We need your support to keep TheyWorkForYou running and make sure people across the UK can continue to hold their elected representatives to account.Donate to our crowdfunder
The next item of business is a motion to approve a statutory rule. I remind Members that this debate was adjourned for seven days on Monday 16 January, in accordance with Standing Order 16. Members will wish to note that, as Standing Orders require, a Member may speak only once during a debate on a motion. Therefore, only Members who did not speak during the debate on Monday 16 January will be allowed to speak during today's debate.
I welcome the opportunity to speak on this important piece of business in the House today. I thank the Minister for his work in bringing forward the regulations. They are an important step in introducing effective and realistic cost controls to reduce the burden upon our Budget and help bring controls to the scheme. I know that the Minister and his officials have worked extensively on bringing forward the proposals and have rightly taken the time to ensure that they are compliant and effective. I believe that the plans will run from April 2017 to April 2018 and will start the journey towards a longer-term solution to further reduce public expenditure on the scheme. There is no doubt that these actions had to be taken to reduce the pressure on public-sector budgets, whilst ensuring that those who have acted in good faith by investing in technology and equipment are not unfairly penalised.
On Thursday 19 January 2017, the Economy Committee heard a presentation from the Renewable Heat Association (RHA), which outlined how it had seen the boilers as effective in meeting the energy needs of various sectors, including poultry and mushroom production. It also raised genuine concerns about the potential impact of the revised tariffs for the businesses that it represents, and I trust that those can be worked on in the days ahead.
When the renewable heat incentive was introduced, there were many calls to try to move away from an over-reliance on imported fossil fuels. The intentions of the scheme were clearly to try to move away from a reliance on fossil fuels and look at renewable energy as a way of meeting the energy needs of, first, the non-domestic sector in 2012 and then the domestic sector in 2014. A target to increase the level of renewable heat to 10% by 2020 was included in the strategic energy framework, and an interim target of 4% renewable heat by 2015 was also included in the then Programme for Government to help the UK meet its 15% renewable energy target. Despite those targets being in place, initial interest and uptake in the scheme was low, and there appeared to be reluctance among the business community to go with the significant investment that was required to install the necessary equipment.
One point raised by the group at the Economy Committee last Thursday was that the reduction in oil prices resulted in the cost of pellet production being reduced significantly; therefore, the scheme became more attractive.
There is no doubt that mistakes and errors have been made in the RHI scheme. That was widely acknowledged by Arlene Foster, in the House on 19 December, and by our Economy Minister. The lack of cost control measures and the flaws in its design have been acknowledged. At a recent meeting of the Public Accounts Committee, we heard from the permanent secretary, who stated:
"The intention was good, but the execution and design were seriously wrong."
"Tiering is not included in the Northern Ireland scheme because in this instance the subsidy rate is lower than the incremental cost."
Degression, which has been debated at length, was also considered at paragraph 7.5.5, which stated:
"degression is a mechanism, whereby tariffs would be automatically reduced on an annual basis to reflect, and to potentially encourage the reduction of technology costs for renewable heating."
Paragraph 7.5.6 states:
"at this stage DETI does not propose to include/build degression into the NI RHI legislation, however may consider the need to do so in the future."
The internal DETI casework committee considered these proposals on 9 March 2012 and approved the NI RHI renewable heat premium payment (RHPP) scheme and administration arrangements with Ofgem. It is now, therefore, clear from the information detailed in the approved DETI business case that tiering of payments and degression were not included in the design of the RHI scheme.
There were clear risks from the start, with two bodies involved in managing the scheme: DETI was responsible for the policy framework, while Ofgem, acting as the administrator, managed the applications and installations, including compliance. There were risks of ownership and responsibility in the scheme. Departmental officials admitted poor management of the scheme, with no clear project management in place, which would have involved regular management review of all risks, including finance and quality. It would appear from the information that we have gathered that some farmers and industrial operators saw RHI as an income generator rather than as a means to reduce the cost of energy in their business, which was the key rationale behind the introduction of the scheme in the first place.
Lessons must be learned from the scheme and corrective actions put in place to stop the recurrence of such a system failure in the future. That is why I welcome the regulations coming forward today. I trust that these plans will provide a road map and an important first step towards dealing with the problem and will gain the support of the House.
I welcome the Economy Minister's proposals today. As I said last week, I welcome the acknowledgement in his statement of regret and the acknowledgement that serious mistakes led to the perverse incentives to overuse heat. This was clearly not the intention. As I also said last week, good policy development and design are absolutely essential to changing outcomes for the better and for good government policies and interventions. The process for good policy design failed in this case, with the tariff issue not being identified at the time as necessary. An inquiry will find out why this process failed and what lessons must be learned.
These regulations will, hopefully, reduce any Northern Ireland liability for additional cost as soon as possible. However, it is only one part of the issue. There is much to be considered and many questions to be asked. How did this happen? Why was the tariff removed by officials? Why did officials recommend a policy design without the tariff? Did this issue come up during Committee evidence, and was it raised by those who were called before the Committee? Why did the safeguards and scrutiny mechanisms fail to identify the tariff issue at the time when the policy design was agreed? These are important and critical issues for all of us here.
The evidence to the PAC on Wednesday clearly highlighted that this was not a failing by just one person. Regardless of your view — I have heard many different views across all the parties — on ministerial responsibility and the clear desire constantly articulated by many in the Chamber to blame just one person, I would respectfully and strongly say that this will not solve the issue. It is clear from the evidence to the PAC, the evidence to the Committee and the discussions so far that this was a failure in process. Blaming just one person for that will not resolve the failings in that process.
I know that we all want to have good policy design. For good policy design and good policies, we need to make sure that that process is right.
The design process by officials and consultants failed. The business case scrutiny process did not identify the problems. All the evidence given to the Committee did not inform its recommendation. Remember that the Committee recommended this design. This is a very interesting aspect to note. There has been discussion across the Chamber thus far on the role of the Committee. I say this not to blame others for the mistakes that were made but to highlight that mistakes were made by everybody in this process. The Committees of the Northern Ireland Assembly, set up under the Good Friday Agreement and the Northern Ireland Act 1998, have a very different role from some Committees in other Assemblies and Parliaments. The Committees of the Northern Ireland Assembly were to have a collaborative role. They were to work together on policy design. It is absolutely clear in the legislation that the statutory duty of Committees is not just to scrutinise but to help Ministers in the development and formulation of policy. That is a critical difference. It is a difference that means that all of us, all the parties that sat on those Committees, cannot brush off responsibility for that policy development.
This is important because all of us are human and capable of making mistakes. That is why we have the safeguards in place. If people did not make mistakes, if policy design did not have flaws, and if all these issues could be identified by just one person, why would we have scrutiny? Why would we set up these safeguards? The very reason why they are there is to protect against that happening, but all of that failed in this case.
Just last week, Jim Allister said in the Chamber that the Executive had failed but, on the whole, the scrutiny and legislative process of the Northern Ireland Assembly had worked. All of us and every party around the Chamber have to be honest about this. The policy design and proposal went to the Executive, and the entire Executive agreed those. The policy design and proposals went to the Committee. Unlike the Minister, the Committee had the capability and took the opportunity to call evidence from people who were impacted by the scheme, the experts on the scheme and the officials who gave technical advice. That Committee, on questioning all that evidence and listening to the key stakeholders at first hand, looked at the original flawed design and said, "We agree that this is a good design". The Committee, in line with its statutory duty to help to formulate Government policy and to help the Minister, under the chairmanship of the SDLP and with representatives of all the parties across the Chamber with the exception of the Alliance Party, recommended the original design. That scrutiny did not work, but it did not stop there.
The policy proposal went through the business case process with experts in our system, including economists, specialists and civil servants. I have had the opportunity to serve as a special adviser and a Minister, and I know how challenging and difficult it can be to get policy through a business case process. That is the process in which all these questions are asked. Furthermore, it is not just about policy; it is about economics. Trained, professional economists look at this. They do the figures on the business cases. They work out the sums and try to identify flaws. That process did not identify the tariff issue. That was a failure in the business case process, and we all need to know why, because we all want good policies and good initiatives that meet the outcomes that are set down for them.
It did not stop there. After the policy proposal was cleared by officials, after it went to the Committee, where evidence was heard and a recommendation to support went back to the Department, and after it went through the business case process, it came to the House. Jim has indicated that the scrutiny and legislative processes of the House were good. I have no doubt that a research pack was completed and made available to all Members and that they read that and looked at the regulations and proposals. All the parties across the House supported the original flawed scheme.
The Member may recall that her party colleague William McCrea used to sing a little song called 'Excuses'. Does that not sum up exactly her speech and that of Mr Dunne this morning, which have tried to spread the blame to everyone else and run away from the reality that it was Arlene Foster — Arlene Foster alone was the Minister — who signed off this scheme without the cost controls? No matter who else you might try to smear, that is the irreducible realty.
Thank you for your comment. I had hoped that you would have listened to what I said. I think that this has to go above and beyond party politics. We have to step back and look objectively at the evidence before us, the evidence that was in front of the PAC and the evidence that we have all heard. This was not a failing of a single individual. The permanent secretary of the Department went to the PAC last week and highlighted that the recommendation to the Minister clearly did not have the tariff issue involved in it and that the tariff was not recommended to the Minister. We have to ask why. If you are right, Jim, and one person is removed, that would not change the fact that the team of officials failed to recommend a tariff, that the business case process failed to identify this and that the Committee, on listening to the evidence, failed to pick this up. This is not just about one individual and, if we think it is, we are destined to make the same mistakes again. We are all human. Everybody is capable of making a mistake and everybody is capable of following the recommendations of officials and experts because that is what we are told we should do.
There is also a safeguard that that recommendation is questioned and interrogated by the House, by the Committee and by the processes that we have set up. It is not about excuses. It is about being objective and honest. Do you know what? I may not be back. Eighteen people across the Chamber will not be back to the Assembly. Regardless of that, regardless of the party politics and regardless of my personal role, there are important lessons for us all to learn above and beyond party politics. We need and want good policy in Northern Ireland and we need and want good initiatives in Northern Ireland, and that must require good processes and the best people, in terms of experts, being able to feed through the right recommendations for us to take.
I thank the Member for giving way. She made the point that one person was not to blame. Apart from the fact that there were those of us, including me, who did raise issues about the scheme early on, it was one person who, once this became public knowledge, did not accept responsibility as Minister, kept trying to put the blame on civil servants, the media, the Opposition and everyone else, and one person who refused to step up and take responsibility. That is why is that one person is currently in the dock.
Over the last number of months, there has been a campaign to blame this all on one person when all the evidence is patently, absolutely patently, to the contrary and suggests that this was a failure of process. There are a number of ex-Ministers around the Chamber who know the way the process works, and if you have policy experts, an official energy team, a business case cleared and a set of recommendations that come to you as Minister, then Ministers need to be able to rely on that advice. Yes, question it, but we have a whole system in place to safeguard and question. If we cannot rely —
If we cannot rely on and have credible advice and recommendations coming forward, then we have to question why those people are there in the first place. There has been a problem with the process and we need to identify why. Blaming one person will not solve that. Sorry, Jenny.
You raised a very interesting point. Risk registers, single responsible owners and project management are not matters, to be honest, for the Executive or Ministers. Those are very much the part and process of departmental —
I am answering you absolutely honestly about this. In policy development within Departments, it is very rare. In fact, I know of very few, if any, examples of Ministers sitting on project boards for policy development or programme boards. A team of officials are put in place, a senior responsible owner (SRO) is identified and the risk register comes back to that project or programme board. In some cases, depending on the issue, a Minister might sit on a board, but, in my experience, the vast majority of project or programme boards do not include Ministers. It is very much part of the process of policy development to develop the policy, which is then put as recommendations to the Minister.
Does the Member not accept that major financial items would have been clearly indicated in a risk register that would have been brought to ministerial attention, particularly after the scale of the problem was highlighted to the Department of Finance? The Ministers of Finance would have known for some time that that was a huge item of risk that was not addressed. Multiple Members have been in that position.
Certainly. We had an emergency meeting of the Finance Committee last week, and also the scheduled meeting on Wednesday. Particularly in relation to the budget issue, we emphasised to the permanent secretary of the Finance Department that there must be a risk register and that that risk register must identify all risks. It is clear from the evidence to the PAC that there was not a risk register in this case. The responsibility for that risk register, in terms of project management, lies with what is referred to as an SRO. For project management and development, an SRO is always an official. Questions need to be asked about why that did not happen, and I am sure that those issues are being reviewed by the Civil Service and the leadership within the Civil Service.
I want to be very clear that this is not a case of blaming officials entirely for this. I have indicated that there is a whole chain and a process, and those flaws were not identified by any of us as an issue throughout that chain and process.
The Member quite rightly refers to good policy and good policymaking and business cases, and obviously good policy was not applied in this instance. Will the Minister talk directly to the motion that is front of us and the regulations? Will she explain to the House why she is asking us to depart from good lawmaking, without a business case and the necessary statutory requirements that would constitute good lawmaking? Why, in this instance, does she think that bad policy should be followed by bad legislation?
I thank the Member for my promotion; I am not the Minister in relation to this. I will come to that, and I will come back to speak about the regulations. I just wanted to set out the context. I will refer to that in due course. If the Member wants to make a specific intervention at that point, I will be happy to take it.
I have outlined the process that got us to the original policy proposal. Objectively — I say this absolutely honestly — it is in the interests of everybody around the Chamber to find out what happened. An inquiry will do that, and lessons must be learned about that, but there are additional issues. On what has been discussed, we need to find out what happened with the emails from the whistle-blower. We have to find out what procedure was activated. Did officials take it seriously? What follow-up did they do? What process was subsequently followed? What information did the Minister get about that? Those are all additional questions that an inquiry will have to look at. An inquiry must examine all the issues. That is the other part of the essential work that needs to happen here, alongside these regulations and the roll-out of the policy.
At the heart of the regulations is the principle of fairness. I welcome the proposals. The Minister confirmed that they have been scrutinised legally. They attempt to ensure fairness and to bring the scheme back to the original policy intention. That is clearly in the public interest. I welcome the time-limited nature of the regulations; that allows some time for analysis to ensure that the proposed 12% return is indeed fair.
We have heard over the last week concerns expressed — legitimately, one assumes, in terms of the RHI scheme — about a reduction in the tariff. That is why it is important to emphasise, as the Minister has done, that at the very heart of this is fairness. It is not that there will be no incentive. This is bringing the scheme back to the original policy intention to ensure that there is an incentive, but that it is fair and proportionate and that the use of funds is in the public interest. That is the right approach. It is only for 12 months. I am sure that the Minister will speak to this in due course in relation to a review, which will inform the process and the further roll-out.
The aim of this is not only to be fair but to bring down, insofar as possible, through these regulations and the further steps — I welcome that the Minister has been very confident about this — the cost of RHI to the Northern Ireland taxpayer to as close as possible to 0%. There is a great deal of concern out there about the figures of £400 million to £500 million of public funds. We have sought to assure people that, yes, that is contractually committed; however, we will do all in our power to bring it down as close as possible to no liability to the Northern Ireland taxpayer. That money has not been spent. That is the critical issue: the money can be mitigated; it can be prevented from going out the door in a way that is fair and in the public interest.
I thank the Member for giving way. The Member will be aware, of course, that we have managed to spend £30 million this year alone and are spending £85,000 a day. There is no business case or business plan. Indeed, we also have legal opinion that the plan may be subject to challenge. How does the Member tie that in with what she has just said?
I thank the Member for giving way. The Member was maybe too busy chairing the Committee this morning and did not hear the permanent secretary when he said that there was a business case and that, in his view, it ticked all the boxes in terms of value for money, regularity and propriety. Those are already there, and there is a business case. Is it not a bit misleading for the Member to suggest otherwise?
I want to respond to your initial question first. It is rarely possible to design something in such a way as to fully eliminate the risk of legal challenge. If you try to do something different or bring forward something new, often people will say, "There is a risk of legal challenge". In this case, it is particularly challenging; there is no doubt about that. A contract is in place. We must all remember that contracts can be broken, but only where that is fair and proportionate. I would argue very strongly that in this case it is fair, proportionate and, most importantly, clearly in the public interest. In my view, yes, there will always be the risk of legal challenge, but the more important question is this: what is the risk of successful legal challenge? People can take a case. There will be people who will challenge anything worth doing in the public interest on this matter. There is no predicting what a judge may do: we have seen cases in recent years where a judge has perhaps gone in a direction not predicted by legal advisers, not least in relation to roads and infrastructure when the Ulster Unionist Party held the DRD post, and there has been a surprising outcome. <BR/>There is a risk of challenge; you cannot predict what a judge will do in that situation, but I welcome that the Minister outlined that his legal team has scrutinised this in great detail. He has received legal advice that, although there may be a risk of legal challenge, this — in the view of the Minister, which he has outlined, and in my view from looking at it — gives us the strongest possible legal defensible position in terms of breaking those contracts.
It is disappointing that the business case has not yet been cleared. That is not unusual. I am sure that all of us on Committees have looked at these processes. The leader of the Ulster Unionist Party, having been Chair of the OFMDFM Committee, will have questioned officials about the business case process on many issues. It can be frustrating how slow that process is. However, the business case process has been looked at by officials in the Civil Service. I suspect very strongly that if they are taking legal advice about this, they will be taking it from the Departmental Solicitor's Office. I assume — perhaps the Minister will confirm this for me in due course — that the Department for the Economy is taking advice from that same team of lawyers, so I would like to think that, in that situation, the legal advice will be consistent. The legal advice very clearly here appears to be that there is a strong defensible case to break the contracts in that way and put a variation in them to ensure that there is still a return. This is absolutely important: there will still be a return for people of, as the Minister outlined, 12%. That still represents an incentive.
If, over the next 12 months, there are cases, quirks or issues of some form of unfairness that emerge from businesses that have partaken in the scheme, those can, because this is only a 12-month scheme, be fed into the design process for the longer-term or permanent arrangements. That is the right thing to do.
I am disappointed that the business case is not yet through, but I remain confident that it will be. The biggest issue is the legality of the variation of contracts. Presumably, advice will be sought from the same place that advised the Minister and the Department. That legal advice is informing the process; we heard in the Minister's opening comments that this will be a robust and defensible set of regulations.
I also welcome that the Minister outlined clearly that it is not the case that no action has been taken up to this point. It is not the case that the regulations were just created over the course of the last number of days or weeks. He outlined a wide range of actions, including increased audit and investigation, and I think that all of us look forward to seeing the results of that; the changed scheme being implemented and then closed to new applicants; and the now recalibrated cost-control proposals contained in the regulations. I think that all of us would have liked to have seen the issues being dealt with more swiftly, but I welcome the fact that — this is absolutely essential, as was previously outlined — this went through a process of official and legal examination, which informed the recommendations that were given to the Minister.
It is worth very clearly putting on record that, as I previously mentioned, the DUP aim in all of this — I would like to think that this is the aim of all of us in looking at these regulations, which is why I hope that they get the support of everybody around the Chamber — is to reduce to zero any cost to the Northern Ireland Budget. These measures are a critical step in that, sitting alongside the increased fraud and fair-usage investigations, which the Minister has outlined will happen.
I also outlined last week that I was saddened — I remain saddened — that this policy issue and the associated mistakes have brought us to this point. I said very clearly that — I think that all of us accept that this is true — mistakes happen. Our processes, teams and Committees are made up of fallible human beings. However, the design of our processes are as they are to try to pick those up. Our processes are designed to identify and refine policy and to examine it from every angle. However, when the safeguards failed — there is no doubt that they failed to pick up the issue in this case — we needed calm heads and a sensible approach to rectifying this.
We needed a mature, calm and appropriate approach that required two things. First, as soon as possible, we need an independent and robust inquiry capable of getting to the truth of what went wrong, and I welcome that that is happening. That inquiry must and will report as soon as possible. Secondly, we need regulations to be brought forward to reduce to zero, as far as possible, any cost to the Northern Ireland public purse. I welcome that that is the other critical step that is happening today.
I strongly do not believe that the stepping-aside issue should have brought about the situation in which we find ourselves. I do not believe that Sinn Féin is justified in doing what it has done, without a Budget and any contingency planning or preparation, in bringing down these institutions and the people serving in the Chamber who were democratically elected just seven months ago. There were a number of different ways this could have been approached. Sinn Féin argues that this election is about arrogance and corruption, but the inquiry has not yet happened. There have been no findings of incompetence or corruption. The evidence of officials counters any allegations of wrongdoing, never mind corruption, and to quote from and reference the permanent secretary of DETI in his evidence to the PAC, in his view, Arlene Foster did nothing wrong. The inquiry will look at all that, and once it does and conclusions are drawn, that will be the time for action, but to prematurely bring down these institutions and fling around words such as "corruption" is wrong and unjustified.
All that is set beside the incredible position of Sinn Féin. Gerry Adams just last week put up a video on the upcoming election in which he said that it is about "accountability in public life". I find that absolutely astounding from a party, members of which have yet to apologise for the murder and maiming of thousands — yes, that extends to Sinn Féin, because I look across to those Benches week in and week out and see people with convictions in relation to those issues, and we have yet to hear an apology for that.
I will not ponder that point for too long, but there are a series of issues that have come up. Where they are relevant to the regulations is that this is what we need to do whenever we face challenges and difficulties. We need to bring forward solutions through policy, we need to address the issue, we need to protect public funds and we need to do what is right for people in Northern Ireland. There have been a number of hurdles and a number of scandals on all sides about some issues that have subsequently been investigated while others have been left out there. I do not believe that any one party is coming to the electorate with clean hands and able to say certain things, which Sinn Féin is trying to, while throwing a lot of dirt before an inquiry has been heard. I think that is absolutely critical.
Before I finish, I want to say that I have been an MLA for just over a year. Seven months ago I was hugely humbled to be elected to serve the people of South Belfast. I made some reference to the fact that there will be many people around the Chamber who will not be coming back to serve their constituents and the people of Northern Ireland. I remain absolutely committed to doing what is right for Northern Ireland, to working as hard as I can, which I will continue to do right up until the election, and to giving my support in all this to try to find the right solutions for everybody. I am saddened that, at times and reflecting over this, there has been a lot of party politics played. I think that is not good for the people of Northern Ireland. I think we need to rise above that, we need to be objective, we need to look at the evidence and we need to be fair. I think that, if we do those things, every single party across the Chamber should support the regulations today and we should ensure, as far as we can, that the taxpayer and public purse in Northern Ireland do not pay out anything more than they have to through the opportunity that is being provided to us today. As we move forward, regardless of whether I come back here, I am committed to working to build a better and a shared Northern Ireland. I will continue to do that in whatever role I play, but I hope that everybody in the Chamber commits to that and works together today and moving forward to try to ensure that we build a better Northern Ireland.
Let me assure you, Mr Speaker, that I will stick very tightly to the issue of the regulations. After all, the Member who has just spoken gave a devastating critique of the failure of the so-called Fresh Start Executive, so my work in that regard is done. I thank her for that.
I begin by assuring the House that the Ulster Unionist Party will not stand in the way of any initiative that is designed to stem the haemorrhaging of public money through the fatal flaw in the renewable heat incentive scheme. As the person who last Monday proposed the adjournment of the debate for seven days, I think that it might be worth going back over the rationale for doing that, which is that I was concerned that there were several key areas in which we lacked maximum certainty. I also put on record that, in using Standing Orders to try to get the adjournment, I did not try to blindside the Minister. In fact, he can confirm that Danny Kennedy and I went to see him in his office some time before last week's debate began. He greeted us very courteously. He was there with a witness, John Robinson, before John recused himself from these issues. I told him what I was proposing and suggested that he contact the Northern Ireland Office. I believed that, if he did, he would be given certainty that we would still be around today. He chose to go ahead with the debate anyway, and, at around 5.30 pm, when the Secretary of State made his announcement on the date of the election — 2 March — and the dissolution of this mandate, I, as you know, got to my feet and proposed the adjournment. It is a matter of regret that it had to be done in that way, but it was the right thing to do, because it gave us seven days.
I was clear to the Minister about the assurances that we were looking for in order for us to be able to back the regulations. First, we had not heard from the Examiner of Statutory Rules, who is the person who takes the technical and legal look at such legislation on our behalf. Secondly, the Minister had been to the Economy Committee earlier last Monday, but, at the conclusion of the meeting, the Committee chose to note rather than support the regulations, on the basis that it had had insufficient time to scrutinise fully what was being proposed.
The third issue that I thought critical was the lack of a business case, and the Minister made it clear that he was working on one, but there was no assurance given to the Committee about it. The fourth and final point that I raised at the time concerned the European Union. The Examiner of Statutory Rules makes very clear in her report that the regulations will not necessarily begin on 1 April 2017. They will begin either on that date or on the date on which the European Union gives its consent to them. Of course, that could be some time after 1 April, with £85,000 a day being burnt off in the meantime.
Let us go over the four areas. In the past seven days —
I thank the Member for giving way. I ask him to curb his language and maybe the reckless tone. He talks about money being "burnt off". There are many, many credible businesses using the scheme legitimately. Many of them are in his constituency, as there are in mine and everyone else's, and they are using the incentive scheme for legitimate environmental purposes. They bought into it in good faith.
I thank the Member for his intervention, and he is absolutely right. One of the great shames of this debacle — when I use potentially emotive words, I am being careful, and "debacle" is the word that the First Minister used in the House to describe the scheme. The Member is quite right. Yes, there are, and I have been speaking to constituents of mine who are signed up to the scheme. I put it to the Member in this way. Over the weekend, his colleague the Member for South Down had to go to the media and say that a number of his relatives are availing themselves of the renewable heat incentive scheme.
Does that not imply that there is some sort of innuendo against those relatives when all they have done is sign up for a scheme? In fact, if it were not for the fact that they are related to Mr Wells, nobody would have a focus on them. That is why, as a party, we have called for those relatives to have their boilers fast-tracked to the top of the list for an audit. If they have done nothing wrong, let us immediately or as soon as possible clear their name and let the public know that they are simply availing themselves of the scheme that was put before them. That should be the case with anybody who comes into the public domain simply because they are related to an elected representative. I absolutely agree —
I thank the Member for his patience and his indulgence. I hear what he says, and I agree with the sentiments. Will he also agree with me that businesses have already been tarnished in the media in connection with the scheme when they should not have been? When that has been highlighted, it has been called "scandalous" and "sensational", but, as he well knows, when there has to be a retraction in the media, whether in print or on TV, it is a small section with an apology. Will he acknowledge that?
Again, I thank the Member for his intervention. I have 100% no difficulty in acknowledging that. There is an expression that we all know: mud sticks. It is unfair. Let us look at what was done. There was a fatal flaw in the scheme, and we know that now. The impact of that fatal flaw has been that some individuals and some companies have had a shadow cast over them. There is an allegation, there is innuendo and there is a bad smell. That is to be deeply regretted. We must do what we can to assist in putting their good name back into good standing.
I thank the Member for giving way. Will he not agree that, if businesses come forward from the outset and say that they have availed themselves of RHI and explain how and why they are using it legitimately, it could, pardon the pun, take some of the heat off them? I think that you are being much more generous to Mr Wells than you would have been had the media found out what the situation with his family was, rather than him coming forward.
I thank the Member for his intervention. I will not comment further on Mr Wells because I do not think that it is fair to relatives to be put into the public domain simply because they are related to somebody who sits in the House.
On the other matter about companies coming forward, I noted over the weekend that the other unionist Member, as it happens, for South Down was doing something different. He was getting an answer to a pertinent question that reveals that, I think, 62% of applicants to the scheme were not applying for a replacement boiler so that they could migrate from oil or gas to biomass, which is renewable: 62% did not have heating in the first place. They were new installations, and this question must be asked: how does that help the environment? Even though the new installations are environmentally friendly compared with gas and oil, how does it help the environment when we are putting in even more heating installations? I will give way to the Member for East Belfast.
I thank the Member for giving way. I share his concern, although I would temper it with this: it happened at a time when, for example, Moy Park, was going through quite a large expansion, so some new installations will have been for new sheds that were being built for the expansion of the business. A proportion of them will have been, if you like, genuine new heating installations that would have been happening anyway, but the Member is absolutely right when he says that he wants to know how many fall into each category.
Some of the four points were directly within the gift of the Minister to action over the last seven days; others are not. For example, the Examiner of Statutory Rules will take the time that she needs to take, but she has now reported. I do not think that anybody in the Chamber, having read the Examiner's report, could put their hand on their heart and say that she is happy. She might be content — just about content. She certainly makes it clear, to my mind, that a judicial review — a legal challenge — is pretty much inevitable. We know of that grouping or that sort of consortium of RHI users who are getting very well organised and have made it clear that they will seek a judicial review of what is going on, and the concern has to be that it could end up actually costing the public purse more. The £85,000 a day continues to have to be spent if they are successful with their judicial review, and then there is the cost of the review itself. Also, there is the issue of whether it is compliant with human rights.
We will listen to the Minister very carefully because we certainly do not want to stand in the way of any worthwhile attempt to stop the haemorrhaging. We will listen carefully for his assessment of the report of the Examiner of Statutory Rules. She has made it clear that, with limited opportunity for scrutiny, it is effectively impossible for any of us in the Chamber to take a definitive view on the regulations.
I listened to the permanent secretary, Dr Andrew McCormick, who was at the Committee earlier today. He was saying, effectively, that what we have here is the best available. That is very different from saying "good", "sound", "solid" or "as good as it gets" — in the context, this is the best available. That is a fair assessment, and I think that Dr McCormick has done more than anybody whom I have heard over the last number of weeks to maintain the integrity of the devolved institutions. I thank him for that.
Today, the Committee had the opportunity to shift its position from having noted the regulations to approving them but did not do so. The Minister did not turn up. Again, we will certainly listen carefully to Mr Hamilton to hear why he was not able to attend Committee today. Surely, if we are looking for a consensual way forward, the Minister would have made time for his Committee. But, let us not prejudge: we will wait and hear what the Minister has to say.
Then, there is the business case, and we look to the partners of the DUP in government: Sinn Féin. From what I hear, the business case is stuck in the Department of Finance. The Department of Finance could have come to the House and told us that the business case was fine and we could move forward. It had a week, but what happened over that week seemed to be that the two Departments — Economy and Finance — were in a race to see which could be first to commission an inquiry under the Inquiries Act 2005.
I have to put it on record that, bizarrely, I was contacted by representatives of both Ministers and was unable to take the call directly on both occasions. When the Finance Minister's people contacted me, I was at an event on Saturday and was not able to reply for several hours. There was no harm done because that was on Saturday and he wanted a meeting on Monday. Before that, representatives of Minister Hamilton contacted me on Thursday. I was unable to directly respond to that call because I was at a funeral. By the time I responded, the meeting that they had wanted me to attend to discuss the Department for the Economy bringing forward an inquiry had already begun; indeed, as I later learned, the Finance Minister had already got to the point of announcing an inquiry. It is a matter of regret, but, for the record, that is why I did not attend the meeting that the Economy Minister wished me to attend on Thursday to discuss the possibility of him bringing forward an inquiry.
My fourth and final point is with regard to the European Union. As the Examiner of Statutory Rules made clear, the regulations, if approved, will not necessarily kick in on 1 April because they also need to be approved by the European Union. Specifically, we have to know if they are compliant with article 107 of the Treaty on the Functioning of the European Union.
In the last seven days, I have not heard any opinion coming from the Department, and I do not believe that the Committee has been given any assurances in that regard. So, once again, we will listen to the Minister to see if there is certainty. It is a lack of certainty that we are trying to address. For that reason, I thought that a gap of seven days would be useful. We have come to the end of the seven days, and very little additional certainty has been added, so we will listen to the rest of the debate and, particularly, to the words of the Minister.
I welcome the opportunity to take part in this debate. I will begin by welcoming the regulations that we have in front of us this afternoon. I also welcome the opportunity that we had over the last week as a Committee to look at them in more detail and to be able to get evidence from the Renewable Heat Association and from the permanent secretary of the Department for the Economy. I believe that those discussions were useful, and I believe that we are better informed now than we were seven days ago. However, it is clear that the regulations will significantly reduce the cost of the renewable heat incentive scheme in the next financial year and will effectively keep us within the original budget. This is what the public want to see.
We are all aware of the public concern, the public interest and, indeed, the public anger in regard to the issue, and I am pleased that progress is being made on instilling confidence in the public, or reinstating the public's confidence once again, because of the public inquiry that has been announced. That is very welcome, and I will not stray into those issues, other than to say that it is welcome that that is happening.
The other thing that the public want to see is cost controls. Most of the public anger in relation to this issue has come from the fact that this has the potential to have so much of an overspend on our Budget, and there are concerns in relation to allegations of fraud and, indeed, overcompensation as well.
It is important for us to remember that being a recipient of the scheme does not mean that the recipient has been doing or is doing anything wrong. Legitimate applicants should not have their reputations tarnished or their integrity questioned. It is very important that we put that on the record again. However, the way in which the uptake of the scheme developed has meant that action needs to be taken so that we can avoid further negative implications for our Budget in years to come. The regulations —
Will the Member acknowledge that the cost of the scheme — £25 million to £30 million a year — was fully known over a year ago? Can he explain why the current proposals, which have only been out a matter of days, were not brought forward one year ago so that there could have been full scrutiny and a much higher level of certainty going forward as to what the implications of such legislation might be?
That question was asked this morning at the Economy Committee, and the permanent secretary answered that there had been various plans and different proposals being considered in the Department, but this was the one that has come now. I will come on to this in just a second, because I think that it is important that we take the time to get this right, which is one of the reasons why I think that it is correct that there is a one-year interim solution to this, and then we will have time for a longer-term scheme to be addressed after that.
I thank the Member for giving way. On the point that the other Member raised, does the Member not realise that it was brought up last year in this very House, when the then Minister, Jonathan Bell, came here to close the scheme? He would have been fully aware at that time of why the scheme had to be closed, because the then Minister, Jonathan Bell, talked about that very thing.
Of course, Members across the Chamber will know how they voted or did not vote on closing the scheme. To say that we were not aware is completely untrue. If people came to this only in late autumn, that says more about them than it does about the Assembly.
We want a solution to this; we want to be able to control the costs of it. In order for us to do that properly over the long term, it is right that we have something in place now that can deal with the next financial year. The regulations address the worst excesses of the scheme and that which has been the cause of so much public concern and anger and potential negative consequences for the Executive. The regulations are for one year only. They are an interim solution, but they have the potential to save £28 million. We have also been told in our briefings from the Department that those savings could be even greater, depending on improved enforcement and the different attitudes that users take with regard to changed behaviour. There is a sunset clause in the regulations as well. That is appropriate. The right steps have been taken in the way in which these have been brought in as a short-term measure. They will give us the extra time that Members, the Department and the Renewable Heat Association are looking for so that we can address this better in the longer term. Nobody in the House believes that the regulations are the perfect solution to the problems that we face. A delay in the debate for a week —
I will just finish the point first. A delay of a week has allowed us additional scrutiny, but it is, obviously, not the type of scrutiny that we should be accustomed to in the House. However, it is action for the next financial year, and that is important.
I thank the Member for giving way. I invite the Member to concur with me to the House that, under scrutiny by the Committee, the permanent secretary has suggested that potentially the more favourable approach in the long term, subject to public consultation, may be the run-on of the current approach. Again, that raises the question of why it did not come forward sooner, but I invite the Member to recognise that there is a view amongst departmental officials at this stage that this may be the preferred approach, subject to consultation ratifying that over the next 12 months.
Of course, that is the important point: it is subject to consultation. The Renewable Heat Association, when it was before the Committee last week, made the point that it wanted to have more consultation before a final decision was made on the longer-term programme. It was the view of the permanent secretary, I believe — I hope that I am not misquoting him — that it provides the basis for where we go in the future. That is the point of a consultation: we do not predetermine anything, and we allow opportunities for people to have their say. If better options come to the fore, we will look at them and accept them.
I want to mention briefly some of the conversations and discussions that we have had in the Committee for the Economy about the regulations. I begin by thanking the Clerk and his staff for the work that they have done over the past number of weeks. They have put in a lot of work to organise extra meetings and give us the opportunity to have a greater look at what the regulations say and what they will mean.
When the Minister appeared before the Committee last week, he indicated that the regulations were right for us to support because they would, first, address the worst excesses of the scheme, relieve the pressure on the budget and support those who applied legitimately. Those are the things that should guide our thoughts at this time; in particular the public interest in the money that would be spent if we did not take any action. It is important that we reiterate that doing nothing is not an option.
I also thank Dr McCormick for his appearances before the Committee, because we gleaned an awful lot of useful information from him. I want to set out some of the things that he said to us. He was very clear that he has an obligation, as the accounting officer for the Department, to sort this out and to make sure that he keeps his books balanced. He said that there was no quicker or better option. He said that the public interest was not served well by the current tariffs. He said that the regulations were a very defensible, very viable set of proposals and were:
"the only means available to stop a haemorrhaging of funds."
He said that it was a very strong option and that the rationale for supporting them was clearly there. His evidence made clear to us the importance of getting cost control measures in place and the detrimental effect that doing nothing would have; indeed, if the regulations are not brought in, we will have to look at finding the money from elsewhere, perhaps from the Department for the Economy's budget. We know it has many other priorities, such as Invest NI, higher education, skills and promoting our country through tourism, so we need to be realistic as we meet here today. We do not have the comfort of being able to say, "Well, I do not really like the regulations, so we will do nothing". Doing nothing has serious consequences as well.
It is also useful for us to take evidence from the Renewable Heat Association. It was clear that they had a considerable interest in these issues. When questioned, it was clear that they did not have an alternative option that could begin to deal with the issue in this financial year. They were talking about options that would be further down the road but would not address the initial overspend that we would face or the implications that that would have for the Department for the Economy's budget and, perhaps, other departmental budgets. I also asked members of the association if they believed that a rate of return of 50% or 60% or even 70% was excessive. I asked that question a number of times, and I do not think anyone was able to give a straight answer.
Their main point was that there should have been greater consultation on the regulations. Obviously, because of the time pressures we are under, that was not an option for us. We know that, because of the actions of Sinn Féin, the Assembly will not be in existence after Wednesday. We do not have the luxury of taking more time, if we want to deal with this situation and if we want to make sure there is not an overspend in the next financial year, this needs to be dealt with now. Mr Aiken, who is not in his place, said that this was costing £85,000 every day. If we are concerned about that loss of money to other priorities, if we want to see cost control measures brought in, if we want to ensure that the issue is addressed and tackled and if we want the public to know that there will not be an overspend of the magnitude that had been reported, we need to support the regulations; indeed, it is the only show in town. It is, as the permanent secretary has said, the best available option. That is why it is right as well — we say this again — that it is a one-year scheme that gives us the opportunity to further consider this.
I thank Mr Lyons for giving way. On the fact that time constraints did not allow for a proper consultation period, the regulations will not take effect until 1 April: does he agree that that would have allowed time for a consultation, even if it had had to be foreshortened?
It would allow time for consultation but absolutely none to get the regulations passed in the House. Tomorrow or possibly Wednesday, if there were to be a special sitting of the Assembly, is D-Day, and that is it. The opportunity would be gone for us. That would mean, in effect, that consultation would be worthless. That addresses the point that the Member makes.
I hope that Members will support the regulations. Claire Hanna, who spoke at the beginning of the debate last week, set out her position, but what was lacking from it was a clear alternative. What else do we do? It is clear to Members that we either support the regulations or allow that overspend. So many people across the country and so many in the Chamber have spoken out against this and have been so angry about it. Failure to support the regulations will allow that to continue in the next financial year. I do not think that that would be appropriate or that it is what anybody wants to see happen.
So much of the debate on the issue over the last number of weeks has been about trying to hurt or damage Arlene Foster in some way. Mr Allister's point, when he accused my colleague Mrs Little Pengelly of trying to shift the blame and trying to smear others, was very telling, because I think that that is what he and others are trying to do: they are trying to smear Arlene Foster. When he said to stop trying to smear others, it revealed what he was really doing.
I hope that Members, on this occasion, will put party politics to the side. An election is coming up, and we will have lots of time for all that stuff. Right now, the position that we are in requires action, and that is why it is important that the regulations are supported. That is what I hope Members will do.
Thank you, Mr Speaker. I appreciate that.
I was hopeful that the extension of seven days from last week's debate would offer a genuine opportunity for those focused not just on an inquiry but on trying to stop the haemorrhage of public money that should and could be spent on better things, such as hospitals and education — and I could go on. I hoped that that would happen, but, at the outset, I register my disappointment that former members of the Executive and the Committee from Sinn Féin chose not to attend Committee meetings to discuss this point. It is particularly difficult to witness that at a time when they are otherwise very busy on the air waves, trying to play the blame game and essentially rushing to the front line to get the headline.
I would never dare make such an assertion.
It is particularly disappointing because there are clearly two bodies of work at play here. It is in everybody's interest that the truth — who knew what, when and what exactly happened — comes to light. Only in that coming to the public light will lessons be learned from this. There is the second body of work, for which there appears to be little to no appetite. I say that across political parties and the media. If my house were on fire, would I put out the fire and then investigate how it started, or would I investigate it while the fire was raging? What has been happening in the House is that the DUP/Sinn Féin Executive, behind their iron curtain of politics, which has set a tone not befitting the Good Friday Agreement or any politics going forward, have watched the fire rage.
Nobody saw fit to ask, "Should we be putting this out?".
We all know that, at that time, it was the legitimate scheme that should have been produced and laid out at the outset. Had that been the case, we may have had a very good scheme in place, but that was not the case. That is the little fig leaf that Sinn Féin will no doubt use to try to hoodwink and convince the electorate that it somehow had no duty over its mandate in the Assembly to do anything, which was, essentially, to stop the haemorrhaging of public money.
I appreciate that the Member was not here last February, so she had no role in the last discussions, but she needs to be aware that her party voted against the proposal to close the scheme in February 2016. That is the reality; that is a fact. You can say all you want about it, but you and the Ulster Unionist Party voted against the closure of the scheme, despite repeated warnings about the cost that would be accrued and lost to the public purse. Your party voted against closing the scheme. Simple fact. You cannot get round that. I know that you were not here at the time — neither was Justin — so it is not your fault, but your party as a party, and other Members who are still here and were here last year, voted against the closure of the scheme.
On a point of order, Mr Speaker. There has been a consistent pattern over the last fortnight of Sinn Féin Members heckling other Members from a sedentary position. Can you please advise them that, if they want to participate in the functions of the House, they can list their name and come to speak like every other Member who was elected here?
I will continue, and I will continue for the benefit of Mr Maskey in particular, who clearly does not understand the facts of the case. The amended scheme, which had tariffs and caps applied, was presented to the House in February. You are right: you were present; I was not. The Member might be disappointed to learn that this Member can read and take facts.
Mr Maskey and his party might do well to revisit the Hansard report of that time. There you will find a very well-considered scheme that was measured and that, had it been used at the outset, would have led to an avoidance of the saga in front of us today. However, on that date, when SDLP Members presented themselves here, they, like other Members, were mindful that the quick execution and early closure of the scheme were placing legitimate businesses at risk, because people who had signed up to a very good, worthwhile scheme, at that stage —
I will finish my point. They had signed up to a very good, worthwhile scheme at that time. Those businesses were in the process of realising orders coming into their business. They were in the process of installing boilers with — I repeat — the measures in place that should have been there from the outset. So, Mr Maskey, your little red herring has just died.
— to try to somehow undermine me by saying, "You were not here; your knowledge base would not be quite the same as mine". Well, Mr Maskey, my knowledge base is based on fact, not on spin and not on trying to somehow deceive the electorate by saying that you had no part to play in this.
Quite frankly, while we are at it, we will ask this question: why did Sinn Féin not want a public inquiry? What was the reason? Why was there an extended delay in this? A suspicious mind might think, "Maybe there is something that Sinn Féin is a little bit uncomfortable with and which could be laid bare", and imagine if that were to happen on the eve of an election. Sinn Féin's position on this appears to be, "Let's just get the votes in first and get to the facts later".
I will use my opportunity to inform you further, Mr Maskey, of what happened today at the Economy Committee, which you chose not to be present at. Legal advice was brought to the Committee. A legal pathway was set out that the Minister could pursue with these regulations and an amendment to them. It was set out how that might be possible. The problems and areas that we may have reason to have concern about were also set out quite clearly. Also presented to the Economy Committee was the legal pathway that the recipients of RHI funding could pursue through the courts. There were very clear indications that, equally, they have a pathway to follow up on if their contracts with the Department were not being honoured. I have no doubt that it is not the job of the House to judge or measure which of those two legal pathways holds the most weight, but, equally, I have no doubt about the decision being presented to us today. I have no doubt that a judicial review is highly likely, and it has been made clear to us why that is highly likely. Let it be placed on the record that nobody in the House believes that what is in front us of today is anything near perfect. In fact, in the week that is in it, many of the imperfections were highlighted.