Labour demands Theresa May sack Chris Grayling amid claims he misled parliament over ferry deal

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Labour has written to Theresa May demanding she sack Chris Grayling following accusations that he misled parliament over a botched government ferry contract.

The transport secretary is facing mounting pressure after telling MPs that "no money" had been spent on the controversial multi-million pound contract with Seaborne Freight - only for it to emerge that his department paid external consultants £800,000 to evaluate the deal and two others.

Opposition parties have called on the beleaguered transport secretary to resign over the fiasco, with Labour accusing him of deliberately misleading MPs.

The decision to award the £13.8m contract to Seaborne for freight ferry services in the event of a no-deal Brexit was widely criticised last month after it emerged that the firm did not own any ferries. The farce deepened when it was found that the company appeared to have copied the terms and conditions on its website from a takeaway restaurant.

Mr Grayling was forced to scrap the deal last week after Seaborne's apparent main backer, Irish firm Arklow Shipping, withdrew its support.

Defending the decision in the Commons on Monday, the transport secretary told MPs: "We have spent no money on this contract."

He had previously insisted that no money would be spent unless the ferries began operating,

However, a memo produced by the National Audit Office (NAO) found that the Department for Transport had paid £800,000 to consultants Slaughter and May, Deloitte and Mott MacDonald to scrutinise the three ferry deals.

Shadow transport secretary Andy McDonald raised the issue in a Commons point of order on Tuesday and suggested Mr Grayling had breached the ministerial code by misleading MPs.

In a follow-up letter to Ms May, he said the transport secretary had "repeatedly defended the decision to award the contract by claiming there would be no cost to the taxpayer as the company would not receive payment were they unable to provide services."

He wrote: "In answer to my Urgent Question on 8 January, the secretary of state claimed, 'We are not spending money unless these ferries operate'. This is plainly untrue as there are several costs associated with the awarding of this contract. Yesterday, the National Audit Office found that £800,000 had been spent on external consultants to assess the bid.

"The secretary of state for transport has misled parliament. At this stage in Brexit preparations and regarding an issue of such national significance, the transport secretary’s misleading of parliament damages our country’s reputation and corrodes trust in politics."

Mr McDonald said that, under the terms of the ministerial code, ministers are obliged to "give accurate and truthful information to parliament" and must correct any errors "at the earliest opportunity". Ministers who knowingly mislead parliament are expected to resign.

Calling on the prime minister to "immediately" investigate the matter, he continued: "The failure of the transport secretary to correct the record and his repeating of the misleading claim suggests that he intentionally provided MPs with false information.

"Regardless of party-political interest or one’s view on Brexit, we should agree that such conduct is not tolerable. In all these circumstances, so as to restore some semblance of credibility to the office of the secretary of state for transport, I ask you the relieve the incumbent of his post."

A Department for Transport spokesperson said: “No taxpayer money has been transferred to Seaborne.

“The legal advice in question covered the entire procurement process and was required for all extra freight capacity contracts with the three operators.

“As the NAO has made clear, the Department for Transport acted transparently and competitively throughout the process of securing extra freight.”