Wednesday 17 July 2019 11:55 am

Chris Grayling admits Cabinet overruled him on Eurotunnel ferry settlement

Transport secretary Chris Grayling has said he personally wanted to fight Eurotunnel’s legal challenge against the government’s no-deal Brexit ferry strategy in court but that Cabinet collectively decided to settle it.

In what was most likely his last appearance before the Transport Select Committee, Grayling was asked why the Department for Transport (DfT), which he leads, kept getting sued.

Read more: ‘Department wrecking ball: Chris Grayling refuses to resign over £33m Eurotunnel fiasco despite fresh pressure from MPs

Grayling said Cabinet had decided it could not jeopardise the supply of goods to the NHS, which was why it had sought extra ferry capacity in the event of a no-deal Brexit.

“It is a matter of great regret to me that an organisation that has been excluded by the Competition and Markets Authority for running a ferry operation took us to court on the basis that it should have been invited to run a ferry operation,” he said.

“However, government collectively decided that although we would have liked to fight that case in court, we collectively decided we could not not jeopardise the supply of goods to the NHS which is why we settled.

“That settlement was based on a complete undertaking that the money would be spent on improved facilities at the UK border that would benefit the United Kingdom,” he added.

“There is a challenge to that settlement on state aid grounds, but the nature of that settlement is such that if it is found subsequently that it constituted inappropriate state aid, that money is simply recovered from the settlement.”

Asked whether he was put under pressure from No.10 to settle the case, Grayling replied that it was “genuinely a collective decision”.

He added: “My personal preference would have been to fight the case in court because I think it was inappropriate behaviour and it was frankly using a legal technicality to take us to court. I very much regret that case happened.”

Grayling faced a barrage of criticism for handing three contracts to ferry firms – including a £13.8m contract to Seaborne Freight, which owned no ships – and later cancelling them, at a cost of about £50m to the taxpayer.

Following the decision to settle with Eurotunnel, which had argued that the procurement of the contracts had been “secretive”, Grayling sent health secretary Matt Hancock to answer urgent questions in the House of Commons.

Grayling also referenced the legal challenge facing the department over its decision to van Stagecoach from bidding for three rail franchises over pension liabilities.

Read more: Grayling could be forced to take the stand in Stagecoach legal challenge

He said he personally wouldn’t have chosen to exclude Stagecoach but that the department had “followed and taken the best legal advice we can on this issue”.

“The decision to exclude was based on very clear legal advice, absolutely clear categorical advice… it’s not something I would have chosen to do, I think it’s matter of regret, but we have done what we are being told legally we have to do.”