The government is facing questions over why £35m of post-Brexit cash was awarded to a ports company advised by former minister Chris Grayling – while others received “next to nothing”.
Labour MP Rachel Reeves quizzed the government about the money in the Commons on Thursday after details of the government’s £194m port infrastructure fund, designed to help ports build import controls needed for post-Brexit checks next year, were leaked to the Financial Times.
They show that two ports owned by Hutchison Ports Europe, where former transport secretary Grayling recently took on a £100,000-a-year role as a strategic adviser, were handed £35m of the cash.
Harwich port received nearly £23m while Felixstowe was given £13m, in awards that were among the highest for the 53 applications.
Nearly all the projects received much less than they applied for, which prompted warnings from the British Ports Association of “major pressures” to get borders ready in time for the middle of next year, when the UK will begin applying import checks to EU products.
Shadow Cabinet Office minister Reeves questioned why Dover, by comparison, got just £33,000 after applying for £33m, while Portsmouth faces a shortfall of £8m.
Reeves also revealed a letter from the parliamentary secretary at the Cabinet Office to Labour MP for Porstmouth South, Stephen Morgan, which stated that “ministers decided that all bids which are recommended to be supported will be funded to 66%” of their original bid, rather than the full amount they said was needed for post-Brexit infrastructure.
At Cabinet Office questions, Reeves said: “Why has the government short-changed vital infrastructure, critical to the everyday economy, while at the same time wasting millions of pounds on consultants and middlemen as part of Tory cronyism?”
She went on: “What a false economy, given the cost to British businesses and consumers with delays and disruptions at the border.
“Will the government publish the full rationale for each of their 53 port decisions?
“Not least since some companies received next to nothing and while one port company, which coincidentally pays a former Tory cabinet minister £100,000 a year, was awarded £26m yesterday by this government.”
While Reeves said Harwich and Felixstowe were awarded £26m, HuffPost UK understands she intended to refer to the full £35m figure.
Cabinet Office minister Michael Gove replied: “Of course we’d be delighted to make sure that the full assessment criteria are shared with the honourable lady and with all constituency members.
“The port infrastructure scheme had an independent team to look at the eligibility of all the ports that applied and to assess all of the bids and they have done on the most rigorous of bases.
“But it is the case that a number of ports have welcomed the additional funding and the additional infrastructure support that we will give.
“But we will continue to work with all ports in order to ensure that we can have a world class border.”
British Ports Association chief executive Richard Ballantyne said: “On one level the port infrastructure fund allocations are welcome but we understand most projects have not received the full allocations.
“This means plans could need to be redrawn creating major pressures to get borders ready in time for next year.
“We will be asking urgently for clarification on the funding shortfalls and what the allocations mean for certain projects.
“This infrastructure will be needed irrespective of whether there is a Brexit trade deal or not, however there have been delays to the process and finding out what specifications are needed form various government agencies has been challenging.
“The fund was heavily oversubscribed, and we would urge the government to consider allocating further resources so that all ports can be Brexit ready, across the country.
“Whatever government does it needs to be quick.
“Short timescales, winter and operational pressures and post Covid-19 construction materials and employment supply challenges are also combining to mean that at some locations the infrastructure may not be complete in time for the July 2021 deadline.”