Renewable Heat Incentive Scheme (Amendment) Regulations (Northern Ireland) 2017

Executive Committee Business – in the Northern Ireland Assembly at 4:15 pm on 16th January 2017.

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Photo of Simon Hamilton Simon Hamilton DUP 4:15 pm, 16th January 2017

I beg to move

That the draft Renewable Heat Incentive Scheme (Amendment) Regulations (Northern Ireland) 2017 be approved.

This statutory rule is being made under powers contained in the Energy Act 2011, which prescribes that these regulations be laid in draft form for approval by affirmative resolution of the Assembly. I am introducing the draft regulations as the first stage of a comprehensive plan to address the fundamental flaws in the design of the non-domestic renewable heat incentive (RHI) scheme and to eliminate the abuse of the scheme, which has done so much financial and reputational damage.

I will start by thanking the Chairperson and members of the Business Committee for sitting at short notice at 5.30 pm on Friday to consider my request to have the draft regulations considered today. I also express my regret that the urgency of the situation did not permit me to provide the draft regulations to the Economy Committee for the normal scrutiny process. I am grateful to the Committee for accommodating a briefing session this morning.

This is perhaps an opportune moment to seek to address as best I can the points raised by Mr Nesbitt. He is asking for a delay for seven days. As I stand here, there is no certainty that the Assembly will be here in seven days. He suggested that, if I asked for it, the Secretary of State might do it. Oh, that I had such power. There therefore may not be the opportunity to bring in the much-needed cost controls that are inherent in the legislation. Even a delay runs the risk of not having in place the relevant administrative changes that are required and, indeed, the very important state-aid approval that will need to be in place for the commencement of this at the start of the next financial year.

I am not going to spend too long on the very regrettable history of the scheme, which is still being examined by the Public Accounts Committee and which should be examined fully by an independent inquiry.

Photo of Simon Hamilton Simon Hamilton DUP

No I will not give way.

Let me continue. As the Assembly knows, the renewable heat incentive scheme was introduced in November 2012 with the aim of increasing the uptake of renewable heat to 10% by 2020. The renewable energy directive 2009 sets out the following:

"It will be incumbent upon Member States to make significant improvements in energy efficiency ... to achieve their targets for energy from renewable sources".

The scheme sought to compensate investors for the additional cost of renewable heat compared with traditional fossil fuel. Following extensive consultation and consideration of expert advice, a set of tariffs was introduced with the aim of providing a subsidy to scheme participants that would appropriately compensate them for the additional costs of renewable heat compared with traditional fossil fuels.

However, as Members now know, the tariff that was set for what would become the most commonly used boilers — small to medium biomass boilers — was at a level higher than the market price of the relevant fuel, which is mainly wood pellets. There was also an absence of a tiered tariff that would have restricted the number of hours for which the higher tariff could be paid.

These serious mistakes combined to create a perverse incentive to overuse the scheme and left it far too open to abuse. This led to a significant budgetary pressure, and, then, when steps were taken to amend tariffs, a major spike in applications occurred, which left us with no option but to suspend the scheme completely, as approved by the Assembly in February of last year. As a result, even participants who were using the scheme legitimately found themselves being compensated for renewable energy usage to a level far beyond the original intentions of the scheme. Furthermore, it did not provide incentives for the beneficiaries to promote the efficient generation of heat, and much of that has been played out in the media recently, with much understandable public concern.

Although uptake for the scheme was initially low, application numbers increased rapidly from the start of 2015. This increase led to budgetary pressures and led to the introduction of tiered tariffs and a cap, in November 2015, through amending regulations. These tariffs apply to installations accredited after 18 November 2015, but, unfortunately, an upsurge in applications in the three months immediately preceding the introduction of the regulations meant that the annually managed expenditure budget for the scheme would be exceeded and the cost of future payments would become a burden on the Executive's departmental expenditure limit (DEL) budget. As a result, a second amendment to the regulations was made in February 2016. This, in effect, closed both the non-domestic and domestic schemes to new applicants.

In his report on my Department's resource accounts in June 2016, the Comptroller and Auditor General estimated the total 20-year costs of the scheme, if nothing is done, to be £1·15 billion. This is far in excess of the £660 million that should be available as the expected 3% Barnett share of the allocation for the GB scheme.

The proposals today are the first steps towards reducing the burden on the Northern Ireland Budget of an estimated £490 million. I am determined to take steps that will effectively reduce the overspend in future years to zero. This is not the occasion or place to rehearse or come to a conclusion on the whys and wherefores of what went wrong. That will be the work of the Public Accounts Committee (PAC) and an independent inquiry.

My immediate priority is to bear down on the costs of the scheme for the 2017-18 financial year. The costs for that year are projected to be around £50 million. Against these costs, an annually managed expenditure budget of around £22 million is projected to be available. If no action is taken, that will give rise to a shortfall of £28 million in 2017-18, which will have a significant impact on the affordability of other priorities. That would be simply unacceptable.

Under my direction, Department for the Economy officials have been working for some considerable time on a range of cost control options. Last week a business case was submitted to the Department of Finance, and I would like to thank the Minister, Máirtín Ó Muilleoir, for asking his officials to give priority to the scrutiny of that business case and for approaching the work with their usual professionalism and objectivity.

The draft regulations before the Assembly today are designed to give effect to the option which has been demonstrated, through that business-case process, to offer the best way ahead at this time. This will bring payments for small and medium biomass boilers accredited before 18 November 2015 into line with those accredited on or after that date. Future payments to the owners of small and medium biomass boilers accredited before 18 November 2015 will be based on the tiered tariffs set out in the draft regulations.

The tariff will be 6·5p per kilowatt-hour (kWh) for the first 1,314 hours each year, after which the tariff will drop to 1·5p. There will also be an annual cap on the number of hours eligible for payment of 400,000 kWh, which was adopted in the November 2015 regulations as the appropriate ceiling for any of the main business models supported by the scheme. This annual cap is also consistent with the November 2015 regulations for installations accredited since that date. As well as placing a limit on the high tariff, which was the main perverse incentive in the scheme, these changes will promote behavioural changes, as the tiering will encourage greater attention to the efficient use of heat. The business case makes a prudent projection of some cost savings from that effect.

While these changes will virtually eliminate the shortfall in the 2017-18 budget, they will not eliminate it totally. Our modelling shows that there will still be a comparatively small deficit of around £2 million. We anticipate that stronger enforcement will further reduce the cost of the RHI scheme to the Northern Ireland Budget. The new tariffs and cap will ensure that owners of small and medium biomass boilers will receive a rate of return on their original investment within the range agreed by the European Commission when the scheme secured state aid approval. That would move the scheme back towards its original policy intentions, as expressed publicly at the outset of the scheme.

The proposal today will tackle the perverse incentive to continue to produce heat beyond the amount truly needed simply in order to increase payments. From the outset, the original regulations made it ineligible to generate heat for the sake of securing payments. We can and will improve enforcement to address that abuse, but this measure will cut off immediately the most blatant, perverse incentive to use heat for financial gain.

I hope that Members will know that one of my first acts in office as Minister for the Economy was to commission an investigation of accusations of fraud and abuse in the scheme. That investigation and the continuing audit process carried out by Ofgem has already seen the suspension of payments to 33 installations from the scheme. The PwC report on this work was shared with the PAC in November.

PwC undertook a targeted programme of unannounced site inspections to address the allegations of abuse of the scheme received in January 2016. Sites to be inspected were selected using some key potential risk factors. These included the value of the projected support payments, the date of application, the presence of multiple small boilers and high utilisation. There were clearly more concerns about the applications submitted before the introduction of tiered tariffs in November 2015 than those subject to the tiered tariff. PwC also looked for cases where there was evidence of significant increases in heat output generation or usage over and beyond what was expected.

In phase 2 of the work, the sample targeted the top 20 sites by projected payments, non-poultry farms with projected payments of over £1 million, and three sites chosen based on particular observations drawn from a review of application data. Given this targeted selection of sites for inspection, it is not valid to extrapolate the findings to the total range of installations under RHI. Fully eligible small and efficient installations will be under-represented.

It is important that we do not rush to a judgement or tar all RHI installations with the same brush. Many are valid and wholly legitimate and are delivering the original intention behind the policy. However, the PwC report confirmed the very serious weaknesses in the scheme and identified the weaknesses in the design, implementation and oversight of the scheme. It is of great concern that most of the anonymous allegations were confirmed as true.

Since receipt of the report, the Department for the Economy and Ofgem have been working to ensure improved monitoring and enforcement, reflecting the very significant insight and analysis presented in the PwC report.

The change in tariffs under these regulations will be accompanied by new action on inspection, audit and enforcement. It is absolutely imperative that we continue to crack down on any abuse of the scheme. Work by my officials is advancing on going to tender for 100% site inspections. This major project will take a little time to procure as it will have a value above the threshold where EU-wide tendering is required. However, once in place, we will have a new and much stronger process that will challenge abuse and take enforcement action against any fraud that is identified, including clawback of any payments that can be proven to have been illegitimate.

I am also well aware of concerns about potential fraud and abuse in respect of other aspects of renewable energy in Northern Ireland. While initial investigations have not revealed any problems, I know that people inside and outside the Assembly will want to have confidence that the problems that occurred with the RHI scheme are not present in other renewable energy schemes. To that end, I have tasked Department for the Economy officials to produce a risk assessment and audit plan to ensure that all potential vulnerabilities are identified and that proportionate action is planned and executed urgently to ensure that public confidence in the system can be restored. In the meantime, the Department for the Economy is working with Ofgem to ensure that the existing arrangements for inspection, fraud prevention and enforcement are applied as rigorously as possible.

I also wish to signal my intention to begin work immediately on establishing a new strategic energy team in the Department for the Economy. This will bring together experts from across the public and private sectors to seriously strengthen the quality of the strategic energy advice that the Minister receives, as well as assisting to progress the overall departmental energy agenda.

The changes in the draft regulations before the House today are subject to notification to the European Commission under the state aid regulations. Subject to the approval of the Assembly, I will initiate the process of notification as soon as possible, and my officials will work with the Commission to help progress the necessary approval process. The commencement clause in the draft regulations acknowledges that that process is a necessary step.

I referred earlier to the introduction of the draft regulations being the first step of a process to restore the original policy objectives of the scheme and bring costs under control. Members will note that the draft regulations contain a sunset clause and that they will cease to have effect on 31 March 2018. That is to enable further detailed consideration to be given to future options for the operation of the scheme to ensure that the best available permanent way forward is secured. It is intended that such options will be subject to the normal legislative process, with public consultation and scrutiny by the Committee for the Economy. Precise process will depend on the policy approach adopted when fuller analysis has been completed. At a minimum, businesses benefiting from the RHI and other affected parties will be consulted, but, clearly, the more significant the change, the greater the case for fuller consultation. A significant advantage of taking the first step is to limit the flow of funds so that we secure time for that fuller consideration of the issues and to develop a longer-term solution. It will be necessary to complete the process in time for further revised regulations to be adopted well before 1 April 2018.

Before I conclude, I want to address some obvious questions that Members will have about the legalities of the approach that I am introducing today. Legislation has the power to give rights to individuals or, where it is reasonable, to restrict those rights. It is our responsibility as legislators to behave reasonably and respect the rights and legitimate expectations of the beneficiaries of the scheme. We recognise that the regulations may be subject to challenge on two main possible grounds. First, it could be argued that the scheme gave recipients a legitimate expectation that the original tariff would be kept in place. However, the proposed approach gives beneficiaries of the scheme payments for the next financial year that align with the levels that they were led to expect at the outset of the scheme. I do not see how it can be reasonably argued that anyone has a legitimate expectation of rates of return that are far in excess of the returns announced in 2012. As we are making a change with effect for only one year, we can and will make any necessary reasonable corrections when a long-term solution is developed for implementation from 1 April 2018. We will consult and listen to the views of boiler owners and other affected parties as we do so.

Photo of Simon Hamilton Simon Hamilton DUP

I will not.

Secondly, there could be a challenge based on the right to property. The European Convention on Human Rights protects the right to property as set out in article 1 of protocol 1 to the convention. The protocol makes it clear that the right must be balanced against the public interest. It is manifestly clear that action to reduce the loss of funds whilst still providing the expected level of return to beneficiaries is a much better balance between public and private interests than allowing the excess flow of funds to continue unchecked. The issue here also concerns future income, not established property. I am advised that the courts will show less concern for the possible right to future income. In short, having taken and considered the very clear legal advice available to me, I believe that there is a very robust defence against anyone who wants to assert that the very generous original tariff and the accompanying risks of abuse and overspend should be continued.

While the original policy intentions of the scheme may have been laudable, it has been blighted by significant failings in its design, oversight and control. There have been many allegations of potential abuse, which casts a shadow over legitimate users of renewable heat installations. I recognise that some legitimate users will see a substantial reduction in their payments, but that reflects the fact that the scheme was much more generous than it was originally intended to be. I can assure the Assembly that allegations of abuse will be thoroughly and vigorously investigated. Where abuse is proven, payments will be stopped and steps will be taken to claw back payments already made. These are, however, steps that will continue to be taken forward alongside the immediate priority of bringing costs for 2017-18 under control. I commend the regulations to the House.

Photo of Steve Aiken Steve Aiken UUP

I rise to respond to the Minister for the Economy's proposed statutory rule. First, I would like to state that today, with me acting as Chairman, the Committee for the Economy looked at the regulations but decided to note them because of the lack of information that had been presented to it. However, I welcome the attendance of the Minister and the permanent secretary at the meeting this morning.

The legislation is aimed at reducing the considerable burden created by the ex-First Minister and the Minister's Department on the Northern Ireland taxpayer. Just to reiterate, that burden has cost £85,000 a day today and every day since its institution. It is also noteworthy that, despite the ex-First Minister being made aware of the failings of the scheme in 2014 and the Departments that she had held responsibility for having singularly failed to taper, cap or in any way amend this potential £0·6 billion maladministration, only now, in this last available afternoon — "Stand fast" any opportunity to examine this into next week — has any serious attempt been made to extricate us all from this debacle, a debacle for which responsibility lies wholly with her and her party.

The question of proper accountability and responsibility lies wholly with the properly constituted, time-bounded public inquiry under the Inquiries Act. That is not today's subject. Rather, we are discussing the fast-track — I hate to use the word, but it is appropriate — sticking plaster SR that the Minister has brought to the Assembly this afternoon.

Regardless of the views that might be expressed today, it is clear that an attempt must be made to resolve the financial and reputational implications of the RHI scheme, but only — I mean "only" — if the scheme proposed has any chance of success. The Minister has set forth his proposals, but, as we are all, unfortunately, aware, he, his Department and the ex-First Minister have demonstrated time and time again that the Departments are not fit for purpose when it comes to the overspends on the social investment fund (SIF) or RHI, never mind the detail or the jot and tittle. The ability of Ministers and SpAds to budget or even to read a balance sheet would be of considerable use.

At this point, I ask the Minister to make a categorical apology to the previous Chair of the Enterprise, Trade and Investment Committee, Patsy McGlone, and to the members of that Committee who have been very unfairly maligned by him, the ex-First Minister and members of his party who implied that the previous Committee did not effectively scrutinise the original Bill. Some Members and Ministers may consider that a party political point, but I categorically assure him that it is not. It is about the effective scrutiny of legislation, a scrutiny that we cannot carry out if we have insufficient information. The Minister talks of lessons learned, but, in reality, we should talk about lessons identified because, clearly, nothing has been learned.

Returning to the specifics, I say, as Acting Chair of the Economy Committee, that, after the Sinn Féin representatives disgracefully absented themselves from the proper holding of Ministers to account, we are in a position today in which we need to be able to discuss the significant issues. No matter how belatedly, I was able to discuss some of the RHI issues with the Minister on Saturday, for which I thank him. Along with the permanent secretary, I was also able to talk to Mr Michael Doran, who represents RHANI. As we have heard from the Minister, it would be useful for Members to listen to some of the opposing views, as represented by Mr Doran.

RHANI strongly opposes the proposed legislation and believes that an effective audit followed by rigorous implementation of the rules would be a better approach. It clearly believes, on the basis of precedent and senior legal counsel's opinion, that it has a strong case in law and, on implementation of the regulations, will seek an urgent judicial review. RHANI is grateful to the Minister and the Department that, after it threatened an injunction against the Department, the Department decided on Friday not to publish the names of the recipients. Looking forward, RHANI believes that preventing the construction of two planned 800-megawatt CHP plants, which look to somewhere over £160 million in potential payments, would make a considerable difference to the overall bill.

RHANI also believes that the economic impact on small and medium businesses, especially those in the agribusiness sector, will be that they face bankruptcy, having, in many cases, taken out loans averaging around £0·5 million without adequate compensation, especially as those companies sought the loans from banks at the behest of Departments, which emphasised time and again Arlene Foster's commitment to the scheme in letters that she had written to the banks. Today, as Acting Chair, I also informed the Economy Committee that, if we had had sufficient time, I would have liked to call Michael Doran to the Committee so that we could have some more information.

In Committee today, it was clear that the Minister had no clearly agreed business plan. I was going to call for the Finance Minister to outline today his views on the business plan going forward, and maybe he will give us some of his perspectives later in the debate. I do not believe that we have an agreed business plan, and that is a considerable concern.

Unfortunately, and again without any detail from the Minister for the Economy, we have no baseline information. I know he made considerable reference to facts and figures recently that obviously may have come from the draft PwC report. We have not been able to see the draft PwC report, so we cannot see any effective baseline or make any judgement on some of the decisions he is going to make today.

In normal circumstances, some leeway would be given to an effective Minister and Department. However, I think we all agree that, clearly, neither the Department nor the Minister have proved to be fit for purpose, and the laggardly way in which they have acted throughout this mandate, with freedom of information requests unanswered, 120-odd days to answer questions and the almost dearth of any papers, information or discussion with the Department or Minister, means that, through the Minister's action, there is only a very limited amount of goodwill or confidence in his statements.

That said, in the midst of the crisis, the Minister and the permanent secretary appeared before the Committee today. For that, despite all that has gone before, we are grateful. It was interesting that, when pressed, the Minister made clear, as did the permanent secretary, that he was confident of having a business plan approved and they were both confident in their legal advice.

I then asked, and I will now ask again, bearing in mind the considerable public anger at their collective failure, whether they would take full responsibility for this SR and whether, if it was successfully legally challenged and the impact would lead to even more loss to the public purse and our reputation, they would both, forthwith, stand down from public office. The response in the Committee is widely available on social media and in Hansard, but again I say to the Minister that, having given the Assembly and the people of Northern Ireland his assurance that the scheme is fiscally and legally sound, in the event of a successful legal challenge, he should tender his resignation from public office immediately. I think any further obfuscation will tell all the people of Northern Ireland just how much confidence the Minister has in his own decision-making process.

Other notes of interest during the Committee meeting today were the several points that are worthy of wider dissemination before the facts around the RHI scheme are submerged under the combined DUP disinformation campaign and further exacerbated by the propaganda of Sinn Féin. We welcome an assurance from the Minister that an independent audit of the Northern Ireland renewable schemes will be carried out, and we think, quite rightly, that this is supposed to be clean energy scheme — a scheme that is clean not only in the sense of renewable energy but clean from corruption, malfeasance and incompetence. We look forward to an early statement and an early independent audit of the state of the Northern Ireland renewables industry because I think all of us will require some confidence going forward that this is, in fact, fit for purpose.

The Minister also stated — I thank you for restating it today — that the scheme was badly flawed from the beginning. Whilst during the Committee meeting he was at pains to defend the ex-First Minister, it is clear that the intent of the scheme was to provide an incentive of around 12% for biomass boilers. Instead, the scheme claimants made returns of 20%, 30%, 50% or even more. That was allowed to go on despite whistle-blowers and so-called supervision from his Department. I note he has made comments about the reduction in the level of subsidy we are going to see going forward. It would be useful to see what percentage figure his Department is looking at and whether it is, in fact, 12% or more.

The Minister also indicated clearly —

Photo of Jim Allister Jim Allister Traditional Unionist Voice

Just on that point, the Minister today sought to make the excuse that the scheme was more generous than originally intended. Would the Member agree that that is an unsustainable argument, since the tariff that was set was the top-line tariff with no secondary tariff and, therefore, was obviously intended to reap whatever benefits the top tariff reaped? Is it not, therefore, disingenuous to suggest that it did not actually operate as intended? It patently did, and that was why the tiering was taken out.

Photo of Steve Aiken Steve Aiken UUP

Thank you very much indeed. Yes, indeed. That is one of the most fundamental questions we need to ask. Why was a scheme that had been set up in Great Britain, the renewable heat initiative scheme, when it was brought here doctored in such a way? That was indeed the case.

Photo of Robin Swann Robin Swann UUP

Will the Member give way?

Photo of Steve Aiken Steve Aiken UUP

Why did we set the conditions —. Sorry. I will give way.

Photo of Robin Swann Robin Swann UUP 4:45 pm, 16th January 2017

Will the Member refer to example 2 in the Comptroller and Auditor General's report? It is based on a 99-kilowatt biomass boiler running 24 hours a day, seven days a week, and achieving a 93% efficiency. The Northern Ireland system allows an 82% annual rate of return, whereas the GB system, on the same scale, allows 7·4%.

Photo of Steve Aiken Steve Aiken UUP

I thank the honourable Member for that. The figures are startling: 82% and 7·4%. One would have to ask very clearly, "What was going on?".

I will move on. The Minister also clearly indicated that there is evidence of possible fraud. He said it in Committee today, despite what he has just said in the House. Under questioning, however, he admitted that those cases had not yet been referred to the PSNI. Members should be rightly concerned about that information. I, like all properly minded people, hope to see an early report from the PSNI on the matter.

Linked to that, we also had the information from the permanent secretary who stated that the mistake in the original scheme was a policy mistake. Bearing in mind that the policy very much sits in the purview of Ministers and of the Minister of the time, and that the Minister was advised by her special adviser (SpAd) to deliberately move the GB cost controls for the non-domestic RHI scheme in Northern Ireland, and that with the Minister being clear that there is potential fraud, there is no doubt that the accountability and responsibility for this issue points clearly in one direction. While the Minister and the DUP may argue against the causality, the Northern Ireland public and the media will not.

The scheme itself is obviously not a no-cost option. However, in the figures presented today, we should, subject to no immediate legal challenge, see by 1 April a potential reduction in cost from the disgraceful £30 million this year. I emphasise that none of us has seen the business case and, obviously, the Finance Minister is not in agreement with it, but we could possibly see opportunities for that figure to be reduced dramatically. That is to be welcomed, if it is achievable.

We are also uncertain of the examination of the statutory rule, as has been pointed out today, and the Committee agreed today only to note the statutory rule. We are uncertain of the legality of the process. Again, we are reliant wholly on the Minister and the permanent secretary's assertion. Members will draw their own inference from the Minister refusing to contemplate resignation if there is a successful legal challenge. What we need for our health service, universities, schools and for the reputation of our country is to stem the wholly avoidable haemorrhage of £85,000 a day, every day.

As a party, we will listen carefully to the remaining arguments expressed today before we make a decision. Be in no doubt of this: since July of last year, as a party, we have been tirelessly holding, or attempting to hold, our Government to account. If at any stage our Fresh Start SF/DUP "shamocracy" had concentrated on good governance rather than on spin, we would not be in the position we are in now. Again, be in no doubt: this crisis has been mishandled from the beginning. It has destroyed the reputation of an entire system of government, and from a financial corruption issue, the actions of ex-First Minister Arlene Foster and her DUP Government have created an existential threat to the very fabric of Northern Ireland. The RHI scheme has become, in more ways than one, a veritable bonfire of DUP vanities.

Photo of Thomas Buchanan Thomas Buchanan DUP

I support the draft Renewable Heat Incentive Scheme (Amendment) Regulations (Northern Ireland) 2017. I have no doubt that, throughout the debate and before it draws to a close, there will be much finger pointing around the Chamber. I have no doubt about that. The debate has only started, and we have already seen the finger pointing. I commend the Minister and his Department for the work that they have done since the Minister took up his position, especially over the Christmas period.

Photo of Roy Beggs Roy Beggs UUP

Will the Member give way?

Photo of Thomas Buchanan Thomas Buchanan DUP

No. You will have your opportunity. I commend them for the work that they have done in bringing forward measures to mitigate the costs associated with this scheme.

As the Minister outlined today, all the measures before the House are the first step to reducing the projected overspend. Of course, the Minister had a meeting with the Committee this morning, and, while we all agree that that is not the way in which we wish to see information coming to the Committee, given the fashion in which it was rushed through, the situation was not of our doing. The Committee, as the Deputy Chair said, would have liked much more time to look at the regulations, but that opportunity was not there for us. As I said, that was not a situation of our making. It happened because Sinn Féin walked away from the institutions. It is not prepared to face up to the difficulties, to debate them and to see a resolution found to the difficulties that lie there.

No one denies the controversy caused throughout Northern Ireland by the RHI scheme and the concern and anger that there is amongst the people. However, the anger from the people is directed not at the scheme but at those who are abusing the scheme by not using it as it was intended to be used. Therefore, it is important that those people be tracked down and that enforcement action be taken against them. The difficulty, and the problem, lies with the ones who are abusing the scheme and not using it in the appropriate way.

Photo of Thomas Buchanan Thomas Buchanan DUP


The people do not want an election.

Photo of Naomi Long Naomi Long Alliance

Sorry for interrupting your reading.

Photo of Thomas Buchanan Thomas Buchanan DUP

They do not want that party to walk away. What they want is the matter to be dealt with. They want us to sit down, discuss it and find a resolution to it. I spoke to many people over the Christmas period, and right up to now, and their message is quite simple: let the politicians do what they are elected to do, which is work through the difficult situations and not walk away from them. That is the message from the people out there. Lo and behold, we have a party that is not able to do that. It looks like we have quite a number of Members around the Chamber who are not able to do that but who are seeking to walk away from the situation. Of course, this has all been hyped up by the media to their own advantage. As a result of that, we have seen deplorable, downright disgraceful and outrageous attacks on the First Minister, our party leader. We have to condemn those. I would like to hear Members speaking in this debate today condemn the attacks launched on our party leader, the First Minister. Irrespective of what people think about how the scheme was drawn up or whatever, no one —

Photo of Thomas Buchanan Thomas Buchanan DUP

— should have that level of abuse hurled at them.

Photo of Thomas Buchanan Thomas Buchanan DUP

Now we have the regulations before the House today —

Photo of Danny Kennedy Danny Kennedy Deputy Speaker

Order. It is clear that the Member does not wish to give way.

Photo of Thomas Buchanan Thomas Buchanan DUP

There will be plenty of time for everyone in the Chamber to stand up and say whatever they have to say.

Photo of Naomi Long Naomi Long Alliance

It is meant to be a debate.

Photo of Gordon Lyons Gordon Lyons DUP

That was nasty, Naomi.

Photo of Thomas Buchanan Thomas Buchanan DUP

Now we have the regulations before the House today —

Photo of Danny Kennedy Danny Kennedy Deputy Speaker

Order. I ask all Members to allow proper respect to the Member for him to be heard.

Photo of Thomas Buchanan Thomas Buchanan DUP

Thank you, Mr Deputy Speaker. The regulations before the House today, as laid out by the Minister, will mitigate the costs and return the scheme to its original policy intention by introducing a two-tier tariff, an annual payment cap and other mitigating measures. Despite the other party walking away and bringing down the institutions, I ask Members, at this late hour, to do the right thing. Let us support the SR before the House today and ensure that mitigating measures are put in place to stop the overspend on the scheme.

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

I speak as an MLA rather than as the Finance Minister. I am precluded from speaking as the Finance Minister, but I beg your indulgence, Mr Deputy Speaker, to thank the staff at the Finance Department who worked over the weekend and who continue to give advice and work hard to try to assess the proposals that have been brought forward by the Minister for the Economy. Anyone who deals with constituency issues rises on this issue with more sadness than anger, because the reality is that we all deal with people every day for whom £85,000 would absolutely transform the projects in which they are involved.

Earlier today, sadly, we saw that, in trying to defend the indefensible, the DUP went low. As the woman said, when they go low, we go high. I want to go high today by referring to the disrespect which was shown to the public, the lack of respect for the public purse, the dereliction of duty and the shameful way in which this entire debacle has been handled.

I want first to make some quick points. First, the names of the beneficiaries should be published and published now. It is way past the time for excuses or foot-dragging. There are major questions hanging over this scheme in relation to malfeasance and corruption and in relation to people milking and scamming the system. If we want to build confidence in a solution, we should, without prejudice, agree to publish the names of the beneficiaries.

It is also with sadness that I have to note that we do not have a full and comprehensive plan today which would stop the bleeding and staunch the haemorrhaging from the public purse. We could have had that plan if the warnings and the red flags and the advice that had been given since December 2014 and February 2015 from a whole range of bodies, including the Ulster Farmers' Union, had been heeded. In particular, when I met the officials in the Department of Finance when I came into post, they outlined all the efforts that they had made to seek urgent remedy to this debacle. Unfortunately, because actions were not taken when they could have been taken, we are now coming forward with a partial stopgap solution rather than the full and comprehensive plan that people deserve.

There have been a number of missteps here. Arlene Foster should not have come out and said that this would be a solution to the RHI situation. She should not have said that this would be a zero-cost solution. That compounds the disrespect. I do not speak as a member of Sinn Féin, because that is the business that we are in; we are in the business of trading political blows. I speak for the public and for those who are losing money because of the RHI scandal. We added to and compounded the disrespect by claiming that there would be a magic solution. In fact, what we have today is a partial, interim, stopgap plan which kicks the can down the road for one more year, after which we face into 18 years of potential losses in the hope and expectation that there may be a way through. It is not a full and comprehensive plan, and it is not a zero-cost plan.

The lack of honesty in dealing with the public has also been disrespectful and shameful. The public should know that, every day from now until 1 April, the RHI debacle will continue to cost us £85,000 a day.

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

I am going to take the same approach that Naomi Long took earlier. I am not going to take any points of information, nor will I give way. Later on, perhaps, people will have an opportunity to have their say.

Between now and 1 April, this interim solution will cost the public purse £6 million. After that, the cost to the public purse will be, we estimate, £5 million — £2 million-plus for a new inspection regime which is absolutely essential to drive out those who have been abusing the scheme. It will also have a cost overrun, even under the plan that is being proposed. Why does that dismay us? We know that, when we go out into our constituencies, people feel that they have been duped and treated in a way which undermines their confidence in the Assembly and in any honest ability to deal with the problems.

Last Friday, I sat in Carryduff GAC in south Belfast with the chief executive and the heads of Lisburn and Castlereagh City Council, and the Carryduff GAC representatives were talking about a dramatic plan to build a community and sports campus in outer south Belfast. Eighty-five thousand pounds would absolutely transform the potential to draw up that master plan. Ten days of that would build the 3G pitch that they desire; it would certainly be a contribution towards it.

I spoke last week to the Somme Association. In a quirk of departmental responsibilities, the Department of Finance is responsible for the Ulster Tower at Thiepval, at the Somme. Their entire budget for the year is usually £85,000 — £50,000 for caretakers and £25,000 for expenses, around that sort of money. They could institute an entire programme of cross-community peace-building with one day's money from RHI. I visited the Nerve Centre, in Derry. Again, one day's money would enable the Nerve Centre to carry out a cross-community programme with young people to build confidence and creativity and to exploit the potential that our young people have. I visited the Markets Sure Start nursery school that opened earlier this year. I sat down afterwards with those who run the Sure Start initiative right across working-class areas of Belfast. Again, £85,000 would employ two teachers for a year in Sure Start.

The people were let down. They were disrespected and treated in a shameful manner. The reality is that that came from one quarter and one quarter only. Arlene Foster concedes that she was the architect of the RHI scheme. She was the Minister in charge when the tariffs were stripped out. She was the Minister in charge when she refused to heed warnings that this would be an excessive spend, a waste, a blot on our budgets and a hole in our financial projections. That was ignored. It was ignored because the public were disrespected and the public purse was disrespected, and it was done in a shameful fashion.

When the opportunity came to close down the scheme, again a DUP Minister — at that time, Mr Bell — did not act in the swift and expeditious fashion that he should have. He has alleged that that was because of political interference. The reality is that, because of the disrespectful way the public purse was treated and because of the arrogance in dealing with protecting the public purse, a spike was allowed to occur. The Comptroller and Auditor General says that there were as many applications in seven weeks as there were in the preceding 34 months from the opening of the scheme. The cost of the spike is £24 million a year for 20 years. Shameful, shameful treatment of the public purse and the public.

The election will be a referendum on RHI and how it was handled. I hope that, when the people give their verdict, they remember those who insisted that we should treat the public purse and the public with respect, those who came to the defence of the public purse, those who insisted that this be remedied, those who said that they would not accept any type of cover-up and those who insisted that we treat the public with respect. There has been talk in here today of treating each other with respect, but, when you do not treat the public with respect, then indeed you are certainly doomed.

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

Gabh mo leithscéal, Patsy, níl mé ag glacadh le hionchuir.

The key issue, of course, where the disrespect reached stratospheric levels, was the refusal then of the DUP to have an investigation, while acknowledging, as the outgoing First Minister — the former First Minister — did, that she was the architect of the mess. When the opportunity came to build confidence by having an investigation — a no-hiding-place investigation to get to the truth, to deal with people honestly and to tell them what had happened — she set her face against that. One of the DUP spokespersons was insisting that, really, this was a storm in a teacup and it would all be settled. They took the public for granted. They presumed that people would continue to put up with behaviour that was shameful and disrespectful. That is why we arrive at this juncture with an interim solution. When the Comptroller and Auditor General reported in July and PwC reported in October, we really could have taken the steps then so that at this juncture we had the full and comprehensive solution. That did not happen.

I will read into the record some of the efforts made to get a solution on RHI since I was appointed, but I want to mention one other point. There have been many lows here over recent days and months because of the behaviour of certain people who do not respect the public. Earlier today, the Survivors and Victims of Institutional Abuse (SAVIA) organisation and those who suffered abuse in institutions — mainly but not only Church institutions — when they were in the care of the state and the Churches were contracted to provide that care were used to score political points. I have seen disrespect and shameful discussions in the Chamber, but people need to be careful today about where we drag what is left of the credibility of this institution. I have spent the last three to four years working with the victims of historical institutional abuse, SAVIA, Mags McGuckin and others. I met them around the Lord Mayor's table at City Hall. I was the first Lord Mayor to bring the victims and survivors of institutional abuse into the chamber there. I sat and listened to harrowing accounts of rape, abuse and torture, and I gave a commitment that we would get justice and then compensation for those who were affected by that. I remember in particular one well-known young man — when I say "young", he was young in his time — a great pillar of the SAVIA organisation, recounting that, at the age of eight, when he was in the care of the De La Salle brothers, he wet the bed, and they brought him downstairs naked, put him in an industrial dryer and said, "The next time you wet the bed, we will turn that on". So, let us not go low. This is not a day for going low; this is a day for going high. Let us leave for another day the abuse, horror and indignity that the victims of institutional abuse suffered. Let us all make the commitment that I made at a public forum here. It is my belief that this Government, if they come back, or whatever government structure follows must fulfil our obligations to the victims of historical institutional abuse.

I want to put this on record because, sadly, as we go low, the SDLP has tried to pretend that Sinn Féin is somehow complicit in the RHI debacle, even though Arlene Foster has acknowledged that she was the architect and it was DUP Finance Ministers and a DUP Economy Minister who have been in control since then. Here is some of the context that should go on record. In June, the Finance Department contacted the Economy Department asking for a solution to RHI. At a stocktaking meeting in July, it again asked for a solution. At that point, the overspend looked like £32 million. In July, there was a key meeting at which a demand was made for a business case to close this down. With the Comptroller and Auditor General's report being out, it was thought then that moves would be made. That was July 2016. At the Budget meeting between the two Departments on 23 August, RHI was again discussed and pledges were made about resolution, but there was no action. On 4 October, another memo was sent from Finance to Economy asking for action on RHI. On 17 October, there was another meeting asking for action on RHI. That was the point at which my officials reported to me that PwC's report was out, the Department had taken a new response to this and we would get action. The record speaks for itself.

You have been very indulgent, Mr Deputy Speaker, and I appreciate that. I say this with respect because we are moving into a turbulent period for our community over the next five to six weeks. It is my hope that, when and if we come back — I have said that we cannot come back to the status quo — respect for the public purse and respect for ordinary people will be paramount.

I will finish with this: the proposal in front of us slows the runaway train that is RHI, but it does not stop the RHI debacle.

Photo of Claire Hanna Claire Hanna Social Democratic and Labour Party

At the core of this issue and of the governance omnishambles — that is the word that is best applied — is the loss to the public purse, and, of course, we are very keen to hear a coherent plan for how that flow will be stemmed. We all still have a job here in that we have to scrutinise the proposals and assess all the potential outworkings to make sure that this is a plan that will save money and not just a plan to save face, which many people will feel that it is, on the basis of the detail that we have had.

It must be pointed out how disingenuous people find the urgency being projected by the party across the Chamber in coming up with a solution to this problem now and, indeed, the outrage being projected by the party to my right, given that it is very clear that it has known about the problem for a very long time. It appears now to be working primarily to cover its tracks and to come up with lines that will answer the queries on the doorsteps, and there will be queries.

I appreciate that the Finance Minister has made some efforts. People come to us with problems, including, for example, a broken street lamp. If we said, "I emailed and they never came back to me" or, "I phoned them last month and they did not come back to me", people would rightly tell us that we were not doing our job. That is over a broken street lamp; this is over hundreds of millions of pounds of public money, and "I asked a few questions" is not good enough.

Photo of Nichola Mallon Nichola Mallon Social Democratic and Labour Party

I thank the Member for giving way. Unfortunately, the Member who spoke previously did not. I noted that Mr Ó Muilleoir, in his contribution, said that he was speaking on behalf of the public, and he kindly provided all of us with multiple examples of what the £85,000 that is being squandered every single day could be spent on. I am sure that each and every one of us could provide a litany of projects. I certainly could in my constituency of North Belfast. Does the Member agree that the truth is that, under this Executive, the scandal has cost the public over £20 million? Mr Ó Muilleoir highlighted memos that he had sent and meetings, as you referred to, but the key question that he has yet to answer is this: why does his party continue to be the only party that does not support a public inquiry that could get to the truth and get to the bottom of the fallacy and the duping of the public that he so eloquently and passionately said he was vociferously opposed to and horrified by?

Photo of Claire Hanna Claire Hanna Social Democratic and Labour Party

I thank the Member for her points. People are taking a position on this issue a little bit too late, unfortunately. For the record, I want to nail one of the lines that is being pushed out. The post-truth parties are spinning that the Opposition parties voting to keep the scheme open in February was the problem. They do not say whether that makes us entirely culpable or whether some of that blame was shared. For the record, we did vote for the amended scheme. We voted for the scheme that we should have had in the first place, which was about environmental protection. That point is clearly lost on or completely irrelevant to the party opposite, which rigged the scheme in the way that it did here. That damage was being covered up at the time. In fact, the scheme was being sold as just too successful and a victim of its own success. For those who —

Photo of Roy Beggs Roy Beggs UUP

Will the Member give way?

Photo of Roy Beggs Roy Beggs UUP

Will the Member agree with me that the Minister of Enterprise, Trade and Investment, the Finance Minister and, no doubt, the First Minister and deputy First Minister will have known of the scale of this problem for over a year? It is very disappointing that it is only today, in what we expect to be the very final hours of this Assembly, that a proposal comes forth. Why has it taken so long to come up with an alternative proposal?

Photo of Claire Hanna Claire Hanna Social Democratic and Labour Party

That is a very fundamental point, and, as I said, in the online information wars of people trying to cover up and spread the blame, it is very clear. Anybody who has been told that the issue was the Opposition voting for that scheme should read the Hansard report of Monday 15 February. Read the transcript of that debate, and it will become very clear who knew what and when, and it will be very clear why parties are writhing and twisting over a full inquiry into this. They fear the question: what did you know and when? This side of the House does not fear that question.

Despite the problem being in their domain for so long, these very limited proposals have come forward. Understandably, there is a pressure of time, but there is no scrutiny being applied. We are given to understand, by the evidence given in the Economy Committee today, that, in the form it is in now, 99% of this plan was circulated on Monday last week. Why is it that it was sent to the Examiner of Statutory Rules only after 5.00 pm on Friday, when that person, who is the anchor of good legislation, would then necessarily not have access to the legal opinion and costing support required? Why is that the case? We are having to park all sorts of scrutiny here, but that fundamental point will lead some to believe that people do not want this to be scrutinised.

Photo of Patsy McGlone Patsy McGlone Deputy Speaker 5:15 pm, 16th January 2017

I thank the Member for giving way. At this point, to summarise, what is being presented before us today is legislation that has not got the approval of the Executive, has not, as the Minister Máirtín Ó Muilleoir, who has gone, outlined, got the sign-off from the Department of Finance, has not passed through the clear scrutiny of the Committee and has not been approved by the Examiner of Statutory Rules. Is there anything it does have by way of proper procedural legislative scrutiny by this Assembly?

Photo of Claire Hanna Claire Hanna Social Democratic and Labour Party

I think that is a fundamental problem. We are trying to fix a dreadful governance problem with even worse governance here. I think it is exactly the lack of good governance —

Photo of Jennifer Palmer Jennifer Palmer UUP

I thank the Member for giving way. Do you agree that, because this is partly funded by Europe, the European Union will have a veto on, or a say in, the regulations before us today?

Photo of Claire Hanna Claire Hanna Social Democratic and Labour Party

That is one of very many questions I and other Members will have, even if sticking plasters are put over some of the problems we are storing up for further down the line. I think the issue is characteristic of the lack of good governance and transparency in this Executive. The exclusion of other voices led to this being a two-party Executive because other people were not in the loop. While I have no doubt it is the party across the Chamber that designed the scheme and probably had most of the information, it is fair to say that it was not effectively held to account by its government partners, as would appear to be the case with NAMA, the social investment fund and the suppression of information on Brexit.

Photo of John O'Dowd John O'Dowd Sinn Féin

The Member listed a group of people who she claims should have been holding the DUP Minister to account. Does she include the Chair of the then ETI Committee on that list?

Photo of Claire Hanna Claire Hanna Social Democratic and Labour Party

If I am including the Chair, do I include your three party colleagues who were also on the Committee and who did not do that? I think the fundamental point is that very little information came out of the Executive at the time. Clearly, the evidence trail will show — this is why we are not scared of a public inquiry — that the information was within the Executive, or the two main parties of the Executive, from February and that now it is all about throwing shapes.

Eight weeks ago today, the Fresh Start anniversary puff piece was published in the daily newspapers. It reads:

"We made promises to voters that we will keep — taking on the heavy responsibilities that come with elected office, governing in their best interests, tackling head-on the tough decisions."

There is a lot more to read in that, but I will leave that to Members if they need some light relief later. Either those parties were spinning the public a line eight weeks ago when they wrote that or they are doing it now, because both cannot be true. The party that designed this disastrous scheme has, we are led to believe, designed a good mitigation, but it looks like it is on the back of the envelope to everybody else. It leaves us with the choice between an £85,000 per day bleed indefinitely, if this place falls and we do not have another opportunity to fix it, and the potential cost of legal challenges, as well as all the cost of the very belated investigations.

In this scenario, I think you will understand that people are a bit reluctant to trust those who designed the flawed scheme to design the fix. People may put faith in the views of Dr David Capper, for example, in the School of Law at Queen's, who specialises in contract law and who expressed scepticism — that is putting it very mildly — at the view that the proposals can be implemented in a way that is zero cost. He also, you may be aware, expressed the opinion on Radio Ulster at the weekend, after studying the regulations, that regulation 33(p), which provides that subsidies should not be used to:

"generate heat for the predominant purpose of increasing ... periodic support payments" may be a route for tackling abuse of the scheme. I hope the Minister will comment on both aspects of Dr Capper's contribution in his winding-up speech.

I have a few more questions. Will the Minister clarify what impact, if any, the proposals have on the Treasury spend? When the scheme was being designed, it seemed to be, "Sure it's London's money; fill your boots". Is this just recouping block grant money, or does the Treasury expect to get any money back as well? It is all public money that somebody has earned and paid as tax. Will he further clarify if and when the names of those benefiting from the scheme will be published, and, if not, if and when he will publish the legal advice that he has received on that?

Members, we have a very difficult choice. It is more regrettable because it is being hothoused; we are being asked to make the choice very quickly without, as my colleague outlined, any of the normal transparency and scrutiny. It is up to Members to convince the public that this is more than a ploy to restore, in some way, any reputation that the DUP ever had for competence — that is a lost cause, but, hopefully, we can at least recoup some public money.

Photo of Stephen Farry Stephen Farry Alliance

The situation that the Assembly finds itself in today is completely unacceptable. We have the much wider context of the collapse of the Executive and a question mark over whether we will see another Executive in the future. To be much more specific, the process that we are dealing with in relation to this statutory rule today is completely unacceptable. It is the culmination of a flawed process over the past number of months, building on what has been a complete fiasco in terms of the overall non-domestic renewable heat initiative.

We are being asked to make an extremely important decision today, potentially right up against the clock in terms of the dissolution of the Assembly. On reflection, we may have a little bit more time, so it may be wise for us to reflect on how that time could be most appropriately used. As has been stated, this statutory rule has not been subject to anything close to proper scrutiny. While I welcome the fact that a meeting of the Committee was organised for this morning — I thank those involved for doing that — which the Minister and the permanent secretary attended — again, I pass on my thanks to them — we should be under no illusion: that does not pass muster in any scrutiny process or tick any box whatsoever. The Assembly is being asked to fly blind today by potentially approving this, with so many questions still outstanding and not being properly answered. That would be an extremely bad state of affairs even over something fairly non-controversial, but this is perhaps the most controversial and toxic item to face our political institutions for many years, which makes the situation even more concerning.

Photo of Naomi Long Naomi Long Alliance

I thank the Member for giving way. Clearly, there is an issue with the RHI scheme, how it was constructed, and the cost to the public purse. Does the Member agree that the manner in which it has been handled has been more detrimental to public confidence than the original mistake?

Photo of Stephen Farry Stephen Farry Alliance

Indeed. The politics played around this over the past number of weeks has been extremely concerning. There has even been spin in relation to this intervention in terms of the statutory rule and the potential scope for mitigation. We have had announcements made, briefings and interviews in the press about what was to be taken forward before MLAs, or even the Examiner of Statutory Rules, were given access to what was being contemplated. In particular, we had the claim that we can reduce the cost to zero. That is not the case. I will come to that in a bit more detail.

This comes in the context of an Assembly where, since June, we have seen standards of openness, accountability, transparency and accessibility reach new lows. If this was an aberration and we had had the highest standards of good governance from the Executive — if people had said, "Look, we're in a situation of grave difficulty. The timescales are against us. You know we have striven to uphold the highest standards, so can you give us a bit of a bye-ball in this regard because this is very much in the public interest?" — I think that the Minister would have been given a fair hearing. However, this comes in the context of the opposite being the case across a whole range of issues, and that has led to accusations of cronyism and, indeed, corruption of the process and some of the outcomes by the Executive. <BR/>The performance of the Minister and the Department, alongside the low standards across the board, have been particularly worrying. Examples include the responses to freedom of information (FOI) requests, the turnaround time in getting answers to questions, cooperation with the Committee through the timely release of information, the absolute absence of any financial information being provided to the Committee and the absence of any process of engagement with the Committee over the past seven months to try to frame a way in which to mitigate the effects of the renewable heat incentive scheme alongside the PAC's inquiry into what happened prior to that point.

It is important that we bear in mind that the Northern Ireland Act puts Committees here on a different level to those in Westminster. They are here to help and advise Ministers and Departments on policy. That opportunity has not been taken in this instance.

I put on record my disappointment that the Minister did not take interventions. In the context that we find ourselves in today, I thought that he would be falling over himself to give as many answers and as much clarity to Members as possible. It may be his intention to ram this through today, hope for the best and move on, but there is merit in the Minister reflecting on what he has heard to date and on what may be said in due course and considering whether more time can be given to this over the course of what is likely to be a week.

If we shortly hear confirmation from the Secretary of State of the growing speculation that the election date will be 2 March, that implies that we will continue as an Assembly for at least another week. That would give ample time for another meeting, or another two meetings, of the Committee to be held. It would also allow us to scrutinise and hear contrary points of view from the sector and other important stakeholders so that we can take a balanced view on the risks in what we are being asked to vote on today. It would also provide time for the Assembly to return and have a proper debate on the issues before us. I therefore encourage the Minister, if he is genuine about having proper accountability and buy-in from the House for his measures, to consider that approach.

Bearing in mind that there is a degree of scepticism and cynicism that today's action is very much about kicking the can down the road to the far side of an election and buying time rather than being a genuine solution to the problem, it is important that we are able to scrutinise the regulations properly and have confidence that this is a genuine patch-and-mend approach that buys time for a more sustainable solution as opposed to being a political patch-and-mend that allows people to escape as much embarrassment as may be coming their way over the next number of weeks.

Obviously, there will be discussions and points made on the wider issue of how we have got into this situation, and I appreciate that today is not the occasion on which to go into that in much detail. I want to put on record our party's support for a full, judge-led public inquiry based on the Inquiries Act 2005. Nothing less than that is going to provide the public with full confidence in the processes and procedures of the Assembly and the Department. The failure in getting that to happen to date is causing concern. If we see a situation in which we have something less than that, there will always be the suspicion that something has been held back, and people will not be fully satisfied that there has been proper accountability.

Alongside that, we need to have full publication of the list of recipients of support from the scheme. I add that we need to see the Secretary of State taking action to ensure that we have full transparency on political donations. The arguments that have been used against that in recent years around security have always been exaggerated, but today it is more clear-cut, because full transparency is very much where the public interest lies. Of course, people will naturally want to read those two lists in conjunction and see where that exploration takes them.

I also want to make a couple of comments around the process, and I do so from the perspective of a former Minister. The account that we have heard to date of the political interventions around the scheme and the excuses or explanations for inaction gives the impression of people who are extremely passive in their role as a Minister. I am not sure whether that is the genuine approach that was adopted or whether it is intended to throw the scent off other potential issues to do with how things have been taken forward. It is important that we recognise that the role of a Minister is not simply to receive advice from civil servants and sign it off. If that were the approach, it would raise the question of why we needed devolved government at all and why we did not just continue direct rule and let the Civil Service take decisions. Civil servants are extremely important and professional individuals who provide proper advice, but it is the first role of the Minister to scrutinise what has been brought before them and to bring their perspective to that situation.

Secondly, when situations come to light from whistle-blowers and there is information about the potential flaws in the implementation of schemes, it is not sufficient to hide behind the maxim that Ministers decide the policy and civil servants are there to do the implementation. The divide between policy and implementation is never an absolute one, but, in any event, everything that happens in the Department is subject to the authority of the Minister, and Ministers are ultimately accountable to the Assembly and the wider public. If that were not the case, there would not be the questions etc on operational matters that are asked on an ongoing and regular basis. Those are some of the issues that I hope will be aired in a much greater sense in the inquiries in due course.

On the statutory rule that we have before us today, from my party's perspective there are essentially three benchmarks that we want to use to assess the validity of the way forward. The first is "Is what is proposed legal?". The second is "Does it address the financial overspend, and does it create a financially sustainable way forward?". The third is "Does it allow for continued investment in renewables, and, if that is not feasible, does it at the very least allow us to continue to invest in the green economy and means to address climate change?".

I will look first at the issue of legality. Clearly, there is a major risk of a judicial review, and it has been highlighted by a number of individuals that they may well take that line. Obviously, there is a risk that this will be challenged, but it may well be that the advice that the Department and the Minister have received is correct and that any judicial review will be successfully defended. Obviously, we wish that well. However, the Minister has not sufficiently to date assured us that that will indeed be the case. I appreciate that he has taken advice from eminent individuals and organisations such as the Departmental Solicitor's Office and the Attorney General, but, eminent as the Attorney General is, he does not always get it right, as we have noted from a number of recent court rulings. There are some particular issues in that regard that need to be somewhat more fleshed out. One includes the basis on which this can be taken forward in the absence of a decision by the Executive. Clearly, under the ministerial code, something that is significant or controversial outside the context of the Programme for Government needs to be referred to the Executive for a decision. I appreciate that the Minister does not currently have an Executive, but we had one for most of the previous seven months.

(Mr Speaker in the Chair)

There is also the issue of potential discrimination in the scheme, where we have what is in effect a very blunt instrument in defining the cap in relation to 400,000 kWh of usage. That may take into account some situations where people are indeed overspending, but it may prevent people who are using this for a legitimate purpose from continuing their legitimate acts. Equally, there may well be people who continue to abuse the system or get excessive profits who maybe operate on a smaller basis but fall below that threshold. No distinction is made between those categories. That then lends itself to the issue of the definition of what is useful heat and what is not. The approach of a blunt instrument such as the cap is not making that clear distinction. I note that, in addition to clearing the test of a potential judicial review, the permanent secretary confirmed this morning that the SR before us has to get clearance from the European Commission. It may well be that, given that this is a one-year patch, that bar may be lower, but we are far from guaranteed that we are not going to see a turnaround in a matter of weeks with the European Commission saying that this may not be a viable way forward. Again, we have been down that road with the Department over the past number of months on another item. There are issues of legality, and, in essence, we are being asked to take a risk and to take a bit of a punt, potentially to see a situation where, not only with a successful JR or at a cost to the public sector, we end up not closing off the seepage of resource of £85,000 per day out of our block grant because we have not actually put forward a viable system.

The second issue overlaps to an extent with the first point around legalities in terms of the reason why the cap of 400,000 kilowatt hours has been adopted and the point about the definition of useful heat and why that has not been addressed. Again, I echo the point that we are not going to see a situation where we have complete and utter removal of any potential overspend on the scheme; in particular, we have no certainties on what the situation will be beyond March 2018. We may see a dip based on this patch for one financial year, but those costs could rise in the future.

The third thing that we need to be mindful of is the implications for ongoing investment in renewables. We have heard comments from the sector about the potential additional risks to future investment from government, in essence changing the nature of the debate and the terms of the support that can be provided to the renewable sector. In that context, it is something that the Committee would, ideally, like to further explore. Are we actually disincentivising people in the future from investing, whether in this type of approach or, indeed, others, through the fact that we have had a flawed scheme designed by government that has had to be amended mid-course and has created such bad faith around the investment narrative not just for renewables but elsewhere in Northern Ireland? That is an important issue.

The final point I want to make is to stress that what we are being asked to do today is, in some respects, the simplest of the potential options open to the Department. There may well have been more complex approaches. We have heard options around potential windfall taxes and we have had potential recalibration of what is useful heat and what is not, but, in essence, we have had a retrospective application of what was done in November 2015. Given that that is the case, it raises the question of why this was not done sooner in the current financial year. It seems that we have missed the boat over recent months for having this type of approach put forward, properly scrutinised and implemented. I am concerned about why that has been the case.

Finally, I am just learning from my colleagues that it has been confirmed that dissolution will not take place until 25 January, so, clearly, we will meet next week as an Assembly. In that context, the point that I made about the Minister not pressing this to a vote today and the matter returning to the Committee to provide for further scrutiny and coming back to the Assembly next week would be a much more viable approach — indeed, a more genuine approach — that would allow for the public to have a stronger degree of confidence that what we are being asked to do is very much in the public interest. Given the very rushed manner in which this has been done today, while it may eventually go through, I dare say that there will be a question mark hanging over not just the motivation behind this but how effective it will be in practice.

Photo of Mike Nesbitt Mike Nesbitt UUP 5:30 pm, 16th January 2017

On a point of order, Mr Speaker. As Mr Farry said, the Secretary of State has called the election for 2 March, with dissolution not occurring until Thursday 26 January — that is, next week. On that basis, under Standing Order 16, I move that we adjourn the debate on this motion until next Monday, 23 January, and ask the Minister to come back with certainty about the opinion of the Examiner of Statutory Rules. The Committee for the Economy will have time to move off its position of simply noting the regulations, and we can not only see a robust business case but get confirmation that the European compliance unit is happy with the regulations.

Photo of Robin Newton Robin Newton Speaker

Members, a motion has been proposed by Mr Mike Nesbitt that the Assembly adjourns the debate on the draft Renewable Heat Incentive Scheme (Amendment) Regulations (Northern Ireland) 2017 for seven days.

Photo of John O'Dowd John O'Dowd Sinn Féin

On a point of order, Mr Speaker.

Photo of Robin Newton Robin Newton Speaker

Let me finish. I am content that the motion is in order, and I propose to allow up to 30 minutes for a debate. Members will have a maximum of three minutes in which to make their comments and should indicate their desire to speak by informing the Table. The mover of the motion will have three minutes to propose and three minutes to make a winding-up speech. If the House divides, it will be by simple majority.

Mr O'Dowd had a point of order.

Photo of John O'Dowd John O'Dowd Sinn Féin

Sorry, Mr Speaker, you have just given your ruling. My point of order was to ask for further details.

Photo of Robin Newton Robin Newton Speaker

OK. I propose to suspend the sitting for 10 minutes to allow Members to make arrangements for speaking in the debate. The Assembly is, by leave, suspended.

The sitting was suspended at 5.42 pm and resumed at 5.58 pm.