed by a large majority of MPs, which had been ducked by other Governments for decades. The expansion of Heathrow is vital to our international connectivity and shows confidence in the future prosperity of global Britain. The Court’s decision confirms that the right process was followed throughout. We could not be more pleased with the outcome which will benefit people and businesses the length and breadth of the UK for decades to come.

[HCWS1531]

Rail

Chris Grayling Excerpts

Wednesday 10th April 2019 Written Statements

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

I am updating the House on the east midlands, south eastern and west coast partnership franchise competitions.

I am pleased to inform the House that, following rigorous competition, I intend to award the next east midlands railway franchise to Abellio East Midlands pending successful completion of a standstill period of at least 10 days.

The franchise is due to start on 18 August 2019 and will run for eight years, until 21 August 2027, with an extension of two years callable at my discretion.

Passengers, local authorities, businesses and other stakeholders across the country contributed to a highly demanding and challenging specification for this new franchise. Bidders were invited to demonstrate how they would meet this specification, and I am very pleased that we have agreed a plan with Abellio East Midlands for them to exceed these expectations.

Abellio East Midlands will oversee the introduction of brand-new trains, entirely replacing the existing intercity fleet with more reliable and comfortable trains. Passengers will benefit from an 80% increase in the number of morning peak seats into Nottingham, Lincoln and St Pancras. Passengers will also see faster journey times over long distances, with a new express service from Corby through Luton into London.

The east midlands railway will be at the forefront of the Government’s commitment to deliver a cleaner, greener rail network. Abellio East Midlands will trial hydrogen fuel cell trains on the midland main line and will run zero-carbon pilots at six stations along the route.

The new franchise will also deliver a fairer deal for passengers. Over £17 million will be invested in improving station facilities across the route, including to deliver accessibility improvements. Abellio East Midlands will also deliver an additional 916 extra car park spaces and 1,050 cycle spaces.

Passengers will benefit from the provision of free wi-fi throughout the franchise, both on trains and at stations, and a significant uplift to the current ticketing system, with the introduction of smart, flexible ticketing options, including to provide better value for those who travel regularly but less than five days a week, as well as improved ticket-buying facilities and nine newly staffed stations.

The new east midlands railway franchise will also introduce enhanced delay repay compensation, with passengers able to claim compensation if their train is more than 15 minutes late.

We look forward to working closely with Abellio East Midlands to ensure they deliver the high-quality services that passengers expect and deserve from the railway and the east midlands railway franchise.

With regards to the south eastern franchise competition, I am also today updating the House that my Department is negotiating a short-term extension to the current franchise agreement with Govia while we make a decision on the competition. This will ensure continuity of services for passengers until 10 November 2019, with an option to extend the agreement further to April 2020.

We are due to award the west coast partnership in June.

Alongside this, there is a root-and-branch review of the railway underway, independently chaired by Keith Williams. This will make ambitious recommendations before the end of the year to reform the structure of the whole rail industry to prioritise passengers’ and taxpayers’ interests.

The next east midlands railway franchise and the ongoing competitions include significant improvements for passengers and steps to bring track and train closer together. From 2020, we will begin to roll out further reforms, advised by the rail review, across the country. We will be guided by the approaches that deliver benefits to passengers and other rail users soonest. Awarding the new east midlands railway franchise is part of that strategy.

[HCWS1502]

EU Transport Council

Chris Grayling Excerpts

Wednesday 3rd April 2019 Written Statements

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

The Romanian presidency hosted an informal meeting of Transport Ministers in Bucharest on Wednesday 27 March. This was not a formal Council meeting and no decisions were taken. This statement provides a summary of discussions. The UK was represented by officials.

The meeting discussed multimodality, sustainability, infrastructure and road safety. On multimodality, participants underlined the importance of developing a comprehensive approach to multimodal transport. Integrated ticketing systems, promotion of car-sharing or public transport, digitalisation and interoperability were identified as means for developing multimodality.

On sustainability, participants discussed the importance of action to reduce the impact of transport on climate change, recognising the challenges raised by an increasing need for mobility and the negative impact on the climate. Policy and practical approaches to encouraging multimodal transport were discussed, with many interventions focusing on possible measures to be taken in order to decarbonise transport such as: promotion of alternative fuels, digitalisation, better planning of services, uptake of new technologies, and incentives for use of public transport or cycling.

The Commission set out its thinking on the revision of the TEN-T regulation, following the launch of its review process in March, and its plans for consultation with stakeholders and member states in the next few months. Participants welcomed the Commission’s initiative to start the revision process of the TEN-T regulation and discussed future funding options for the promotion of priority projects.

Over lunch the meeting heard some presentations on road safety. The European Commission stressed the importance of member states implementing the “Vision zero” to reduce fatalities and severe injuries on roads. The European Commission will be seeking to re-focus its efforts in this area by introducing a new policy framework on road safety for 2021-30. In addition, it will seek to foster a partnership with the European Investment Bank to provide the “Safer Transport Facility” with the aim of providing a “one stop shop” to support member states in achieving the objective.

The UK did not intervene substantively.

[HCWS1479]

Oral Answers to Questions

Chris Grayling Excerpts

Thursday 21st March 2019 Commons Chamber

[David Duguid (Banff and Buchan) (Con)]

5. What recent assessment he has made of trends in the number of passengers flying from British airports.

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

In 2018, 292 million passengers flew to or from a UK airport. That figure was almost 3% higher than in 2017, and 24% higher than in 2008. The feedback that I have received from airports this year suggests that they expect that growth to continue. The one thing that could bring that growth to a grinding halt is Labour’s plan, which was announced yesterday, to hike the cost of going on holiday.

[David Duguid]

On 8 February easyJet ended its service between Aberdeen and Gatwick, which was the latest in a succession of cuts to flights between Aberdeen and London. British Airways has reduced services between Aberdeen and Heathrow in recent months, and that is making life more difficult for businesses and individuals across north-east Scotland, including in my constituency. Will my right hon. Friend meet me to discuss the impact that those service reductions are having on the north-east economy, and say what can be done to help alleviate the situation?

[Chris Grayling]

I will be very happy to meet my hon. Friend. He knows my concern about the need to guarantee enough capacity for regional connections. It is one of the reasons we have said there will be a bloc of new capacity at Heathrow airport, when it expands, set aside for regional connections. That is fundamentally important to the future of aviation in the United Kingdom.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

The Secretary of State highlights the projected increase in passengers, particularly at Heathrow. In recognising that and planning ahead, does he agree that a new southern rail access to Heathrow serving Surrey and southern markets and going, hopefully, via Feltham in my constituency, will be a positive contribution, increasing the speed at which passengers reach Heathrow and reducing congestion?

[Chris Grayling]

I absolutely agree: we need both western and southern access to Heathrow. That is an important part of ensuring that the airport can expand in a sustainable way, but it will also make a real difference to the hon. Lady’s constituents who work at the airport.

[Steve Double (St Austell and Newquay) (Con)]

Air passenger duty not only puts UK airports at a competitive disadvantage, but is a particular challenge to domestic carriers, where passengers end up paying the duty twice. Will the Secretary of State join the “A Fair Tax on Flying” campaign and encourage the Treasury to cut air passenger duty on domestic flights once we leave the EU?

[Chris Grayling]

I know how strongly people in regional airports feel about this issue and the intense pressure from around the United Kingdom on the Treasury to look at this again. I know my right hon. Friend the Chancellor of the Exchequer has taken careful note of all those representations. Of course, the one thing that would not help Newquay airport and others is Labour’s plan to hike air passenger duty.

[Chris Bryant (Rhondda) (Lab)]

Which? reckons that, if we have a no-deal Brexit, British passengers may well face more than five hours’ wait in airports in this country and on returning to the UK. It recommends that people should take with them not only water and food, but nappies. Does the Secretary of State recognise that there is a real danger in a no-deal Brexit for British passengers? Has he considered yet using the Civil Contingencies Act 2004 to make sure that passengers are protected?

[Chris Grayling]

We of course continue to look very carefully at all the potential implications of different Brexit scenarios. What I would say to the hon. Gentleman is that passengers from this country go on holiday around the world, not just in the European Union, and they do not end up waiting for five hours at airports. The reality is that those countries and those airports want British tourists and they will work to make sure that that is possible.

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

To encourage passenger numbers flying out of Scottish airports, why will the Secretary of State not guarantee public service obligations for additional slots for the new runway at Heathrow?

[Chris Grayling]

I have been very clear that the Government will, using the tools at our disposal, ensure there is guaranteed capacity for regional airports at Heathrow. That is absolutely clear Government policy.

[Jim Shannon (Strangford) (DUP)]

The passenger numbers at Belfast City airport and Belfast International airport have been exceptionally good, but connectivity is key. Will the Secretary of State outline what connectivity can be brought to benefit Belfast City airport, Belfast International airport and Londonderry City airport?

[Chris Grayling]

I have had regular meetings with both airports since becoming Secretary of State. They have great ambitions to expand their route networks. The commitment I give to the hon. Gentleman is that my ministerial team and I will do everything we can to support their ambitions to attract more international routes and better connections within the United Kingdom.

[Karl Turner (Kingston upon Hull East) (Lab)]

The rise in passenger numbers has obviously led the Government to become complacent. Long-haul connections from UK airports have not kept up with our European competitors and many airlines are feeling the pinch. Is it not time for the Government to commit to road and rail investment to strategically important airports, so that they can compete effectively?

[Chris Grayling]

The hon. Gentleman clearly has not been following too closely what has happened. We have, for example, just opened a new road alongside Manchester airport. We are in the development phase of western rail access to Heathrow. We are taking HS2 to Old Oak Common, creating new opportunities for accessing Heathrow airport, and there are more things happening around the country. I absolutely share his view that we need to improve connections to airports. [Interruption.] He says, “Heathrow”. We have just funded new trains for Newcastle-upon-Tyne Metro, which of course connects to the airport. The Government are investing in connections to our airports.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

7. What recent assessment he has made of the potential effect of the UK leaving the EU on the viability of the aviation sector.

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

Flights between the United Kingdom and the European Union will continue whatever the outcome of EU exit. The Government will continue to work closely with the UK aviation sector as we negotiate our future relationship with the EU, including to maintain the leading position of the sector.

[Mr Bailey]

In the event of a no-deal Brexit, flights between the EU and the UK would be capped at 2018 levels, which could result in the cancellation of up to 5 million flight tickets. What assessment has the Secretary of State made of the financial impact on the air travel industry, and of consumers’ ability to emulate the Prime Minister in her ability to walk on water?

[Chris Grayling]

I am afraid that the hon. Gentleman is wrong, because a new regulation is now in place that guarantees aviation between the UK and the EU in all circumstances, and it does not include any kind of cap.

[Sir Desmond Swayne (New Forest West) (Con)]

14. What bilateral arrangements will be in place if we leave next Friday with no deal?

[Chris Grayling]

We had done a lot of work on ensuring that we had good plans for bilateral arrangements, were they to become necessary, but I can tell the House that in the past few days the European Council has confirmed and ratified a regulation to ensure that across the whole European Union flights will continue as normal this summer. That means people can go ahead and book their holidays with impunity and enjoy a good time in their normal destinations.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Wherever people fly in Europe, they have always been protected by good relationships and good air safety, but the Secretary of State must be aware of the scandalous situation in which people are frightened to fly on a certain type of Boeing aircraft. There are leaks indicating that there are real problems that Boeing has not faced up to. It has not grounded the 737 fleet. Planes are crashing and people are dying, and Boeing should be brought to book. Is he going to do something about it?

[Chris Grayling]

As the hon. Gentleman knows, this country was one of the first to ground the 737 Max aircraft, which was absolutely the right thing to do. There are clearly some alarming circumstances surrounding the two accidents that have taken place. It is something that Boeing clearly has to deal with. Unless and until the problem is solved, I cannot see countries such as ours allowing those planes to fly again.

[Clive Efford (Eltham) (Lab)]

Regardless of when we leave the European Union, we must continue to apply the highest environmental standards around our airports. What will the Secretary of State do to continue to reduce the noise footprint around airports, particularly those in very built-up areas, such as London City airport?

[Chris Grayling]

We have now appointed the head of the new aircraft noise body, which will monitor noise levels at airports and inform the Civil Aviation Authority when it needs to step in and use its enforcement powers. Of course, with the transition to a new generation of lower noise, lower emission and lower fuel consuming jets, the noise footprint around our airports is now considerably lower than it was a few years ago.

[John Spellar (Warley) (Lab)]

8. What steps his Department is taking to support UK transport-related industry after the UK leaves the EU.

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

My Department is working closely with the transport industry to ensure that businesses and passengers are prepared for EU exit. We engage frequently with stakeholders to understand their needs, and we have taken action to ensure that we are prepared for all possible outcomes. We have agreed contingency regulations with the EU to ensure that flights continue and that hauliers have access to the EU marketplace in a no-deal scenario. We have also set up new UK safety certification regimes so that we have proper safety standards and rules in place in all eventualities.

[John Spellar]

Unfortunately, the Secretary of State did not refer to the manufacturing industry in that answer. As Brexit looms, his civil servants will no longer have their lame excuse that they are unable to prefer trains built locally—an interpretation of European regulations that is not shared by any other major country in Europe. Even when a firm built a factory in the north-east, it disgracefully lost a contract to a firm that will build the great majority of those trains abroad. Will this Brexit-supporting Secretary of State finally show some backbone and instruct his civil servants to buy trains made in British factories by British workers?

[Chris Grayling]

Of course, the contract to which the right hon. Gentleman refers, which was won by Siemens rather than the other bidders, including Hitachi in the north-east, was in fact let by the current Labour Mayor of London.

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

When it comes to support for planning, it should be noted that, earlier this month, the chief executive of the Road Haulage Association said:

“It’s obvious that government has lost its way…tens of thousands of UK hauliers… are still in the dark. Because of government ineptitude they are simply not ready.”

In a similar vein, can the Secretary of State confirm that the no-deal ferry contracts do not allow for a delayed start date? If so, what will be the cost to the taxpayer and his Department of this latest blunder?

[Chris Grayling]

If the hon. Gentleman had been listening a moment ago, he would have heard me say that we have now completed interim arrangements. The European Union has introduced interim regulations to ensure that hauliers will continue to have access to the European market, which is the right thing to do. We do not want businesses to be disrupted, and those firms will be able to continue to travel to and from the continent in the coming months, doing the work that they do now.

[Alan Brown]

If the Secretary of State listened to the question, it would be much more helpful than listening to the answer.

A spokesman for the road freight industry has stated:

“Our pleas for clarity have been constant—yet none has been forthcoming.”

He also said:

“We have never shared Mr Grayling's optimism”.

Given the £33 million settlement payment to Eurotunnel, a reported £28 million compensation payment to the ferry companies in respect of the no-deal contracts, a shortage of some 60,000 HGV drivers that will be exacerbated by Brexit, and the loss of transport industry confidence, surely the best boost for the industry would be the Secretary of State’s stepping aside.

[Chris Grayling]

In the light of the conversations that took place yesterday and the statement from the President of the European Council, I am quite glad that we will have provision in a week’s time—if it is necessary, and I hope that it will not be—to ensure that essential supplies and medicines can come into the country. Of course, if the hon. Gentleman does not want a no deal, his party could climb off its high horse and support the Prime Minister’s deal.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

9. What assessment he has made of the potential merits of extending the Tyne and Wear Metro to Washington.

--- Later in debate ---

[Kevin Foster (Torbay) (Con)]

13. What plans he has to improve the resilience of the rail network in (a) Devon, (b) Cornwall and (c) Somerset.

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

I was very pleased to be in Dawlish last month to kick off the next stage of our programme to make the railway line there resilient against storms and floods. The £80 million investment in the new sea wall south of the station should mean that the line does not get blocked by high tides as it has done in the past, and I look forward to that work being completed later this year. Further work at Dawlish will follow, and we have also completed work around Exeter to provide greater resilience in that area. It is a real priority for this Government to ensure that the rail network in the south-west does not get disconnected by storms and bad weather in the future.

[Kevin Foster]

I thank my right hon. Friend for giving me such a positive answer. The news of the £80 million funding for the new sea wall was very welcome for the whole region. As he knows, when the Dawlish line is cut off, the whole of Devon and Cornwall is cut off from the network. Can he confirm that, if the local council gives planning permission for the work, it will be started very quickly, to deliver this much-needed scheme?

[Chris Grayling]

I very much hope that the work will commence within a matter of weeks. We will then need to go on and deal with the cliffs, which are a significant issue and will require longer development and consent processes because of the extremely sensitive environment around them. It is my view that we need to sort out the cliffs as well as the sea wall.

[Tom Brake (Carshalton and Wallington) (LD)]

15. What powers he has to sanction train operating companies for poor performance.

--- Later in debate ---

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

16. What discussions he has had with stakeholders in the aviation industry on remotely managed air traffic control.

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

Trains to planes, Mr Speaker. The Aviation Minister has held discussions on remote air traffic control tower operations with several organisations, including the Civil Aviation Authority, NATS, operators of airports such as Cranfield, Highlands and Islands Airports, and the Western Isles Council.

[Mr Carmichael]

Highlands and Islands Airports and the Scottish Transport Minister seem determined to drive the centralisation of air traffic control across the highlands and islands, despite the legitimate safety concerns expressed by its staff and socioeconomic concerns expressed by communities across the region. If they are not going to listen to us, will the Secretary of State ensure that the CAA certainly does when it comes to the sign-off of any scheme?

[Chris Grayling]

I know well the team that runs the CAA, and I can give the right hon. Gentleman an undertaking that they would not sign off anything that they believed was unsafe.

[Nigel Mills (Amber Valley) (Con)]

T1. If he will make a statement on his departmental responsibilities.

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

I am pleased to announce today that I have approved more than £54 million of funding for the north-west relief road in Shrewsbury. It is an important route that will take cars away from the town centre, reducing congestion, cutting journey times and improving air quality within Shrewsbury, and it forms part of a £1.8 billion programme in the midlands alone to improve motorways and major roads.

[Nigel Mills]

May I take the Secretary of State back a year to when he came with me to Alfreton station in my constituency and saw the need for level access to the south-bound platform? Now that the new funding period is starting, can I get an update on when money will be released to deliver that improvement?

[Chris Grayling]

I am aware of that issue, which my hon. Friend and I saw together, and I will ask the rail Minister to give him an early update.

[Rachael Maskell (York Central) (Lab/Co-op)]

There are just eight days until the UK leave the EU. No deal or plan is in place; there is simply chaos across the Government. However, it is the chaos across our borders that is my concern today. Will the Secretary of State ensure that the Prime Minister, in making her case to the European Council to avoid a no-deal Brexit and about how essential it is to extend article 50, highlights that a border between the EU and the UK will harm trade and the flow of goods, food and medicines and be catastrophic for the logistics sector?

[Chris Grayling]

As the hon. Lady and the House will know, we do not want problematic arrangements at the border. Indeed, the deal that the Prime Minister has reached with the European Union would prevent such problems. The hon. Lady is right to say that there are only eight days left, so why does the Labour party continue to put party advantage ahead of national interest? Labour should support the deal next week, so that we can move forward with a constructive partnership with the EU.

[Tim Loughton (East Worthing and Shoreham) (Con)]

T2. An issue even more taxing than Brexit and the uselessness of Southern rail in Sussex is the continued congestion on the A27, and we are still to get a decision on whether the New Monks Farm development, which will include an IKEA that will attract 2 million passenger journeys a year on to that road, will go ahead. I met the Secretary of State a couple of months ago to ask for an update on further proposals to address the congestion, so when can I have it?

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

T3. The Secretary of State was unable to answer a written parliamentary question on the legal costs of Eurotunnel’s court proceedings and the settlement deal. Has he now done his sums, and can he give us the cost to the taxpayer of this whole debacle?

[Chris Grayling]

As I indicated in a previous statement to the House, this is being looked at carefully by the National Audit Office, which will publish all the information in due course.

[Craig Tracey (North Warwickshire) (Con)]

T4. Thatcham Research is launching a consumer vehicle security rating that ranks the vulnerability of new vehicles to keyless car theft. Does the Minister agree that drivers are entitled to know how secure their cars are? What steps can the Government take to ensure that happens?

[Chris Law (Dundee West) (SNP)]

T5. With a shortage of 60,000 HGV drivers in an industry that relies on 60,000 eastern European drivers, and with a predicted 150,000 shortfall by the end of 2020, why will the Department not urgently fund driver training and qualifications?

[Chris Grayling]

The haulage industry is, of course, a commercial business, and we expect it to provide training for new employees. The Government have put in place a wide variety of support for training through the apprenticeship levy and through other work by the Department for Education and the skills sector. It is for commercial businesses to deliver the training their staff require, and the Government will always provide whatever support we can to help them do so.

[Mr Laurence Robertson (Tewkesbury) (Con)]

T7. In the past 12 months, 845 road incidents involving horses have been reported to the British Horse Society alone. There will have been many more, but those incidents resulted in 87 horses and four people being killed, as well as many injuries. What steps can the Minister take to improve horse and rider safety on the roads? Will he discuss this with Ministers in the Department for Environment, Food and Rural Affairs to see whether more bridleways can be provided to help alleviate the problem?

[Mr George Howarth (Knowsley) (Lab)]

Some of the people of Knowsley are having real problems getting to work. On the one hand, they regularly face cancellations on Northern Rail and, on the other hand, if they have to use the Mersey Gateway to get to work in the morning, they have to pay £900 a year. The Secretary of State has done absolutely nothing to address any of these problems. Is it not about time he moved out of the way and let someone else get on with it?

[Chris Grayling]

As the right hon. Gentleman knows, we have been working hard with Transport for the North to improve the performance of Northern Rail. As he will also know, the Mersey Gateway bridge and its infrastructure were done in collaboration with Halton Borough Council to enable a substantial additional facility to be put in place for the north-west.

[Andrew Griffiths (Burton) (Con)]

T8. On Saturday, some 15,000 people had a great day at the midlands grand national in Uttoxeter, bringing much-needed revenue and jobs into my constituency. However, had it taken place on Sunday, racegoers would not have been able to get to Uttoxeter until 2.53 pm. I am delighted that the Minister has listened to my long-running campaign and agreed to bring forward signalling on Sundays in 2021, but that is not soon enough. Will he agree to meet me, and perhaps bring along his cheque book, so we can sort this out for my constituents?

--- Later in debate ---

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

In response to the question from the hon. Member for Banff and Buchan (David Duguid), the Secretary of State committed the Government, on Heathrow expansion, to support regional links. Will he confirm where he expects that support to come from—the Government, local authorities or, in Scotland’s case, the Scottish Government?

[Chris Grayling]

There are two points to make. We have various tools at our disposal, including the public service obligation system, to protect routes and sometimes to support them. However, as Heathrow expands and as demand for air travel grows, I do not expect most of those routes to need Government support. This is a question of making sure that the capacity is available for routes that will be commercial.

[Helen Whately (Faversham and Mid Kent) (Con)]

Headcorn station, in my constituency, is used by more than 600,000 passengers each year, yet it has no step-free access, making thousands of journeys more difficult for disabled passengers. Will the Minister update me on whether Headcorn will receive funding from the Access for All programme?

--- Later in debate ---

[Chris Grayling]

This is nonsense; the investment going into our rail network in the next few years is at a record level, and the money coming to Scotland, thanks to the generosity of this Government, goes beyond what the Scottish Government would be entitled to under the Barnett formula. I suggest they use that money wisely, to provide the kind of additional facility the hon. Gentleman is asking for.

[Tom Pursglove (Corby) (Con)]

Network Rail has demolished the Leyland bridge, with no short-term plan to put a temporary structure in place so that we have not got the inconvenience and great disruption being caused to local residents and businesses. Will the Minister intervene to make sure that Network Rail urgently reviews this and finds a temporary solution to this pressing problem?

[Chris Grayling]

I am aware of the issue; my hon. Friend has raised it with me. I simply say to him that I have asked for this matter to be looked at carefully. I do not want improvement works to be done at the disadvantage of his constituents.

[Martin Whitfield (East Lothian) (Lab)]

Which is the greatest danger to the Secretary of State’s Department—no deal, or no Brexit?

[Chris Grayling]

My Department will prepare for all eventualities and we are doing so.

[Maggie Throup (Erewash) (Con)]

Recent vegetation management alongside the railway has destroyed huge swathes of the Erewash landscape. Will the Minister outline what further steps have been taken to ensure that Network Rail does vegetation management responsibly and does not take the drastic measures it has taken throughout my constituency? It is really affecting the wildlife, as well as my constituents’ wellbeing.

[Lilian Greenwood (Nottingham South) (Lab)]

Electrification is clearly the optimal solution for intensively used rail lines, and the Railway Industry Association has shown that it can be delivered at costs that are 33% to 50% lower than those for past projects, if it is part of a rolling programme. Why will the Secretary of State not electrify the midland main line and give Nottingham the cleaner, greener and cheaper services it deserves?

[Chris Grayling]

I am sure the hon. Lady will welcome the fact that under my stewardship, in the past three months the Department for Transport and our transport system has opened three times more electrified railway than the Labour party did in 13 years in office, so I am not going to take any lessons from the Labour party. We continue a programme of modernisation of our rail network, which includes electrification and extra capacity and gets cars off the roads and people on to the railways.

[Bob Blackman (Harrow East) (Con)]

Will my right hon. Friend the Secretary of State update the House on when he expects Crossrail to start running? What investigation has been carried out into the scandal of its finances and budget and the overspending that has taken place?

--- Later in debate ---

[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—

[Mr Speaker]

Well, the Secretary of State appears to wish to say something. [Interruption.] Order. We are not going to continue the debate. If the Secretary of State wishes to correct the record or to explain in a sentence why he does not feel any need to do so, that would be acceptable.

[Chris Grayling]

I simply refer to the section of the hon. Gentleman’s speech where he says that air passenger duty has been frozen. He goes on to say:

“This is not a sensible approach to transport policy.”

So it is exactly what he says.

[Mr Speaker]

Well, very well. The matter will have to rest there. I simply say to the shadow Secretary of State that I might well have been intrigued to read the speech anyway, but in light of the fact that there are these five references, which he has just advertised to the House and the nation, I am now impelled to do so. It sounds a diverting read and it will form part of my late-night consumption in the days and weeks ahead and I am deeply grateful to him.

Air Services to the EU

Chris Grayling Excerpts

Thursday 7th March 2019 Written Statements

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

Leaving the EU with a deal remains the Government’s top priority. This has not changed. However, a responsible Government must plan for every eventuality, including a no-deal scenario.

In December, Cabinet agreed to proceed with the Government’s next phase of no-deal planning. This means we are setting in motion our remaining no-deal plans.

Both the EU and the UK have been clear that they are committed to maintaining air services in any scenario. Aviation links are a key priority for the Department for Transport. The UK has the third largest aviation network in the world, and the biggest in Europe. Air travel is vital for both the UK and the EU in connecting people and businesses, facilitating tourism and trade. The UK and EU have a mutual interest in maintaining well-functioning aviation markets.

The Government have made preparations to deliver continuity of air services between the UK and the EU in the event that the UK leaves the EU without a withdrawal agreement. We set out in our technical notices in September 2018 that the UK would take a pragmatic approach to any no-deal scenario, and provide EU airlines with permission to operate. We expected EU countries to reciprocate and provide permissions to UK airlines.

Following this, the European Commission proposed a regulation to ensure air connectivity in the event that the UK leaves without a withdrawal agreement. A final version of the draft regulation has been provisionally agreed by the EU. This is expected to be confirmed by the Council and the European Parliament shortly. The provisionally agreed EU regulation is intended to apply after the UK leaves the EU, and would entitle UK airlines to continue operating air services from the UK to the EU until March 2020.

Accordingly, I am today publishing a policy statement to set out how the UK intends to provide the necessary permissions to member state airlines in order for them to operate to the UK. We have made all decisions in relation to how the UK will reciprocate based on three key principles. First, we want to provide certainty and reassurance to industry and consumers. Secondly, we want to minimise the potential for disruption. Finally, we want to maintain a level playing field for UK industry, ahead of future negotiations.

Full details on how the UK will reciprocate are set out in the policy statement. In short, for the 12 month duration of the EU regulation, the UK intends to reciprocate the rights provided in the EU’s regulation, and grant EU air carriers a level of access to the UK at least equivalent to the rights that would be granted to UK airlines under the regulation. This includes traffic rights, ownership and control, leasing of aircraft, co-operative marketing arrangements and fair competition. As an exceptional measure to ensure the continuity of regional services and to minimise disruption, we will for a short period go further and allow member state airlines to operate wholly within the UK for the IATA summer season 2019, which ends on 27 October 2019, ensuring continued regional connectivity and providing time for EU businesses to adjust to new arrangements. We will also allow code sharing on existing services to continue.

While continuing to plan for all eventualities, we also believe that it is right to underline the fact that the UK is taking a positive and pragmatic approach. Overall, we continue to believe that liberal, reciprocal market access is in the best interest of the EU countries and the UK, and we will move swiftly to propose negotiations on this basis in the event that the UK leaves without a withdrawal agreement.

[HCWS1384]

EU Exit Preparations: Ferry Contracts

Chris Grayling Excerpts

Tuesday 5th March 2019 Commons Chamber

[Alan Brown]

I thank the hon. Lady for highlighting yet another miserable failure, with more money being thrown down the drain. It is interesting that Eurotunnel was paid £33 million for vital services, given that that seems in one way or another to replace the contract of Seaborne Freight, which was given only £14 million. So we really do have to ask what extra we are getting for the £33 million, or is this all the compensation that Eurotunnel walks away with and the taxpayer has no chance of recouping? Again, the Transport Secretary really needs to explain this.

The Government have argued that direct negotiation was possible under regulation 32 of the Public Contracts Regulations 2015, which relates to emergency situations brought about by unforeseeable events. So, after more than two years of no-deal planning, we suddenly had an unforeseen event—an unforeseen event, however, that allowed such protracted negotiations and £800,000-worth of due diligence. I would like the Transport Secretary to explain how long those negotiations were ongoing in this supposedly emergency situation, because £800,000 of consultants’ money amounts to a fair bit of time in negotiation, so he needs to explain when the actual emergency situation kicked in.

The argument from the Dispatch Box was that Seaborne Freight would only receive the money if it delivered the service, but that misses the point, because if it did not deliver the service, the emergency service it was contracted for would not happen, and that would leave the Government in a right mess in terms of no-deal preparations. The Transport Secretary has also argued that Seaborne has not cost the taxpayer any money. Hopefully he will re-explain these figures, because I would like to know how £800,000-worth of due diligence, at least some of which was on Seaborne Freight, has not cost any money. How did going to court and defending the Government’s position not cost any money? How did an out-of-court settlement with Eurotunnel at £33 million not cost any money that was related to Seaborne, because I am pretty sure a key plank of Eurotunnel’s objections was the fact that the Transport Secretary gave an important contract to a company with no ships? Meanwhile Eurotunnel is a company that obviously provides successful cross-border services. It is no wonder it was at court.

I would also like to ask the Transport Secretary whether there are any more objections outstanding: any more risks of court action. In response to a written parliamentary question I was told that a limited number of representations were received. In my book, a limited number is more than one. We have already had one court case to date; are any more court cases pending?

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

None.

[Alan Brown]

Are we absolutely sure about that? Given the Transport Secretary’s ability to count, “A hae ma doots,” as they say.

The Transport Secretary has never been able to answer what the loss of the 10% Seaborne contract would actually mean for the impact on Dover? Dover is so sensitive that even 10% would have a massive effect. We have heard about the fact that a minute and a half to two minutes of additional checks per lorry could lead to 30-mile tailbacks. Fortunately, under the Transport Secretary’s competent planning for no deal, we know that the Government have planned for at least 10,000 lorries by doing an exercise involving 89 lorries, driving up and down the motorway! [Interruption.] Yes, and the bin wagons. So 89 lorries driving up the motorway and parking up at Manston airport successfully proves that this Government can handle no-deal preparations! I am relieved; I am happy at that. I hold to my faith in the Transport Secretary.

--- Later in debate ---

[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.

[Chris Grayling]

Will the hon. Gentleman confirm to the House that the probation service contracts are running around £1 billion under budget?

[Alan Brown]

I cannot confirm that. The right hon. Gentleman is quite comfortable with his legacy there, so I will leave that to him; what he said is on the record. No one else seems to appreciate his legacy, including the current Justice Minister, who is trying to deal with the mess.

--- Later in debate ---

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

As I have explained to the House on several occasions, the Government entered into contracts with ferry operators to provide additional ferry capacity and services into the UK as part of no-deal contingency planning. However, as we have heard clearly this afternoon, the reality is that the SNP does not believe in preparing for no deal. Even though the hon. Member for Kilmarnock and Loudoun (Alan Brown) accepts that it is a possibility, a risk and a danger, he does not support us in preparing for the risk of a no-deal exit—[Interruption.] The Labour Front-Bench team say, “Take it off the table,” but we can only take no deal off the table by reversing Brexit or agreeing a deal. The reality is that Labour and the SNP have spent week after week trying to prevent a deal, voting against the deal and trying to disrupt the process of getting towards a deal. Frankly, they are acting in anything but the national interest in doing so. We, however, have been acting in the national interest in preparing for all eventualities.

[Wayne David (Caerphilly) (Lab)]

If the Secretary of State really believes that no deal should be an option, why on earth did the Government not begin preparations sooner?

[Chris Grayling]

We have been preparing for a no-deal exit for months and months. There was a particular reason, as I will set out in a moment, for this particular procurement at this particular time, but my Department has been working for months to prepare for the risk of no deal. That can be seen in the new international aviation agreements, in Kent, where we have put in alternative resilience systems to the deeply disruptive Operation Stack, and in many other things.

[Julian Knight (Solihull) (Con)]

It is not just here that we see the Opposition parties not acting in the national interest, because the same applies to statutory instruments. It is a constant refrain. Does my right hon. Friend agree that the only way of taking no deal off the table is by voting for the Prime Minister’s deal? It is time for the Opposition parties to put narrow party politics aside.

[Chris Grayling]

Absolutely. All that we have heard for months is, “Why are the Government getting this wrong?” but we have had no tangible or realistic plans from the Opposition. At every opportunity, they simply work to disrupt the Brexit process. Labour stood on a manifesto that respected the referendum result, but the party is doing anything but respecting the result. If it continues to disrupt the Brexit process, it will pay a heavy price in its heartlands, where people voted for Brexit.

[Charlie Elphicke]

I have been reading the NAO report with considerable interest, and it says:

“Over the summer of 2018, government departments stepped up their contingency preparations for no deal.”

The truth of the matter is that Government policy changed in summer 2018 to step up contingency planning, so the Department for Transport acted from that point onwards because wider Government policy had changed from that point onwards.

[Chris Grayling]

My hon. Friend is absolutely right, although I must say that we started some of our planning well before then. However, it is certainly the case that last summer, as we saw the progress in the negotiations, the Government stepped up their preparations for no deal, as any responsible Government should. It is quite extraordinary that the Labour party seems to believe that we can just wave a wand and take no deal off the table. We have voted to leave the European Union, and we will either leave the European Union with a deal or without a deal, or we will reverse Brexit. Those are the only three options.

[Mr Francois]

It is right that Government did indeed step up their no-deal preparations, as my right hon. Friend has quite rightly told the House, but one of the points of debate has been the speed at which the Chancellor of the Exchequer has been prepared to release funding to individual Departments to facilitate those preparations. Does my right hon. Friend think it would be helpful in future if the Chancellor were to lean forward a bit more to ensure that all preparations are fully funded in good time?

[Chris Grayling]

I will leave my right hon. Friend to make his point, because I do not want to start debating discussions within the Government.

The hon. Member for Kilmarnock and Loudoun asked why we started this procurement when we did. As I have said, we and the national health service had been preparing for disruption at the ports lasting approximately six weeks after exit day. However, based on the negotiations, on comments coming from Brussels and on what we saw happening on the other side of the channel, the analysts changed that assumption late last autumn and recommended that Government prepare for a longer period of disruption.

At that point, the Department of Health and Social Care rightly highlighted the fact that that would put significant pressures on their stockpiles of drugs. The Government therefore collectively decided following discussions in Cabinet Committees to go to the ferry industry to secure capacity to guarantee the delivery of drugs to this country in the event of a no-deal Brexit. That was a collective decision, and it was the right decision. We talked to all the current ferry operators working across the North sea and the English channel, plus any other operator with tangible plans to do so. That is where the procurement came from.

[David Hanson (Delyn) (Lab)]

Is this not the key question, however? Did the right hon. Gentleman have advice from his officials that negotiations solely with ferry companies would result in a legal challenge by Eurotunnel, which ultimately he has now paid off with a £33 million investment from taxpayers?

[Chris Grayling]

We knew, in accelerating the procurement process, that there was a legal risk. That has been highlighted in the NAO report. However, it was my judgment, the judgment of my accounting officer and the judgment of those who vetted the plan across the Government that that was a risk that we should take, given the need to ensure that we had a supply of drugs into the country in the event of a no-deal Brexit.

[David Hanson]

The right hon. Gentleman has said that there was a legal judgment that there was an element of risk. He took that risk, and his actions have therefore cost the state £33 million.

[Chris Grayling]

We took a collective decision, in the light of the legal advice, which was taken by me, by my accounting officer, and by those who approved this across the Government, and we did so—[Interruption.] We did so because we judged it important to ensure that we had a proper supply of drugs to the NHS in the event of a no-deal Brexit. I challenge Labour Members, as they chunter from the Front Bench, to say that they disagree with ensuring a supply of drugs to the UK in a no-deal Brexit.

[Peter Kyle (Hove) (Lab)]

I have been listening very intently to what the right hon. Gentleman has been saying. The thing that really surprises and shocks me is the fact that there is a complete lack of humility with regard to the fact that £33 million of public money—taxpayers’ money—has been wasted. Could he just stand up and say sorry to them?

[Chris Grayling]

I very much regret the fact that we were taken to court. It was a risk that we acknowledged was there, but I stand by the decision to make sure that we could guarantee the supply of drugs to the NHS in the event of a no-deal Brexit.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

Does my right hon. Friend agree that proper preparation is an important role of the Government, and that frightening people unnecessarily, particularly those who are vulnerable and dependent on medicines, such as those with epilepsy, is completely irresponsible and unkind? Can he confirm to my constituents that the medicines will be available, regardless of whether we have no deal or Brexit on the Prime Minister’s deal?

[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.

[Joanna Cherry (Edinburgh South West) (SNP)]

rose—

--- Later in debate ---

[Charlie Elphicke]

rose—

[Chris Grayling]

I am going to make a bit of progress, because I have given way many times.

Let me touch briefly on the issue of Seaborne Freight, which was raised exhaustively by the hon. Member for Kilmarnock and Loudoun, and on which I have answered question after question in the House. First, to be clear, the agreement with Eurotunnel was not about the contract with Seaborne Freight; it was about the procurement process, and particularly about the continuing contracts we have with Brittany Ferries and DFDS for additional ferry capacity into the UK, to provide us with resilience. I have spoken exhaustively in the House about Seaborne Freight. I am disappointed that the contract had to be terminated. I stand by the decision to give that company a chance, particularly since it was backed by Ireland’s biggest shipping firm at the time. We have, as a Government, paid no money at all to Seaborne.

The hon. Gentleman keeps asking me about spending money on due diligence. We spend money on due diligence for contracts that we do not award as well as for contracts that we do award, because rightly and properly in government due diligence is applied to a tender of any sort. That is what we did in this case, and what we do in all other situations. That, again, is the right thing to do.

So it is absolutely clear—I want to be absolutely clear—that when it comes to the Eurotunnel litigation, the settlement struck between the Government and Eurotunnel was separate to the issue of the Seaborne debate, and it was struck, I think, in a way that is designed to ensure that the taxpayer actually receives value through the addition of important facilities at the border that will smooth the flows.

[Joanna Cherry]

On that point, will the Secretary of State give way?

[Chris Grayling]

It was a challenge to the procurement process, on which I said I took detailed legal advice at the time of procuring, which I and my accounting officer took into account when awarding these contracts. We expected that if a legal challenge were brought, any court determination would be brought well after Brexit and would not disrupt the process. All this, as the hon. Member for Kilmarnock and Loudoun will be aware, has already been looked at by the National Audit Office. We have invited it to take a further look, but I stand by the decisions that we took.

These decisions were not simply taken by me and by my Department; they were decisions taken collectively, in the national interest.

[Joanna Cherry]

Can the right hon. Gentleman confirm, just for the record, that not a single penny of the £33 million paid out to Eurotunnel will be returned in the event that there is a deal?

[Chris Grayling]

The deal that we have done is to pay for additional facilities at the border, to create a smoother flow at the border. That is something that we will benefit from at the borders.

[Joanna Cherry]

You are not telling the truth.

--- Later in debate ---

[Mr Speaker]

I say to the hon. and learned Lady that I am chairing this debate. The hon. and learned Lady will speak in full, or otherwise, if and when she catches the eye of the Chair. Thank you.

[Chris Grayling]

Mr Speaker, I simply reiterate: the settlement that we have reached with Eurotunnel is going to pay for improved facilities at the border, to improve flow, to make sure that our border through the tunnel works more smoothly in future, particularly in the post-Brexit world. That is a simple, factual point about the settlement that has been reached.

[Charlie Elphicke]

I thank my right hon. Friend for giving way one more time. He knows that the port of Dover could see the legal risk of the process that he had undertaken, but decided to act in the national interest. Will he make sure that the port of Dover is not in any way disadvantaged in relation to this matter?

[Chris Grayling]

I have to say that the management of the port of Dover have been exemplary for the last few weeks in co-operating with us, not only over this but in preparations for no deal. They rightly judged that it was not in their corporate reputational benefit to try to block the delivery of drugs to the NHS in a post-Brexit world. I am disappointed that not everyone took the same view.

[Alan Brown]

rose—

[Chris Grayling]

I am going to make some progress.

I simply want to reiterate the point. We have taken the decisions. We collectively, in the Government, back in November; we collectively, a couple of weeks ago; we collectively, about this settlement, have taken the view that we need foremost to put the national interest first. We need to make sure that this country is ready for a no-deal exit, even though we are working very hard to make sure that that does not happen. We are working very hard to make sure that we are prepared for all eventualities. That is the responsible thing for the Government to do. Sometimes you have to take some risks in doing that, but I think sensible Governments take risks in the national interest. I and we and all of my colleagues who took this decision collectively, stand by this decision; we are deeply sorry that it did not work out in the way we had intended, but the reality is, it was the right decision to take, because we were putting the national interest, and particularly patients in our national health service, first—and that, Mr Speaker, you would expect any responsible Government to do.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

[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.

--- Later in debate ---

[Alan Brown]

Once again, I thank you, Mr Speaker, for granting this debate. I also thank all Members who have taken part, particularly the two Conservative Members, whose contributions in trying to defend the Transport Secretary unwittingly made our case for us in terms of how big a farce this has really been. There was a ludicrous defence of the Transport Secretary by the hon. Member for Dover (Charlie Elphicke), who stated the whole Government were to blame for being too late in undertaking contingency planning. With the Transport Secretary also advising us suddenly of a collective Cabinet decision, we now know we have collective Cabinet incompetence, which says all we need to know about this Government and the leadership of the Prime Minister.

Despite having had nearly three hours of debate, the reality is that we still have no clarity about what the £33 million to Eurotunnel gets us and what, if anything, is being withheld by the Government in event of a withdrawal agreement being reached. We have had no reasons for the court climbdown on Eurotunnel’s challenge; nobody has been able to answer the questions on isotopes from my hon. Friend the Member for Glasgow North West (Carol Monaghan); and we have had no justification for how this whole procurement exercise is suddenly a medicine-led exercise. We have had no clarity or justification on the rationale for pursuing an exemption in competitive tendering on the basis of the regulation 32 exemption for unforeseeable circumstances, and no answers to the detailed questions from my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry).

Many Members have called for the Transport Secretary’s head, although, as I said earlier, it goes much wider than this. There was a classic oxymoron from the Transport Secretary: in defending his approach to the contingency planning he said that sometimes risks have to be taken. It undermines the point of contingency planning if he is actually willing to take risks. I will finish with this: the longer he stays in post is a risk too far for the United Kingdom. Again, I thank Members from across the House for their contributions.

Question put and agreed to.

Resolved,

That this House has considered the latest developments in the UK Government ferry contract awards for no-deal preparations.

[Chris Grayling]

On a point of order, Mr Speaker. I would just like to inform the House that the annex containing the requirements for Eurotunnel to spend money on improvements at the borders has now been published on the Government website.

[Mr Speaker]

That is an extremely helpful point of order from the right hon. Gentleman, and I thank him. It is by way of being a public information notice and I take it very much in that spirit.

Oral Answers to Questions

Chris Grayling Excerpts

Thursday 14th February 2019 Commons Chamber

[Carol Monaghan (Glasgow North West) (SNP)]

21. What steps he is taking to reduce potential disruption to travel in the event of the UK leaving the EU without a deal.

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

My Department is undertaking a comprehensive and wide-ranging programme of work to ensure that we are prepared for a scenario in which the UK leaves without a deal. We continue to work to ensure that the UK does not leave without a deal.

[Gavin Newlands]

I am grateful for that answer, which I am not sure even those on the Government Benches will buy. The Secretary of State told the House on Monday that Arklow had confirmed its backing for Seaborne Freight “from the outset”. Yesterday the permanent secretary to the DFT told the Public Accounts Committee that the DFT had awarded Seaborne Freight the contract before Arklow confirmed its backing. Those two statements are entirely contradictory, so who is telling the truth—his permanent secretary or him?

[Chris Grayling]

It is very simple: the contract was conditional on Seaborne Freight producing a reference from Arklow, which it did.

[Angela Crawley]

The director general for the Department for Transport said yesterday that it was no longer possible to complete procurement and operation for any large amount of further capacity across the channel by either sea or rail before the end of March. The Secretary of State’s handling of this issue means that there are now no plans in place for an alternative and a 10% shortfall in capacity. How does he plan to resolve this latest disaster?

[Chris Grayling]

The hon. Lady clearly was not listening on Monday, when I indicated that we had options in contracts to provide additional capacity on longer sea routes to replace any that we might have had on the short sea routes.

[John Mc Nally]

I can assure the Secretary of State that I was absolutely listening intently on Monday. From that position over there, the Secretary of State said on Monday, in relation to Seaborne Freight, that

“we have not spent any money on this contract.”—[Official Report, 11 February 2019; Vol. 654, c. 619.]

We now know that that is not the case and that his Department spent approximately £800,000 on external consultants for Seaborne. Will he now take the opportunity to set the record straight and apologise to taxpayers for what has amounted to a monumental waste of taxpayers’ money?

[Chris Grayling]

I am afraid that, once again, SNP Members have their facts completely wrong. Interestingly, we have heard complaints from the other side that we did not do enough due diligence. Actually, as with all major Government contracts—Mr Speaker, you will recall that £90 million of contracts are going to Brittany Ferries and DFDS—we contract professional support when we let contracts of that size.

[Marion Fellows]

The Secretary of State may wish to argue that he got his £800,000-worth since the consultancy did come back with concrete findings, including that Seaborne presented “significant execution risks” and that a “basic blush test” was the most that could be carried out on the company’s financials. Which of those two findings did the Secretary of State find most reassuring when deciding to proceed with the Seaborne ferry contract?

[Chris Grayling]

The bit I found reassuring is that we let a contract where there was absolutely no upfront commitment from the taxpayer at all, and we paid nothing until the service was delivered.

[Carol Monaghan]

The Secretary of State said on Monday, “I believe in competition”, so why, after realising back in September that a no-deal Brexit would require increased freight capacity, did he embark on what has been called a

“secretive and flawed procurement process”,

tipping off some companies in private while leaving established companies, such as Eurotunnel, out of the loop altogether?

[Chris Grayling]

We carried out a proper procurement process in discussion with all the leading ferry operators.

[Tim Loughton (East Worthing and Shoreham) (Con)]

A major contributor to travel disruption over many years has of course been Govia Thameslink Railway. Its incompetence was recently underlined when a disgruntled constituent wrote to GTR, asking whom he should complain to and whether he should write to Chris Grayling. He received the reply from GTR:

“Chris Grayling no longer works for the company”.

Can the Secretary of State tell us whether a no-deal Brexit will make it easier to withdraw the franchise from GTR at long last and end this nightmare?

[Chris Grayling]

Happily, I have never worked for GTR. I would say to my hon. Friend that, if there are specific concerns he wants to raise about the franchise, he is very welcome to write to me. However, I am sure he is pleased that, over the last few months, the performance on that network has become significantly better.

[Kevin Foster (Torbay) (Con)]

I am sure the Secretary of State, like me, will reflect that it is always interesting to hear those who complain about the potential impact of a no deal then complaining about efforts to mitigate it. Will he confirm that he believes, the same as me, that the biggest potential for disruption to travel would be to put an international border across the east and west coast main lines, as the separatists opposite want to do?

[Chris Grayling]

Absolutely. Of course SNP Members fail to understand that their policies, if you follow European Union laws to the letter, require a hard border between Scotland and England. I have to say that I personally value the Union of the United Kingdom of Great Britain and Northern Ireland. I value our friends in Scotland, of whom we have many on the Government Benches, and I think SNP policies would be deeply damaging to Scotland.

[Chris Green (Bolton West) (Con)]

No matter what the outcome in terms of the delivery of the democratic decision of the British people, will my right hon. Friend confirm that the electrification project between Preston and Manchester, going through the heart of my constituency, will continue to deliver more electric coaches for my constituents?

[Chris Grayling]

I was very pleased to learn this week that the electric trains have now started running between Blackpool and Manchester through my hon. Friend’s constituency. Of course, it is worth remembering that that single electrification project represents a level of electrification many times greater than the Labour party managed across the entire country in its years in office— 13 years: 10 miles, which is fewer, by far, than that single electrification project alone.

[Clive Efford (Eltham) (Lab)]

If I understand this right, the Secretary of State is claiming a triumph for having signed a contract with a company that had no ferries to provide no ferries and, because it cost the taxpayer no money whatsoever, that is okay. Is that where the Secretary of State is? We are still facing the south-east of England being turned into a huge car park if we were to leave with no deal, and what has he done about it? Absolutely nothing.

[Chris Grayling]

As I set out, we have substantial contracts with two major operators to provide additional capacity, and we have put in place contingency measures in Kent, in case they are needed because of delays caused not in this country but on the French side. When I see what is happening in Calais and the preparations being made, I am increasingly confident that the flow of traffic through the channel ports will continue pretty normally. It is in everybody’s interest on both sides of the channel for that to happen, and it will certainly happen if we leave the European Union with a deal. It is disappointing, however, that the Labour party seems to want to stymie us leaving the EU with a deal.

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

The Secretary of State’s handling of Seaborne Freight, and the way he is answering questions, proves that he lives in a parallel universe. The reality is that, with Eurotunnel taking the Government to court, his actions will cost the taxpayer at least £1.8 million and the costs are rising. Will he confirm how many representations have been made by other providers and whether there are likely to be further court challenges? Will he do the right thing and at least publish the legal evidence that the Government had, so that they can perhaps save some money in the long run?

[Chris Grayling]

The hon. Gentleman is trying hard, but the simple reality is that we approached the market and the market brought forward proposals. We have two substantial contracts to provide additional capacity. We took on a third smaller contract, where there was no upfront exposure to the taxpayer at all. Unfortunately that was not delivered because even though the company had ships lined up and agreements lined up, its principal backer decided not to continue with the contract.

[Alan Brown]

The Secretary of State did not approach the market—it was all done in secret; that is not approaching the market. He is baffled by the criticism of his handling of this, which is incredible. Let us look at his handling of the mock exercise for lorries in a no-deal scenario, with 89 lorries mimicking 10,000. Under his watch, we have had the east coast main line bail-out, the Northern rail fiasco, the Thameslink fiasco, delays to High Speed 2, issues with drone legislation and contracts awarded to Carillion when it was obviously going bust. What does it take for him to do the right thing and go?

[Chris Grayling]

The hon. Gentleman continues to produce in the House statements that I am afraid are simply inaccurate. The trial in Kent, managed by Kent County Council, worked very smoothly to illustrate the nature of movements in and out of the port of Manston. He keeps talking about Carillion. Carillion had no contracts with HS2. It was part of a consortium that was jointly and severally liable and that work has continued.

[Jessica Morden (Newport East) (Lab)]

7. What recent discussions he has had with port operators on preparations for the UK leaving the EU.

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

10. What recent assessment he has made of the potential effect on the haulage sector of the UK leaving the EU.

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

The Government continue to work towards a deal and we are confident of securing a relationship with the EU that maintains the current liberalised access we enjoy. Of all goods moved by UK-registered heavy goods vehicles in 2017, 1% were moved internationally. We do not expect that there will be significant impacts on international trade movements, or on the haulage sector overall. If we leave without a deal, there might be some short-term disruption, and we have undertaken extensive contingency plans to mitigate this.

[Alex Cunningham]

Short-term disruption—that’s a good one.

Haulage companies such as Scott Bros. and Devereux in my Stockton North constituency are extremely anxious about their future when we leave the EU. They are not helped much by the road haulage permits legislation, which in effect highlights the potential damage that Brexit will do to the industry, and certainly does not show a Government standing up for the industry. What is the Secretary of State going to do about it?

[Chris Grayling]

The hon. Gentleman and, indeed, his constituents will welcome the fact that the European Union has been clear that the current arrangements will continue after April and is moving forward with plans to do that. In addition, we have bilateral agreements with other countries that will ensure that international trade continues to flow, and we are of course also continuing members of the common transit convention.

[David Duguid (Banff and Buchan) (Con)]

Seafood processing businesses in Banff and Buchan have expressed concerns to me about the possible requirement for European Conference of Ministers of Transport permits in the event that we leave the EU without a deal. Will my right hon. Friend meet me and representatives of the sector to discuss their concerns?

[Chris Grayling]

I am always happy to meet my hon. Friend, and I meet people from the sector quite regularly. His constituents will be assured—indeed, we have written to all applicants for the permits to indicate this to them—that the European Union’s position is that it intends to continue with the current arrangements. We put through measures to make sure that we had a contingency plan, which was supported across the House, but I do not expect it to be needed because, according to the EU itself, we will carry on with the current arrangements.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

We know that the contract with Seaborne was, in the words of the Secretary of State’s own permanent secretary, a “novel and exceptional” proposition, but she revealed yesterday to the Public Accounts Committee that the only confirmation that the Department had about the arrangements with Arklow were from Seaborne itself. There was no paper document and no contract was signed. The Secretary of State talks about due diligence, but we know it failed on due diligence, and we now know that there was no comfort document for the Department about the contract with Arklow, so will he tell us what due diligence he thinks did take place, because what we have seen shows that it did not?

[Chris Grayling]

At Christmastime, Arklow confirmed in writing, and we have copies of that—[Hon. Members: “In January.”] At Christmastime, Arklow confirmed in writing that it was backing the proposition. [Interruption.] At Christmastime, Mr Speaker. I hear the sedentary comments but I am absolutely clear: at Christmastime.

[Mr Speaker]

The hon. Lady does not look satisfied, but I hope that she is nevertheless enjoying her birthday, upon which I congratulate her.

[Rachael Maskell (York Central) (Lab/Co-op)]

Despite Labour’s warnings throughout the passage of the Haulage Permits and Trailer Registration Bill, just 984 licences have been made available following 11,392 applications. Despite the short-term agreement with the EU, if companies cannot move their goods, they will have no choice but to move their businesses, so why is the Secretary of State running down British jobs and British business?

[Chris Grayling]

What a load of absolute hokum! We are working very carefully, on a bilateral basis, to make sure that there are contingency plans in place, but the European Union—we have to bear in mind that 80% of the trucks that come through our ports delivering goods to the United Kingdom are run by continental hauliers—is being very clear that it wants that to continue, and it will.

[Rachael Maskell]

It gets worse: crashing out of the EU in just 43 days’ time will mean that we are a third country, like the Ukraine or China—as indeed, would Irish companies who use the UK as a bridge to the continent. Haulage firms would have to fill out a 38-point document for every single consignment—that is not for each lorry, but for each consignment on each lorry—just hours before each transit, causing catastrophic delays. So who now is the enemy of business? It is this Government, who are running down the clock to create real chaos at our borders. It is surely not this Opposition, who are insistent on a permanent customs union.

[Chris Grayling]

Of course, what the hon. Lady does not understand is that she talks about a permanent customs union, but a permanent customs union requires border checks. The Labour party simply does not understand the arguments that it is making. It is trying to disrupt Brexit. It is trying to put forward policy ideas that do not work. We are working to secure a deal that will work, and we will carry on doing it.

[Simon Hoare (North Dorset) (Con)]

11. What assessment he has made of the safety needs of horse riders on the public highway.

--- Later in debate ---

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

12. What level of direct and indirect public funding will be required to support new regional connections with Heathrow airport.

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

The airports national policy statement expects post-expansion Heathrow to deliver 14 domestic routes and to work with airlines to protect existing and develop new domestic connections. We expect these routes to be commercially viable with support from Heathrow.

[Ruth Cadbury]

I thank the Secretary of State for that answer, but during the airports national policy statement, the Government said that the aviation Green Paper would address the level of public subsidy required to support certain regional connections into Heathrow, but the Green Paper, now published, says that when there is such a requirement for a public services obligation route,

“funding contributions should increasingly be provided locally.”

Will he therefore confirm that many local councils that were hoping to reap economic benefits from additional regional routes may in fact end up having to subsidise loss-making routes?

[Chris Grayling]

As the House will know, it is often custom and practice to share the cost of a public service obligation with a local authority. It is right and prudent for the Government to seek to share the load when we can.

[Justine Greening (Putney) (Con)]

Next week, I will hold a public meeting in my constituency on Heathrow expansion. Many of my constituents are concerned that Heathrow is just like Seaborne. It is another case where the Department for Transport has fallen hook, line and sinker for impossible claims made by a company that has very little chance of ever delivering on them—“Not a single extra car going to the airport,” and, “Air pollution not a problem,” even though we know that it is a huge problem in that part of London. It is exactly the same. The difference, though, is that when the Heathrow proposals go utterly pear-shaped, taxpayers will pick up the bill, and this is not just a £14 million project, but an £18 billion project.

[Chris Grayling]

My right hon. Friend is very committed to her view on this matter, but this House voted by a majority of nearly 300 to pursue this project and give Heathrow the green light. It now has to go through detailed consent processes, but I believe that it is a project that is strategically important to the United Kingdom.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

A new Southern rail link connecting the south and south-west with Heathrow via Feltham was favourably assessed by Network Rail two years ago as having the highest benefit-cost ratio of all the Southern rail options proposed. We are waiting on the edge of our seats for progress towards the next stage. When will the Secretary of State be able to announce funding and proposed plans to take the project to the next stage, so that we can start to move forward?

[Chris Grayling]

I regard Southern rail access as extremely important. We are now looking in detail at what we believe the specification of the scheme should be. It will clearly require some degree of public support, and that is the next stage, which I expect to pursue in the coming months, albeit relatively soon.

[Steve Double (St Austell and Newquay) (Con)]

I thank the Secretary of State for his support for the new Heathrow connection to Cornwall Airport Newquay, which is due to come into place on 1 April. However, with the proposed acquisition of Flybe by Virgin Atlantic, can he reassure the House that Government support for the new route will continue even if the operator changes?

[Chris Grayling]

Absolutely. My hon. Friend knows my commitment to making sure that we continue those links to Newquay. They are an extremely important part of Cornwall’s economy, and I will be working to ensure that nothing happens to interrupt those services.

[Several hon. Members rose—]

--- Later in debate ---

[Andrea Jenkyns (Morley and Outwood) (Con)]

T1. If he will make a statement on his departmental responsibilities.

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

A moment ago, I talked about the importance of the Union—the United Kingdom of Great Britain and Northern Ireland—and we also talked about regional air links. I am pleased to announce that I have agreed to extend the current public service obligation on flights from Londonderry to Stansted for a further two years from May. I believe that that will provide a boost for business in Northern Ireland and, rather importantly, allow spectators to attend the 148th open championship at Royal Portrush this summer.

[Andrea Jenkyns]

The fantastic pupils at Outwood Primary Academy Ledger Lane in my constituency have organised a petition calling for Wakefield Metropolitan District Council to improve road safety and have persuaded 430 parents and teachers to sign it. The signatories want to see a speed indication device, or other speed restrictions, outside the school. What is the Secretary of State doing to improve road safety outside schools?

[Chris Grayling]

The Government are combining a range of measures including our cycling and walking safety two-year action plan, which addresses that issue specifically. However, I hope that Wakefield Council, which holds the power to install speed indication devices, will look carefully at the petition, and will respond positively to my hon. Friend’s young constituents.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

T2. Scotland’s premier food and drink exports could deteriorate while stuck in traffic jams in the south-east of England. If the Secretary of State is so keen on new routes to Europe, would it not make sense for him to support ferry links in areas much farther north, such as Rosyth?

[Chris Grayling]

We have, of course, supported ferry links farther north, but I think that the additional capacity from east coast ports may, in many circumstances, provide a realistic alternative—indeed, a real alternative—for manufacturers and producers in Scotland.

[Scott Mann (North Cornwall) (Con)]

T3.   Cornwall Council has made the Camelford bypass its No. 1 priority in the context of the major road network. Will the Minister update us on the progress of the network?

[Sarah Jones (Croydon Central) (Lab)]

T4. May I invite the Secretary of State to visit Croydon? More trains pass through Croydon than pass through King’s Cross, Euston and Paddington combined. The Secretary of State is aware that just outside east Croydon there is a bottleneck that threatens to bring the whole thing to a grinding halt as passenger numbers increase. I wonder whether he would like to come and have a look.

[Chris Grayling]

I do not need to come and have a look, because I travel through Croydon, via the west Croydon route, quite regularly. I know that there is a need for significant improvement in the area of the Windmill Bridge junction. My hon. Friend the Member for Croydon South (Chris Philp) has been vociferous in telling me that that needs to happen, and the Department and Network Rail have already started work on what we believe will be an important project for the future.

[Mary Robinson (Cheadle) (Con)]

T6.   The expansion of the Metrolink network is a key part of Greater Manchester’s transport strategy. In the light of proposals to increase the amount of housing stock in Gatley, Cheadle Hulme and Heald Green as part of the Greater Manchester spatial framework, improvements in our local transport capacity are a priority for my constituents. What steps has the Department taken to support tram-train technology, with a view to expanding the tram-train Metrolink to my constituency?

[Chris Grayling]

As my hon. Friend will know, the Mayor of Manchester and I recently agreed to work together on the potential expansion of the Metrolink network with the use of tram-train technology. The Government have already funded a tram-train system in Sheffield, which is making a difference there, and I am keen to see how we can extend that to Greater Manchester.

[Tom Brake (Carshalton and Wallington) (LD)]

T5. Does the Minister agree that one of the best ways to improve air quality in urban areas is through the use of tram schemes? May I commend to him the Sutton tram scheme and encourage him to work closely with the Mayor of London to try to ensure that such schemes are viable and are rolled out?

--- Later in debate ---

[Mr Gregory Campbell (East Londonderry) (DUP)]

The Heathrow logistics hub process is coming to a conclusion, and there are a number of bids from Northern Ireland, including one from my constituency. Without prejudicing the outcome, will the Minister ensure that he co-operates closely to ensure that there are regional variations to benefit thousands of jobs in Northern Ireland?

[Chris Grayling]

I have already told Heathrow airport that, while the detail of the decisions is a matter for them, I would certainly want to see a proper spread across all parts of the United Kingdom.

[Tom Tugendhat (Tonbridge and Malling) (Con)]

rose—

--- Later in debate ---

[Richard Burden (Birmingham, Northfield) (Lab)]

After awarding the contract to Seaborne Freight, the Secretary of State boasted to the House that he was backing a British start-up. I tabled a written question to his Department asking whether it was his working assumption that any ships operated by Seaborne would operate under the British flag. Why were his Ministers, in the answer I received on 14 January, unable to give a straight yes or no answer?

[Chris Grayling]

Because these are matters for a commercial company. I think that it is still the right thing for a British Government to do to support British start-up businesses, but these are commercial matters for those businesses.

[Several hon. Members rose—]

--- Later in debate ---

[Joanna Cherry (Edinburgh South West) (SNP)]

On Monday, the Secretary of State justified the non-competitive tendering process for Seaborne Freight by referring to a “change in the assumptions”. Would he care to elaborate on exactly what he meant by that? Does he think that that defence will stand up in court?

[Chris Grayling]

I recall explaining on Monday precisely what the circumstances were, and I do not want to detain the House any longer by repeating an answer that I gave to the hon. and learned Lady three days ago.

Seaborne Freight

Chris Grayling 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.

[Craig Mackinlay (South Thanet) (Con)]

Does my right hon. Friend share my disappointment that Arklow Shipping, a major Irish shipping company and the main backer of Seaborne, has pulled away from this contract? Can he give assurances to Thanet District Council and local taxpayers that the cost of keeping Ramsgate in a state of readiness as part of the Brexit contingency planning, which we are all happy to do, will not fall on local taxpayers?

[Chris Grayling]

I share my hon. Friend’s disappointment. We are spending a lot of money on contingency planning and resilience in Kent, and I personally regard the port of Ramsgate as an important part of that. He knows that I am committed to continuing to work with Thanet District Council, and I would like to see ferries come back to Ramsgate. Whatever happens, we must make sure that we keep open opportunities for the future, in my view.

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

Last month, the Secretary of State said that he had full confidence in Seaborne, and just last week he lobbied Thanet Council on its budget plans for Ramsgate. Does this not tell us everything we need to know about his judgment? His argument that Seaborne accounted for only 10% of the proposed additional services and that it did not matter if it did not deliver was nonsensical. Flouting EU procurement rules on unforeseen events by arguing that this was an emergency situation was also fundamentally flawed, given that he awarded a contract to a company with no ships. He says that he has been in negotiations with Seaborne for 12 months. How is that an emergency situation? He has now created his own emergency procurement process.

How many representations has the Secretary of State’s Department received on the procurement process, and are those representations still live, given the two contracts worth £89 million that he has awarded? Are we ever going to see the legal advice and the due diligence that was supposed to have been undertaken? Also, he has not answered the question on why this contract was not referred to a procurement assurance board. What will this missing 10% of capacity mean for Dover? What impact will it have on the port there? To keep HGV freight moving, what is his Department doing about the backlog of 9,000 ECMT permits? Given that he has now reached a stunning new level of incompetence, which must have been really hard to achieve, when will he go?

[Chris Grayling]

I am not sure that the hon. Gentleman was listening to a word I said. He asked a question about no ships. I can confirm that, as of last week, two ships had been identified and that options were in place to operate the route. This makes it even more disappointing that Arklow was not able to continue its support. He asked a question about negotiating for 12 months. That was Arklow, not my Department. He asked a question about the legal position. The legal position was signed off by officials in my Department and by the Treasury and by my accounting officer. The hon. Gentleman also asked about extra routes. As I mentioned in my remarks, we already have options for additional capacity in the North sea. Those routes are clearly longer and more expensive, but they are available to us. He asked about the ECMT permits. The current position is that the European Union has been very clear that we will continue with the current arrangements. I know of no reason why that should not happen, but we have bilateral arrangements that we can fall back on if it does not.

[Sir Roger Gale (North Thanet) (Con)]

Setting aside the utterly synthetic outrage dribbling from Opposition Front Benchers, and further to the answer given to my hon. Friend the Member for South Thanet (Craig Mackinlay), I should like to tell the Secretary of State that Councillor Bob Bayford, the leader of Thanet Council, has made it plain that Thanet wishes to act in the national interest and will continue to seek to do so, but it cannot act alone. There is a contract that Thanet has not yet signed, and will not now sign, with Seaborne Freight. That contract is ready for signature. Is there any reason, given the precedent set with Manston airport, why the Department should not sign that contract and take over the port itself for the duration?

[Chris Grayling]

As my hon. Friend knows, I have had discussions with the leader of Thanet District Council over the past few days, and I have been clear that there is a strong case to include Ramsgate port in the resilience work being done in Kent to prepare for a potential no-deal Brexit. We must also be mindful of the council’s financial position and ensure that it is not exposed to financial risk as a result of the broader resilience work happening across Kent.

[Lilian Greenwood (Nottingham South) (Lab)]

Questions remain about the legality of all three contracts for additional ferry capacity. The Government used an accelerated procurement process to award the contract to Seaborne Freight, which can be done only in urgent and unforeseeable circumstances. The Department said that the circumstances were the

“unexpected and unforeseeable limitations on the extent to which the market had… been able to”

put “in place contingency plans” for a no-deal Brexit. Given that the Government have consistently provided reassurances that that there will not be a no-deal Brexit, how was it “unexpected and unforeseeable” that the market was unable or unwilling to put in place contingency plans for this scenario?

[Chris Grayling]

The particular prompt for this procurement exercise was a change in the assumptions last autumn about the level of potential disruption around the channel ports. That prompted us to look again at what the capacity requirements might be to maintain supply of essential services into the United Kingdom, particularly for the NHS. It would be prudent for any Government in such a position to plan for all eventualities. I want the UK to leave the European Union with an agreement, and we are working hard to achieve that, but we would not be doing our job properly if we were not preparing for all eventualities.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

I offer strong support to the Secretary of State because, unlike the Labour party, he is actually undertaking contingency plans for all eventualities. On that point, will he update the House on the other two ferry contracts, their status and when they will come into operation?

[Chris Grayling]

My right hon. Friend makes an important point. I have heard nothing from Labour bar attempts to disrupt the Brexit process. There has been no support for contingency planning or for a deal. All Labour Members seem to want to do is to act against the national interest, which is typical of the Labour party today. Its Members are more interested in themselves than in the country.

As for the other two contracts, they are proceeding according to plan. The routes will be ready, but I hope that they will not be needed, because I hope that we will leave the European Union with a deal. However, we must be ready, and we will be ready.

[Grahame Morris (Easington) (Lab)]

The Secretary of State spent a great deal of time maligning the RMT union, which had simply been asking that Ministers ensure that the Brexit ferry contract ships are crewed by British seafarers on decent pay and terms and conditions negotiated through the recognised trade unions. Can the Secretary of State answer a straight question? In answer to the previous urgent question, he talked about the advantages of developing a facility at Ramsgate, so will he confirm whether Ramsgate will be now be used at all in the event of a no-deal Brexit?

[Chris Grayling]

I believe in competition, so I would like Ramsgate to operate a ferry service whether there is a no-deal Brexit or not, and I know that the leader of Thanet District Council would like to see the same. It is a good port that has played an important role in the past. However, we will continue to work with the council not only to secure the short-term needs of the port of Ramsgate, but to help it promote the port as a viable option for the future.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

We have heard a lot of nonsense about the company not owning any ships, but is it not the case that the majority of rail operators in this country do not own any trains and that many airlines wet lease aircraft, meaning that not only do they not own the planes, but they do not directly employ the crew?

[Chris Grayling]

My right hon. Friend makes an important point. I have said that the Labour party does not like business any more, but it does not understand business any more. Many Labour Members will go on holiday this summer using airlines that own no planes, because that is how business works, but they lost any understanding of how business works long ago, and I see no sign of that changing.

[Ms Angela Eagle (Wallasey) (Lab)]

Last month, the Secretary of State came to the House waxing lyrical about his support for start-up businesses, meaning Seaborne Freight. Is he not even remotely embarrassed that the project has fallen to pieces despite Government support? Will he not at least say sorry to the House for the mess that he has made?

[Chris Grayling]

This is a start-up business that did not succeed because its principal backer changed its mind. That is to be regretted and it is a great shame but, as a Minister, I will never make an apology for the Government trying to work with new small businesses. Again, the Labour party does not like small business and does not want us to work with small business. When we do, it shouts and screams. Well, I think the Government should do more for small business, and I am going to carry on doing so.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

My right hon. Friend cannot possibly be criticised for entering into a contract, which cost the taxpayer no money, with a new business backed by one of the biggest shipping owners in Europe. Is it not eccentric of Arklow to behave in the way it has and to abandon a contract it supported a fortnight ago? Is there any question of the Irish Government’s involvement either to help or to hinder one of their biggest businesses?

[Chris Grayling]

It is not for me to ascribe any motivations to Arklow for the decision it has taken. I regret it having taken that decision, and I think it is a shame, particularly as it gave clear commitments to Seaborne at Christmas time and to my officials and me in January before changing its mind suddenly. I do not know what prompted that decision. I just think it is a very great shame.

[Tom Brake (Carshalton and Wallington) (LD)]

What will it take for this Secretary of State to get the sack? Let me see if the following would cause the Prime Minister to issue him his P45: breaking EU procurement rules. Does the Secretary of State really believe he can claim no deal is an emergency that came to light only in October? If it did, it is his fault for underestimating the disruption caused at the ports. Is he confident that this argument is going to stand up in court?

[Chris Grayling]

I have been absolutely clear that this procurement was dealt with very carefully by officials in my Department and in the Treasury who fully understood the legal implications of it, and it was approved by my accounting officer. I will not comment on any other legal matters.

[Charlie Elphicke (Dover) (Con)]

The whole House knows that the Secretary of State has been one of the most assiduous Cabinet members in working on contingency plans to make sure that we execute the national interest in leaving the European Union. Has he looked at the possibility of not simply Dover to Calais and Dunkirk but Dover to Zeebrugge? That is a short sea route going to Belgium, not France.

[Chris Grayling]

Absolutely. I am also aware that the port of Zeebrugge has made a lot of preparations for the post-Brexit world. One of the things that can help to ease pressure on Dover would be an additional route from Dover to Zeebrugge. I am very keen to see the port of Dover carry on through the Brexit process without significant disruption, and I will do everything I can to help it achieve that goal, but it is sensible to have some easing of pressure on both Dover and the tunnel to give guarantees on services such as the NHS. I will be doing everything I can to make sure things remain as normal as possible for Dover.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

Given that this is just one example of hapless contingency planning that we are aware of, and that there may be all sorts of other haphazard things going on, should not the Secretary of State commit to more transparency about contingency planning more broadly? He knows that the Operation Yellowhammer papers on trade and transport went before the Cabinet last week, and there was a discussion at full Cabinet about whether those papers should be published. Which side of the argument was he on? Was he for publication?

[Chris Grayling]

Let us be clear, first of all, that Cabinet minutes are not published. I have been pretty transparent over the months in explaining what we are doing on the aviation front and the haulage front. We have been having regular contact with industry, and we are working very closely with the aviation sector and the haulage sector. I do not think we can be accused of hiding what we are doing. The reality is that I am standing here today precisely because we did not hide what we are doing, as we published the detail of these contracts.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

May I send a message to the Secretary of State? The south-west and Plymouth are open for business, and I am sure that my constituents who work in that city would really welcome any further opportunities that a contract would present.

[Chris Grayling]

I am grateful to my hon. Friend; it has been good to see Members from around Plymouth welcoming the extra traffic that would flow through Plymouth as a result of these contracts. I should also take the opportunity to provide a message of reassurance to Hampshire, where we have done extensive work around the port of Portsmouth in respect of just a couple of extra sailings a day. Let me put it clearly on the record that there is no expectation of major road disruption affecting the surrounding areas of either Plymouth or Portsmouth.

[Joanna Cherry (Edinburgh South West) (SNP)]

The UK Government have been aware of the possibility of a no-deal Brexit since article 50 was triggered in March 2017, so can the Secretary of State tell us why this contract, which was awarded only at the end of December 2018, proceeded under regulation 32 of the Public Contracts Regulations 2015 without competitive tendering? Will he state clearly for the record, as I have asked this question of him and other Ministers five times now: what were the reasons of extreme urgency and the unforesee- able events that justified his Department proceeding without competitive tendering under regulation 32?

[Chris Grayling]

The hon. and learned Lady was not listening a moment ago when I answered that very same question from the Chair of the Select Committee. I said that the thing that prompted the move was a change to the assumptions on the levels and length of disruption that might arise in a no-deal Brexit scenario.

[James Cleverly (Braintree) (Con)]

Part of the criticism that my right hon. Friend’s Department has received has arisen because Seaborne Freight was seen as a company that had no track record in shipping. We now know that Arklow was the company behind Seaborne Freight, and it had a huge amount of experience in shipping. What more can be done, in terms of no-deal preparations and more broadly, to ensure that when new start-up companies that are backed by well-established companies present themselves to Government the House can understand the relationship between those start-ups and the companies backing them?

[Chris Grayling]

We always have to take steps to be careful about commercial confidentiality, particularly when a company is in a complex negotiation, as was the case in this situation in respect of new ships. I was clear to the House when I spoke a few weeks ago that Seaborne Freight had substantial backers. It is really important that when Ministers stand up and say, “Look, we know they have substantial backers”, the House does not disbelieve that, because actually it has proved to be true.

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

The Secretary of State has said that no money has been spent on this process, so could he tell us how many of his officials were working for free during this process? He says no money has been spent, but what about the embedded cost? The time each official and each Minister has spent on this project is cost, so will he publish the costs of how much time has been spent on this debacle? If he will not resign, will he at least apologise for this mess?

[Chris Grayling]

Dear oh dear, they keep trying, don’t they? We have hundreds of civil servants across Whitehall working on no-deal preparations to make sure that we are ready in case it happens. I am clear that we do not want no-deal, but we are taking the necessary precautions. The problem is that the Labour party does not believe that should be happening.

[Mr Philip Hollobone (Kettering) (Con)]

With regard to no-deal preparations, will the Secretary of State confirm to the House, once again, that we have signed the common transit convention, which means that import duties and customs declarations do not have to be sorted out until goods arrive at their final destination? In his reply, will he also mention that the mayor of Calais has said that Calais will be open for business even in the event of no deal?

[Chris Grayling]

Both of the points made by my hon. Friend are absolutely correct. My view is that the common transit convention solves many of the problems. We cannot be 100% certain, because we have not had confirmation from the French yet about how they would manage border posts in Calais, notwithstanding the common travel convention, but he is absolutely right that it should enable trade to flow through smoothly. I have been clear in saying regularly that I expect those ports and the tunnel to operate pretty much normally, but we have contingency in place just in case that is necessary.

[Thelma Walker (Colne Valley) (Lab)]

A fake lorry traffic jam in Kent, rail timetable chaos, which is still affecting commuters and local businesses in my constituency, and now a cancelled contract with a ferry company that owns no ferries—is the Secretary of State proud of his record?

[Chris Grayling]

There was no fake traffic jam; it was an exercise to test the movements of vehicles into and out of Manston in Kent. The timetable troubles were caused by a project where Government were investing in rail infrastructure in the north-west—something that never happened under Labour—which ran late. As I said a moment ago, this shipping company identified and got firm options on two ships but was unfortunately not able to carry on because its backers pulled out.

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

Despite the hogwash and doom-mongering from the Opposition Benches, the Secretary of State is absolutely right to ensure that there is contingency planning for every eventuality. For the avoidance of doubt, will he confirm that the taxpayer’s interests have not been damaged and that he will continue to take all necessary steps to ensure that we are ready, deal or no deal?

--- Later in debate ---

[Chris Grayling]

Absolutely. This is essential Government spending across Government. We have to be ready for all eventualities. I make no apology for the fact that the Government are spending money on preparing for no deal, but my view is that the best kind of contract for the Government is one for which we pay no money until the service is delivered and, of course, that is what we had in this case.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Over the past year, a new start-up based in my constituency, Carmarthen Bay Ferry, has successfully operated an excellent service for the people of Carmarthenshire and tourists, linking Glanyfferi in my constituency and Llansteffan on the other side of the Towy estuary. In the light of the collapse of their arrangement with Seaborne Freight, will the British Government have a look at the Carmarthen ferry model to see how to run a successful ferry operation?

[Chris Grayling]

I am not sure that operating a freight haulage operation across the English channel is quite the same as operating what I am sure is a fine business in the hon. Gentleman’s constituency, but I wish it well for the future anyway.

[Andrew Bridgen (North West Leicestershire) (Con)]

“When the facts change, I change my mind” is a quote widely attributed to John Maynard Keynes, someone normally highly supported on the Opposition Benches. Will my right hon. Friend the Secretary of State confirm that the facts have changed and it is only prudent that Government policy changes to reflect the new reality?

[Chris Grayling]

Absolutely. We set out a plan, and I was clear that we did not expose the taxpayer to risk. The events of last week happened, so we changed our mind. My hon. Friend is absolutely right. The best thing for the Government to do is to pursue the right policy at the right time.

[Mary Creagh (Wakefield) (Lab)]

It is touching to see this arch-Brexiteer Secretary of State relying on the good will of an Irish shipping company and the Dutch dredging firm that dredged the port of Ramsgate. Will he tell us whether that dredging was carried out under the appropriate licences and who will pay for it? He talked about due diligence; Arklow told “Channel 4 News” that it did not agree to the contract with Seaborne and blamed the UK Government for moving too fast. If Arklow could do the due diligence on Seaborne, why could not the Secretary of State?

[Chris Grayling]

I can only refer the hon. Lady to what I quoted earlier:

“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.”

It is there, plain, in black and white.

[Dr Matthew Offord (Hendon) (Con)]

There has been much ridicule of Seaborne Freight because it did not own any ferries but, to build on the theme of the question from my right hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), is the Secretary of State aware that Uber does not own any taxis and, indeed, Airbnb does not have any hotels, either? Does he agree that it would be more ridiculous if the Government had not planned for a no-deal scenario and had refused to award any finances to it, as the shadow Chancellor advocated?

[Chris Grayling]

This is the point: the Labour party wants to disrupt Brexit. It wants us to leave the European Union but will not approve the deal and does not want us to prepare for no deal, so it has no policy at all. Frankly, as I have said on more than one occasion, Labour is not fit to be an Opposition, let alone a Government.

[Karen Lee (Lincoln) (Lab)]

Did the Secretary of State’s decision to cancel the contract with Seaborne predate the letter from Arklow—yes or no?

[Chris Grayling]

No.

[Tom Pursglove (Corby) (Con)]

In the light of the decision to end Seaborne’s contract, what discussions has the Secretary of State had with other providers about their providing extra capacity?

[Chris Grayling]

We made provision in the contracts that we signed with Brittany Ferries and DFDS for additional capacity on other routes, that were not in our original mix. Those are options that we are free to take up and we will have cross-Government discussions in the next few days to assess current needs and forecasts and see whether that is required.

[David Hanson (Delyn) (Lab)]

The Secretary of State says that there are no costs to Government, so for the avoidance of any doubt, will he place in the Library the costs of any legal fees and the numbers and types of civil servants working on both the pre-work and the cancellation? Will he tell us the total cost of all that to the taxpayer?

[Chris Grayling]

My Department is accruing a bill of many, many millions of pounds, preparing for a no-deal Brexit in a whole variety of different areas—we are working on maritime, aviation and haulage—and I regularly answer questions about those amounts through written questions. I am also always happy to place information on those amounts in the Library of the House.

[Kevin Foster (Torbay) (Con)]

I am sure that, like me, the Secretary of State finds it interesting to come into this Chamber one day and hear complaints about the potential impact of no deal, and to come in here the next day and hear complaints about the efforts to mitigate those impacts. Will he confirm what work has been done to ensure that the main routes across the English channel—the Eurotunnel and the main crossings between Dover and Calais—will continue working even in a no-deal scenario?

[Chris Grayling]

My Department and I are working on detailed plans to ensure that the pressures on both the tunnel and the port of Dover are as small as possible. I am very confident, as I have said on more than one occasion, that things will move pretty smoothly through there. The purpose of this additional capacity is to ease some of those pressures and to prepare for contingencies if they are required.

[Layla Moran (Oxford West and Abingdon) (LD)]

The Secretary of State has mentioned several times now his reliance on his Department, but in the end the buck stops with him. When evaluating these bids, it is worth noting that Deloitte did not make a formal assessment of Seaborne’s financial stability because it was not incorporated until April 2017. Mott MacDonald provided a technical assessment of that and the review flagged up significant execution risks relating to the Seaborne bid. We may not all be experts in everything we talk about, but surely the public expect a level of common sense when it comes to things as big as this. Where was the common sense of the Secretary of State when it came to this contract?

[Chris Grayling]

The common sense came in two forms: first, when Arklow Shipping confirmed to my Department in writing in December that it was supporting this; and, secondly, because we had a contract where no payment was made until the service was delivered.

[Chris Green (Bolton West) (Con)]

Spectators of this debate may think that the greatest of catastrophes has happened, but all this debate really reveals is the Conservatives’ support for innovation, for small business and for delivering on Brexit, and the Opposition’s opposition to that.

[Chris Grayling]

I keep saying that I find it baffling that the Opposition should be opposed to giving a chance to a small business when the taxpayer was exposed to no financial risk at all, particularly when that small business had a major international backer. It is inexplicable.

[Richard Burden (Birmingham, Northfield) (Lab)]

On successive occasions, the Secretary of State has assured the House that he carried out full due diligence tests of this contract before he awarded it, but I for one am none the wiser about what those due diligence checks consisted of. Today, will he answer the question that he failed to answer when he last appeared before the House on this matter? In April last year, Seaborne Freight issued an investor briefing that claimed:

“Detailed port agreements with Ramsgate and Ostend negotiated and agreed.”

We now know that no such agreements existed. Did his due diligence checks not reveal that and, if not, what kind of due diligence was it? Or did they reveal that and, if so, what weight did he attach to the fact that Seaborne had issued an inaccurate investor briefing?

[Chris Grayling]

The comfort that we had was that the three professional advisers advised us that credible plans were in place. That was reinforced by written confirmation from Arklow Shipping that it was supporting the proposal and by the fact that we protected the taxpayer’s interests by ensuring that no funds would be paid over unless this was delivered. The fact that, last week, we had a firm that had options on ships and agreements reached in principle with both ports, suggested to me that it was on the right track. It was just a shame that the backers did not feel able to continue.

[Helen Goodman (Bishop Auckland) (Lab)]

In another triumph of the Department’s no-deal Brexit planning, the Secretary of State’s junior Minister wrote to all Members of Parliament about the hauliers who, presumably, will use these sea routes, saying that 3,816 international permits had been awarded, but there are 526,000 HGV hauliers in this country, so fewer than 1% will be able to get a licence. Is this really going to work in the event of no deal?

[Chris Grayling]

As you will be aware, Mr Speaker, the European Commission has already said that it wants haulage to continue. It does not expect a permit-based system to be required. But in the event of a no-deal Brexit, we have bilateral agreements with a number of other EU member states that come into effect. We have put in place a system to distribute the ECMT permits precisely because we want to make sure that all bases are covered. However, we wrote to hauliers last week saying that they were being issued as a formality. Nothing that has happened so far would lead us to believe that those restrictions will be there.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for his answers so far. Has he had the opportunity to review the unexplainable action of Irish firm Arklow Shipping in relation to its agreement with Seaborne Freight? Was there a signed contract or is it the case, as some stories today indicate, that the Republic of Ireland and the EU are doing all they can to frustrate Brexit?

[Chris Grayling]

I do not want to attribute any possible reasons for Arklow Shipping pulling out. It was a shame that, just at the point when everybody had draft contracts in place ready for signing, the company backed away. It is a regret that that is the case. I would have liked to have seen this new service come into effect, if only to ensure that the port of Ramsgate had alternative business for the future, but I am afraid that it is not for me to comment on the motivations of the company involved.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Perhaps when the Secretary of State is finally fired for his incompetence over this issue, he might get the consolation prize of being invited on to Comic Relief’s special edition of “The Apprentice”, where we can see him on “Team Seaborne”, trying desperately to fill in the capacity that he has failed to provide as Secretary of State. I think we could all do with a laugh on that front. The reality is that the financial risk is neither here nor there. There are barely 50 days to go and the Secretary of State has still failed to provide that vital freight capacity, so where is it coming from? Is he going to ask the Ministry of Defence to provide this emergency capacity?

[Chris Grayling]

Dear, oh dear; you do get them from the Opposition, Mr Speaker. The hon. Gentleman has clearly not been listening to a word I said. I said that we have options available on two other routes in the North sea. Those routes take longer and are more expensive, but we have had them in reserve all along. I judged and we judged—my Department felt—that it would be better if we could have access to a shorter route from Ramsgate to Ostend. That has not worked out and we now have the option to return to the original choices.

[Brendan O’Hara (Argyll and Bute) (SNP)]

Putting aside the further reputational damage caused, is the Secretary of State fully satisfied that he has handled this affair to the very best of his ability? If this embarrassing shambles was indeed him at his very best, what on earth has to happen on his watch to make him resign?

[Chris Grayling]

Dear, oh dear. I will simply say that I am always going to do what I believe to be in the national interest, and that is what I and my team in the Department have been doing.

[Louise Haigh (Sheffield, Heeley) (Lab)]

One of the many things that this shambles reveals is the Government’s utter lack of preparedness for a no-deal Brexit. To avoid any more embarrassments for the Secretary of State, is not it high time that his Government ruled out a no deal?

[Chris Grayling]

If the hon. Lady wants a non-no-deal Brexit, she should line up behind the deal that the Government have reached with the European Union, but if she is not prepared to vote for it, she should not complain when Ministers are preparing for all eventualities.

[Kevin Brennan (Cardiff West) (Lab)]

The hon. Member for Argyll and Bute (Brendan O’Hara) has been very unfair; I am sure the Secretary of State is handling this to the best of his ability.

The Secretary of State was very careful not to answer the first part of the question from the hon. Member for Strangford (Jim Shannon), who directly asked whether there was a contract between Arklow and Seaborne. Is not it the case that the Secretary of State knows full well, as reported in The Irish Times today, that there were numerous discussions between Seaborne and Arklow, but there was no contract or even formal agreement in place—and yet he went ahead?

[Chris Grayling]

I do not think that Opposition Members are listening at all to what I have said. The agreements were all in place and ready to be signed, but the reality is that, at this moment, Arklow took a step back and did not want to continue. We had commitment now, a month ago and at Christmas time that Arklow was backing this proposal, but to be on the safe side—to be sure—we set up a contractual structure that meant that the taxpayer had no exposure unless the service was delivered. That was the right thing to do.

[Wayne David (Caerphilly) (Lab)]

Last month, the Secretary of State said to this House:

“We contracted with Seaborne Freight because the service it proposes represents a sensible contingency”—[Official Report, 8 January 2019; Vol. 652, c. 190.]

Given what we now know and with the benefit of hindsight, will the Secretary of State have the humility to come to the Dispatch Box and say sorry?

[Chris Grayling]

It was a sensible contingency. If we require that capacity now, we will have to use longer routes through the North sea, when it would be better to go from Ramsgate to Ostend. We have the resources, facilities and capacity available to deal with what we have identified as the needs of organisations such as the NHS.

[Nic Dakin (Scunthorpe) (Lab)]

My hon. Friend the Member for Birmingham, Northfield (Richard Burden) asked the Secretary of State whether, at the point of signing off the contract, he knew that Seaborne Freight had not got in place the agreements with the port authorities in Ramsgate and Ostend that it was saying that it had got. This is about due diligence—was it done?

[Chris Grayling]

I can only think that Opposition Members have not been listening to a word I have said. I said at the start that we knew that they had not got the arrangements in place. That is why we put in place a tight contractual structure that involved no financial commitment from the taxpayer until they had got those things sorted out.

[Martin Whitfield (East Lothian) (Lab)]

We have heard today that there was no legal contractual agreement between Arklow Shipping and Seaborne. The Secretary of State has confirmed that the reason for pulling out of this contract was the announcement on Friday. If that is the case—if he only knew about it on Friday—then how can the DFT spokesperson be correct that he is in advanced discussions with other shipping companies?

[Chris Grayling]

Precisely because, as I said, we already had secured options that would enable us to provide alternatives.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Throughout this ridiculous Brexit shambles, Brexiteers have liked to lean on historical events to justify the metaphors for some of their Brexit fantasies. Was this calamity actually engineered by the Secretary of State, so that he could paint himself as some kind of latter-day Horatio Nelson—“I see no ships”? Well, we see no competence. Will he resign?

[Chris Grayling]

Actually, I did see ships—they were lined up ready to go on this route. It is a shame the backers pulled out.