Theresa May continues to have full confidence in Transport Secretary Chris Grayling, the Prime Minister’s official spokesman has said.

The display of support came amid calls for Mr Grayling’s resignation from MPs across the Commons after a controversial no-deal Brexit ferry contract awarded to a firm with no ships was cancelled.

The Transport Secretary’s decision to award Seaborne Freight a contract worth £13.8 million to run services between Ramsgate and Ostend had attracted widespread criticism.

The Department for Transport (DfT) said it had decided to terminate the contract after Irish company Arklow Shipping, which had backed Seaborne Freight, stepped away from the deal.

But MPs – including pro-EU Tories – said Mr Grayling should take responsibility for the situation and resign.

Anna Soubry
Anna Soubry (Jeff Overs/BBC/PA)

Conservative former business minister Anna Soubry said Mr Grayling “should be quietly considering his position”.

“He has no grip on the very serious nature of his job,” she told The Observer. “The Prime Minister should also be considering whether there is not someone else who could do the job better.”

Labour said Mr Grayling “has to go”, with Jeremy Corbyn describing the situation as “completely ludicrous”.

Jeremy Corbyn
Jeremy Corbyn (Aaron Chown/PA)

Asked whether Mr Grayling had the PM’s confidence, Mrs May’s official spokesman told a regular Westminster media briefing: “Yes.”

The spokesman added: “In relation to Seaborne, we were clear that it would need to meet specific milestones in order to fulfil its contractual obligations.

“When it became clear that it would not reach these requirements without the continued support of Arklow Shipping, the Transport Secretary decided to terminate the contract.

“It is obviously ultimately important that we protect taxpayers’ money.”

The PM’s spokesman said he understood that no taxpayers’ money had yet been spent on the contract.

He added: “We are already in advanced talks with a number of companies to secure additional freight capacity, including through the port of Ramsgate, in the event of no deal.

“There is no threat to contracts with DFDS or Brittany Ferries, who will be providing around 90% of additional capacity in the event of no deal.”

Mr Grayling last month defended the Seaborne Freight contract, insisting it was “not a risk”.

It was one of three firms awarded contracts totalling £108 million in late December to lay on additional crossings to ease the pressure on Dover when Britain leaves the EU, despite having never run a Channel service.

The department said it had been Arklow Shipping’s backing that gave it confidence in the viability of the deal, and that it stands by the robust due diligence carried out on Seaborne Freight.

It added that no taxpayer money had been transferred to the company.

Speaking in the Commons, shadow transport secretary Andy McDonald said: “What began as a debacle has now descended into a Whitehall farce. This minister is rewriting the textbook for ministerial incompetence in office.”

Andy McDonald
Andy McDonald (Peter Byrne/PA)

He said Mr Grayling ignored warnings from MPs and industry, also claiming the Department for Transport “took shortcuts” in the procurement process with Seaborne Freight.

Mr McDonald added: “Isn’t it the case that this Transport Secretary’s approach to transport and wider Brexit contingency planning is off the Richter scale?

“And for the good of the nation, and for the sake of some semblance being restored to this shambolic Government, shouldn’t he now do the decent thing and go?”

Mr Grayling replied to his Labour counterpart: “I have to say that he brings a new meaning to the words utter hogwash.

“He clearly wasn’t listening when I said we’ve spent no money on this contract.”

He defended his department’s no-deal Brexit planning, adding that the Seaborne Freight contract was “assured jointly” by DfT and Treasury officials.

Mr Grayling said the two alternative North Sea options to Seaborne Freight are longer routes which would be “more expensive” but they have been “in reserve all along”.