EU Exit Preparations: Ferry Contracts

I beg to move,

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

May I first thank you, Mr Speaker, for granting the debate? You asked me earlier if I was happy now, and I was happy, but given that I had such a short time in which to prepare for the debate, I hope you will forgive me for doing a bit of cursing as well.

I am very glad to have secured the debate. We have a Transport Secretary who has tried to duck some important issues and has had to be dragged, kicking and screaming, to the Dispatch Box. We can see him saying, “Here we go yet again.” The head-shaking has started, and the chuntering: we are talking nonsense, and we do not understand anything. That is why this emergency debate has been granted.

Let me say to Conservative Members who objected to the debate that it is about transparency and accountability, and about how the Government are being run. They should share the concerns of Scottish National party Members about the lack of that transparency and accountability, and the fact that these no-deal preparations have been a pure and utter shambles.

Assuming that the hon. Gentleman wishes to respect democracy and therefore to deliver on the Brexit decision of the British people, may I ask what plans he has to ensure that life-saving, life-enhancing medicines will cross the English channel post Brexit?

Well, let’s see. Perhaps I would ensure that no deal was off the table, so that there would be no hint of that cliff edge with no medicines coming through. That is what I would do to start with. We should also consider extending article 50, to try to give this incompetent Government time to make some real preparations, although I have no faith in the possibility that any more time would actually work for them.

I have mentioned transparency and accountability. Let me record my thanks to the journalist who first broke the story about Seaborne Freight in the new year and to the Public Accounts Committee and the National Audit Office for the work that they have done so far in assessing the diligence. Members on both sides of the House have raised some important questions: for instance, my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) first raised the matter of the likely illegal tendering process.

We have still to get to the bottom of the overall process. It started in secrecy; it has been shrouded in secrecy ever since; and the Transport Secretary’s non-answers and evasions have not helped us to secure any further clarity. His Department has form when it comes to procurement issues. I remember, years ago, the collapse of the west coast main line franchise, which came about following another court action challenge. That resulted in Virgin receiving a direct award to extend its services, which clearly does not provide the best value for money for the taxpayer.

If the Transport Secretary believes so much in competition and privatisation, we have to ask why so many rail franchises have received direct awards, because that is the complete opposite of competitive tendering. The Southern rail franchise model has clearly failed, and much of that failure has been due to the inaction of the Transport Secretary, and the fact that somebody just wanted to have a fight with the unions rather than trying to improve markets and get services up and running.

Does the hon. Gentleman agree that the £33 million for something that never materialised—the phantom ferry contract—is not dissimilar to the £30 million that the Secretary of State’s predecessor committed to the garden bridge? There is nothing to show for that either. It was not even directly a transport project. The hon. Gentleman mentioned rail upgrades. Vital rail upgrades elsewhere in the country were cancelled when the money was committed to this project. It is taxpayer money, and Members should not laugh at this appalling waste.

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.

None.

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.

Is the hon. Gentleman aware that according to reports what those lorries were mostly doing was sitting stationary while the drivers were drinking cups of coffee, so I am not sure the Secretary of State will have learned too much from that?

Well, at least the lorries were not polluting the air so much if the drivers were just sitting drinking coffee; I am sure they enjoyed the exercise anyway. This illustrates a key point, however: if the Government are seriously saying that they are ready for a no-deal Brexit, they need to up their game in what they are doing and show some level of competency. I do not see many Conservative Members wanting to justify that exercise or how the Government handled that.

I congratulate the hon. Gentleman on securing this debate. Does he share my concerns about the lack of planning for other ports around the country? The Department for Transport and Ministers have been very lackadaisical about making sure that, if there is a no-deal scenario, those ports will be able to operate?

I thank the hon. Lady for that intervention. I assume she is speaking in particular about ports in the north-east of England, and it seems that the Department for Transport has not engaged with any of the Scottish ports either. This is all about mitigating things around Dover, which is fine as Dover is clearly the biggest and busiest port, but one way to mitigate the traffic impact at Dover would be to stop as much traffic as possible travelling from the north to the south and to look at these other ports, and doing some real strategic planning. Strategic planning is severely lacking from the Department for Transport.

I have listened to what the hon. Gentleman has been saying with great interest. He will understand that, as I represent the constituency of Dover, this subject is very dear to my heart. In any negotiation, we have to have contingency planning. That is very important and it is right that the Department for Transport takes measures to ensure that, if there are disruptions at France, as has been threatened by some French politicians, it has alternatives and different ways of getting goods in and out of the country notwithstanding that. Does he not think that in principle the Department for Transport was acting in the national interest?

We could argue that in principle the Department for Transport was trying to do the right things in terms of contingency planning because, let’s face it, a no-deal Brexit could happen. But in practice, it has been a pure and utter failure—a shambles. That is the difference. Contingency planning needs to be absolutely that—putting in place proper, robust procedures for the contingencies. It is clear that that has not happened.

I am sure the hon. Gentleman has, like me, read with interest the National Audit Office detailed report into this. It goes through the decision making in the Department for Transport and it does not come across to me as highly critical. It highlights that

“The additional freight capacity is intended to allow government to prioritise the flow of critical goods into the UK and to enable imports to flow as freely as possible in the event of no deal.”

It has to be in the national interest that we make sure we get medicines and other critical goods into the country and that we are prepared for every eventuality. Does he not accept that as a matter of principle—yes or no?

I thank the hon. Gentleman for gamely trying to defend the Government position. Fair play to him; he is the only one willing to do that. I would like to see him argue to all the members of the Public Accounts Committee that that NAO report was reassuring and that the evidence it took was reassuring, because that is not what I have heard from PAC members. So again I disagree.

If this were a real and robust process, the Government would have defended themselves to the hilt in court. They would not have caved in and done an out-of-court settlement. Again, that is indicative of where the Government are and the lack of confidence they had once they were eight-balled by Eurotunnel.

I also read the NAO report said that warnings were ignored in the “rushed…ineffective” and “inappropriate” privatisation, creating “significant risks”, that it wasted £500 million and that the number of recalled prisoners skyrocketed. But that was about the Secretary of State’s careless probation service legacy. So he clearly has a track record. As a master of understatement, he said that those reforms had not worked as well as he had hoped.

I thank my hon. Friend for that intervention. I spoke earlier about the systemic procurement failures in the Department for Transport. It is clear there is a common thread between the systemic failure in the privatisation and procurement of probation services and the man who is now in charge at the Department for Transport, who is sitting here lackadaisically thinking everything is okay in the world and he is doing a fine job. I am sorry but that is not the case and that is not how it is seen in the wider country.

I will now return to some questions raised in the Chamber that have still not had satisfactory answers. The permanent secretary at the Department for Transport told the PAC that the Department had awarded Seaborne the contract before Arklow confirmed its backing. So the Transport Secretary needs to be able to provide further clarity on that. We return to the question: where were the written guarantees that he was supposedly assured about from Arklow before it walked away? It is shameful that it turns out that as far as we know no written guarantees were given by Arklow, yet when it walked away some of the most hard Brexiteers, the right-wing Brexiteers, said it was an Irish conspiracy because Arklow is an Irish company. That is shameful. It was the Department for Transport not doing its due diligence

Additionally, the director general at the Department for Transport said that it was no longer possible to complete procurement and operation for any large amount of further capacity across the channel before the end of March by either sea or rail. Can the Secretary of State explain that? Can he explain how the sudden £33 million settlement with Eurotunnel, if it is going to provide all these vital services at the end of March, stacks up against the fact that the previous argument was that the Department no longer had time to be able to source those additional services?

In relation to Seaborne Freight, the Secretary of State said that