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UK government cancels Brexit ferry deals

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Media captionChris Grayling says the contracts were part of a no-deal 'insurance policy'.

The Department for Transport is cancelling contracts to provide extra ferry services after Brexit.

Ending the contracts with Brittany Ferries and DFDS could cost the taxpayer more than £50m.

The government bought £89m worth of capacity from the two firms. Some of that capacity might be sold, but millions of pounds could be lost.

The contracts were designed to ease pressure on the port of Dover, by creating extra services at other ports.

In February, the DfT was forced to axe its £13.8m contract with a third company, Seaborne Freight, which the BBC found had never sailed a vessel.

Earlier this year, the National Audit Office estimated that the cancellation costs of all the ferry contracts would be £56.6m.

The cost is likely to only be several million pounds less than this.

A government spokesperson said: "The termination of these contracts has resulted in less cost to the taxpayer than the termination costs reported by the NAO."

The government was also forced to pay £33m to Eurotunnel, to settle a case which challenged the procurement process for the ferry contracts.

In addition, the DfT is now facing legal action from P&O Ferries, which says its rival, Eurotunnel, was given a competitive advantage by the government.

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Image caption Brittany Ferries is one of the suppliers which had a contract to provide extra ferry services

'We needed to be ready'

Mr Grayling, the Transport Secretary, said the cancelled contracts were part of a £4bn no-deal "insurance policy" the government had put in place.

"People would expect a responsible government to take out an insurance policy, and that's what we've done, to make sure we can deal with all the challenges in a no-deal Brexit.

"We never wanted it, we never worked for it, but we sure as certain needed to be ready for it," he said.

If extra cross-Channel freight services are needed again in the run-up to the new Brexit deadline in October, the government could have to negotiate a new set of contracts, he said.

Grayling under fire

Labour shadow transport secretary Andy McDonald said the contracts will be "a case study in ministerial incompetence" on the part of Mr Grayling.

"The Transport Secretary's approach to procurement and planning has cost taxpayers tens, if not, hundreds of millions of pounds. His career as a minister has left a trail of scorched earth and billions of pounds of public money wasted.

"This country cannot afford Chris Grayling."

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