Spartacus Blog

George Osborne and the British Passport

Saturday, 24th March, 2018

Yesterday, George Osborne wrote an interesting editorial on the British passport dispute: "A French-Dutch company has won the contract to print the new blue British passport. Surely this is exactly the kind of global free trade the Brexiteers told us they were all in favour of? Britain benefiting, as the free market delivers the most competitive product to our citizens."

Osborne then goes on to quote Jacob Rees-Mogg as saying that “free trade puts consumers first and lowers prices for all”. Yet Brexiteers "now tell us that the new passport contract should have been awarded to a British firm - not because it offers a better product at a better price, but for the simple reason it is based in Britain. Let's call that what it is: an anti-free trade, anti-free market act of nationalism." (1)

Andrea Leadsom, the leader of the House of Commons took another approach. She blamed the European Union's anti-competition rules and said that the British government was forced to accept the Gemalto contract as it was the cheapest one on offer and would save about £120m over the five-year contract. However, it would be very different after Brexit as we would be free to place large orders with British firms. (2)

Is that true? No, it is a blatant lie. We are the only country in the EU that has official documents printed in other countries. In France, documents have always been made at the National Printing Works, which has been a limited company since 1994 but with the state as sole shareholder. Italian passports are made in Rome by the State Mint and Polygraphic Institute, which has been a public limited company since 2002 but with the ministry of economy as sole shareholder. Spanish documents are made by that country's Royal Mint of Spain, a public corporation run by its treasury department. Germany's Berlin Federal Print Company, a state-turned-private company, has the contract with its government and the Netherlands, which will benefit from Gemalto's success, also keep its passport manufacture strictly in-country. (3)

De La Rue chief Martin Sutherland explained that his company had no chance of competing for the rights to make passports for France as the French state makes them “in-house”. In 2009 the EU made it possible for all members to have all official documents printed in its own country. However, Britain waived this option and this meant the contract has to go out to international tender under WTO rules. (4)

The Government awarded Gemalto the £490million deal to make post-Brexit passports from 2019 — The Government awarded Gemalto the £490million
deal to make post-Brexit passports from 2019

The government clearly is interested in getting the cheapest deal even if it goes against the best interest of the British workforce. John Spellar, the Labour MP for Warley argued: “No other EU country is so hostile to its own industry and workers. We are still the soft touch of Europe and even after the vote for Brexit deadbeat civil servants and complacent Ministers have still not got the message. This decision to buy foreign passports is disgraceful, outrageous and stupid." (5)

Unite general secretary Len McCluskey, pointed out: “Let’s get one thing straight. This is not about Brexit. It’s not about red versus blue. It’s about saving decent British jobs, plain and simple. At least 200 jobs are now at risk because the Tory government thinks it is best to ask a French-based company to make UK passports... Instead of taking back control, the government is doing things on the cheap. Workers in Gateshead, West Houghton and Bath will pay the price with their jobs... I can hear Monsieur Macron laughing all the way over the Channel as he counts the cents that will roll into his Treasury.” (6)

As George Osborne made clear when he was Chancellor of the Exchequer, he never gave high priority to British jobs. Are the views he expresses on the new passport based on his own financial interests. As well as being paid well for editing the Evening Standard he also receives £650,000 a year as an adviser to BlackRock, a company that part-owns Gemalto. (7)

What about the newspaper he edits? It is owned by Alexander Lebedev, a man with an interesting background. Before the collapse of communism in the Soviet Union, he was a spy working for the KGB with diplomatic cover of an economics attaché. His specialist subject was the "challenges of globalization". The Sunday Times stated that he "spent more time studying finance and the City than British secrets". (8)

Alexander Lebedev and Vladimir Putin (2002)

It is strange that the British media is so interested in Jeremy Corbyn having a meeting with a Czech spy in 1986 but do not seem concerned about a leading Conservative political figure is employed by a former KGB officer. After leaving the Russian intelligence community, Lebedev set up his first company, the Russian Investment-Finance Company. According to Forbes Magazine, by 2008, Lebedev was worth US$3.5 billion. (9)

On 21 January 2009, Lebedev and his company Evening Press Corporation (UK), obtained a 75.1% of share in the Evening Standard newspaper for £1. The following year he purchased The Independent and Independent on Sunday for a £1. He commented at the time: "I do not treat newspapers as business. I treat them as my responsibility. I think newspapers are the only instrument which, through investigative reporting, can ferret out everything about international corruption." (10)

I am not convinced that Lebedev's newspapers will be doing any investigations into his own or his editors, business dealings.