Failing Grayling facing grilling over Brexit Eurotunnel payout

Eurotunnel had launched legal action over the awarding of £108m in contracts to three ferry firms, including one which had no ships, for services in the event of a no-deal Brexit.

Meg Hillier, chairwoman of the Commons Public Accounts Committee, said MPs would be scrutinising the Department for Transport’s handling of the affair when its permanent secretary appears before them next week.

‘This was an extraordinary procurement which is now unravelling at the taxpayers’ expense,’ she told The Times.

Eurotunnel had previously accused the DfT of awarding the contracts through a ‘secretive and flawed procurement process’.

The decision to award Seaborne Freight a deal worth £13.8m sparked widespread concern as the start-up firm has not previously run a ferry service.

Conservative MP Huw Merriman, who sits on the Transport Select Committee, said Grayling would have to explain ‘exactly what’s happened, what he’s going to do to remedy it and what he thinks is his position as a result of that’.

He told Channel 4 News: ‘What we are touching on here is something that does seem to have occurred under his executive position as secretary of state, which is why he will need to explain exactly why the decision has been made to pay such a high amount out.’

Merriman, who also criticised Eurotunnel for pursuing the action, said it was ‘absolutely outrageous that a company has managed to get £33m out of a £108m tender contract, effectively make 33% profit, by doing absolutely nothing’.

Former minister Anna Soubry, who recently quit the Tories to join The Independent Group of MPs, was scathing of Grayling’s record.

She told BBC Radio 4’s Today programme: ‘If you look at the evidence he should have gone a long time ago.

‘It’s a litany of disaster. That is his record and that is the evidence.’

Labour MP Rachel Reeves, chairwoman of the Commons Business, Energy and Industrial Strategy Select Committee, backed calls for Grayling to go.

She said it was a sign of the prime minister’s ‘weakness’ that she had not removed him from the Cabinet.

Reeves told the BBC: ‘There is no reason whatsoever that this man should still be in the Cabinet, making key decisions still on transport policy.

‘He should be sacked by the prime minister, and it is a sign of her weakness that she’s not able to do that.’

Deputy Labour leader Tom Watson said ‘heads must roll’ over the fiasco, telling The Guardian: ‘This is a scandalous, needless, reckless waste of public money caused by the Tories’ gross failure in Brexit negotiations and their botched effort to prepare for the disastrous folly of a no deal – which shouldn’t even be on the table.’

The embarrassing settlement came on the same day that the public spending watchdog released a scathing report on reforms to the probation service introduced by Grayling in his previous role as justice secretary.

The Ministry of Justice is expected to have to pay nearly £500m more than was required under the original contracts for the private firms, which are ending 14 months earlier than planned.

The National Audit Office also said the number of offenders returned to prison for breaching their licence conditions after serving short sentences had ‘skyrocketed’ since the part-privatisation was introduced.

Sir Amyas Morse, head of the NAO, said the ministry had ‘set itself up to fail’.

Despite the double-blows for Grayling, which come after a long line of mishaps during his six-and-a-half years in the Cabinet, May was standing by him yesterday.

Downing Street insisted it had full confidence in the transport secretary and explained the ‘primary reason’ for reaching an out-of-court agreement with Eurotunnel was to ensure the supply of goods such as crucial medicines and medical supplies ‘would not be put in jeopardy’.

‘A lengthy legal case and the uncertainty it creates is not in anyone’s interest,’ it added.

In a statement, Grayling said: ‘The agreement with Eurotunnel secures the government’s additional freight capacity, helping ensure that the NHS has essential medicines in the event of a no-deal Brexit.’

A Eurotunnel spokesman said the agreement would ensure the Channel Tunnel ‘remains the preferred route for vital goods to travel between the EU and the UK’.