HARRY MOTTRAM FREELANCE JOURNALIST: row over who will print the post-Brexit blue passport blows up as Remainers say ‘I told you so’ and Leavers say ‘it must be printed in the UK’ (but was there a darker reason why the UK’s De La Rue put in such a high price and failed to land the job)

Harry Mottram reports

Last week De La Rue plc, the security and anti-counterfeiting printer for banknotes, identity and passports announced it had not been awarded the contract by Her Majesty’s Passport Office (HMPO) to print the post Brexit blue passports. Instead the contract has gone to the French Dutch firm Gemalto with a lower price of £120m.

In a statement the company says: “De La Rue has worked closely with HMPO over the last nine years, designing and producing the UK passport and establishing it as one of the most secure passports in the world. The current ten-year contract has a total value of £400m. Today’s decision is expected to have no impact on the performance of current and next financial year as we continue to fulfil the contract until July 2019 and assist with the transition process thereafter. The Company is disappointed with the outcome of the tender process and will now consider its options including an appeal.”

The decision caused a Brexit row with Remainers suggesting this is a consequence of the 52-48 leave vote while Leavers saying there will be some economic damage initially but overall leaving the EU will be good for the economy. The local MP for Teeside MP Simon Clarke near where De La Rue has a printing plant wrote in the Northern Echo: “Mrs May made a point of meeting Nissan bosses in the wake of her ‘Brexit means Brexit’ speech to reassure them that Britain’s ‘special relationship’ with the Japanese car firm, which includes hefty financial incentives funded by British taxpayers, will continue after the UK leaves the EU. No doubt a similar behind-closed doors deal could have been struck to ensure that the soon to return British blue passports would be made by current supplier, the De La Rue factory at Team Valley, Gateshead. Instead a French firm tendered the lowest bid and is set to win the lucrative and symbolically important order.”

The fortnightly trade magazine Print Week seemed glad to report on the various excuses made by De La Rue’s chief executive Martin Sutherland who said Gemalto’s bid was too low and that: “These are such tight margins, or even negative margins, that’s just not a viable business. It’s an incredulously low price. This bid is so low that you have to question whether it’s viable.”

However the Mail on Sunday suggested another more (and perhaps more likely reason) and that was De La Rue were trying to cover a black hole in their pension fund by inflating the price for the British tax payer. Jonathan Bucks wrote: “The British firm that lost out on a lucrative contract to print the UK’s first post-Brexit passports is facing accusations that its bid was inflated in an attempt to fill a vast pensions black hole. The decision to pass over De La Rue in favour of Franco-Dutch firm Gemalto last week should save taxpayers £120 million, but sparked an outcry over the Government’s lack of patriotism by handing the ten-year contract from 2019 to a foreign-owned company. But now The Mail on Sunday can reveal that De La Rue is grappling with an eye-watering £189 million pension deficit, which is almost 40 per cent of the company’s value and high enough to imperil its future, according to experts.”

Ignoring this theory, the trade magazine’s Jo Francis feverishly reported on the number of online signatures that had been amassed for petitions calling for the decision to be reversed and the “huge volume of comments being made on social media.” On Twitter a lively debate broke out with many pointing out that De La Rue print bank notes and passports for various countries and the bidding process was all about the free market – something that Brexiteers crave for. Robert Stauss writing in the Finantial Times comments: “Why is it OK for De La Rue to produce passports, money and so on for other countries but unreasonable for another company when it is for the UK?”

In the meantime the share price for De La Rue has slipped initially dropping five percent on the news of lost contract although there has been a slight rally since last week. The company has its HQ in Basingstoke with additional sites in Gateshead, Westhoughton, Debden, Overton and Bathford, and employs hundreds of workers in the UK. The firm employs 3,150 people around the world producing seven billion items in passports and bank notes for more than 40 countries a year and has been in business for more than 100 years.

Due to De La Rue appealing against the decision and an online campaign and in the media to reverse the ruling the Government has granted more time for the printing company to reappraise their bid.

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