Passport Procurement Exposes Brexit Divisions – Free Trade or Protectionism?

Let’s give our UK government some credit for their handling of the passport procurement issue.  It would have been easy for ministers to panic when the news that UK-based De La Rue has lost the contract for printing the revived British blue passport post Brexit hit the headlines, particularly after jingoistic and stupid headlines in certain newspapers.  We half expected an announcement that the procurement process would be terminated or re-considered. “Of course it is not acceptable that Gemalto, a Franco-Dutch firm, should win the contract”, some second-rate junior minister would announce, we thought.

That sounded like it might be under way when Matt Hancock, Cabinet Office Minister (not second rate, we should stress) explained that the  procurement process was not completed yet. But then we saw a more robust response emerging, saying that while the UK had to open this procurement up to competition under EU regulations, some of the current passports were produced outside the UK already. The winning firm also has facilities in the UK, and most importantly perhaps, the deal on the table would save the British taxpayer £120 million over five years. That’s a lot of public money for nurses’ salaries or pothole repairs.

De La Rue made some comments about quality, but one assumes that there was a pretty tight specification that the potential providers had to bid against, so that does not seem like a convincing argument. And the personalisation of the passport, which uses sensitive personal data, will still take place in the UK.

There is always the possibility that this turns into a KFC-type disaster with a new supplier who turns out to be incapable of delivering as promised, but at the moment, the worst of the reaction seems to have passed. You do wonder what the people complaining want – should we give all government contracts to UK firms, no matter how incompetent they are? Do we want other countries to stop giving our firms any contracts because we put up the protectionist barriers here?

This does also illustrate the huge split in the Brexit camp. Some see the future of the UK as a dynamic global trading nation – in which case they can’t possibly complain about the result of an open and competitive tender. But the other camp want the drawbridge to be raised, with our businesses protected from the harsh winds of competition. And if you are simply an ambitious politician, like Jacob Rees-Mogg, you will try and stay in both camps at once of course. But actually, you can’t have it both ways (and I speak as a neutral, not a Remainer, by the way).

There is another interesting point though around how France handles their passport production. The suggestion is that they deem it to be a matter of “national security” which enables the procurement to be restricted to French suppliers, so that De La Rue for instance cannot bid. But would the UK want to do that – remember the £120 million? That also raises questions about just why De La Rue are so much more expensive, incidentally.

Some commentators (including the Supply Management website on Thursday) seemed to think that Brexit will give the UK the opportunity to change the way we run procurement, presumably to just award contracts to nice British firms. But that's not true; any likely trade agreement with the EU post Brexit will require public procurement to run pretty much as it does now, and even World Trade Organisation rules don’t allow countries to just award contracts domestically as they see fit.  So don’t believe everything you read …

Voices (3)

  1. Trevor Black:

    It is ironic that with all the nonsense surrounding the Brexit debate that the only country that appears to be anxious to comply with the EU procurement directives is the UK. There is also the interesting debate at the moment concerning the takeover of GKN and while successive Governments have supported “the carpetbaggers” who asset strip our industrial base and trouser the profits, I recall the French government preventing the sale of the dairy supplier Danone on the grounds that it was “too French”. Is this what a common market is supposed to look like? I now realise that the term “in the national interest” is something that you can jump in and out of.

  2. Chris Stokes:

    You have to feel sorry for the procurement team. If they award to the cheap French company they get slated by Brexiteers who say it should be restricted to UK bidders. If they ignore the French bid they get slated by Remainers saying this shows how we won’t get value for money if we leave.

    Actually you are wrong about WTO rules not allowing us to award contracts domestically as we see fit. The standard WTO rules do not apply to Government procurement. We would have to opt in to the Government Procurement Agreement (GPA) to include these, and that is done totally by negotiation (we agree to open up Government procurement to the extent that we get a similar amount of foreign Government markets opened to us). At the moment the EU is a signatory to the GPA but it came in after we joined the Common Market so UK were never an individual signatory.

    1. Paul Wright:

      I could be wrong but I believe the government has indicated it will join/stay in the WTO GPA after Brexit

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.