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

Part of Executive Committee Business – in the Northern Ireland Assembly at 5:15 pm on 16th January 2017.

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Photo of Stephen Farry Stephen Farry Alliance 5:15 pm, 16th January 2017

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.