Northern Ireland (Regional Rates and Energy) (No. 2) Bill - Second Reading

Part of the debate – in the House of Lords at 8:51 pm on 12th March 2019.

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Photo of Lord Duncan of Springbank Lord Duncan of Springbank Parliamentary Under-Secretary (Northern Ireland Office), The Parliamentary Under-Secretary of State for Scotland 8:51 pm, 12th March 2019

The noble Lord raises a question to which I do not have the answer, I am afraid; I do not have it to hand. That is why if we are in a position at a date soon hereafter to sit down and explore some of these issues in an effort to move them forward as best we can, that would not be a bad initiative. Let us revisit that. I am not trying to park it in any way.

I hope noble Lords will forgive me for being a little disorganised: I seem to have an awful lot of papers spread in front of me. I will try to take the points raised by each noble Lord in turn. The noble Lord, Lord Bruce, asked about the RHI situation and how it compares with other parts of the United Kingdom. We are broadly agreed that the scheme in Northern Ireland was not well constructed; we can probably all accept that. The unfolding inquiry into that will set out clearly exactly what has gone on. In response to the question from the noble Lord, Lord Alderdice, yes, we can have that debate should your Lordships desire to have one at the stage when a report emerges; I am happy to say that.

The scheme set out a 12% return; that was at the heart of what was meant to be achieved by the initiative. It is indeed 12% in Great Britain itself; the scheme that we anticipate in the Republic would be 8%. One of the reasons that we end up with different figures is that there are different ingredients going in. For example, the scheme in Great Britain is a 20-year scheme, whereas that anticipated in Northern Ireland is a 15-year scheme. Some of the capital costs involved in the scheme depend on when the emergent technology became more cheaply available. The scheme in Northern Ireland that commenced in earnest in 2015—although it opened earlier—contrasts quite clearly with the scheme which opened in Great Britain in 2012, during which there were significant cost reductions.

The scheme construction also differs significantly between Great Britain and Northern Ireland, not least the element of “tiering” which exists in British schemes but not in Northern Ireland and the digressive component. I will not go into greater detail on that; we will have an opportunity to do so next Tuesday evening. In the intervening period, I recommend that any of your Lordships who are minded to find further details meet my officials so that those who have serious concerns can have them addressed.

To put this into context, the 12% return that we talk of is the needful part within the state aid rules. The scheme in Northern Ireland as it initially emerged had a return rate of 55%—noble Lords will see the contrast between 55% and 12%. It is not difficult to see how those individuals, who, through clear guidance, accepted a scheme with its various component parts and invested on that basis, now find themselves in the invidious position of all their calculations being blatantly wrong, based as they were on incorrect information. It is important for me to stress that those who were responsible for the wrongness of that scheme, I do not doubt, will emerge from Patrick Coghlin’s report; we will have an opportunity to discuss that further.

I stress that those within the Northern Ireland Civil Service undertaking the work on the current proposals are not the same people. This has been conducted in a very different fashion, based on significant investment in looking at the actual data rather than forecast data. Rather than trying to anticipate what the figures will be, the report itself and the consultants who examined it looked at the actual data. Again, it might be worth getting into the detail of that at an opportunity that will be provided by my officials and by others, because noble Lords will be surprised how quickly this moves from a high-level discussion into extraordinary technicalities.

I have written at the top of this page: “still a Minister”. I think that must reflect on what was going on down the Corridor. I will check when I leave, obviously.