Public Services

Passport to protectionism

Jessica Figueras Published 27 March 2018

You could see this week’s ‘blue passports’ furore coming a mile off, says Jessica Figueras, chief analyst at GlobalData Public Sector

 

Back in October 2016 when HM Passport Office first engaged the market about the new £490m passport production contract, I predicted "howls of nationalistic protest should a French or German competitor win this iconic British contract from a British supplier". Thus it came to pass , as De La Rue apparently lost out to Gemalto on the straightforward cost and quality grounds familiar to seasoned navigators of OJEU.

Without seeing bid details it's impossible to say why De La Rue's was seemingly so much less competitive. But modern passport production is all about embedded security features, not printing, and the claim to market leadership there is held by Franco-German companies Gemalto, Oberthur and Giesecke & Devrient. (De La Rue sold its smart cards business to Oberthur back in 1999).

I also warned that EU procurement rules could become a fresh political battleground - and this too has come to pass. De La Rue has taken to the TV studios threatening legal challenge with feisty nationalistic rhetoric, and politicians of all stripes have leapt to pour scorn on public procurement rules.

So will passports be a storm in a British teacup, or the straw that broke OJEU's back? Culture Secretary Matt Hancock has noted procurement policy was up for debate post-Brexit. But it's hard to imagine government appetite for more than superficial change, given the UK's leading and enthusiastic role over decades in shaping the open-competition regime which did for De La Rue. Most likely ministers will try to ride out the storm.

But with Trumpian protectionism now a thing in the UK too, this won't be the only controversial award. The temptations for UK-headquartered companies to indulge in a bit of posturing, should they fail to win contracts, are obvious. We'd warn our clients to think very carefully indeed before following De La Rue's example, though. Protectionism eventually does for those who wish themselves to compete globally. And in the UK, where public contracting is already racked with drama, it could mean that future sensitive contracts are not put out to open competition at all.


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