Brexit: No-deal Ferry Contracts

Lord Rosser Excerpts

Wednesday 1st May 2019 Lords Chamber

Asked by

[Lord Rosser]

To ask Her Majesty’s Government what plans they have to mitigate the expense to the taxpayer of ferry contracts entered into in preparation for a no-deal Brexit on 29 March, which have now been cancelled at a cost estimated to be in excess of £50 million.

[Lord Rosser (Lab)]

My Lords, I beg leave to ask a Question of which I have given private notice.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, in light of the Article 50 extension, the ferry contracts with Brittany Ferries and DFDS have now been terminated. The National Audit Office estimated the total termination cost to be £56 million. I am pleased to tell the House that the figure for termination is £43.8 million. Furthermore, the total amount for termination fees and running costs is a little over £50 million. These contracts were an important insurance policy to ensure the continued movement of medicines and other essential goods.

[Lord Rosser]

I thank the Minister for that response, which indicated the cost to the taxpayer of the contracts with Brittany Ferries and DFDS. Can the Minister confirm what actual benefit the taxpayer got in return for what I think she said was £43.8 million? What services were provided to the taxpayer? On top of that, the Government have already had to pay £33 million to Eurotunnel in return for no services whatever but to settle a legal case challenging the procurement process for the ferry contracts, and the DfT may now be facing legal action from P&O Ferries on the grounds that Eurotunnel has been unduly favoured. The Government’s answer is no doubt that they had no alternative but to make contingency arrangements because of their own failure over two years to conclude an acceptable Brexit deal, but they cannot argue that in relation to the £33 million to Eurotunnel or any payments to P&O Ferries. The Government always talk about getting value for money. In this case, we have had a lot of money but no value to the taxpayer. Is the Minister now going to apologise for the unnecessary expense that has been incurred and for the failures of the Government, and of the Secretary of State in particular?

[Baroness Vere of Norbiton]

I would like to focus on the first of those questions: what exactly was the benefit to the taxpayer? The benefit was that the taxpayer had an insurance policy. Like many organisations, the Government are able to take out insurance policies, and these contracts were precisely that. The benefit to the taxpayer is that the Government were able to ensure the continued movement of absolutely critical goods—what we call “class 1 goods”—into this country in the event of no deal. I am fairly sure that the noble Lord would have been the first to criticise the Government had these goods not got through.