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House of Lords Hansard
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23 March 2018
Volume 790

Private Notice Question

Asked by

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To ask Her Majesty’s Government why the UK has not followed the example of France and Germany and restricted the tender process for the new UK passport to UK-based companies.

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My Lords, I beg leave to ask a Question of which I have given private notice.

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My Lords, all EU member states are bound by the same procurement rules. However, contracts do not need to be put out to tender where services can be obtained from a state-owned company. Some countries have a state-owned passport printing operation. However, in the United Kingdom, we have not had a state-owned passport printing facility since the 1990s. The printing of blank passports overseas presents no security concerns.

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I note my noble friend’s Answer, but do not Her Majesty’s Government realise that this possible decision will have a huge adverse effect on the whole of British industry and the British people as they face Brexit? We now know that the French and Germans can produce their own passports without going beyond their country boundaries because of some obscure rule of the EU—which we are leaving. We see in the press the stated figures: the French bid of £490 million and the UK bid of £540 million. The difference, therefore, in annual cost is £4.4 million. On the basis of the 6,931,924 applications for passports in the UK in 2017, the difference works out at 63p per passport. Against those figures and the suggestion that the French bid was possibly made on a loss-leader basis—as one who worked in industry before coming to this place, I point out that loss-leaders are not unknown, particularly when dealing with interesting bids such as this one—will the Minister give an assurance that nothing will be signed or sealed until the whole matter has been reviewed?

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My noble friend mentioned the arrangements that occur in some countries in the European Union. As I said in my opening Answer, contracts do not need to be put out to tender where services can be obtained from a state-owned company. Some countries have a state-owned company; we do not have that here in the United Kingdom. I will not comment on any commercially sensitive details but I should add that there will be a saving of £120 million to the taxpayer over the course of this contract.

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My Lords, does the Minister not understand that he sounds rather complacent on this issue? I have to ask: why do other European countries have state-owned companies? It is because of their concerns around security. To most of us, it seems quite a bizarre decision that, while other countries are producing their passports at home, we have taken that away from a company which, by all accounts, has provided an excellent service to this country. There is a risk of workers in this country losing their jobs now that that company has lost a flagship contract. Given the rhetoric of Ministers that Brexit means taking back control, is the Minister able to tell the House how taking back control means handing out the passport contract to another country?

I have two further questions on the issue of security. First, the Minister dismissed security implications because the passports are blank, but I would question that and ask whether our security agencies feel the same. How are we going to ensure compliance when a company outside the country is producing the passports? Secondly, as we move forward with the digital development of passports, what plans are being considered now to ensure compliance with security arrangements in those circumstances?

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I thank the noble Baroness for her questions, in which she made a number of points. There will be jobs created in this country under the new contract. Under the present contract, 20% of the blank passports are already manufactured overseas. As far as the security issue is concerned, under the new contract all passports will continue to be personalised with the passport holder’s personal details, such as name and photograph, in the United Kingdom. This will ensure that no personal data will leave the United Kingdom.

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My Lords, the farce of the blue passports continues. The Minister has confirmed that the Government could have created a state company to produce these passports and they seem to have been remarkably unprepared for the furore that was bound to welcome this application of EU public procurement rules. Will he also confirm that we could have had whatever colour of passport we wanted, since burgundy was always optional? We could have had pink, for example. Can the Minister also remind the House of the Prime Minister’s Mansion House speech, when she said she wanted a reciprocal binding commitment to fair and open competition with the EU? Presumably that covers not only state-aided competition but public procurement, so we will essentially continue to apply EU competition rules. Finally, will the Minister remind us whether Brexiteers are protectionists or global free traders? Surely they cannot be both.

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My Lords, the first thing that I should make clear is that the regulations under which this tender was competed for were under EU law, WTO law and UK law. As for the colour, the noble Baroness mentioned pink—rather similar to her rather fine coat—but I like the idea of having a blue passport again. The noble Baroness also drifted off into other areas that are outside this Question, therefore I will not answer.

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My Lords, can my noble friend not see the irony that jobs will be lost in the north-east, which voted overwhelmingly to leave the European Union, because the Government are arguing that a state company in France, which does not have to make a profit, should be given preference over a company that does have to make a profit and is employing people in Britain? Surely that is an extraordinary position for a Conservative Government to take.

Will my noble friend indicate why he thinks there is not a security issue concerned with the manufacture of British passports? I note that he has not gone on the security issue: he has chosen another argument, which is that nationalised companies should be given preference over companies that need to make a profit. That is yet another reason why we need to get out of the European Union.

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My Lords, I thank my noble friend for his question. He rather put words into my mouth in certain areas. What is really important in this issue is to ensure that we get value for money for the taxpayer, as I am sure my noble friend would agree. He must also be aware—I am sure I have heard him say as much in the Chamber and I would be very surprised if I had not—how important it is that the UK is now a global country and able to seek the best deal for the taxpayer for this sort of contract. This is a good contract. It will save the taxpayer money. All these contracts have to go through a commercial process. In this case, as I said, jobs will be created in this country by this new contract.

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My Lords, the Minister talks as though the contract has already been concluded. My understanding, from those involved in submitting bids, is that it has not been concluded and there is an opportunity for the Government to think again. Will he go back to his Secretary of State—that is as much as I can ask him—and say that, on both sides of this House, there is a desire that this should be reviewed in the name not just of security but of national pride.

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My Lords, I thank the noble Lord for that question. As far as the process of tendering is concerned, the three bidders were notified of the outcome of the competition on 21 March. Following the notification, there is a regulatory standstill period of a minimum of 10 days before the contract can be signed. A public announcement to confirm the winning bidder will be made once the contract has formally been awarded. I also note what the noble Lord said and I will ensure that the Minister is aware of his concerns.