France is set to make Britain's blue Brexit passports as De La Rue abandons its legal challenge

Passport maker De La Rue backs down from its legal challenge over new contract.
The UK firm had threatened legal proceedings against the government following the decision to manufacture new passports outside the UK.
A £490 million contract to make the UK's new blue passports has been awarded to Franco-Dutch firm Gemalto.

LONDON — British passport maker De La Rue has dropped plans for a legal challenge against the government over its decision to have the UK's new blue passports manufactured outside the UK.

"Further to the announcement on 22 March 2018 and having considered all options, the Group today announces it will not appeal against HMPO's decision on the UK passport tender," the company said in a statement to the stock market.

In March, the government announced the decision to award a £490 million contract to French security giant Gemalto. At the time, the Home Office stated that changing contractors would save the taxpayer £120 million.

De La Rue, however, objected and threatened to pursue legal action against the government.

The company's CEO Martin Sutherland even invited Theresa May to "come to my factory and explain to my dedicated workforce why they think this is a sensible decision to offshore the manufacture of a British icon."

Passports issued after the United Kingdom leaves the European Union will be blue and gold rather than the current burgundy colour. British passports are currently manufactured by De La Rue, which also produces all English banknotes, including the new polymer £5 and £10.

The decision to award the contract to a French firm was the result of a "blind tender" process under which ministers were not allowed to see which company had submitted each bid. Strict EU rules on procurement meant the government had to open the process to all European firms.

Touted by the Home Office as a symbol of Britain's post-Brexit independence, the decision to manufacture passports abroad was met with outrage by pro-Brexit MPs, the Labour party, and trade unions.

Eloise Todd, from the pro-remain campaign group Best for Britain, previously said: "The new pro-Brexit blue passports were supposed to be a statement of intent and now we find out they are to be made by the French or the Dutch. The irony is unreal."

Alongside dropping its legal challenge to the government's decision, De La Rue also announced a profit warning, saying that operating profit is expected to be at the lower end of recent analyst forecasts. The company said this reflects "the write off of the £4 million bid costs related to the UK passport tender and delays in the shipment of certain contracts in the last week of the period."

De La Rue shares opened down 6%.