The UK government is facing questions over £37.5m ($51m) in Brexit grants to a ports firm that “coincidentally” employs former transport minister Chris Grayling.
Official documents seen by Yahoo Finance UK show Hutchison Ports received port infrastructure funding (PIF) from taxpayers for three ports including Felixstowe, which is at the centre of recent disruption.
The funding is to build inspection facilities ahead of new Brexit border checks on EU food, plant and animal imports from July.
But the government’s decision to grant ports less than half the £450m ($608m) they applied for and hand some ports much more than others has come under scrutiny.
Labour’s shadow cabinet office minister Rachel Reeves called the shortfall a “false economy” given industry fears of supply chain disruption and delays when new checks are imposed.
“Will the government publish the full rationale for each of their 53 port decisions? Not least since some companies received next to nothing while one port company — which coincidentally pays a former Tory cabinet minister £100,000 a year — was awarded £26m yesterday by this government,” she said in parliament.
It is understood she intended to refer to the £37.5m received by Hutchison Ports, with £22.95m for Harwich, £13.1m for Felixstowe and £1.5m for London Thamesport.
Lots of questions remain unanswered about the Government’s support to our nation’s ports. Grateful to @RachelReevesMP for joining my call to ensure @PortsmouthPort gets the funding it needs pic.twitter.com/jdcF0KB0dY
— Stephen Morgan MP (@StephenMorganMP) December 17, 2020
Grayling’s advisory role at the company hit the headlines earlier this year, with official records on MPs’ financial interests revealing his significant salary for just seven hours a week.
A government committee weighed up whether he should take up the job under rules on former ministerial appointments, noting a “perceived risk you would have influence across government that could provide an unfair advantage.”
But the committee accepted the appointment, noting the time since he was in office and that Grayling said he would not advise on any matters related to Brexit or lobby the government.
The former minister was widely ridiculed while in government for handing a ferry contract to a firm without any ferries.
Reeves said ports had been “short-changed,” noting Portsmouth had been left with an £8m shortfall, and Dover had received just £33,000 after reportedly applying for £33m. Portsmouth’s Labour MP claimed there were “unanswered questions” over grants.
Every port received at least 34% less than they requested, with some seeing a greater drop and more than one in five bids rejected.
Richard Ballantyne, chief executive of the British Ports Association, called it a “real spanner in the works at the 11th hour” for firms’ preparations in an interview with Yahoo Finance UK on Wednesday. He warned some facilities may not be ready by July.
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Tim Morris, chief executive of the UK Major Ports Group, said there was disappointment that funding allocations were “so late in the day” and a “haircut” on what firms needed.
But cabinet office minister Michael Gove told Reeves in the Commons an “independent team” had looked at the eligibility of all applications and assessed them “on the most rigorous of bases.”
He also said Dover had been bidding for infrastructure due to complete in 2023, when PIF was aimed at planning for full import controls from next July.
Gove said in a committee later on Thursday it was working with Dover to “make sure appropriate investment” could be secured for such facilities, and working with other departments to help Portsmouth.
Hutchison Ports and Chris Grayling have been approached for comment.
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