Passport row embroils UK as contract passes to foreign firm

A bidding race to supply the post-Brexit UK passport has come to an end, with longstanding UK supplier De La Rue losing out to Franco-Dutch rival Gemalto at the final hurdle.

The current burgundy passport has been produced by a De La Rue facility in Gateshead for the last nine years – under the terms of a 10-year contract worth around £400m ($565m) – but after next year the new blue and gold version may be assembled in France, although Gemalto does operate a facility in Fareham, Hampshire.

The decision has raised fears that jobs at De La Rue’s Gateshead unit – which employs 600 people – could be lost as a result of the switch unless it can win additional contracts from other countries.

In a statement, De La Rue said it was “disappointed with the outcome of the tender process and will now consider its options including an appeal.” Speaking on BBC Radio 4’s Today programme yesterday the company’s chief executive Martin Sutherland said it was a “surprising decision” given that UK ministers have been vocal of late in talking about the importance of the blue passport as an icon of national identity.

It has emerged that the competitive tender process between De La Rue, Gemalto and a German firm was carried out under EU rules, with all bids sealed and anonymised, and the bottom line was that De La Rue was undercut on price - reportedly to the tune of £50m.

Sutherland pointed out however that other EU countries do not necessarily adhere to those rules.

Decision to produce passports abroad is devastating for my constituents who work at De La Rue & a massive blow to the reputation of British business. At a defining moment in our history, this sends out completely the wrong message & will reduce our standing in Europe & the world

— Liz Twist MP (@LizTwistMP) March 22, 2018

“I’m not allowed to compete for the French passport contract,” he said, as France’s government will not allow the tender to go to non-domestic companies as it says it is a matter of national security.

“We’re the largest commercial producer of passports in the world…supplying over 40 countries,” Sutherland told the programme. “We’ve been working with the government for 10 years without a single hiccough… but now this icon of British identity is going to be manufactured in France.”

He added that he would like the prime minister or home secretary to “come to my factory and explain my dedicated workforce why they think this is a sensible decision to offshore the manufacture.”