EU Exit Preparations: Ferry Contracts

Debate between Lord Grayling and Joanna Cherry

Tuesday 5th March 2019 Commons Chamber

[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 ---

[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.

Oral Answers to Questions

Debate between Lord Grayling and Joanna Cherry

Thursday 14th February 2019 Commons Chamber

[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

Debate between Lord Grayling and Joanna Cherry

Monday 11th February 2019 Commons Chamber

[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.

Seaborne Freight

Debate between Lord Grayling and Joanna Cherry

Tuesday 8th January 2019 Commons Chamber

[Chris Grayling]

I absolutely agree. Of course, if we find ourselves in a no-deal scenario, a number of other ports, including Tilbury, will play a part. I hope we do not reach that point, and I think we all agree that we want a sensible free trade agreement with the European Union after 29 March, but the reality is that we need to make sure we are prepared for all eventualities. In such a situation, many of our ports up the east coast and along the south coast will play an important part in making sure that trade flows freely.

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

I am very concerned about the legality of this procurement process. In his statement yesterday, the Secretary of State said that he had proceeded under regulation 32 of the Public Contracts Regulations 2015, which allows the Government to circumvent the normal, transparent and EU-mandated procedures. I have a copy of the contract notice here, which is freely available on the internet, and it says that the basis for proceeding under regulation 32 is “extreme urgency.” As my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) said, the idea that no deal is a possibility and, to quote the Prime Minister, that no deal is better than a bad deal has been around for some time, so how can the Government, at this late stage, justify proceeding with procurement that is appropriate only in the case of extreme urgency?

I have two questions for the Secretary of State and, just for once, my constituents would like to hear an answer. First, will he release the legal advice that permitted him to proceed under regulation 32? Secondly, as he will be aware, if he has proceeded wrongly under regulation 32, his Department and the Government are open to legal action. How much money has been set aside for the contingency of court action about the illegality of the procurement process and a claim for damages?

[Chris Grayling]

It is my view that, as we move towards leaving the European Union, preparing for all eventualities is a matter of extreme urgency, which is also the advice that my Department has received and has given to me.