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Taxpayer to lose £50m as Government cancels no-deal Brexit ferry contracts

Contracts signed by the Government ensuring a smooth transition on the port of Dover following a no-deal Brexit have been cancelled by the Department of Transport (DfT), potentially costing the taxpayer £50m.

The Government contracted with Brittany Ferries and DFDS to receive £89m worth of capacity running up to the original European Union withdrawal date on March 29 which would ensure additional ferry transport was provided in the event of a no-deal Brexit.

It is thought some capacity will be sold to ease the cost, however, the National Audit Office estimated this year the cancellation of all ferry contracts would produce a cost of £56.6m.

Sky News sources report the Department for Transport say the total figure “will be around 10% less” or about £50m.

A source from one ferry company also told Sky News that since December 2018 they have changed schedules, added 20 weekly sailings, disrupted 30,000 passengers and hired more staff “all to be ready for what is now not needed”.

The source said: “The consequence for DfT is that they have to accept that the termination clauses now apply.

“Which means – yes – paying a proportion of the original contract costs (which take account of the costs we have incurred to prepare).”

But the DfT is now facing legal action from P&O Ferries which say Eurotunnel was given a competitive upper hand by the government, in addition to, having already settled £33m with Eurotunnel following a case which challenged ferry contract processes.

 

Brittany Ferries

 

And with transport secretary Chris Grayling known to have lost the taxpayer £2.7bn during his time in the position so far - £2bn of which is said to be due to the collapse of Virgin Trains east coast in 2018 – some have suggested his time is up.

Shadow transport secretary Andy McDonald suggested the Tories are “rewarding incompetence” by keeping Mr Grayling in the job and further hinted he should be fired.

He said: “The multi-pound bungler has wasted £2.7bn of taxpayers money that could have gone to cash strapped local councils, hospitals and schools. Yet no matter how many mistakes he makes or how much public money he squanders, he remains in post.”

However, Mr Grayling maintains the cancelled contracts were part of a no-deal Brexit back-up plan costing £4bn to deal with contingency processes.

“People would expect a responsible government to take out an insurance policy, and that’s what we’ve done, to make sure we can deal with all the challenges in a no-deal Brexit.

He added: “We never wanted it, we never worked for it, but we sure as certain needed to be ready for it.”

The 57-year-old also said the government would have to put new contracts in place with ferry companies if extra services are needed again when preparing for the new EU exit date at the end of October.

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