P&O sues over £33m Eurotunnel payout in Brexit ferry fiasco | Politics

P&O Ferries is suing the government over its £33m settlement with Eurotunnel, in the latest controversy over the Department for Transport’s fraught no-deal Brexit preparations.

The department was forced into the £33m payout after failing to include Eurotunnel in its agreements with ferry operators to provide emergency cross-Channel services, including the scrapped contract with Seaborne Freight.

The DfT had signed deals worth £89m with Brittany Ferries and DFDS to secure routes for vital goods in the event of no deal, with forecasts of massive congestion on the routes to Dover and Calais where most freight traffic flows.

Now P&O is contesting the compensation awarded to Eurotunnel, claiming it leaves its ferry service facing an unfair disadvantage.

A spokesman for P&O Ferries said: “We have repeatedly made clear during decades of providing vital transport services between Britain and the continent that we are happy to compete with other providers on a level playing field. We also fully accept that it was prudent of the government to make contingency plans to protect international supply chains in the event of a hard Brexit.

“We do not believe that the payment of £33m of public money to Eurotunnel to settle its legal challenge to these plans is fair or reasonable. It is explicitly designed to be invested in the tunnel’s infrastructure and if left unchallenged would put our services at a competitive disadvantage.”

The transport secretary, Chris Grayling has already faced pressure to resign for the ferry fiasco. The preparations were exposed to ridicule when it emerged that Seaborne, which was awarded a £14m contract, had no ships and the legal terms and conditions on its website had been copied from a pizza delivery service.

After that contract collapsed and the Eurotunnel settlement was announced, Labour calculated that mistakes made by Grayling in various ministerial roles had cost the taxpayer a total of £2.7bn.

A government spokeswoman said the no-deal ferry preparations were a “cross-government decision”. While the government would not comment directly on the P&O legal challenge, the spokeswoman said: “This cross-government decision helped protect vital freight capacity for medical supplies to enter the country in the event the UK left the EU without a deal. We are confident we acted appropriately in reaching an agreement with Eurotunnel.”

The bill for the DFDS and Brittany Ferries contracts is to rise after the date of Brexit was delayed by seven months to 31 October.

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