De La Rue chief chose wrong card to play in passport contract battle

De La Rue’s explanation of why it now accepts defeat in the contest to print the UK’s post-Brexit blue passport is feeble. Apparently, the company has engaged in “intense consideration” for the past four weeks and has received “clear legal advice”. Come on: five minutes of casual reflection in the boardroom a month ago should have been enough to recognise the reality of the situation.

The bid from Gemalto, the Franco-Dutch rival, was £120m lower than De La Rue’s over the life of the 11-year contract, so the UK government was never likely to perform a protectionist U-turn that would have made a nonsense of ministers’ rhetoric about the UK being “open for business” after Brexit. A pause for thought might also have saved Martin Sutherland, De La Rue’s chief executive, from making himself look a fool.

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Sutherland started the process of working the nation – or part of it – into a fine frenzy last month by grumbling about how it was terribly unfair that Gemalto had got the gig. He challenged the prime minister to visit De La Rue’s factory in Gateshead to explain to workers why she thought it sensible “to offshore the manufacture of a British icon”.

Now, after talking up the prospects of an appeal, he’s capitulated. Bidding for contracts, and sometimes losing, is deemed to be part of “the rough and tumble of business”. As for the threat to jobs in Gateshead, Sutherland points out that the current contract with the Passport Office has another 18 months to run, which leaves “plenty of time to find alternative contracts to fill the gap”.

The government’s position has been more clear-sighted from the outset. This was an open competitive tender. Quality was prioritised and the savings from Gemalto’s bid were substantial. The new supplier already produces UK driving licences. Some of the new passports will be produced by Gemalto in its UK factories.

Sutherland, one must assume, was hoping that the bizarre excitement over the return of the blue (ish) passports would somehow override the extra costs to taxpayers. For a company that boasts about its “global footprint” and work with “governments, central banks and commercial organisations in over 140 countries”, it was the wrong card to play.

It is equally odd that Labour shadow ministers, from Keir Starmer to Diane Abbott, thought it wise to back a doomed campaign to impose extra costs on the public purse for the sake of symbolism. There are interventionist industrial causes that are worth backing. This was not one.