New blue UK passports being championed as a symbol of Brexit are set to be made by a Franco-Dutch company after British firm De La Rue said it would not appeal against the decision.
The Home Office faced a storm of protests last month after Gemalto, which has its headquarters in Amsterdam and is listed on the French and Dutch stock exchanges, was lined up to deliver the £490mn passport contract.
When Gemalto emerged as the preferred bidder, Martin Sutherland, chief executive of De La Rue, branded it “shocking news” and vowed to fight to get the decision overturned.
But yesterday he threw in the towel, saying: “Having done our homework and taken legal advice we now think the best pragmatic decision is to move on.
“Our chances of getting the decision overturned look slim. This is the rough and tumble of business, you win some you lose some.”
He added: “I’ve been consistent. On the day I said I was surprised and disappointed at the decision and it is still surprising and it is disappointing. I remain in the same place today.”
The burgundy passport, in use since 1988, will go back to its original blue and gold colour from October next year. De La Rue has held the contract to manufacture British passports since 2009.
However, ministers claim that the decision to choose the Franco-Dutch firm will save £120mn during the lifetime of the 11-and-a-half- year contract.
De La Rue also confirmed yesterday that its full-year earnings would be hit by a write-off of about £4mn related to the bid costs for the passport tender.
It said underlying operating profits were now forecast in the “low to mid £60smn range”, against previous expectations for between £71mn to £73mn.
The firm added: “De La Rue will continue to fulfil its existing contract and assist with transition to the new supplier and is therefore expecting no impact on the group’s performance in the next 18 months.”
Shares in Basingstoke-based De La Rue fell as much as 8% after the announcement and details of the profit blow.
The Home Office decision to choose Gemalto drew anger from a raft of politicians, including Brexiteer Jacob Rees-Mogg, whose North East Somerset constituency is home to De La Rue’s Bathford plant.
Gemalto, which is headquartered in Paris, already produces the UK’s photo driving licence.
The firm, which is being acquired by French defence group Thales, has a number of sites in the UK, including factories in Heywood and Fareham.
Unite national officer Louisa Bull said De La Rue not appealing would come as a “bitter blow” to its workers including those at its plant in Gateshead which Sutherland had urged Theresa May to visit to explain the decision to give the contract to the rival firm.
Bull said: “Workers will feel let down that the company is not prepared to fight the government’s decision to ship the production of the new blue passport overseas.”
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