Ministers under fire over Raytheon e-borders legal bill

Ministers are facing calls to reveal the cost of a four-year legal battle with the US defence giant they sacked from the aborted e-borders project.

Raytheon was hired by the previous Labour government to set up an electronic system for counting all travellers in and out of the UK.

It was fired by the coalition in 2010 over alleged poor performance and is suing the government for £500m.

MPs are demanding to know why the case has not been settled.

Instead of fighting it in open court, both parties agreed to go to arbitration, meaning hearings were held behind closed doors in a private court.

The outcome has yet to be revealed by the arbitration panel, even though hearings are thought to have ended a year ago.

The Home Office said in June last year it expected a verdict "soon". Raytheon said in April this year it would probably come in the first half of 2014.

'Matter of urgency'

The cost to British taxpayers is likely to run into hundreds of millions of pounds but MPs fear the full details of the dispute will never be revealed.

Conservative MP Mark Reckless, speaking in a Westminster Hall debate on migration statistics on Thursday, asked whether arbitration in private was "really appropriate in terms of public contracts, let alone ones for £750m".

Tony Blair launched the e-borders programme to improve security

Keith Vaz, chairman of the home affairs select committee, said: "This is about the public knowing. It's public money that's gone into this. We also need to know why it has taken four years.

"We need to know what went wrong so we don't do it again. For all we know, if we don't know what went wrong, this could be happening again and again and it is vital that we get to the problem of e-borders."

E-borders was meant to collate and store on a single database information about all passengers who enter and leave the UK to improve security and identify suspected terrorists and criminals.

The coalition terminated the contract with Raytheon in May 2010 saying it had no confidence in the supplier to address problems with the system.

Raytheon said the government's targets and objectives changed repeatedly through the course of the programme, which covered both Labour and coalition administrations.

At the time, the Home Office said Raytheon would be replaced by a new e-borders supplier "as a matter of urgency".

Exit checks

But in March this year, ministers formally killed off the e-borders name, moving its functions into the Borders System Programme.

Immigration minister James Brokenshire said exit checks would be in place by April 2015

This relies on the Home Office Warnings Index, first introduced in 1995, and Semaphore, a pilot system developed by IBM in 2004 that was meant to have been replaced by the Raytheon-led Trusted Borders consortium.

Immigration Minister James Brokenshire told MPs that the aim of counting all passengers in and out of the UK to provide more accurate immigration statistics - one of the original objectives of the e-borders system - had been dropped.

But he said the Office for National Statistics was experimenting with using data from Semaphore to improve the accuracy of its migration figures.

The figures are currently based on a random survey of travellers, a process that has been heavily criticised by the Public Administration Committee for its wide margin of error.

He said the Home Office was still on track to introduce exit checks at international rail, sea and air terminals by April 2015.

'Huge mistake'

And the electronic monitoring system it has been using since 2010 was fulfilling the original mission of e-borders "to target and monitor those seeking to travel to and from the UK who may harm this country's interests".

"It is an extremely valuable tool and, indeed, since 2010 our borders systems have issued alerts resulting in 13,300 arrests, including 60 for murder, 59 for kidnap and 167 for rape," he told MPs.

Raytheon is a major manufacturer of guided missiles

Keith Vaz said the Labour government he had been a part of had made a "huge mistake" by signing a £750m deal with Raytheon in the first place and the coalition had been right to cancel it.

He said the US multinational, which manufactures missile defence systems and made the computer guidance system for the Apollo 11 moon shot, had been hired because it had delivered similar border security systems in other parts of the world.

But he said the ministers in charge - which did not include himself - had mishandled the contract.

"When they signed the agreement with Raytheon, they did not put benchmarks in that agreement, as a result of that Raytheon was able to turn round and say 'well, we were not told what to do.'

"This is the subject of an arbitration that has been going on, I think, for four years. It could well be the longest arbitration in history. And every time we ask for information, nobody wants to tell the select committee what is going on."

Labour's shadow immigration minister David Hanson backed calls for the full details of the case to be published so it could be held up to public scrutiny.

Mr Brokenshire neglected to address the Raytheon issue in the Westminster Hall debate - but was urged to "take notice" of MPs' concerns by Bernard Jenkin, the Conservative chairman of the Public Administration Committee.

Raytheon executives were quizzed about the e-borders legal battle in April, in a conference call with financial journalists.

Senior vice president and chief financial officer Dave Wajsgras said: "We expect the decision from the panel sometime in the first half of 2014. That's our expectations. But it's behind closed doors and we'll see, you know, when we get a decision. That's all we have."