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The shipless shipping contract and other dodgy Brexit business
#1
The shipless shipping contract and other dodgy Brexit business

I opened this tread because I suspect that there may be more dodgy Brexit business coming up. Wealthy Brexiters requisitioning their assets in relation to Brexit counts as dodgy business too.
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#2
The shipless shipping contract and awarding contracts without public tenders

The shipless shipping contract was revealed on 29 Dec 2018:

Brexit: over £100m spent on extra ferries in case of no deal (29 Dec 2018)
Ports in Poole, Portsmouth, Plymouth, Immingham and Felixstowe would be used to ease Dover pressure
The Department for Transport has spent more than £100m on ferries to ease potential problems that could arise in the event of a no-deal Brexit.
Documents outlining the £107.7m agreements say increased border checks in UK ports after Brexit could “cause delivery of critical goods to be delayed” if the UK leaves with no deal.
The Liberal Democrats described the move as “complete madness” and said public money was being spent recklessly in a last-minute attempt to prepare for a no-deal outcome.
The DfT has signed contracts with the French company Brittany Ferries, the Danish company DFDS and the UK’s Seaborne Freight to ease pressure on Dover.
The additional crossings are understood to be the equivalent of about 10% of the current traffic on the Dover Strait and will see ports in Poole, Portsmouth, Plymouth, Immingham and Felixstowe used.
Contracts were not put out to tender. The DfT said it was responding to a “situation of extreme urgency” brought about by “unforeseeable events”.
https://www.theguardian.com/politics/201...of-no-deal


I posted the above in News update on 29 Dec and underlined Contracts were not put out to tender. The DfT said it was responding to a “situation of extreme urgency” brought about by “unforeseeable events”. because I thought that this was very dodgy indeed and quite likely illegal under EU law - here is the link to the News update:
http://debateuncensored.co.uk/showthread.php?tid=200&pid=3949#pid3949

Ashtaret too thought this "Contracts were not put out to tender" was very dodgy and replied:

I do not truly believe UK will stay in the EU regardless, but if they were trying to, this would be yet another on the list of EU law violations (along with their internet surveillance f.ex.) that they would be fined and possibly sanctioned for.


After that there was some more reporting about it in the UK, and transport secretary Chris Grayling who is in charge of this blunder tried to fudge in his statements. But in the UK the dispute is primarily about the dodgy shipless company - but nobody is really questioning why all three contracts were awarded WITHOUT public tenders! It seems to me that apart from the dodgy shipless Seaborne Freight (which seems to be a shell company) all three contracts are very likely illegal - namely, under EU law public tenders can be avoided for such contracts as transport of goods only under very restricted special circumstances (see below) to protect the level field re competition in the EU single market.


What we know - published official documents

Well, since the UK is still an EU member, the UK government was obliged to notify the European Union about the public procurement contracts for no-deal shipping and these notices were published in the public procurement section of the Supplement to the Official Journal of the European Union  - here are links to all three awarded contracts with basic info:

Contracting authority: Department of Transportation (UK government)

1. Bretagne Angleterre Irlande SA (Brittany Ferries)
Headquarters: France
Value: 46,624,500 GBP
Conclusion of contract: 21.12.2018
SME: no
https://ted.europa.eu/udl?uri=TED:NOTICE...XT:EN:HTML

2. DFDS A/S
Headquarters: Denmark
Value: 47,293,532 EUR
Conclusion of contract: 22.12.2018
SME: no
https://ted.europa.eu/udl?uri=TED:NOTICE...XT:EN:HTML

3. Seaborne Freight (UK) Ltd
Headquarters: UK
Value: 13,820,252 GBP
Conclusion of contract: 22.12.2018
SME: yes
https://ted.europa.eu/udl?uri=TED:NOTICE...XT:EN:HTML


These three contracts fall under the EU directive about public procurement:

DIRECTIVE 2014/24/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 26 February 2014 on public procurement

Article 32
Use of the negotiated procedure without prior publication

1. In the specific cases and circumstances laid down in paragraphs 2 to 5, Member States may provide that contracting authorities may award public contracts by a negotiated procedure without prior publication.

2.   The negotiated procedure without prior publication may be used for public works contracts, public supply contracts and public service contracts in any of the following cases:

© in so far as is strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, the time limits for the open or restricted procedures or competitive procedures with negotiation cannot be complied with. The circumstances invoked to justify extreme urgency shall not in any event be attributable to the contracting authority.

https://eur-lex.europa.eu/legal-content/...32004L0018

If you want to come to your own conclusions, have a quick look at one of the three notices in the Official Journal (all three are very similar) and a quick look at the whole Article 32 in the Directive so that you have an impression for what kind of circumstances exception from public tenders applies.


General observations

* The rules of that horrible sinister non-transparent (according to the Brexiters) EU have yet again forced the nasty UK government to publish things which they would prefer to keep secret. (Another great reason for Brexit - it will be easier for the corrupt British klepto-elite to steal public money.)

* The Danish DFDS signed their contract in euros, whereas the French Britanny Ferries settled for brexis. I think that the Danes did the right thing - the EU27 too insist that all UK's financial obligations are done in euros. Being paid in brexis is rather risky and means an almost certain drop in the value of the contract vs the euro, in particular in the no-case outcome which is what these three contracts are about.

* Because DFDS has the contracts in euros (according to the data in the Official Journal), the quote in the British media that the UK government awarded "£107.7m" for the three contracts is not correct. Just saying. DFDS' 47.3 mio euros equal about 42.5 mio brexis (on 22 Dec 2018).

* According to the data in the Official Journal, the UK government concluded the contract with DFDS and Seaborne Freight on 22 December 2018 = on Saturday. Just saying.

* The UK government giving the contract to the dodgy non-seaborne Seaborne Freight is shameless theft of public money (revealed only due to the EU rules about transparency of public procurement). And the sheepishly obedient British subjects are just watching it all. Incredible.

* When converted to brexis, the values of the three contracts are:

46.6 mio brexis = 45% ... France (a company with ships)
42.5 mio brexis = 42% ... Denmark (a company with ships)
13.8 mio brexis = 13% ... UK (a start-up SME without ships running from a port which needs dredging)
-------------------------------------------
103.0 mio brexis ... total

So the UK government awarded 87% of the money to EU27 companies.  Big Grin  Brexit means giving UK money to the EU27. Where there was no public tender, so the UK government could have awarded the money to anyone (and it did). It surely seems that even if the UK claims to be a great maritime nation, UK companies are not capable of competing with the EU27 ones even under no-competition circumstances.


Breaching of EU competition rules with no public tenders?

In all three contracts, the UK government wrote that same explanation in this section about why it had no public tenders: 

Section IV: Procedure

IV.1) Description

IV.1.1) Type of procedure

Award of a contract without prior publication of a call for competition in the Official Journal of the European Union in the cases listed below
Extreme urgency brought about by events unforeseeable for the contracting authority and in accordance with the strict conditions stated in the directive

Explanation:

A situation of extreme urgency exists in the context of UK-EU roll-on-roll-off ferry capacity by virtue of the UK leaving the EU on 29.3.2019 and the prospect that this exit may be on a no-deal basis. This extreme urgency arises from a combination of events, and the anticipated response to those events of a range of entities, including:

1) The possibility of severe congestion at and around UK ports from 29.3.2019, caused by increased border checks by European Union Member States, and consequently a significant reduction in capacity at ports on the Short Straits. It is anticipated that this could, without further intervention to secure additional ferry capacity, cause delivery of critical goods to be delayed and cause significant wider disruption to the UK economy and to the road network in Kent;

2) The significant lead times that are required to source additional ferry capacity which require action to be taken several months in advance of the capacity being required to be delivered; and

(3) Unexpected and unforeseeable limitations on the extent to which the market has to date been able to respond to these circumstances by putting in place contingency plans to deal with this scenario.

It is clear that the UK government based its explanation on Article 32 of the Directive (see above). Where these specification from the preamble of the Directive are relevant too - and they demonstrate how very exceptional the circumstances need to be to justify avoidance of public tenders = no competition:

(50) In view of the detrimental effects on competitionnegotiated procedures without prior publication of a contract notice should be used only in very exceptional circumstances. This exception should be limited to cases where publication is either not possible, for reasons of extreme urgency brought about by events unforeseeable for and not attributable to the contracting authority, or where it is clear from the outset that publication would not trigger more competition or better procurement outcomes, not least because there is objectively only one economic operator that can perform the contract. This is the case for works of art, where the identity of the artist intrinsically determines the unique character and value of the art object itself. Exclusivity can also arise from other reasons, but only situations of objective exclusivity can justify the use of the negotiated procedure without publication, where the situation of exclusivity has not been created by the contracting authority itself with a view to the future procurement procedure.

Contracting authorities relying on this exception should provide reasons why there are no reasonable alternatives or substitutes such as using alternative distribution channels including outside the Member State of the contracting authority or considering functionally comparable works, supplies and services.

Where the situation of exclusivity is due to technical reasons, they should be rigorously defined and justified on a case-by-case basis. They could include, for instance, near technical impossibility for another economic operator to achieve the required performance or the necessity to use specific know-how, tools or means which only one economic operator has at its disposal. Technical reasons may also derive from specific interoperability requirements which must be fulfilled in order to ensure the functioning of the works, supplies or services to be procured.

Finally, a procurement procedure is not useful where supplies are purchased directly on a commodity market, including trading platforms for commodities such as agricultural products, raw materials and energy exchanges, where the regulated and supervised multilateral trading structure naturally guarantees market prices.

(80) ... Only in exceptional situations where extreme urgency brought about by events unforeseeable by the contracting authority concerned that are not attributable to that contracting authority makes it impossible to conduct a regular procedure even with shortened time limits, contracting authorities should, in so far as strictly necessary, have the possibility to award contracts by negotiated procedure without prior publication. This might be case where natural catastrophes require immediate action.

https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1546471707171&uri=CELEX:32014L0024


Well, UK government's explanation is just laughable. According to the EU competition rules, the UK government can only get away with no public tender due to "extreme urgency brought about by events unforeseeable by the contracting authority" IF, as the rules state, the UK government itself is NOT the one who caused this 'unforeseeable extreme urgency'. Hence in it explanation, the UK government is blaming everyone but itself, namely the 27 EU members (which are actually preparing for no-deal Brexit much better than the UK) and the companies which may not have contingency plans. Hey, Brexit on 29 March 2019 has nothing to do with the UK government which could not have foreseen this unexpected event, except that

(1) The UK government itself triggered Article 50 on 29 March 2017 thus setting the default Brexit date on 29 March 2019 - yet the UK government is now surprised about Brexit.

(2) For two years, PM May and other top UK politicians kept regurgitating 'no deal is better than a bad deal' and other no-deal slogans (e.g. 'we should just walk away') - yet the UK government is now surprised about the no-deal possibility.

(3) The withdrawal agreement does exist (as negotiated by both sides) and it contains the backstop version which was requested by the UK (and which means huge concessions from the EU27 - but now the UK wants to 'renegotiate' its own proposal for the backstop without having any new proposal) - the WA is waiting for the UK to ratify it, which would eliminate the 'unforeseeable' circumstances of no deal.

(4) The 27 EU members started preparing for no-deal Brexit many months ago - yet the UK government has only just figured out that some preparations are needed.

For example, the European Commission started publishing Brexit preparedness notices which in particular target the no-deal outcome already in January 2018 = one year ago. Here is a notice from January 2018 about changes to export-import licences:

NOTICE TO STAKEHOLDERS: WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES IN THE FIELD OF IMPORT/EXPORT LICENCES FOR CERTAIN GOODS (25 Jan 2018)
https://ec.europa.eu/info/sites/info/fil...ces_en.pdf

More about Brexit preparedness from the European Commission:
https://ec.europa.eu/info/brexit/brexit-preparedness_en

The EU27 have also started legislative procedures to prepare to possible export-import problems due to Brexit. Among EU27 members, Ireland will me most impacted because it is currently exporting to continental Europe mostly via transport across the UK plus the Channel Tunnel, so the Commission opened a public consultation about changes to the Ireland-continenal Europe transport corridor due to Brexit already on 28 June 2018

Realignment of the North Sea – Mediterranean Core Network Corridor - BREXIT preparedness
Summary
The United Kingdom is part of the North Sea – Mediterranean transport corridor. Subject to any transitional arrangement, as of the date of its withdrawal from the EU, the United Kingdom will no longer be part of the corridor. Therefore, there is a need to revise the alignment of the corridor in order to ensure a continuous connection between the section located in Ireland and the section in the Continental EU.
https://ec.europa.eu/info/law/better-reg...3440106_en

Several ferry companies (which do actually exist and operate and have ferries) were among stakeholders that provided feedback during the public consultation (check info at the above link).

Besides, in Ireland concrete changes to transport routes due to Brexit started already last spring. See for example:

SHIPPING GROUPS BOOST IRELAND-EU ROUTES AHEAD OF BREXIT (5 April 2018)
Shipping companies are ramping up direct freight services between Ireland and continental Europe as the country’s hauliers make plans to bypass British ports after Brexit.
https://www.ft.com/content/dbeecd9c-3754...31af407cc8

INVEST IN NON-GDA LANDAND SEA EXPORT ROUTES TO EUROPE IN RESPONSE TO BREXIT – IAE (20 February 2018)
Ireland needs to prioritise investment in land and sea routes serving south coast ports, to enable Irish exporters respond to Brexit, according to a report by the Irish Academy of Engineering (IAE).
The report, ‘Brexit: Implications for Transport Infrastructure Investment’, prioritises development of Ringaskiddy port and Galway-Limerick-Cork-Ringaskiddy motorway.==
http://www.engineersjournal.ie/2018/02/2...rexit-iae/

Oh, and from the Sun:

EUROPEAN SHIPPING COMPANIES PLOTTING TO BYPASS BRITAIN WHEN TRADING WITH IRELAND AFTER BREXIT (7 April 2018)
Currently most goods shipped between Ireland and the rest of Europe travel through the UK.
But businesses have been spooked by Brussels’repeated claims that there can be no friction-less trade with Britain after Brexit.
Luxembourg-based shipping company CLdN is introducing two “mega vessels” running from Zeebrugge and Rotterdam to Dublin.
A spokesman for the firm said: “In anticipation of Brexit, the shipping community was looking for alternative solutions.”
Irish Continental Group will boost its weekly capacity from 120 to 1,155 trucks between Dublin and the French port of Cherbourg this summer.
And Brittany ferries is also planning to open a brand new service between Cork and Santander in Spain later this month.
https://www.thesun.co.uk/news/5994027/eu...er-brexit/

Oh, and in Ireland a new huge ro-ro ferry was launched to cope with Brexit already in April 2018 = 8 months ago:

‘Brexit-busting’ ferry launched from Dublin Port
 (20 Apr 2018)
Hundreds attend christening of world’s largest short sea roll-on roll-off vessel
The world's largest short-sea ro-ro ship arrived in Dublin Port, the ship should allow Irish cargo bypass British ports with direct routes to Europe.
The absolutely enormous cargo ship that was christened by Leo Varadkar and other luminaries in Dublin Port on Friday morning is officially to be called Celine but over the course of a long and lavish ceremony marking its birth it was more commonly referred to by its shiny new nickname, Brexit Buster.
https://www.irishtimes.com/news/ireland/...-1.3468760

Besides, the European Commission has warned about the possible problems with customs controls in case of no deal in its official document in July 2018 = half a year ago and urged the members to prepare accordingly:

Communication of 19 July 2018: "Preparing for the withdrawal of the United Kingdom from the European Union on 30 March 2019"
Contingency measures would not necessarily involve legislative actions at EU level and could fall within the responsibility of Member States, depending on the area of competence. In the area of customs, for instance, there would be no need in principle to amend the Union Customs Code as it already includes rules on third countries; contingency measures for implementation at national level might be necessary to cope with the risk of long lines of vehicles waiting for customs procedures to be fulfilled. Within the legal framework of the Union Customs Code, contingency measures should be developed and implemented in a coordinated way...
Examples of legislative changes needed as a result of the United Kingdom’s withdrawal
* Proposal to amend the Regulation on the Connecting Europe Facility to adjust the alignment of the North Sea-Mediterranean corridor and design a new maritime route to link Ireland with the continental part of the corridor.
Member States share the competence to legislate with the European Union in many policy areas, and their national and regional authorities are in charge of implementing and enforcing the Union acquis. Adaptations to national rules and guidance for stakeholders will be needed, as well as significant investments in personnel and infrastructures (e.g. for customs, sanitary and phytosanitary controls at the borders, competent authorities in charge of specific procedures etc.). Regional authorities, especially those with legislative powers, but also local authorities should be involved in the preparations...
All stakeholders concerned should prepare for a situation where shipments of goods from and to the United Kingdom are subject to customs procedures and controls. National administrations have started preparing for this new situation, in particular by planning new recruitments...
https://eur-lex.europa.eu/legal-content/...6R%2801%29


Considering the above evidence, UK government's explanation that the looming export-import delays due to no-deal Brexit are 'unforeseen' hence urgent no-public-tender procedures were needed are beyond pathetic. So it is very likely that the UK government broke the EU competition rules with the three shipping contracts and will be fined for it.

There is also a logical problem with UK government's explanation - it claims that additional ferry capacity is needed AND delays in Kent due to additional customs procedures (on the EU27 side). I find these two claims contradictory. If there are customs delays, there will be LESS transport of goods between the UK and the EU27, so why are additional ferries needed? Surely the primary measure should be extended infrastructure for customs checks and hiring / training more customs official? Or does the UK government need additional ferries to 'park' some trucks at sea to make the queues of trucks on land a bit shorter?


Is one of the contractors a dodgy shell company?

Well, the UK government's contract with the shipless Seaborne Freight company surely looks very suspicious from the perspective of corruptive abuse of public money (on top of illegal no-public-tender procedure).


What next?

I strongly suspect that Vestager's team is already on the case on both points - (1) no public tenders (all three contracts) and (2) awarding a contract to a dodgy company. It will be interesting to see how it all develops. In particular because the issue is politically sensitive due to breximess in the UK - so when will Vestager announce the start of investigation to work around these political sensitivities?
(As I said before, Vestager is impressive and really should stay on as the competition Commissioner - but it is not very likely due to Danish internal political landscape).

If you had a look at the above documents, what is your opinion? Was it all illegal / breaching of EU competition rules or not?
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#3
Perhaps not entirely dodgy Brexit business but certainly dodgy UK business:

THE SPIDER’S WEB: BRITAIN’S SECOND EMPIRE
https://youtu.be/np_ylvc8Zj8

Documentary about tax evasion and money laundering. Strong motives for a certain corrupt elite to support Brexit.
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#4
Well written, Ajda, and on the spot. Yes, phony business regarding no tender and the hitherto unknown UK shipping company. 

Apparently the UK has got no respectable company no more which would or could compete for the contract. To circumvent the blame that only EU-27 companies were to be involved they pulled a white rabbit out of the hat. 

I despaired a little as the last two weeks were so eventless, just the quiet time of the year (the mutterings of Mr. Corbyn were only political white noise for the UK public). During the last two years I have become sort of a Brexit addict. But lo and behold, the new year arrives and the Brexit saga thankfully swings into full gear again.   Rolleyes
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#5
Music 
(03-01-19, 12:53 PM)Ajda Slovenia Wrote: [size=21.8208]The shipless shipping contract and awarding contracts without public tenders[/size]

Contracts were not put out to tender. The DfT said it was responding to a “situation of extreme urgency” brought about by “unforeseeable events”.
https://www.theguardian.com/politics/201...of-no-deal


These three contracts fall under the EU directive about public procurement:

DIRECTIVE 2014/24/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 26 February 2014 on public procurement

Article 32
Use of the negotiated procedure without prior publication

1. In the specific cases and circumstances laid down in paragraphs 2 to 5, Member States may provide that contracting authorities may award public contracts by a negotiated procedure without prior publication.

2.   The negotiated procedure without prior publication may be used for public works contracts, public supply contracts and public service contracts in any of the following cases:

© in so far as is strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, the time limits for the open or restricted procedures or competitive procedures with negotiation cannot be complied with. The circumstances invoked to justify extreme urgency shall not in any event be attributable to the contracting authority.

https://eur-lex.europa.eu/legal-content/...32004L0018

Well while I agree that - from an EU 27 perspective - these contracts should have been put out to tender I do see one problem: 

Article 32 para 2 © refers to 'events unforeseeable by the contracting authority'. In other words it depends not on what one would generally expect an authority of average competency to be able to foresee - it depends solely on what the authority in question was able to foresee. 

Given the level of 'competence' shown by the UK government to date it is quite possible that they were indeed unable to foresee the necessity. 

After all these ferry services are only needed due to the EU's intransigence with regard to customs issues and other regulatory 'details' and the UK could not possibly be expected to foresee that the EU would deem compliance with international or EU law more important than the phenomenal and totally undeserved opportunity to give the UK exactly what it wants.  

In fact judging by the comments in the media regarding renegotiations one must conclude that large parts of both the government and parliament still don't believe no-deal and the resulting 
ferry-necessities are an actual possibility.  Big Grin
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#6
(07-01-19, 08:20 PM)Moonfire Wrote: Well while I agree that - from an EU 27 perspective - these contracts should have been put out to tender I do see one problem: 

Article 32 para 2 © refers to 'events unforeseeable by the contracting authority'. In other words it depends not on what one would generally expect an authority of average competency to be able to foresee - it depends solely on what the authority in question was able to foresee. 

Given the level of 'competence' shown by the UK government to date it is quite possible that they were indeed unable to foresee the necessity. 

After all these ferry services are only needed due to the EU's intransigence with regard to customs issues and other regulatory 'details' and the UK could not possibly be expected to foresee that the EU would deem compliance with international or EU law more important than the phenomenal and totally undeserved opportunity to give the UK exactly what it wants.  

In fact judging by the comments in the media regarding renegotiations one must conclude that large parts of both the government and parliament still don't believe no-deal and the resulting 
ferry-necessities are an actual possibility.  Big Grin

If I follow your argument about what "the contracting authority in question is able to foresee" I think I could expand upon it to the extent that the next time I'm caught speeding at 200kph I'll claim the legal defence that "I cannot be guilty because I'm too stupid".
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#7
The entirely predictable cannot be unforeseeable.

Bu the formidable Joanna Cherry QC SNP MP is already on the case



"I’ve called on UK Govt to release their legal advice on #SeaborneFreight #ferrycontract

They say they proceeded under Regulation 32 of Public Contracts Regs but I doubt there was the requisite urgency because #NoDeal #Brexit is not an “unforeseeable event”"

https://twitter.com/joannaccherry/status...4253355010
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#8
(08-01-19, 01:29 PM)Ramier Wrote: The entirely predictable cannot be unforeseeable.

Bu the formidable Joanna Cherry QC SNP MP is already on the case



"I’ve called on UK Govt to release their legal advice on #SeaborneFreight #ferrycontract

They say they proceeded under Regulation 32 of Public Contracts Regs but I doubt there was the requisite urgency because #NoDeal #Brexit is not an “unforeseeable event”"

https://twitter.com/joannaccherry/status...4253355010

Somebody stop that woman!!!

She's blowing the UK's entire legal defense out of the water.  Cry Dodgy

How dare she claim it is not an unforeseeable event - when every other MP is doing his/her level best to keep their heads in the sand and see absolutely nothing...
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#9
(07-01-19, 09:57 PM)Blackbeard's Ghost Wrote: If I follow your argument about what "the contracting authority in question is able to foresee" I think I could expand upon it to the extent that the next time I'm caught speeding at 200kph I'll claim the legal defence that "I cannot be guilty because I'm too stupid".

I'm sure that approach will work just fine ... provided you only try it in the UK. Big Grin Big Grin
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#10
Update on Shipless Pizza Ferries:

Chris Grayling’s defence of the Seaborne Freight contract was the most risible thing I have ever heard said in the House of Commons (8 Jan 2019)
It takes a great amount of political skill to defend the transparently indefensible, and Grayling has absolutely none
The satirist concedes defeat when he has to deploy what is known in the news business as a “straight intro”, but once again Chris Grayling has got the better of us so, with a real sense of sadness, here goes...
https://www.independent.co.uk/voices/chr...18121.html
Big Grin
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