EU Exit Preparations: Ferry Contracts

Lilian Greenwood Excerpts

Tuesday 5th March 2019 Commons Chamber

[Charlie Elphicke]

Therein lies the heart of this debate. The Opposition are saying that the Secretary of State should not have taken this action at all. They are attacking him for taking contingency planning measures.The kernel of their argument is that he was wrong to take them. I think that that is incredibly opportunistic. As I said, he may or may not have been allowed out of the traps as early as many of us in this House would have liked, but once he was away, he took the measures that were necessary.

Beyond the whole issue of contingency planning, some important improvements are needed in our country. The reason we need contingency planning is that we have not invested in our border systems and infrastructure as perhaps we might have done in the past. To set out the case for my constituents and the people of Kent, we need to ensure that our infrastructure is better prepared, because—irrespective of Brexit—we have big queues in Kent and problems on the ferries and in the tunnel.

Contingency planning or no contingency planning, there needs to be investment in more lorry parking in Kent, and the Department for Transport needs to be more effective in taking it forward. The roads to the port need upgrades. In particular, the A2 dualling, which was taken out of the programme by John Prescott in 1997 as one of the cuts in the early days of the then Labour Government, is long overdue and needs to be brought back as quickly as possible. It is also incredibly important that contingency plans work on a balanced basis between the tunnel and the port of Dover.

[Lilian Greenwood (Nottingham South) (Lab)]

Does the hon. Gentleman accept that our case is not that there should be no contingency planning, but that if the contingency planning had been done in a timely fashion and under proper procurement rules, it would not have put the Government at the legal risk that has now cost them at least £33 million?

[Charlie Elphicke]

The difficulty with the hon. Lady’s point is that she and her party are trying to lay the blame opportunistically at the Secretary of State’s door. My point is that the Government as a whole should have released the funds and made the decision to invest in our borders. Irrespective of this debate and of Brexit, that investment is in the national interest because our country will benefit from having more efficient, effective, safe and secure borders and from more efficient trading systems. Fewer people will be able to enter the country unlawfully, and people who are here unlawfully can be helped back to where they have come from.

We need to ensure that our trading systems are efficient and effective not just for our trade with Europe, but for the trade that we already do under World Trade Organisation terms. The more efficient we make them, the more economic growth we will get. Again, those are not my words, but those of Jon Thompson in evidence to the Treasury Committee—and he runs HMRC.

--- Later in debate ---

[Lilian Greenwood (Nottingham South) (Lab)]

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

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

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

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

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

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

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

He went on to say:

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

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

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

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

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

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

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

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

[Andy McDonald]

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

[Lilian Greenwood]

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

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

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