I will pick up where I left off before Question Time. Essentially, I was trying to talk to the facts as they are presented to us today on this regulation or amendment to it. We are acutely aware that what is being asked of Members falls outside anything that would be considered good governance or arrangements for making good legislation or amendments to it. It was very disappointing that the Minister was not in attendance at the Committee this morning, as many legitimate questions are still unanswered. It is not a very comfortable place to find oneself in when there are so many questions that are unanswered, and yet the business has to proceed against a ticking clock set by others.
The omission of critical things include the agreed business case. In probing and trying to get to some sort of answer around the business case, we did hear that there is no valid objection to it, which falls far short of there being any agreement to it. At this moment — I could be corrected on this — the Minister of Finance has yet to give any agreement to it. As we are charged here today with measuring the probability of judicial review against the potential costs of such a judicial review against the public interest, what would certainly have weighed in favour of this regulation going through as amended would have been the Finance Minister stepping up and giving some commentary or lead on it.
I refer to the Iron Curtain of politics, which, ironically, the two Executive parties now find themselves on the wrong side of because if the House had been privy to any sort of monitoring rounds or draft Budget we would have been able to measure whether it was workable or whether it was workable with regard to the debate and the priorities that were being set. Of course, while some talk about equality, they were very comfortable with the fact that they did not treat other Members with equality. They were very satisfied to sit behind that Iron Curtain and reserve information for themselves only. Today, unfortunately, it is not the SDLP or the opposition parties that have fallen foul of that but the general public.
That is an absolute indictment of this Executive and the way they operated. Regardless of who or what, if anything, is returned to the House, I surely hope that there will be time to reflect on that and the manner in which business was done.
I will move on. On the probing, a cynical person might say that this is the Minister basking in the sun for his electorate, trying to push something through at the eleventh hour, so that, when he knocks on the door and they ask, "What did you do to stop the loss of money?", there will be a piece of paper. That might have been true, only we learned today in Committee that this is the brainchild of a SpAd, an unknown SpAd.
A super-SpAd. We do know that it was not a SpAd in the Department for the Economy. A good idea is a good idea — I have no problem who it comes from — and if a good idea saves money for the public purse, I will be the first to jump up and support it. However, when there appear to be political fingerprints all over this and, like everything else, that information was withheld, forgive me for being cautious, forgive me for having another list of questions that will go unanswered.
There is no trust here. It has been lost through a drip effect from the Executive over a long time, and I ask this question: who knew what and when? We are trying to place the amendment in front of us into context. I noticed that Mr Maskey has absented himself from the Chamber, maybe wisely so. When we reflect on who knew what and when, we know that, in November, the scheme was revisited and sensible proposals were put forward on putting in caps and tariffs that were voted on and rightly so. We also know that, in February, the Minister came to the House and referred to an advertising campaign as part of his explanation of why, suddenly, the scheme had become so popular. The SDLP's response at that time — I stand over it — was very measured and considered, given the information that was in its domain at that time. Others reacted in a different way. With hindsight and a look back over Hansard, it would lead you to wonder why others were less measured. Why did they feel a need to hurry in? What information were they privy to? How did they know the importance of cutting the scheme short of two weeks, not that it was going to make a big difference at that stage. It raises suspicions, and it certainly raises eyebrows. What was Máirtín Ó Muilleoir referring to when he urged the House to vote in a way that did not stack up in a measured way, considering what was in front of us? Mr Maskey may be muddled in his recollection because, perhaps, what he has to do and I do not is to separate what he knew and what he should have known. I have the privilege of standing here speaking on the public record on the basis of what was allowed to be known to the public and to the Opposition parties in the House.
Will the Member agree that one of the people who knew well what was happening with the scheme was none other than the Chairperson of the Committee for Enterprise, Trade and Investment, her party colleague? Has she studied what Mr McGlone — I have a lot of respect for him, and he did a lot of work on the Committee with me — said in that debate?
I thank the Member for that intervention. It is quite an astute one. He might be disappointed to know that I have studied it, and, if you look carefully, you will see that it is clearly on record that Patsy McGlone at that time made it known to the House that questions remained unanswered. He did not know. He, like others, was kept in the dark.
The people who appear to have had the privilege of knowing are the people who had the gift of delivering a public inquiry over the last seven to eight months. Those people, for reasons that will become increasingly well known to us all, did not want such a public inquiry, when, in fact, the SDLP could see — I am sure that, with the benefit of hindsight, even the DUP may see this — that the right thing to do was for Arlene Foster to step aside to allow for a full, independent public inquiry, to allow lessons to be learned and to allow a consultation and a measured approach on how to bring this to a close.
I appreciate the Member giving way. She will be aware that, at the end of December, her party brought tabled a motion in the House. The motion that her party tabled was not about establishing a full public inquiry; it said that Mrs Foster was not fit to hold public office. You said that before we had even had the inquiry in the first place. You prejudged any outcome.
It did not ask her; you are right. When I took an intervention via Conor Murphy, I asked him whether it was not the first step in creating a credible public inquiry. At that time, Conor Murphy let me know that in no circumstances would the SDLP's idea of asking Arlene Foster to step aside first have anything to do with a public inquiry. He saw no reason in it. He said that we were after a head. That was not the case. We asked Arlene Foster to step aside for good reason. She was the Minister who created the scheme, oversaw the policy around it and set it off in its delivery, and there was a clear, unequivocal conflict of interest. She could not have served in the role of First Minister while such a critical inquiry was being brought about.
Sinn Féin did not share our opinion. As you know, you had their full support on that day that Arlene Foster should remain in post. Therefore, SDLP calls for the public inquiry again could not be heard through the iron curtain of the Sinn Féin/DUP Executive. The calls for that independent inquiry, like everything else that appeared to come from these Benches, was dismissed — dismissed at the expense of people waiting for hospital beds and educational establishments that are being run down to nothing. It is shameful that anybody would attempt to come here and give a revisionist history of what happened, when the public record shows clearly what happened. Sinn Féin members can account for themselves on the doorsteps as to why they did not support the SDLP on that.
I move on to the reasons and other suggestions that are really causing a problem here and that we must put on the public record. We have no agreed business case. There has been no consultation. We cannot brush over that fact. That is a serious flaw. To just circumnavigate consultation in any legislative process suggests that we are on very thin ice. I say that with the greatest respect to the Minister because I know that he was intent on pushing this across the line, but he must acknowledge that the things that are missing in this process weigh heavily on us all.
Because there was no consultation or no time for consultation, we never got near the period where compensation would be discussed. The public appetite for compensation might not be high, but I am weighing all this up against the possibility of a judicial review. The fact that it was not even referred to or that there was no time or allowance for it again weakens the position. Our access to information has been shameful. Asking any legislator to come into a House and legislate in a way that allows them access to small amounts of information at a time of someone else's choosing is simply not good enough and never will be good enough.
Let us not forget that there is a danger in going ahead with this. We are setting a very dangerous precedent that this is how law can be achieved. We know that people come into the House who do not enter into the spirit of how it has been set up. They are here to manipulate it to their own ends at every turn. To lower the bar to this standard suggests a doomy future for the House.
There is no doubt in my mind that people are watching this debate and looking at the possibility of taking forward a judicial review. The regulations go no way towards trying to separate out people who are being overcompensated, people who are wasting energy and money and people who are simply abusing the system. We are no further on, in that, if we pass the regulations today, which is regrettable, the public deserve to know exactly the lie of the land about who is using and abusing the scheme.
I will go further. We still await and maybe will hear from — there are a lot of eleventh hour decisions here, so who knows? — the missing Minister of Finance about these regulations. We need to know what conversations he has had. What is his thinking on this? Has he an appetite to make it work, or is he satisfied to walk away from his responsibility?
There is no doubt — others will join us now in learning how things are being mooted over the airwaves — about the need for an independent review. I have serious questions about who knew what and when. I mentioned why I have suspicions that Sinn Féin and the DUP were privy to information that others in the House were not privy to at a time when a vote was taken in the Chamber. Given that, I do not think that it is in the best interests of the House that either of those parties put forward the Minister for an investigation. I would have thought that the best person to step up and lead on this investigation has to be Claire Sugden, our Minister of Justice, which would create enough political distance from any investigation. Whether I like that or not, I welcome an investigation. It has to happen, and it is not too late for Claire Sugden to step up and play her role. However, I find it regrettable that the people of Northern Ireland are being asked to vote on this important matter before they get the facts. Every candidate who intends to stand for the Assembly in the forthcoming election should make a public declaration on RHI.
I make my remarks in the context of talking about the regulations, and there is the possibility that the individuals returned will be responsible for working on the temporary plan. They should declare an interest and beyond, because this is not about family members; it goes beyond that. Is any Member sitting on critical information that will come out during an inquiry that they would in good faith like to share with the House today? The public deserve to know the facts. A lot of facts are clearly and obviously missing, which is to our detriment.
I find it very unfortunate that this is our last chance to get to any detail. It is the eleventh hour. It is unfortunate that Sinn Féin has walked out — fled the crime scene. Simon Hamilton is before us, but in what capacity? I am not sure, because he was unable to meet us as Minister this morning. I remain very much in the dark, but I will remain measured in listening to the remainder of the debate. I assure the public that, going forward, the SDLP will take a very cautious approach to the debate.
As always, I speak on energy matters with enthusiasm and passion. This is where I come from; it is my background. I sat on the Enterprise, Trade and Investment Committee for so long, and I like this stuff; I actually do. I have found the whole debate or debacle — call it what you will — fascinating and historic. I have not yet made up my mind on incentive schemes. My colleague Steven Agnew, who is sitting across the way in the corner, knows my stance on this, as we have attended many an Enterprise, Trade and Investment Committee together. Not only have I not made up my mind about incentive schemes but we must ask this question: how, and at what level, do you fund an incentive scheme? An incentive scheme, by its nature, incentivises businesses and households to do something that you want them to do. You are channelling them and causing an effect by the incentive that you give. That is what an incentive scheme is.
I thank the Member for giving way. He talks about what it means to give an incentive. I am sure that the Member understands the difference between subsidy, incentive and profit. Whilst it may be possible to subsidise activity — that is, to reduce the cost of it — or to give an incentive — an inducement for somebody to do something that they might not otherwise do — the problem with this scheme is that it generated a profit for doing what had previously been done. That goes to the nub of why people are concerned.
I thank the Member for her intervention. She is exactly right, but let me tell her and the House this: all incentive schemes are about profit. When you have a renewables obligation certificate (ROC) scheme in place, you get money to generate electricity to the point at which it is free. That is a profit; there is no other way of dressing that up. That is what an incentive scheme is and was, and it has spread right across western Europe.
I am quite happy that you have given way. There is a difference between incentivising activity and what you have just described. Allowing people who produce electricity beyond that which they would normally use and pay for to sell it back to the grid is an incentive. Creating profit simply from burning pellets is a different matter altogether. It generates profit by doing the business you would have been doing rather than simply reducing the cost. The first is an incentive; this is a profit.
I hear what the Member says. Does she not realise that we are moving an incentive scheme from what could be a 60% profit to a 12% return. However, it is still a return; and it is exactly the same with wind, solar, biomass or tidal energy. Name any incentive scheme for renewable technology, and it will come down to pounds, pence and profit. That is an undeniable truth; it is what we are talking about here. We are talking about assisting businesses and households to go to a certain place that we want them to go to. Some of us might not, necessarily, want them all to go that way, but that is the case, and it has been the case —
I will finish the point. That has been the case right across the Western World. That is what we are talking about. It alarms me that, when we talk in this place about a scheme of this nature, sometimes, there is a lack of knowledge on these subjects. That really gets at, and grates at, my heart. I will give way.
Will the Member please recognise the difference between profit for a farm as a whole — as a business — and profit through heating your shed? Will he please distinguish between the two?
There absolutely is, and that is where we will talk about the abuse of any given scheme. I completely qualify that; I quantify that. You are exactly right: if unuseful heat has been generated, that is an abuse; it is a complete fraud. That is not what the scheme was designed for.
I thank the Member for giving way. There is a danger, because it has been suggested in a number of comments that, if the scheme had been operated within the rules and the spirit, it would not have generated a profit from burning the fuel: that is not the case. You do not need to scam the scheme to make a huge profit and return on the scheme. That is the difficulty. Suggesting that that is the case is completely wrong.
I did not suggest that, Mr Speaker. I am basically trying to lay down the laws and policies of an incentive scheme, why they even exist and why we are discussing incentive schemes for renewable technology. That is what we have been about for the past 20 years. That is why we have set targets for renewable technologies, wind energy, solar farms and all of that in our Programmes for Government. That is why we are here.
Thank you for giving way. Do you take the point that there is a difference between an incentive scheme and one that has absolutely no controls in it — a badly managed scheme — and that the people of Northern Ireland and Members are angry at the way this scheme was managed, as opposed to any incentive that there may or may not have been in it?
The Member is absolutely right. We will get to controls now, if I am allowed.
Whilst Sinéad Bradley let me in during the second half of her contribution — after half-time — she did not let me in at the start. There are facts around this, and then there is hyperbole, sensationalism, loose language, insincere language and, in some ways, dangerous and reckless language being used here in these debates. It is all about the political stances and political games that we all play. I understand all of that, but, at the hub of the matter, the people need to know what is taking place here. Since the debate started way back in 2012, I have known that there has been too much noise around this — too much noise that is not actually fact. That is the truth.
Sinéad Bradley talked about facts. She rightly tried to pin Sinn Féin down, because it has a lot to answer for on its current stance. Why are they not in the Chamber now, when they were here for the first part of the debate? It is a very important regulation that needs to be passed. Sinéad Bradley talked about facts. She corrected herself in the second half of her contribution. The scheme was amended for new entrants in November 2015, and, in February 2016, it was closed. Of course, we all know how people voted at that time on whether to keep it open or to close it when it needed to be closed. At the start, she talked about her house being on fire. She used the illustration of her house being on fire and asked, "Is it not better to put the fire out before you investigate?". I think she was trying to say — I will give way if she wishes — that you stop the scheme straight away and then investigate: that is not an option. That is not an option for businesses that have forked out £70,000 or £80,000 on a new boiler for a broiler house that they have been building because the Government have told them and inspired them to do so. Remember Going for Growth? What was it all about? It was about incentivising growth in our farming industry. I listened to the point that the leader of the —
Thank you for giving way. I appreciate what you are saying; I take your point. Can you explain, if it was not an option to stop, what has changed? Why is it an option now?
It is not an option now; we are putting in cost controls that will bring the costs down. That will mean that they are not as burdensome on our block grant as they would have been if we had allowed the scheme to go on. We are also finding, day in and day out, that there are people who are acting fraudulently and not in the nature of the incentive scheme itself and, as your colleague rightly says, burning the pellets in a boiler that is situated in an empty shed. That is totally and utterly wrong, and it has to stop. Having listened to this the whole way through since 2012 and considered incentive schemes throughout the Western World, I want a Minister who will fix it. I want a Minister who will bring legislation to the House to fix it, and that is what the Minister is doing today.
The Member mentioned at the end of her contribution the time that we have had to scrutinise the legislation, and she is absolutely correct in that. There are legislative stages to go through, and we need to scrutinise these matters and the regulations carefully, but the facts are that we do not have that time. We wish we did, but, because of the position of Sinn Féin and the actions that it has taken, this is it, folks. This is it — it is coming down. We need to get things in fast. Sinéad Bradley, my colleague across the way, was quite right too —
I thank the Member for giving way; he has done so a number of times. On the point that, "This is it", I am working on the basis that we will be back here after the election. The regulations do not kick in until after 1 April, so is there not time to come back to a new Assembly to put something in place?
I congratulate the man on his optimism. I wish that I shared it, I really do. I have seen the sea change — the change in stance and even in the demeanour of members of Sinn Féin in the House in the last week — and I do not see this place coming back any time soon, even after an election. So, again, our chances have been shot.
We have a Minister now wanting to bring in regulations that will protect the burden placed on the Northern Ireland block grant, even when he is not in position after the election. That is commendable and is the right thing to do, and I think that he has moved in that way. But to think that the Minister has done something in a knee-jerk way is utter nonsense. The crisis did not start in an episode of a show or on a media outlet or the front page of a paper; it started last year when the scheme was closed. When people realised what was going on, they closed the scheme and then investigations kicked in, first with the Audit Office. That is how long this has been going on — not since late autumn. If people think that this started in late autumn, they have not been reading it at all and do not know what they are talking about. That is what really annoys me at times on incentive schemes. Where is the Finance Minister today?
Yes, sorry for my slip of the tongue.
The Member says that this has not crept up on us suddenly. Why then it is that, at the last gasp of this Assembly, this is the first time that we have seen a proposal to put tiering into the tariffs? The second point, if I may, is that I do not think that it is too pejorative to say that this is but a sticking plaster, because the regulations run out after one year. What is the vision for thereafter? Will there be a scheme continuing the tariffs but with compensation to those affected? Is there some other grand plan, or do we just not know what will happen then?
The Member raises very good points. Of course, he talks about compensation: the incentive scheme is a compensation scheme. That is what an incentive scheme is. On his point, when the scheme was closed, there was an Audit Office investigation. There was a PAC investigation after that. The Ministers would have got around, seen the context and the depth of the problem and then acted out what they were going to do. That takes time because, first of all, you have to measure and inspect the problem, and, to date, there have been 300-odd inspections. These are things that have been going on; they do not happen overnight. You do not want the Minister to come to the House in a knee-jerk fashion; you want him to come here with proper regulations that he can put to the House. The House can then either pass them or disagree with them and the thing falls, just like when other Ministers brought the incentive scheme to the House on the first occasion in 2012 and on the other occasions in 2015 and 2016 when decisions were made in the House.
I would also like to add something to my colleague Emma Little Pengelly's point. She was right, of course, that Committees have a scrutiny and support role. I sat on the Enterprise, Trade and Investment Committee and know its worth. I also know that that Committee saved electricity bill payers £700 million over 20 years. How did we do that? We did it because the Minister at the time was going to bring in a Northern Ireland-only ROC scheme. That would have cost bill payers £700 million over 20 years, and the Committee blocked it. It did so four times, in May, June, July and September 2015. The run in RHI that was created happened that autumn. Why did the run take place? Should we then blame everyone who was involved in that run? Are these the people who we think are scamming the scheme? No, they are not. It is quite simply this: there is a world of renewable energy. We all know about it, and we have all met the people who installed the boilers and the wind farms and everything else for the ROC scheme.
Amber Rudd in Westminster closed the ROC scheme a year early. When she did that, Northern Ireland had a decision to make, and Northern Ireland made that decision. What that did was generate interest and debate in this topic. RHI installers and influencers were going round telling businesses — rightly so; I am not saying that there was anything wrong with that — that if the ROC scheme can close early, so can the RHI scheme. Of course, there was a longer lead-in period for RHI — many more years. However, I believe that that caused concern in the industry that the scheme was not viable; it was not here for ever and could close early. I believe that businesses then decided that instead of replacing their boiler in five years' time, they would do it while the RHI scheme was open because it might close the following year along with ROCs. ROCs, of course, applied to wind power, solar power and other technologies. There was also tidal power and biomass. I suspect that that was one of the reasons why a run was created.
There were 900 applicants in the scheme before that — a scheme that was under-subscribed and underspent. The Northern Ireland Assembly and the Executive were being criticised by Westminster because the scheme was underspent. Then there was the run, which created the overspend. That is something that we have to deal with. This happened over a period of weeks and maybe months, and the Minister at the time decided to change the regulations in November 2015 and was right to do so. He decided to close the scheme in February 2016, which he was also right to do, even though most of the Opposition parties voted against it at that time. It was the right thing to do at that time.
Here we are now with this House about to fall in two days' time, and we have a Minister who needs to act fast. By putting these measures in to introduce tariffs and cost controls, he will bring the cost of the scheme down. Instead of people making a 60% return, it will be brought down to 12%, which is probably reasonable enough for an incentive scheme. I support the Minister in that regard. It has to be done. Then we have to look at a long-term solution to the problem.
What annoys me, however, is the white noise from some people, I may say, who do not have a clue about incentive schemes or even about renewable energy but who will use this situation as an opportunity to take a scalp. They will say, "We are the Opposition, and it is our job to scrutinise and harass and argue the other side of any argument." I get that; if that is what you are there for, I get that. Remember, however, that we have to be responsible.
OK. We have all witnessed the attacks on some of our members and on our leader. We will let the public decide whether "harass" is one of the words that can be used to describe what has happened over the last number of weeks.
I have looked at the scheme and studied it. Whilst it is not perfect — I do not think that the Minister would argue with that — it is what now has to happen to reduce the burden on the Northern Ireland block. The evidence overwhelmingly supports the action that is proposed today. It is an approach that will address the excesses that have led to clear public concern, move the regime back towards its original policy goals and move towards zero the cost pressures that the scheme placed on the Northern Ireland block grant.
When you are out there in the media, please do not talk about an incentive scheme as if it is a bad thing. I might think that it is a bad thing because I just do not like incentive schemes, but this is spread across the Western World and it is how people incentivise their energies. Do not bad-mouth an incentive scheme when so many good businesses picked this up and ran with it and converted to the very scheme that we tried to push on them. They have been growing their broiler houses. The leader of the Alliance Party made an intervention about Moy Park earlier — I am sure that her East Belfast constituency is flooded with chicken farmers — and she made a very good point. We have been pushing these companies to grow. Going for Growth is the title of our policy around this, on both the ETI and Agriculture sides of things. We have been pushing this. We have been encouraging our businesses to grow and to put more broiler houses on their sites. What are you going to use when you build a broiler house? You are going to use the technology that is there and that is easily incentivised; that is what you are going to use. There are so many businesses here that have done so much good work. Profit is not a bad word; that is what business is. They have also employed people; that is what businesses do. Politicians do not employ —
I thank the Member for giving way. He makes the point quite properly that many businesses will have availed themselves of this scheme legitimately. Does he not believe that there is an incentive for those businesses to come forward and say, "Yes, we do have these boilers; look and see what we use them for"? That would further expose businesses that have abused the scheme.
I appreciate the Member's giving way. The Member will be aware that a business in my constituency, a car dealership that had one of these boilers, effectively had its reputation damaged without any accusation that it had done anything wrong but simply by virtue of the fact that it was part of this scheme. It is an important point that, in the fevered atmosphere that there has been around a lot of these issues, good people who have not done anything wrong have had their reputations damaged.
Both gentlemen make very good points. My colleague Christopher Stalford makes the most salient point that these businesses cannot trust the media. Look at the media over the last two months. Look at how businesses have been ridiculed, slammed and smeared. That is what has happened out there. I tell you now: the media have a lot to answer for in this regard. These are businesses that are doing good work in Northern Ireland. They are creating profit, jobs and investment, and now they are going to be slammed.
I take the other Member's point, but if businesses come out now, will that help them? I simply point to the honourable action that Jim Wells took this week. How will the media play that out? I will tell you something: it will not be played out in a good way.
A business will come forward and could even show its profit lines and profit margins and how much it will make in any given year, and what will the media do with that information? It will be pound signs and shame. That is what it will be, but it should not be because we are trying, in the Northern Ireland Assembly, to help businesses to grow.
We have tried for years in the House to get round state aid rules and to be able to say to businesses, "We can support you a, b and c", like other countries and other member states do and somehow get away with. Incentive schemes are one way of bypassing state aid rules. Let us be fair. Let us say it as it is. Let us be frank. Now we have all this mess and hyperbole around this. Do not attack the businesses. If you attack the scheme as an incentive scheme, you attack the applicants. If you attack the applicants, you attack the people who employ people in this country and create wealth. I plead with you: please do not do that. Do not take that opportunity just because you want a scalp and just because you want extra airtime in the radio or TV studios. Please resist that opportunity.
Let us look at the sensationalism in our media, let us look at the drip-feeding that we have experienced over the last number of weeks and let us look at the agendas of media. It is all information. I always think that something happened to the media — maybe the leader of the Ulster Unionists would agree with me — in that, somewhere along the line, the media stopped reporting the news and started wanting to be the news. Somewhere along the line, that has been lost. Let us look at sensationalism and drip-feeding. Where is the information going out on the air waves about Sinn Féin's resignation and the fact that that will have cost this country and the Assembly £600 million come July? That is real money. It is 5% of our Budget. Where is that on the newsreels? Where is that on the air waves? We also know that Sinn Féin and the SDLP —
Sorry, £480 million. Of course, that is a lot of money for anybody, but that is over 20 years and is a projected spend. It has not been spent yet. We have £600 million in one year going out of our Budget. Put that in context.
Arlene Foster, the First Minister of this country, was asked to come to the Chamber. She came to the Chamber, and you walked out. She was asked to go to the PAC to give an account of her actions when it was investigating the RHI scheme. She agreed to do that. It was not enough: you wanted her head. You wanted her to stand aside then. Why would the First Minister either being in place or standing aside make any difference to any inquiry or investigation, public or otherwise? It does not make sense.
I know that. Total respect to you, Mr Speaker.
Let us see what has happened here. The public can see what has happened with the head-on-a-platter stuff from the Opposition parties, but I am also appalled by the stance of Sinn Féin. They have not come out of this very well. They have flipped and flopped and done all sorts of things because, first, they are not sure of their stance and, secondly, they want to prolong the hyperbole because it suits their agenda.
I will leave it there because I do not want to incur the wrath of the Speaker any more. I support the Minister in his plans. It is essential that the regulations are passed today; he needs to get them through. It will be a 12-month plan that will curb the burden on our block grant. Let us then find a lasting solution that will fix it one way or the other and allow businesses to get on with doing what they are meant to be doing: creating jobs and making profits.
I rise as a member of the Public Accounts Committee. I am glad to finally speak openly about the issue because we have been constrained to some extent by the conventions of the Committee.
Mr Frew referred to his thoughts about incentive schemes, and I tend to agree with him. When the scheme was first conceived, it was meant to be exactly that: a good scheme to encourage people to move from fossil fuel wastage to renewable energy. There is absolutely nothing wrong with that. The idea was that it would be cost-neutral, with money coming in from the Treasury, us and the recipients. All fine and dandy. It followed about a year after the GB scheme, which did exactly the same thing but was a year ahead of us. It is fair to say that the GB scheme did not, at the outset, include tiering or degression, but the authorities there discovered or realised very quickly that there was a need for those instruments, so they put them into their scheme at a stage when it did not disadvantage anybody. Perhaps we should have learned a lesson at that time. If we had, we would not be anywhere near the situation we are in now. There was correspondence between our Minister and the appropriate Minister across the water — I think that that has been touched on — but our Minister, for whatever reason, decided to leave the scheme the way that it was. I am sure that she got expert advice.
We will not oppose the implementation of the regulations, but I say that with considerable reservation. I hope that, when the Minister responds, he will give us a few answers as best he can. I do not care how long he takes over it because we would rather have the answers than leave anything hanging. This is our last chance. Inevitably, we will end up with a public inquiry, and I am glad that at least one Minister, whose party is not very well represented today, has decided to take it on. We have seen the proposed terms of reference. They are solid, and we look forward to hearing the result in the fullness of time.
In simple terms, the Minister's solution involves introducing the restrictions that were imposed on the scheme in November 2015 to all the recipients who availed themselves of the scheme before that date. That is fair enough. I have a question about that straight away. Some of us at this end of the House received considerable criticism for not supporting the closure of the scheme in February 2016. Everybody, including Mr Maskey, Mr Frew and everybody else who has been slightly critical of us, knows that we opposed the closure of the amended scheme for a short period. If the proposed solution is so good, where was the harm in allowing the scheme to continue on exactly the same basis for a few weeks? The obvious reason for that has been given very adequately by Mrs Bradley and others, and it was that there were people who had contracted to spend an awful lot of money on equipment — on boilers. There were also boiler suppliers who had contracted to bring in boilers. There was a chain of people. We were all lobbied about it at the time. I am sure that Mr Frew was as well — he is nodding his head. It seemed sensible to allow a bit more time for the scheme to progress on the basis of apparent cost neutrality or close to it. I do not know why on earth, almost a year later, we are still being criticised for that, except that there is political —
I thank the Member for giving way. Let us get away from "cost neutral". It may be cost neutral to the Northern Ireland block grant, but it costs ratepayers throughout the UK — in GB and Northern Ireland. No incentive scheme is cost neutral, but you raise a good point: if you delay something or increase the time allowed for something to take place, whether by two weeks or longer, an argument could be made for doing that at every stage of this scheme and every time it was changed. Sinéad Bradley raised the question of why the two weeks were allowed. She asked why it happened and said that answers were needed. The answer is quite clear: to allow people to put in the boiler that they had paid for and ordered.
The damage was done in the period running up to November 2015. It was not done between that date and 2016. No more damage would have been done between February 2016 and the end of March, which was the proposed date of the scheme's closure to new applicants.
As far as the application of the regulations are concerned, which is what we are here to talk about, there are serious doubts about whether this is feasible or legal and whether it infringes European regulations in particular. It will affect bona fide recipients of the scheme. These are people who took advantage — I will rephrase that — decided to enter the scheme out of the best of motives. Others, and some are becoming public knowledge, quite clearly saw an opportunity to scam the system and make a lot of money through a use of heat that had nothing to do with heating a business for commercial purposes. This, however, is a broad-brush approach. The tiering will hit people, and the 400,000 kilowatt-hours a year limit will also hit some bona fide businesses. It may well not disadvantage people in the second category — those who were trying to take advantage of the scheme — because they use only 390,000 kilowatt-hours a year. You can follow the argument without me telling you.
Mrs Pengelly said that it was important that what was proposed was fair and in the public interest. I tend to agree. Those are noble ambitions when trying to frame law, but we are trying to frame a regulation that breaches a legal contract that people have taken out in good faith and which both parties signed. It is very clear — I should rephrase that as well — it is totally unclear in some aspects, but it is a legal contract. People signed up to the scheme with the expectation of a 20-year return, and the Minister of the day wrote to the banks, as we know, to reassure them that it was a good scheme and worthy of their support in the form of bank loans for boilers, which they may not instinctively have warmed to, so to speak.
In a minute. The banks were reassured by that letter telling them that there was to be a 20-year return at a decent rate of interest. Certainly, 12% sounds like a decent rate of interest or return. Yet, because of how the scheme was constructed, it turns out that some of the recipients here could be looking at a rate of return miles above that — rates of 60% and 70% have been mentioned. I have heard that 84% is the top-line figure possible.
Yes, I share that concern. The whole thing has been hastily conceived and put together, in some ways necessarily so because we will all be redundant after Wednesday — except for the Minister, of course. Be that as it may, rushed laws and decisions are not necessarily good ones. We will have to see where this goes.
One legal issue is that this could be challenged because of the lack of consultation. Mr Lyons took me to task earlier — he is not here now — in a very gentlemanly way for suggesting that we should have had a consultation. Of course, given the current timescale, we cannot consult because we will not be here. If we had dealt with the problem at any of the points in time when it arose, we would have had plenty of time for a consultation. I am thinking back to November 2015 and July 2015; I will come back to that date in a wee while.
How did we get to this point? Various experts had input into the formation and gestation of the scheme. There were so many expert authorities, starting off with Cambridge Economic Policy Associates. There was also Ofgem and all the input of the Civil Service, the Executive, the energy experts in the Department — I gather that that is going to be renamed the energy unit or something, but I presume that it will be the same personnel — and, of course, the Enterprise Committee, on which, for the record, Alliance did not have a seat at the time. So it goes on. How could all those people look at the scheme and not see the potential flaws, given the experience of the GB scheme? Cambridge Economic Policy Associates admitted freely that it made a bit of a mistake, to put it mildly, right at the start. What we have here is a considerable mess. One Member a wee while ago indicated that my party leader would not have many chickens in her constituency, but she can recognise a cock-up. That is what this is. It is beyond belief that we can get to this point.
You can say "oof"; I have heard you say worse than that.
We hear a lot about ministerial responsibility. I have been here long enough to know that when Ministers get something right they are perfectly happy to take the credit, preen themselves and say, "This is a fantastic result". They are not so keen to take responsibility when something goes wrong or, in this particular situation, for the activities of special advisers, which has been much addressed. There is absolutely no doubt about it: a Minister is responsible for the actions of their special adviser. It does not matter whether he or she authorised those actions; he or she is still responsible. When I hear about Ministers not being across every jot and tittle or having to rely on their Department or advisers, or when I hear that they did not know that their advisers were doing particular things, I wonder what is going on.
In July 2015, the Minister of the day, who is with us today — Mr Bell — his permanent secretary, who is with us today; and the special adviser, Timothy Cairns, recommended that the scheme should be closed. What happened then? They had a visit from another special adviser —
I will refrain in future, Mr Deputy Speaker.
The fact is that the closure of the scheme was recommended at that time. Just think of the mess that we could have avoided if that recommendation had been acted on. As people have said, up to that date, there was concern that there was an underspend on the scheme and that we had not been successful enough in promoting it. However, the danger signs were there all the same; it was beginning to gain momentum. The Minister of the day quite correctly tried to get it closed down or to get it regulated so that we would not be in this mess.
What happened at that point? Another special adviser apparently came in with "informal advice"; I think those were the words used. I think if one SpAd approaches another Department with informal advice, instruction, coercion or pressure — I do not care what you call it — they are acting on behalf of the Minister. They cannot avoid it, and the Minister cannot avoid it. So I am quite certain that the Minister of Finance at the time, who that particular SpAd worked for, was well aware of what was going on. It may just be coincidence that the same Minister and SpAd who set up the scheme in the first place and who oversaw it were the same two who tried to pressurise the Minister of the day not to close it down. So there we are. As Mrs Foster herself actually said at one point, Ministers decide, special advisers advise and civil servants advise. Ministers decide.
I want to move to the question of disclosure of the recipients' details. I understand that the Minister on Wednesday, after we have finished here, is going to disclose the details of the recipients — the full list. We have been advised through the PAC that it is not possible to do that. The application form which everybody signed to enter the scheme confirms that they do not object to details being released, but it stops short of mentioning names and addresses. It gives the type of scheme, the type of equipment, the payments received and something called "location", which apparently, in these terms, does not mean "address" but is probably part of the postcode. I think that is the information that has already been given to 'The Stephen Nolan Show' through an FOI request. I would like the Minister to address that point. Is he going to release on Wednesday the names and addresses of all the recipients, or is he going to release the details that he is allowed to under the scheme?
Thanks, Mr Deputy Speaker. Everybody else has ranged far and wide, but I will try not to.
I have already dealt with this, but the question that has been much discussed here today is why we voted against the closure of the scheme in February 2016. We have addressed that. The real damage was done here between July 2015, when this incident occurred amongst special advisers and two Ministers, and November and December 2015. I understand there were something like 800 applications in those two months. That is when the damage was done — when the scheme was still wide open. I have to say it is a pity we are coming to discuss this so late in the day — in the dying days of the Assembly. I would like the Minister, as best he can, to address the questions I and others have raised. Is this legally possible? We seem to have two different legal opinions, one of which came to us, through the PAC, from the permanent secretary, and one which the Minister has apparently obtained. You would think they might both be from the same source, but perhaps not.
I really hope the Minister can bring this to an end. It is in everybody's interests that he does, but, as I started off saying, we have serious reservations about whether this is possible, whether it is legal, whether it is fair and transparent and all the rest of it. There are too many questions and too much avoidance of responsibility.
I will close by saying — I will try to phrase this very carefully, Mr Deputy Speaker, to avoid your wrath — that the people who have come before the PAC from various quarters have given us a different impression of their ability to answer a question.
We had the architects of the scheme, Cambridge Economic Policy Associates (CEPA), before us, and their evidence was, frankly, poor. Its representatives were evasive. They did eventually admit that they had made a mistake, but there was no follow-up.
I will mention the whistle-blower. In the middle of 2013, the whistle-blower came on the scene. Three of us, of whom I am the only one in the House at the moment, have met the whistle-blower. She pointed out in an email to either the Department or the then Minister at the time severe doubts and reservations that she had about the scheme. I think that the email went to the Minister. The Minister passed it, quite rightly, to her departmental officials for comment. It is not clear whether any feedback was received, whether the Minister asked for any feedback, or whether she just passed the email on.
The whistle-blower sent another email, this time to Mrs Foster's personal server, so she certainly got that one. That email was a lot more pointed. However, the first one — the main one — made it absolutely clear that there was a potential problem with the scheme that had not yet started to cost the country a load of money. At last week's meeting of the PAC, its DUP members tried to imply that this lady was really interested in a business opportunity and that she had spoken against the scheme because she was in a business that conflicted with it. That is totally unfair to say about somebody who came forward as a concerned citizen, with absolutely the right motives, to point out that the scheme was going to cost us money. The problem for her was that she was in a business involved in energy economy. She was trying to get people to take fairly simple actions that would improve their energy economy and energy usage, through insulation, digital technology and a lot of other ways in which you can cut your fuel bills. She was being told by potential customers, "Why would we do that when the Government are offering us money to burn fuel? It is far more profitable for us to burn fuel and take advantage of this" —
I absolutely agree with the Chair of the PAC. If the Department and the Minister had listened to the whistle-blower at that time, we would not be here. If they had listened to Mr Bell two years later, we would not be here. There had been concerns raised before hers, but the whistle-blower — the concerned citizen — got it absolutely right.
Her concerns were laid out very clearly in the email, which is now in the public domain. Even Stephen Nolan has it. Talk about an opportunity lost. I do not imagine that anybody realised the magnitude of the situation at the time, but that is three and a half years ago. Think of the damage that has been done since. I hope that Departments and Ministers will at least learn the lesson of the necessity to listen to whistle-blowers and not to discount them, because it is perfectly clear that that is what happened in this case. The emails went into the system and were not reacted to. I do not know whether there was personal contact between the whistle-blower and Mrs Foster, but there was certainly email contact. There may have been telephone contact. It was an opportunity missed.
I am not going to go on beyond that, save to say that I hope that we can put this thing to bed along with the remaining time of this Assembly and that a public inquiry will be set up to deal with matters properly and come to firm conclusions on blame and lessons to be learned.
I begin by referring to a subject that some Members have already placed on record during the debate, and I make no apologies about revisiting that subject, as it is part of the journey to the debate today on these regulations. During recent weeks, when the media and the Opposition parties in this Chamber performed a public service by shining a light on the RHI debacle, much play has been made of the fact that all parties in the Assembly on 15 February last year, with the exception of Sinn Féin and the DUP, voted against the statutory rule brought by then Minister Bell to suspend the scheme at the end of February. I was not serving in the Chamber at that time, but I have read the Hansard report on the debate to try to understand the background and the context of what was said and done that day. It is quite clear to me that some of the subsequent comments around the vote that day have been, to put it mildly, as economical with the truth as President Trump's chief press officer has unashamedly been in the last few days.
In reality, MLAs were seeking the continuation of a properly revised and tiered RHI scheme that had the proper cost controls applied since the previous November through to the end of the financial year on 31 March 2016. That would have permitted a controlled wind-down. It is quite clear from Hansard that members of the Committee for Enterprise, Trade and Investment, especially its Chairman at that time, along with all the Members of the Assembly, felt that they were being starved of information around the scheme. It is also clear that the DUP and its, until quite recently, friend and partner in the Executive, Sinn Féin, voted as they did after that debate because they knew much more than others about this developing scandal that they hoped would simply go away.
This regulation has been brought to the House by the Minister with a haste that I suspect has more than one eye on the public judgement on the RHI scandal. The House was invited last Monday to pass it into law with total disregard for due process or scrutiny by the Economy Committee and the official Examiner. Where is the precedent for such a manoeuvre? Surprisingly, it is the draft Renewable Heat Incentive Schemes (Amendment) Regulations (Northern Ireland) 2016, which was laid in the Business Office on 8 February 2016, a mere four working days before the plenary session at which it was considered. It is truly amazing that this scheme has twice had to short-circuit the normal protocols of this Chamber. Is it any wonder that there was considerable suspicion about the amendment that was being rushed through the House last Monday?
Last February, there was not the normal Committee scrutiny of the motion to suspend the RHI regulations. It will take the investigation of a full public inquiry to find out the full truth of what was going on behind the scenes in January and February. We have heard contrasting stories of bullying and shouting as Minister Bell attempted to close the scheme early. All normal Assembly scrutiny processes were bypassed, yet the DUP has unashamedly tried to blame the Committee and Opposition MLAs ever since, with fingers being pointed in any direction that they could think of except towards themselves and refusing to recognise the concept of ministerial responsibility that pertains in most countries outside of North Korea.
It is obvious from what is in the public domain at present, with no doubt more to come, that an attempt was being made to keep most of the Assembly in the dark in February 2016. It was known that there was an overspend, but the full financial disaster was not made clear before the Comptroller and Auditor General's report at the start of July. The DUP knew exactly how bad the situation was, and this prompted it to vote as it did last February.
However, Sinn Féin must equally have known how bad it was, and yet it chose to vote alongside its Executive partner. In my eyes, this poses questions for it to address. It is ironic that a party that played a very bad game of hokey-cokey around a full public inquiry, with its position changing two and three times a day, should now be attempting to instigate such an inquiry and announcing it just a few hours after a senior figure in its party was on the radio saying that it would not and could not support one.
It will be interesting to discover, through an inquiry, how much they did know and how they allowed their non-aggression pact with their partners in the Executive to adopt the example of the three brass monkeys, who saw no evil, heard no evil and refused to talk about the evil.
I am grateful that the Opposition were able to ask the House to delay the debate for one week to allow some level of scrutiny to take place. The Economy Committee has worked hard since to gather evidence and take some legal advice, without the help of Sinn Féin. It seems to me that this exercise, far from providing answers, has actually raised more questions. Since last July to the end of December 2016, a further £15·5 million of the public purse has gone up in smoke. The Economy Committee was told that lots of work was going on behind the scenes to try to come up with a mitigation plan. The permanent secretary informed the Committee that the plan contained in this statutory rule had only been conceived on 30 December last year. Just two weeks later, it was announced to the world as a finished article — an amazing feat of record-breaking administration after seven months of inertia since the audit report of last July. We were told that, because of a lack of any sustainable data, a lot of guesswork had to be employed in its formation. Is this really the way to run a country? However, a more damning piece of information came to the Economy Committee this morning, when the permanent secretary told us that this latest plan was actually suggested by a special adviser from another Department, whom he refused to name. Why the secrecy? Have we not had enough of this culture of lack of transparency that breeds suspicion in the mind of the public we serve?
Last week, the Committee heard evidence from representatives from the mushroom-growing industry, the poultry sector and spokespersons for the renewable industry. The mushroom industry representative told us that large contracts with customers had been agreed for the supply of product based on a price tendered on the basis of the sums that they had done around their heating outgoings. They felt that they would be unable to simply tear up their contracts with customers in the way that this statutory rule was going to allow. The poultry sector expressed similar concerns and felt that many livelihoods were going to be put in jeopardy if the goalposts were moved. One of the spokespersons for the renewable industry highlighted a point I made to the Minister that, if the Government decided to simply tear up existing contracts, future overseas investors might think twice about coming here to do business with a Government that may not be prepared to see out the terms of a contract.
This plan smacks of being a desperate measure by the DUP to bring some level of respectability to a monumental failure of their making. It is obvious that they want to draw this upcoming election back to their comfort zone of a battle between green and orange. From what I am hearing — I suspect that the DUP are hearing it as well — an angry Northern Ireland public will not be falling for that trick.
During an Economy Committee meeting, I pointed out to the Minister the dilemma that many people had signed up to this scheme in good faith and were encouraged to borrow large amounts of money from banks that Mrs Foster had written to, in glowing terms, to allay any fears they had around lending money. The Minister replied that, indeed, many people had not signed up in good faith. Surely, if people of ill intent could see the golden egg on the other side of their boiler, why did the then Minister or her staff not pick it up? When asked who requested leaving out the cost controls section contained in the UK model, the permanent secretary replied that it was a policy decision. Who makes policy decisions? It is not a Committee or a civil servant but the Minister. Why was it allowed to be left out by the Minister?
I believe that pressure was being applied by whatever means necessary to make this scheme a political flagship success. I received information from one businessman who was visited at his home by officials who told him about this wonderful scheme. He thought it was too good to be true and was politely walking them to his gate. He mentioned that, since the scheme was only open, at that point, to commercial users, he would not be eligible. They then asked him whether he ever brought work home from his business or visited his company's computer from home. They suggested that they could be creative with paperwork to get him into the scheme. He told them to close the gate behind them on the way out, as he recognised the whiff of fraudulent behaviour. Were these salesmen being judged on how many people they signed up, with weekly targets to meet? It seemed to me to be so. Was the thinking behind the renewable heat incentive scheme to make it a political success story at any price? A lot of what we know now certainly points in that direction. Had that success materialised, I am sure that we would have heard from many authors, and the kudos would not have been shared, like the blame for this scandal being thrown in every direction open to the political policymakers — in this case, the DUP.
The permanent secretary expressed his disappointment this morning that, during the spike in applications, nobody told him that it was potentially a licence to print money, but did the whistle-blower not do that very thing some time ago and, in one case, directly to Mrs Foster?
The House is in an impossible situation today on whether or not to support the statutory rule, given the lack of information. We are damned if we do and damned if we do not. No doubt, if it all subsequently goes sour through legal action, we will be reminded that we all supported it. What a way to govern. What a way to run a country. This is all a monumental mess of the DUP's making. The taxpayers and the rest of us in the House are being asked to do the heavy lifting to sort it out. Some things never change.
Mr Frew referred to the fact that we should not attack the concept of the scheme and so forth. I remind the House of some comments that I made in a recent debate when I said that the RHI was a good concept, damaged by poor administration and lack of ministerial control.
As I stand here today, another £85,000 of public money has been spent. That is in addition to the tens of millions of pounds that have already been spent: I believe that it is some £30 million. Let me address the House through the absence of a filter that Dr Paisley taught us, which was, when you speak, tell the truth should the heavens fall. That is how I will approach the regulations that the current Minister is bringing forward. I will examine them against the truth of what occurred in the past and see what we can do to take devolution forward in Northern Ireland.
People sometimes criticise politicians for looking at the issue of morality. I believe that it is at the core of RHI. I think that there were practices and procedures at significant and serious levels that were fundamentally immoral and wrong, and for those out there who say to us that morality should not influence your politics, I refer them to one of the greatest politicians, Mahatma Gandhi, who said:
"Morality is the basis of things and truth is the substance of all morality."
A lot has been said and done, and, with your permission, Mr Deputy Speaker, I will examine the regulations against the truth of what has occurred, and I want to reveal further information before a public inquiry.
When I spoke, I set out two objectives. The first one was to achieve a judge-led public inquiry with the ability to compel witnesses and evidence. My real fear — it was borne out over the last several weeks — was that, if we did not have a judge-led public inquiry, a series of allegations, counter-allegations and misinformation would be put out there, and it aggrieved me that, for weeks, I watched while no public inquiry was brought forward. If it is the case that we are now going to have a judge-led public inquiry under the Inquiries Act, everything that they have put me and my family through will have been worth it.
The second objective that I wanted to achieve was to stop the haemorrhage of public funds. Let us not pretend that the money is still to be spent: tens of millions of pounds of taxpayers' money has already been spent — £85,000 a day, day by day, as we go along. It is the greatest financial scandal that Northern Ireland has had to deal with since its conception. If it is the case that, prior to my speaking out — I speak as an avowed unionist — £1·18 thousand million of British taxpayers' money was to go into the scheme, you know why I speak.
People ask why, in 20 years, this was the first time that I had broken ranks and spoken out. Looking at these regulations, I will tell you why. It is because I genuinely believe that, if I had not spoken out, these regulations would not be before you. They were not before us at the beginning of December. When I spoke out then, we were not told that we could reduce the cost to the taxpayer to zero, so why did I speak out, break ranks and speak to the press? I spoke to the press because, day after day, broadcast, print and digital journalists were requesting interviews with me on the truth of these matters, yet the DUP press office told them that Jonathan Bell was not available to speak. They never once asked me whether I was available to speak. I spoke out after journalists provided me with conclusive proof that they had asked that I be contacted, and the reply was, "Jonathan Bell is saying that he is unavailable". Let me tell you this: Jonathan Bell never once said that he was unavailable — never once.
I thank the DUP MLAs — I will not single them out — and the MPs who have contacted me. MPs have come and sat in my home and encouraged me to speak out and tell the truth. I will not embarrass you. I know that you do not want to face what I have had to face. I thank them for coming and talking to me and encouraging me, because we had to achieve two things: the public inquiry and stopping the haemorrhage of public funding.
I understand that this puts everybody in an invidious position. I was placed in an invidious position. I think that the Speaker was placed in an invidious position. He is a man whose integrity and honesty I knew within only a very short time of knowing him. Having known him now for three decades, I can only stand over the Speaker's integrity and honesty, and that is on the basis of those 30 years of knowing him.
Let us look for wisdom in these regulations. It was Thomas Jefferson who said:
"Honesty is the first chapter in the book of wisdom."
Let us look to wisdom to see how we can get to the bottom of this.
Let me say for the record that, when I made my concerns known, a DUP MLA came to me and was able to prove to my satisfaction that special advisers John Robinson and Andrew Crawford — in their words, not mine — had said, "Try not to get Arlene called before the Public Accounts Committee, but under no circumstances allow Jonathan Bell to be called to the Public Accounts Committee". Those are the words that were given to me by one of my colleagues. I stand suspended from the party for, as far as I can see, telling the truth on this issue. That was the information given to me: prevent him from coming before the Public Accounts Committee. It was on that basis that I spoke out. Why? I did so because terminally ill children were being prevented from getting a hospital place in my area. While attempts were being made to prevent me from coming to the Public Accounts Committee, a terminally ill child was told, after being seen by doctors, that they could not have a hospital place and that, if they needed one, they would have to go to Craigavon, some 40 miles-plus, I estimate, from their home. A terminally child was prevented from getting a hospital place.
While attempts were being made to prevent me from coming before the Public Accounts Committee, these regulations were not in place, the £85,000 was still being spent and the Maynard ward in the Ulster Hospital, through some nurses taking sick, was closed. We did not have regulations like these today whereby we could have stopped the £85,000 haemorrhaging. These regulations were not in place. Do you know what happened? The ward was closed. There was no money to pay for bank nurses, but there was £85,000 a day to pay for this.
Maybe, by speaking out and supporting these regulations, we can find ourselves in a position — it is too late for that terminally ill child; it is too late for all the children that needed the Maynard ward, and they did need it — where we can finally get regulations in place and we can do better for future generations of seriously ill children and offer them a better way forward.
I want to make it clear through the Deputy Speaker that the Public Accounts Committee had intended to call you, previous Minister Foster, previous Minister Wilson and the former Chair of the Committee for Enterprise Trade and Investment Patsy McGlone. Unfortunately, due to timing and the events in this House my Committee inquiry was cut short, but we would have truly liked to hear all four testimonies given in front of the Committee.
Thank you for that, and I thank the Chair. I did receive the invitation and I am more than willing to appear at that or any future inquiry. People have said that I have used the cloak of Assembly privilege. Mr Deputy Speaker, every word I have said in the Chamber will be repeated with my hand on the Bible under oath in front of the judge-led public inquiry — just in case anybody is in any doubt about that.
The latest of the thousands of messages I have got, confirm it for me again today. I will not give Teresa's surname, but it is from your colleagues in the NHS, and this is why I believe these regulations have to be supported —
I appreciate what the Member is saying. I believe he is saying it in good spirit, but I ask him to consider if he has given any cognisance to the fact there are other permutations that may roll out. Mike Nesbitt alluded to it earlier, but the possibility exists whereby a judicial review could and may happen and, if it is won, we could end up not just returning this money but creating a further loss to the public purse. That will not aid the hospitals he refers to or the wider community who are so desperately looking for this money. Is it time for a more cautious considered approach, because, in good faith, we are all walking on a road that could prove to be very costly?
The Member makes a very interesting and valuable contribution. Mr Chambers made a similar one in the last couple of minutes. There are serious concerns about these regulations, and we have to address them the best we can. It is my considered view that it is best to support these regulations. They have gone through in this limited time because we are in a very difficult situation whereby if they are not supported we cannot get the figures down.
I do have serious reservations about people who say they can get this down to zero; media have advertised that we can get this down to zero. I do not agree with a lot of what has been said about the media. If it were not for the media and the BBC, I could not have got my points out.
I doubt very much, had it not been for them, that we would be in a position today where we have, we are led to believe, a public inquiry and proposals to stop the haemorrhage. It is a balance. That is the best that Members can be asked to do: make a balanced judgement on what has occurred.
I look at the regulations to see, truthfully, how they can help us get out of the mess that we are in. I spoke to the permanent secretary and made known my concerns about closing the tariff. I said:
"When it was coming to me to close it, had it not been interfered with by the higher Department, I could have closed this on 1 October and halved the bill. Isn't that right?"
The permanent secretary told me, "Well, that's right".
We now have regulations on the table that were not on the table when I tried to close the scheme on 1 October, before I was interfered with. I asked, "Is it right that we could have closed it?". Had we closed it then, I believe, as Mr Lunn said in his contribution, the cost to Northern Ireland would have proved to be minimal. Mr Lunn is entirely correct in his assertion. I say to you again:
"When it was coming to me to close it, had I not been interfered with by the higher Department, I could have closed this on 1 October and halved the bill. Isn't that right?"
Dr McCormick replied to me, "Well, that is right". But history did not turn out that way.
OK. Let me read that into the record, and I will obey your instruction. This is what I asked — verbatim:
"But when it comes to me to close it, had I not been interfered with by the higher Department, I could have closed this on 1 October and halved this bill. Isn't that right?"
The permanent secretary replied, "Well, that is right".
There were no regulations on the table when I spoke out. There was no suggestion that we could reduce to zero or even significantly reduce the costs, and we had no legal procedure, that I was aware of, that we could have followed.
In preparing to speak today, I sought from the Department for the Economy and the permanent secretary all the information that was made available to me as Minister. I understood that a Minister could see all the stuff that was there before. I have to inform the House that, on the first occasion when I went to do it, I agreed to call down at 2.00 pm. I was told that the permanent secretary was not available. I then went to the Department. I was left for, I think, hours on end while nobody came to see me. I had asked for all the information, so that I could inform the House properly in the debate. I was left for hours. Eventually, another official came to see me to say, "Look, the permanent secretary is somewhere in Parliament Buildings. Do you want to go and look for him?". I said, "No, I will stay in the Department until I get the information that I have requested". It is with regret that I inform the House that I still have not seen the information that was before me as Minister.
It has been confirmed to me by the permanent secretary that there is an email in the system that says that DUP party officers interfered in the process. I do not believe that to be correct; I believe that it was the DUP special advisers who interfered. But I cannot speak authoritatively because, even after the Public Accounts Committee meeting, when I asked the permanent secretary last week whether I could come and see the information that, I believe, legally should be made available to me, I got no reply. Nothing.
That left me with those famous two roads diverging into a narrow wood. Which one would you take? Was I going to tell the truth? Was I going to stand behind Minister Hamilton, who had said in July on 'Good Morning Ulster' that Mr Bell had acted very quickly. I could have sat back and let the £85,000 per day continue to be spent, the hundreds of millions of pounds be committed, the terminally ill children be sent away and the wards be closed. I could have sat back, but I do not believe that that is the role of a public servant. That is what we are: servants of the public. The public are not our servants.
I look through the actions that were taken prior to the regulations coming through. I have been suspended. For the avoidance of doubt, if people say to me that I did not speak out until very late, I have a letter to the former First Minister, Arlene Foster, dated 23 March 2016. There are three pages of A4, and I gave her my permission to put it into the Assembly Library and to make it public. The first paragraphs of that letter, after the introduction, are on the renewable heat incentive scheme and refer to the fact that the SpAds advised mine to keep the scheme open and to all of the difficulties. That is in a letter dated 23 March 2016, given to Arlene Foster. It surprises me, when I see the contents of the letter, that I am suspended from the party for telling the truth, while people on the Front Bench and those behind them are guilty of far more serious inappropriate relationships and behaviour than I am — far graver. That has been there, and it is in the public domain. I will take those forward, if necessary. I am taking legal advice with the Commissioner for Standards to see how those can be taken forward.
I believe that the regulations have to be made. I do not believe that we have the luxury of continuing to pump out hundreds of millions of pounds to take £1·18 thousand million from the British taxpayer. I do not think that we have the luxury to continue to do that. We have to do something.
There are questions that I asked myself when there were no regulations in place. If I do not speak out, who will? If not now, when? If not here, where? I am glad that we have the regulations in place today because I spoke out, because nobody else was going to speak out, and because I did it in December. You can see that I laid the concerns before the First Minister — now the former First Minister — Arlene Foster on 23 March 2016. If it was not in December, when was I going to do it? If it was not here at Stormont, where were we going to do it?
We need to take action on the scheme. I asked the Department to show me all the information so that I could speak today. I asked for it last week. They have not contacted me. They have not shown me all the information. I have not seen all the information — not even emails that were sent to me personally. You may hide information from me, but you will not hide it from a judge-led public inquiry.
I appreciate the Member giving way. He has announced on two occasions that he sought ministerial papers. Members may recall that there was an aside in the debate on 19 December about a possible involvement of the Department of Justice. I was given sight of the papers that day before the debate took place, because an issue had appeared in one of the Sunday papers. I was also given copies of all relevant papers relating to my time as Minister. It is certainly my understanding of normal procedures that Ministers should be given copies, with the names of junior officials and so on suitably redacted. Nonetheless, I now have copies of everything relevant in my possession.
That is also my understanding, and I will take it up with Malcolm McKibbin, if necessary, by means of a formal complaint. As late as last week, I heard in a Public Accounts Committee that I was given only partial information from the time that I was Minister. When I asked for the email that, the permanent secretary told me, stated that DUP party officers had interfered at the start of the process, I was told, last week, that I would be able to see it. I asked to see all the papers, but I have not had a single communication from my direct conversation with the permanent secretary last week. That is why —
Why does the Member think he is being obstructed, if that is what has happened? Does that include the important period pertaining to 1 October and the delays relating thereto?
It certainly includes that period. I will not go on to speculate on why. Perhaps the head of the Civil Service will be able to reveal it to me in the coming days. Perhaps the judge, when all the papers are laid before him, will be able to give a more definitive answer.
What I do not see in the regulations that needs to be in them in this: can records be expunged? I happened to be at a carol service in my church in Newtownards on the Sunday before Christmas while the Economy Department was sending out press releases to the media on the issue. When I again asked — I will reveal this to the judge under oath — the permanent secretary why references to Arlene Foster and the Department of Finance were taken out of emails without my permission, he replied, "Because the record was expunged". How is it that a Minister can have the email record changed without his knowledge or without his consent? How can that happen? I asked the permanent secretary, and I referred to the deputy permanent secretary — this is not in the regulations — where the instruction came from to cleanse the record of any reference to OFMDFM and the Department of Finance and whether there was evidence to the effect of this changing of records. The permanent secretary replied to me:
"There is an email to that effect, yes".
There is evidence in what the permanent secretary told me of records being expunged, and there is evidence in the permanent secretary's words that there is an email to that effect. Just to be clear — this is not in the regulations, and perhaps it should be — I said:
"If there were emails there" — as there were—
"you said they're telling you to expunge the record".
The permanent secretary replied with one word: "Yes".
Is it the case that we are here today and hundreds of millions of pounds could be saved only because I spoke out, because I told the truth, because I was prepared to take the suspension and because I was prepared to have my political career effectively terminated, albeit that, with no disrespect to any political party, it will be the public who decide if my political career is to be terminated? I have heard it said, "Jonathan, you believe the public want to hear the truth; you'll find out that they don't". I believe that the public want to hear the truth.
There is nothing in the regulations — this concerns me — in relation to how special advisers can interfere in a process and how, when a Minister makes a decision —
I will reflect on that, Mr Deputy Speaker.
How did we get to the situation where we needed the regulations? We need to regulate because the regulations that are in place are completely ineffective and have been proven to be completely ineffective. I ask the Minister to say, when he is summing up, whether the regulations will prevent a member of a party or a party collectively deciding things against the wishes of a Minister. A lot has been said in connection with the regulations. I look at the information and the evidence that I have before me, and I ask permanent secretaries whether it is right that a member of the party can do this. Then I look at the regulations. In my head, I have an understanding of the evidence of what the permanent secretary said to me: "Your special adviser, Timothy Cairns, is right: you're a member of the party, and your party decides these things collectively". Will the regulations prevent that sort of thing happening again? He said to me, "Your special adviser, Timothy Cairns, is right: you're a member of the party, and your party decides these things collectively". Therefore, a scheme was kept open. It should have been for four weeks, and I still do not have the information to tell you why it was kept open for six weeks. I cannot see the papers; I have not been allowed access to them. Why are we in a situation where we need regulations for what could have been put right had I been allowed to do what I wanted to do on 1 October? That is why the regulations, while I support them today, need to be more robust.
At that time, I said to the permanent secretary — I will quote the evidence:
"That's OK, but I don't want somebody coming back and saying to me, 'Jonathan, you had the authority to do it on 1 October and you did not do it'".
The permanent secretary replied "No" and said that everybody would recognise that every government worked by and on collective responsibility.
We are in a mess, and somebody has to shine a light on that mess. It fell to me, and I do not know why. I did not seek it, nor did I want it. I did not want to do it. Twenty years of loyalty to a party should show that I am a fairly loyal person. I am support the regulations because they are, perhaps, the first step in getting that mess sorted out. Johnny Bell does not matter. The public will decide whether Johnny Bell comes back to the House, nobody else. The public will decide whether they want their representatives to shine a light and, effectively, to be salt and light on a hill. The regulations are necessary because special advisers — is there anybody here who doubts it? — interfered in the process. They kept the scheme open, hundreds of people poured into that scheme and, as a result, contracts were issued to allow hundreds of millions of pounds — going up to £1·18 thousand million over the next period — to be spent.
I thank Mr Bell for giving way. As he knows, the total number of applicants in the end was about 2,100: does he recollect how many had applied when he made the recommendation to close the scheme in July 2015?
Remember that this was only beginning to be discussed in July and August 2015. There was a period in September, with the McGuigan murder, when ministerial offices were not held. In rough figures, I think that there were about 1,000 in place. I have already read into the record the evidence where the permanent secretary told me that I was right. I wish that it had been read into the record at the Public Accounts Committee, but I have the record.
The situation is that we need the regulations because special advisers interfered to keep the scheme open. Members on the DUP Benches to my left came to me to say that it was kept open because Timothy Johnston's brother was installing the boilers and spoke about John Robinson: I am not going into whose family member was installing them. If the Members to my left have information, they must not try to filter it through me but must stand up and tell it like I had to stand up and tell it. It is the hardest thing to do, I can assure you.
Order. As all Members know, Members enjoy privilege in these proceedings for the purposes of defamation under section 50 of the Northern Ireland Act, but all Members must take responsibility for their remarks. I caution all Members to ensure that their views are expressed with due care.
Today is not the day to have the inquiry, not least because the Department will not give me the information. I only wish that I could be like Mr Ford and have seen the information. I find it very interesting, Mr Ford, that you say that you were allowed to have copies. I was told that I could look at them but was not allowed to have any copies. That is something else that I will take up with Malcolm McKibbin, the head of the Civil Service. It seems that one former Minister is given that level of access, and this former Minister is treated in the way that he has been.
I am grateful to Mr Bell for giving way again. Just to clarify, on the day that I was given sight of the documentation, when I then formally requested copies, it was agreed that I would get copies a couple of weeks later.
Order. We are again beginning to stray away from the issue before the House. I respectfully ask the Member who is speaking and the Member who intervened to bear that in mind.
Let me conclude, Mr Principal Deputy Speaker. The regulations are necessary because of the extreme mess that we have found ourselves in. The points that I made when I had to shine a light on this devastating situation were not made in December. The points were made in writing to the then First Minister in March 2016. The reason why we have the regulations now is because I spoke out in December 2016. The regulations are necessary because terminally ill children are being sent away from our hospitals, and our wards are being closed because we cannot afford bank nurses. The £85,000 could be spent there every single day. I hope that the regulations can address that. I hope that future generations of children and our health service will not be deprived of the funding needed because of the actions that I felt led to take. I make no apology for telling the truth. I am one of these people who actually believes that there is a time to say:
"Here I stand, I can do no other".
As Martin Luther also said:
"Peace if possible. Truth at all costs."
A school principal, maybe. This is a major issue that has adversely affected public confidence in the institutions of the Assembly and the Executive. It would be wrong to seek to deny or minimise the fact that that is the case. This is not a situation that any of us who ran in the Assembly election for the first time not seven months ago would have envisaged that we would have to deal with. It is not a situation that, I suspect, even some of the auld hands who have been in this place from the start ever envisaged that they would have to deal with. However, we are where we are. It is incumbent on us all, as responsible public representatives, where a problem has been identified, to do all in our power to ensure that the situation is corrected and put right.
I have sat through most of this debate, and, to be fair, it has been tempered and reasonable. Members from all sides have made reasonable and tempered contributions, and it has been conducted in a spirit of trying to put the problem right and of trying to fix the situation. Indeed, if that had been the tone of the discussion throughout, we might well be closer to a solution to the problem. Alas, that is not the way that it has worked out.
Steps are needed to put the matter right and to improve this situation. That is why I welcome the proposals brought to the House by the Minister. Other Members commented, and I absolutely agree with them, that we are not in an ideal situation to provide a level of scrutiny or review of the Minister's proposals. That is not of the making of anyone in the House bar one party, which decided that it would rather crash the institutions than deal with the problem. That is that party's entitlement, but, if we are being elected to talks, one of the things that I want on the agenda is an end to the situation whereby one party walking away from this place can bring it crashing down. If people want substantive talks, I am all on for that because never again can the democratic institutions of Northern Ireland be threatened by one party walking away as it has. We are not, because of that, in the position to offer the fullest scrutiny of the Minister's proposals. That is regrettable. I would have welcomed the fullest possible scrutiny of his proposals. I welcome the fact that cost controls are being introduced into the scheme. I think that all Members agree that that is necessary.
I have reviewed the evidence that was presented to the Public Accounts Committee, and I urge all Members to study it in full, particularly the evidence concerning the role played by Mrs Arlene Foster the former First Minister. I urge all Members to read that.
I welcome the fact that these measures have been brought forward, and I welcome the fact that, as someone else said during the debate, they have been described as defensible and viable proposals. It is important that whatever comes forward cannot be simply seen, as has been suggested, as a stopgap solution. It is important that we have defensible and viable solutions to the problem that confronts us.
I have been an Assembly Member for a short time, and this has been an inglorious end to a brief term of devolution. There is no point in seeking to deny that. Those of us who were elected here for the first time — there are some of us in all parties — did not envisage that it would come to this. However, the mark of a responsible politician and the mark of a sensible public representative is that, when a problem presents itself, they seek to find a solution. The fact that the Minister has found a solution, or has at least put forward ideas, is to be welcomed. It stands in stark contrast to others who serve in the Northern Ireland Executive but who, frankly, would rather give press conferences in the Great Hall than come to the House with positive solutions or positive ideas. That speaks to what their agenda really is.
I appreciate the Member giving way. Can the Member give us any clue to why Sinn Féin may have removed itself from the Assembly? The fact that it has removed itself not only from the Executive but from the Assembly and Committees as well shows that it not only wanted to bring this place down but that it does not care about what happens here either, does it not?
I apologise if the word "fig" is unparliamentary, I did not think that it was. They do not give a hoot about putting the problem right. If they did, they would be here, they would have come forward with ideas. Instead — ah, a trio has joined us for the first time in days. Welcome to the place that you were elected to serve. If they cared truthfully about the issue and about putting things right, they would be here offering suggestions. In fact, what we have seen from people serving in the Northern Ireland Executive is that any time a Minister — in this case, Mr Hamilton — put forward a suggestion and any time a public suggestion was put forward on potential ways of getting around the problem or solving the problem, what were the other half of the Executive doing? They were trying to undermine efforts to fix the problem. That speaks to me about the real agenda, which is not about fixing the problem. They were determined not to —
We will worry about figs — as long as there not an incentive for growing them.
I welcome the fact that there will be an inquiry. I have said from the start that I want every scrap of paper — every email, every memo, every letter. I want everything relating to the matter put into the public domain for people to see and judge for themselves. It is not in the interests of anyone, whether you are DUP, Ulster Unionist, SDLP, Alliance, Sinn Féin or whatever if there is not full disclosure of everything relating to the scheme. I absolutely support that and want to see that, because it is not in the interests of any of us for the reputation of politics and those who engage in it to be damaged or maligned.
The lack of consultation on the measures has been raised during the debate. I have said that that is not a situation of the Minister's creation or of any other party in the House bar one. If we had devolution, functioning devolution, Members would have had the opportunity to pore over the regulations. I am glad that even what we have had today, in accountability and discussion, has afforded the elected representatives of the people, at least those who decided to turn up and be in the Chamber, the opportunity to raise their issues and concerns and ask questions. I hope that the Minister is able to answer all the questions that have been asked by everyone who spoke in the debate thus far.
Are people interested in the solution? Are they interested in fixing the problem or are they more interested in showboating? When the time comes for the vote, if the House divides, that is when people will be able to see for themselves who is interested in fixing the problem and who is interested in showboating and political point-scoring.
I would like to finish with a quote from Dr Paisley:
"Never confuse sitting on your side with being on your side."
Just over a week ago, I was travelling around south Armagh, navigating the treacherous roads in the snow. We were enjoying picture-postcard views of Slieve Gullion, Sturgan mountain, Topney and Camlough mountain, looking down over Camlough lake. It was hard to imagine that, in just a few months' time, hundreds of athletes will be swimming that lake competing in the crooked lake triathlon. If any of you has not visited Slieve Gullion and the area of outstanding natural beauty, I encourage you to come along to see the spectacular scenery.
I will get to the point. My colleague Councillor Thomas O'Hanlon and I were observing that not too many farmers around Sturgan Brae were availing themselves of the RHI scheme. The farm sheds had a blanket of snow that was not being melted by the heat generated by multiple wood pellet boilers. I recognise that those farms and businesses that are availing themselves of the incentive are not doing anything wrong under the law, which legitimately allowed them to claim a subsidy for switching to, or beginning to use, renewable heat. I also know that our farmers have got a little bit of a bad rap around this scandal. The farmers I know are honest and hard-working and recognise the daily grind of milking cows; dosing and testing their livestock; moving their stock to and from market; maintaining their fences, ditches and hedgerows; cleaning out their houses; draining their land; ploughing, sowing and harvesting their crops; covering silage pits; and calving and lambing in the middle of the night. Our farmers do not do weekends; they work a seven-day week.
Back to the RHI motion. There are a number of issues and questions that I would like to raise in relation to the scheme. The scheme had already been set up in the UK, where it was operating as it should, by promoting the use of woodchips as a renewable fuel. Around 80% of boilers are fueled by woodchip in the UK. Woodchip boilers have a smaller carbon footprint than wood pellet boilers and are better for the environment. Unlike wood pellets, the production of woodchip supports local businesses, as it can be produced locally by any farmer, carpenter's workshop, willow grower, garden centre or wood yard. However, here in the North, our scheme has been set up in such a way that it encourages the adoption of wood pellet boilers. Some 80% of boilers in the North are burning wood pellets, a globally traded commodity. In the North we have one privately owned producer of wood pellets, with an annual revenue of £100 million.
Let us do a quick deep dive into the figures for the scheme as it was set up here; they are very revealing. Let us say that your farm sheds or chicken houses have a 500 kW heat demand. For a 500 kW heat demand, you would expect to use a 500 kW boiler as your configuration. The tariff for a kilowatt-hour is 1·5p; the subsidy per hour is £7·50. The annual subsidy for running the boiler 24/7 for 50 weeks of the year, shutting it down two weeks for maintenance, is £63,000. The cost per hour to run the boiler, with wood pellets costing around 4p per kilowatt-hour, is £20 per hour. The cost per year to run the boiler is £168,000. So to run your boiler full tilt for a 500 kW heating demand costs £105,000 per year.
But wait: why use one boiler when you can use five? Let us replace our 500 kW boiler with five 99 kW boilers. Our tariff per kilowatt hour then moves up to 6·5p, and the subsidy per hour rises to £32·18. The annual subsidy for running the boilers 24/7 for 50 weeks of the year is £270,270. The cost per hour to run the boilers is £19·80. The cost per year to run the boilers is £166,320. That is a profit of £103,000 from running five 99 kW boilers as opposed to a cost of £100,000 from running one 500 kW boiler. Did no one see anything wrong with that? The scheme was set up as a disincentive to run one boiler, when using five is much more lucrative.
Are we to believe that nobody in the Department knows how to use an Excel spreadsheet? Are we to believe that none of the highly paid SpAds knows how to use an Excel workbook?
The cost of setting up a woodchip storage and delivery system is twice that of wood pellets. Pellets are refined sawdust; the calorific value is higher for pellets. Pellets are approximately double the cost of woodchip to buy and pellets have a much larger carbon footprint because of the high energy demand of the production process and transport. Whereas, as I said, woodchip can be produced by any farmer, carpenter's workshop, garden centre or willow grower locally, the only wood pellet producer in the North cannot meet the demand for wood pellets so we have to import them. A big opportunity was missed to keep money in the country; the socio-economic benefits are not in Ireland.
Why was the scheme set up here in such a way as to promote the use of the globally traded commodity wood pellets as opposed to woodchips, which are produceable locally, with the obvious socio-economic and environmental benefits? This was a green scheme that has turned into a scheme deep in the red.
I thank the Member for giving way. He made reference to the fact that it was supposed to be a scheme about reducing carbon. However, in 2013, when I asked the Minister what work was being done to ensure that people had energy-efficient measures in place before they installed a boiler, the answer came back that it was assumed that they would do that.
Thank you. We see where assumptions have got us.
When the scheme went out to consultation, what submissions were made? Who made them? Did those submissions influence the decision-making? Who benefited? Why did they remove the cap or tiering system that was introduced in the UK? Who made that decision? Why was the tariff reduced above the 100 kW threshold in NI as opposed to the 200 kW threshold in the UK? Who made that decision?
I thank the Member for giving way. It was suggested at Committee today that nobody removed the caps and tariff because they were never there in the first place. That is not true; the scheme was otherwise adapted from what was in the UK, so it was a very conscious decision by someone to remove the checks and measures that should have remained.
Thank you. It is obvious that those checks and measures were removed; that is why we are in the present crisis.
Were no heads raised when farmers were installing five boilers to do the job of one? Who knew what and when? Boiler suppliers and fitters were laughing all the way to the bank, but now they have no business because the scheme was not set up in a sustainable manner, as it was in the UK.
The EU renewable energy directive sets a binding target of 20% final energy consumption from renewable sources by 2020. A major point to recognise is that that scheme was set up to ensure that the UK as a whole achieves the renewable heat targets required by 2020 under that EU directive. The UK is still required to meet those targets or else face fines. In the current frenzy to come up with a fix, which has been proposed by the people who caused the problem in the first place, we cannot lose sight of the fact that there is still a target to be achieved, or else the taxpayer will ultimately face EU fines for not achieving it. That point is being completely lost: this was a green scheme that has turned into a scheme deep in the red.
What is the current percentage of renewable heat against total heat? How much more is required to achieve the target by 2020? We need to ensure that the amendments to the scheme include a plan to achieve the targets. The SDLP voted against the amended scheme being closed down in February 2016. That was the amended scheme that should have been adopted in the first place; it was a scheme that incorporated caps and tiering to prevent abuse.
I know the propaganda machine of the party to my right is presenting this in a different way, twisting the truth to hide its incompetence as silent partners —
I know the machine of the party to my right is presenting this in a different way, twisting the truth to hide its incompetence as silent partners of the "Look After Its Own" party. The "Look After Its Own" party wants us to believe its Minister Arlene Foster, her SpAds and officials could not grasp the importance of a cap or tiering. Her advisers or an official decided to remove that protection, but the fundamental fact is that Arlene Foster did sign off on it.
Those questions need answers. They need to be answered by the Economy Minister, who is here, and by the Finance Minister, who is not here. We need an urgent, time-bound, judge-led public inquiry into the RHI scheme.
There has been a lot of discussion in the debate about scrutiny, such as what scrutiny of the proposal for the RHI scheme took place, who is culpable, where things went wrong and how they were not spotted. Today we are being asked to approve regulations with very little scrutiny and very little time for scrutiny. We know why that is: we are facing an election, the Assembly is due to dissolve on Wednesday and we are pushed for time. The question is this: why? Why are the institutions collapsing? Why have we got here? It is the Executive that have collapsed, and I think it is fair to put the blame at the door of the Executive parties. We had a possible scenario in which Arlene Foster could have stepped aside, we could have had a public inquiry and, indeed, we could have taken the necessary time to find a solution to the RHI debacle in order to protect public money. Arlene Foster is no longer First Minister — she did not step aside — but there is the same result. We are having a public inquiry, it would seem, and we will get the details of it tomorrow. We have these regulations proposed as a solution but without proper scrutiny and with an election looming.
The first scenario would be much more preferable, in which our institutions were not facing collapse; we, as public representatives, were not being contacted by organisations that are having to put their staff on protective notice because there is no Budget and they have not been given any certainty about their funding; and what was left of the goodwill towards politics in Northern Ireland was not completely destroyed. We are being asked to back the Minister's proposals. Given the time, we had the extra week to examine the proposals, hear from the Examiner of Statutory Rules and see whether more confidence could be given. I cannot read the paper by the Examiner and not continue to be concerned by what is being put forward.
This is a gamble. On the one hand, the prize is savings to the public purse. The Minister has not outlined as much. I notice that, last week, he did not refer to reducing to zero the cost to the Northern Ireland Budget, although some of his colleagues have today. I will see whether he makes that commitment today. We therefore have the prize of some reduction in the public spend. On the other hand, we have the risk of litigation and judicial review, and of further waste of public money on expensive legal challenges. And for what? What is being proposed is a temporary fix. It is a sticking plaster for one year while we, I assume, work on a proper solution. I do not think that I can take that gamble with public money. Given the focus that there is on this and the scrutiny that we do as MLAs in the midst of it all, I do not think that I can support the proposals today.
There has been a lot rehearsed about the RHI scheme, so I will not go into it in great detail. It was supposed to be a green scheme, with £25 million from the UK Government to help us switch to a low-carbon economy. I raised in September 2013 the issue of the perverse incentive. I got a response back from the then Minister. She stated:
"In designing the domestic Renewable Heat Incentive (RHI) DETI has included energy efficiency assumptions that will ensure that the tariffs are most appropriate and most beneficial for those that have already carried out energy efficiency improvements".
"within the existing RHI for commercial premises it is assumed that the installation of a biomass boiler, or another renewable technology, would be the final action taken by a business seeking to become 'low-carbon'." — [Official Report (Hansard), Bound Volume 88, pWA209, col1].
That for me was the problem: assumptions were made. When those of us in the wider green movement — I and others — questioned at the scheme's inception why energy-efficiency measures were not being required as standard before installing, which would have required an audit in advance of installation rather than retrospectively, as we have now, the position was clear: we assume that people will do the right thing, so we will not add in those measures.
There is a lot of talk about whether it was a case of omission by lack of action or deliberate action that led to this. I believe that there were deliberate decisions made not to have audits and inspections of properties in advance of installing the boilers. There was consultation on the proposals for degression. You have a consultation, and the assumption that I make — a fair one, in this case — is that you are considering having a form of cost control. Again, a deliberate decision was taken not to introduce cost controls. Indeed, when I questioned the head of energy division at the ETI Committee in February 2016, he made it clear that it was a policy decision by the Minister not to introduce degression because we were focused on implementing the domestic scheme. That throws up the question of why you cannot have two priorities, but how that unit was funded and resourced is another matter.
Enough evidence was presented about the risk of £490 million of public money being lost that the then Minister, Arlene Foster, could and should have stepped aside until we got to the bottom of the issues. That it is what any honourable Minister would do, and, indeed, as has been pointed out, it is what Peter Robinson did when there were suspicions about him. Again, when that is the bar that is to be achieved, it is a sad day when Peter Robinson is being held up as the pinnacle of respect.
Thank you, Mr Deputy Speaker, and I thank the Member for giving way. If he cares to look back on any of the communication from Peter Robinson around the period of him stepping down, he will see that that was not for investigation but because he wished to spend time with his family, who were going through extremely difficult circumstances. There seems to be a lot of confusion about that, and it appears to me that, if you keep pumping out a message, even though it is the wrong message, it appears eventually to be the truth when, in actual fact, it is not.
I thank the Member for his intervention. That is not my recollection, but I am happy for what is in the public domain to prove me wrong. Certainly, he stepped down, and an investigation took place — it was not a full public inquiry — by which he said that he was exonerated, but we never saw the result of that investigation.
I will come back, as I am sure you will agree we all should, Mr Deputy Speaker, to the regulations. There is considerable risk with them. I feel that they do not appear to have been conceived when the Audit Office reported. They do not even appear to have had their genesis at the time when the scheme was being amended and the problems were realised and beginning to be addressed. It appears that they have been prepared only since the time that this became a significant public story in recent weeks, when it was clear that the Assembly was on the brink of collapse and it was important to be seen to be doing something. That is not the right circumstances in which to take such a risky action.
I have serious concerns, and I genuinely hope that I am proven wrong. If the Assembly passes the regulations today, I hope that they save public money. If people want to come back to me in six months' time or whatever when they have proven to have done so and tell me that I was wrong, I will admit that. I will not hide behind excuses or advice that I have been given from my office. I hope that I am wrong. If they are passed, I hope that they save public money, but my worry is that they will cost more in legal challenge or, indeed, if the caveat that they can go ahead only if approved by the EU finds that, whilst the Minister looks like he is trying to do something, the EU says no and someone else can again be blamed. We had this situation before when the Minister sought to incentivise United Airlines. He said that he could not do so because the EU said no, and United Airlines said that it chose not to take our money, thank you very much.
I am not going to stand here simply to oppose what has come forward with no alternative. The Green Party has proposed a windfall tax, and I have written to the Finance Minister about that. I think that I am right in saying that I have yet to receive a formal reply, although we raised it again in our meeting today in relation to the public inquiry. We believe that our proposal can do what the Minister seeks to achieve with these regulations but in a way that, I believe, is safer regarding any potential legal challenge. I believe that it is fair in that, in our proposal, any payment made over the cost of wood pellets would be considered a windfall so that this perverse incentive to burn and heat empty sheds would be gone.
Those who purchased boilers to heat empty sheds would never get that money returned. They would be out of pocket — rightly so — because of their fraudulent activity in seeking to use public money in such a perverse way for personal profit. I think that it is a fair and right proposal, and it would impact. Those who bought boilers legitimately would still get a fair return on their investment and still receive an incentive, but they would have no incentive to waste heat or to be energy inefficient. There would be no cash for ash. I hate the fact that a green scheme has been abused in this way and that a scheme that was designed to reduce carbon has resulted in a likely increase in emissions. I hate the fact that the scheme was botched, but I do not think that these botched regulations are the way to right that wrong.
I appreciate the opportunity to speak on this issue. Much has been said about RHI over a number of months, but there has been very little action. Now is the opportunity for Members to take action to do something about it and to ensure that the £490 million that the BBC claimed had gone up in smoke does not go up in smoke and that public resources are used for other purposes. At the same time, that would give us time to come forward with a more comprehensive package to deal appropriately and adequately with the issues of concern that have rightly been raised on the overspend.
The concept of RHI is a very important one because, as of today, we are still members of the European Union.
Thank you, Mr Deputy Speaker, and apologies for moving around.
A number of years ago, of course, nobody imagined that we would be leaving the European Union, which has set us very stringent targets for the use of renewable energy. Therefore, the concept of a renewable heat initiative, using woodchip instead of fossil fuels, was a good one. When the uptake was slow, many did not anticipate that there would be a spike at some stage. The spike happened only after a Minister in the Westminster Government announced that they were to withdraw funding from wind energy. Nonetheless, the spike happened, and we are now in the circumstance that we are in, and something needs to be done.
There has been a whole series of efforts to try to make it appear that this is hugely corrupt. I do not believe that that is the case. I believe that there are significant inadequacies, that people got it wrong and that the scheme as devised is clearly flawed. All of those issues are out there, but I do not believe and have not seen evidence that this involves political corruption. I do not think that that case can stand. Nonetheless, let us have the public inquiry, and let us have its findings as quickly as possible. I do not like and would resist a long public inquiry, as might be proposed. I would much prefer a very rapid inquiry: one that has all the papers, witnesses and everything else that you can have at a public inquiry, but one that also gets answers for the public quickly.
We find ourselves in this circumstance today, and we will see the colour of Members' money. Those Members who choose to go through the Lobbies and do something different are saying, "Roll on. Keep spending the money. We will make plenty of noise and plenty of protest and seek to get as much publicity as possible over this issue. Let us get as angry as possible, but we are quite happy for it to go up in smoke because then we can continue to blame the DUP for what is going on". So, let us see the colour of your money. If you are for real, you will do the right thing and vote for the proposals today. I know that the proposals will hurt people who have installed boilers. People who installed woodchip boilers are not criminals, rogues, thieves, murderers or a whole lot of other things; most are just involved in a business that needed heat and, therefore, they looked at this option and did it.
Moy Park encouraged its growers to do it. What really bugs me, particularly on social media, is that people do not seem to realise that day-old chickens need considerable amounts of heat, and for quite a long period afterwards. Woodchip boilers provided that heat from non-fossil fuels, and that was beneficial. Moy Park encouraged farmers to install them because the chickens —
Yes, I will give way in a moment. The chickens thrived better in the drier heat produced by the woodchip boilers than that produced by gas boilers. The gas boilers are on also. They are not part of the scheme, by the way, before we get new accusations flying about. Very often, woodchip boilers do not bring the heat in the house up to a high enough temperature. So, for people who think that heat was being generated just to be blasted out the doors, that is not the case; the heat was being generated and was being augmented by the old gas systems when those chicks were in their early stages.
Will the Member make the distinction between woodchips and wood pellets because 80% of the boilers in the North run on wood pellets as opposed to woodchips?
Woodchips and wood pellets are for renewable heat boilers. They are both renewable forms of heat. Nonetheless, I was trying to explain that these are being used for good purpose. So, when Mr Wells discovered that his brother and a number of his cousins have one, they are not doing anything wrong. They are legitimately carrying out a business and have invested many tens of thousands of pounds each in acquiring the boilers. I will add that I know Mr Wells's brother, and the last person he would seek agricultural advice from is Jim because Jim is not really someone who is known to be that interested in broiler chickens; he is more interested in birds of prey.
I thank the Member for giving way. The point that he makes is well made. It is similar to the point that I made earlier about the number of new boilers that were installed where previously there had been no heating, but this was partly due to an expansion, so there were new buildings. So, there is some explanation for some of this. Does he agree with me that one of the saddest things about all this is that the whole concept of renewable heat and what was trying to be done was valid and good and that businesses good and bad alike have been tarnished by the incompetent way in which the scheme was administered?
This is a very difficult moment for me because I have to agree with absolutely everything that the leader of the Alliance Party has just said. In truth, it is common sense.
I deeply regret that we are in the circumstances in which we find ourselves. I committed to the Assembly 10 years ago to try to get devolution off the ground again and I think that, for all its faults and foibles and so forth, it has been a good thing, and last night's shooting demonstrates the importance of us working together. The fact that we are going into an election and probably going into negotiations after that election takes us into an unknown, which, I believe, was avoidable and hugely regrettable.
Getting back to the point, Mr Deputy Speaker, before you pounce on me, supporting the regulations would be a demonstration that the Assembly means business.
It wants to put right something that it got wrong. It would be a step forward for the public. As I have said before, the public are looking for solutions; some politicians are looking for scalps. That is unfortunate. Even on the evidence that has been provided thus far, it has been demonstrated that it has been wrong to engage in the hate campaign against Arlene Foster and to identify and pinpoint one individual as the person who devised the scheme. She did not devise the scheme, and everybody knows that.
We are where we are. I encourage people to support the regulations. I would not be altogether happy with the regulations as they stand if they were for 25 years, so I encourage the Department to work comprehensively with the industry to identify the means by which to go forward with a scheme that can support those who are involved in producing renewable heat and does so in a way that gives them a return on their investment but does not lift £490 million from the taxpayer. Everybody would be a winner at that point.
Like Mr Bell, I sincerely hope that these proposals end the £85,000 per day cost of the RHI scheme, but the proposals must be more than a pre-election panic measure in the hope that the public will forget the incompetence and the arrogant response to the scandal. What is proposed in the regulations is the introduction of some of the controls that should never have been removed in the first place on the previous Minister's watch. As my colleague Alan Chambers said, the permanent secretary, when he was giving evidence to the Economy Committee earlier today, admitted that the scheme that is in front of us today was cooked up by a special adviser over Christmas. He did not say who it was. Perhaps the Minister may elaborate when he is summing up later this evening. I have to say, though, that, in most people's eyes now, having the fingerprints of a SpAd on anything will not be seen as much of an endorsement.
I have questions that, I hope, the Minister will reflect on and address when he gets an opportunity to make his comments on the regulations. Does the business case — we have yet to see the business case, of course — achieve the zero additional cost that he and Arlene Foster first promised a number of weeks ago? I believe that the proposals before us will retain an ongoing cost of over £2·25 million. I would appreciate it if the Minister could confirm whether that will still be the case.
The key question of course is this: are the proposals legally sound, or will they fall at the first legal challenge? I will come to that in a bit more detail further on in my remarks. First, why did it need the threat of an election to generate a response to mitigate the impact of the scheme on the public purse? The Minister, as we all know, has had the Northern Ireland Audit Office report since July. Lack of action to date has already cost taxpayers over £16 million since then. These proposals will add another £6·5 million to the bill before it comes into force on 1 April. We now, at least, have a public inquiry following Sinn Féin's welcome U-turn on the issue. Arlene Foster had promised to call one nearly a fortnight ago, and, of course, we have had nothing since then as well. Despite this better-late-than-never proposal, we have many questions outstanding, and no one, of course, has been held to account for the, at best, appalling errors of judgement and mismanagement.
As has already been mentioned, the eleventh report of the Examiner of Statutory Rules to the Assembly refers in detail to the regulations before us. It highlights issues that I would be grateful if the Minister could respond to at the end of the debate. We know that there has been no detailed scrutiny by the Economy Committee due to the tight turnaround for the regulations. My colleague Steve Aiken has stepped up in the absence of the Chair to maximise the engagement and scrutiny by the Committee in such a short timescale. Why has it taken so long to finally produce a scheme to stem the waste of public funds, thereby curtailing the time available for proper scrutiny? Have we not learned the hard lessons from the failures of the scheme?The question is raised in the report of the Examiner of Statutory Rules of whether this instrument is intra vires under section 24 of the Northern Ireland Act 1998 because of its incompatibility with the European Convention on Human Rights, specifically article 1 of protocol 1. Can the Minister confirm that there is no risk under ECHR and that the proposals under the regulation are deemed to be proportionate?
No doubt the Minister will have a copy of the letter that all parties received from David Capper, a reader in law at Queen's University Belfast, urging the inclusion of a hardship clause in the regulation to ensure that it is not seen as a blunt instrument. Mr Capper suggests that a hardship clause:
"would allow any participant in the scheme to make a case to the Department for compensation if they could prove that cuts to their support payments would cause them hardship or severe hardship or significant financial difficulty or expose them to the risk of significant legal liability. You could put the onus on the applicant to show that, without some compensation, they would bear an unfair share of the burden that the taxpayer would otherwise have to bear if nothing were done to control the costs of this scheme."
Mr Capper concludes his letter by saying:
"This will maintain a fair balance between private rights and the general interest."
Has the Minister considered that proposal? What are his views on the issues raised by Mr Capper? Is the Minister satisfied that his duty to consult those potentially affected by the regulations will not be used as a reason for legal challenge?
My party has proposed the use of a windfall tax — Mr Agnew referred to that a little earlier — to recoup the excess income from the RHI scheme. That is the best method for recouping the excess cost while minimising the potential for legal challenge. Has the Minister considered that option? If not, why not? If he has excluded it as an option, can he tell us why he has come to that conclusion?
(Mr Speaker in the Chair)
Today is about trying to put right the mistakes of the past concerning the now infamous RHI scheme. The priority must be to put in place cost controls to minimise the liability to the public purse, but any proposals must minimise the scope for legal challenge; let us not repeat previous mistakes. The purpose of the regulations must be to stop the waste, protect public finances and put in place the protections that were — for some unknown reason that, I hope, the public inquiry will uncover — removed when the scheme was introduced in Northern Ireland.
No doubt like many in the Chamber, I was out on the doorsteps at the weekend, and people are genuinely angry at this incompetence and scandal. I have never witnessed a public reaction like it. They would be even angrier, if that were possible, if the regulations failed to stem the flood of waste. If the mitigating actions were also introduced in an incompetent way, making them open to legal challenge and continuing the £85,000 per day waste of taxpayers' money —
Will the Member recognise with me that, if there is a judicial review, the cost of £85,000 per day will still be incurred into the next financial year, not just this financial year, and continue until there is a judgement? Therefore, this is not a cost-free solution. There is a high likelihood of legal challenge — indeed, we have been advised by those in the industry that they are likely to seek a judicial review — and there will be ongoing costs incurred into the future. We will not face zero costs in the future as a result of this botched scheme.
I thank the Member for his intervention. I share his understanding of what the likely ramifications may be. I fear that the regulations have too many holes and are too open to legal challenge, which could mean that the £85,000 per day of waste that my colleague refers to will continue.
I am afraid that this so-called solution is half-baked and produced in haste, and I worry that it will fail in its objective. Despite all those caveats, questions and concerns, as my party leader said earlier, we will not stand in the way of the regulations, in the hope that the waste will be curtailed.
Regrettably — other Members have accepted this — this is not the solution promised by the former First Minister a number of weeks ago, which boasted that it would be a comprehensive solution dealing with the entirety of the costs to the public purse of this DUP fiasco of the RHI scheme. Minister Hamilton is clearly bringing forward an interim solution for decision today. It has been described as "sub-optimal", which is government speak for better than nothing.
In essence, it is a sticking-plaster solution for one year only, and it is now, unfortunately, the only option available to us in the short term.
We are presented with a plan at the eleventh hour because successive DUP Ministers have let the public down on this issue. Arlene Foster was the Minister responsible when the scheme was created; Sammy Wilson signed it off; Jonathan Bell failed to close it, although he alleges political interference in relation to the delay in closing down the scheme; and the current Minister, Simon Hamilton, has failed to act in a timely manner to try to staunch the flow of public funds.
Since the summertime, the Department for the Economy has failed to respond to persistent requests from the Department of Finance to sort out the RHI mess. That means that it is now bringing forward — according to the permanent secretary, at the advice of a special adviser only on New Year's Eve this year — a stopgap plan when, last July, with the publication of the Comptroller and Auditor General's report, or indeed last October, with the publication of the PricewaterhouseCoopers report, it could have brought forward the full plan that the public deserves. So the upshot —
I thank the Member for giving way. Sinn Féin was in the same Executive as the DUP when all this was happening, and one of the Ministers who was promoting RHI was the Minister of Agriculture and Rural Development. Can the Member deny or confirm that that Minister, right up to and even during the spike, in November 2015, was publicly promoting RHI to farmers?
The Member may well be correct in that assertion, but the reality is that, in January 2016, the Committee was first advised of it, and the deputy First Minister was advised by the senior civil servant, the head of the Civil Service at that time, that the scheme had run out of control and that the advice of the officials in July was to close it down. Quite clearly, nobody in the Department of Agriculture was aware of the advice given to the Minister of Enterprise, Trade and Investment at that time. Nobody in Sinn Féin was aware of the advice being bandied around within the Department of Enterprise, Trade and Investment. If other people were promoting the scheme, it was in the lack of knowledge that the scheme from June/July 2015 was recognised within the Department of Enterprise, Trade and Investment as being out of control, financial costs were spiralling and the advice was to close it down as quickly as possible. If other officials were briefing their Minister to go out and support the scheme in the autumn of that year, clearly officials in other Departments were not aware of the knowledge in the Department of Enterprise, Trade and Investment and, apparently, among the special advisers of the DUP and other DUP Ministers.
As I was saying, the upshot of the failure to bring forward a scheme to deal with RHI losses since earlier this year — you could argue that within the Department of Enterprise, Trade and Investment until the election, and the Department for the Economy since — continues to cost the public purse £85,000 per day. The solution that we have before us is severely flawed. I do not think that anyone disagrees with that. As yet, it does not have European Commission state aid approval, and therefore the plan may not kick in for definite on 1 April. If state aid permission is not through by then, it stalls until such time as that approval comes through. No one knows for sure how long it will take to clear the state aid hurdle. I also read in the media that it is likely to face a judicial review. A point was made in an intervention during the last contribution that that also creates uncertainty as to when this stopgap scheme may kick in.
It is clearly not a zero-cost solution. Another £6 million will be lost to the public services between now and 1 April, when this plan is scheduled to kick in with lower tariffs. In the 2017-18 financial year covered by this plan, losses to the renewable heat scheme will be at least £2·5 million, and another £2 million-plus will be spent on inspections and the inevitable legal challenges. So it is not the full and comprehensive solution that was trailed in the media by the former First Minister over the Christmas period. In fact, while this plan deals with £30 million of public funds at risk next year, what is clearly needed is a plan to deal with the full £500 million of public funds at risk over the 20-year period.
To accept this plan today requires, as Stephen Farry said in the earlier part of this debate, a "leap of faith". However, to have faith in this solution, we have to have faith in those who are tasked with its delivery. Ofgem remains at the centre of this plan. Ofgem's involvement in this scheme has been disastrous. It has done virtually nothing to tackle the fraud and abuse of the scheme, and the Public Accounts Committee evidence given by Ofgem in October was one of the low points in this entire debacle.
A robust, 100% inspections regime is central to any solution. As yet, no business plan has been produced for that inspections regime, and inspections may not start until 1 May. That is a disgraceful delay. The business plan for the inspections regime needs to be developed and approved as a matter of urgency. Then, we have to have confidence that the DUP's fingerprints are not on the plan; that it has not been influenced by the architect of this mess, Arlene Foster, or by the DUP special adviser in the Department for the Economy who has had to step aside from all issues relating to RHI because of his family connection to the scheme. Of course, to make that leap of faith, we will also have to have confidence that the names of the beneficiaries during the spike period are not being held back because they contain more revelations about DUP links to those applicants. Minister Hamilton was asked repeatedly to release the names before this debate in order to build confidence in the solution he is proposing, and he refused to do so. That is a necessary confidence-building measure, Mr Speaker.
The part of the interim solution that has merit is the intention to reduce the tariffs for all business users from 1 April for one year. That is expected to reduce RHI losses by around £25 million next year. The rest is a hotchpotch that may or may not deliver as promised. That is why, regardless of how the vote goes today, the Minister of Finance must continue to engage with the Department for the Economy to make sure that he is satisfied that this plan will not only slow the runaway train, which is the DUP's RHI scheme, but enable us to stop it dead in its tracks from 2018 onwards and save not £25 million but £500 million for the public purse. That, I think, is the measure that is required in order to give confidence. We have, tomorrow —
I appreciate the Member giving way. Now that he is here and is setting out his view regarding the regulations, will he explain why he as Committee Chairman has been absent from the Committee for the Economy and why his two party colleagues have not bothered to turn up? If he had, he would have had the opportunity to question officials and other people who gave evidence, but he absented himself. Does he have an explanation for that?
I can assure you that I am as much across this part of my brief as anybody who has been at the Committee. I notice that the Committee failed to take any position with regard to this proposition when it was put to them.
Mr Speaker, through you, if the Member's only issue with Sinn Féin in relation to this is our attendance at Committee meetings, when we recognise the full scale of the impact on these institutions, public finance and public confidence that this scheme has brought to the Assembly, he is living in cloud cuckoo land. This has been a disastrous scheme from start to finish, and the handling of it has been disastrous. The proposal in front of us is not the proposition that was outlined by the First Minister a number of weeks ago. It is a sticking plaster solution, which, we hope, will have some effect in saving at least £25 million. The reality is that we have had to initiate, through the Department of Finance, a public inquiry to try to get to the heart of this matter, because of the refusal of the DUP to deal responsibly with the matter, when there was an opportunity before Christmas for the DUP and the former First Minister to do so. So, if the only issue that the Member has is attendance at Committee meetings, I think he is missing the point by a very, very wide margin.
This is a very serious issue. It has hugely damaged public confidence. I suggest that the solution being proposed is a long, long way short of one that will restore any degree of public confidence, but we have to deal with it as we see it in front of us. We have to accept that it is not the solution that was promised, and we have to look at it in the round to see if it will do what it intends to do by way of saving some element of public finance in relation to this, and we will make our judgement accordingly.
Tempting as it might be in the current context to go beyond the scope of the regulations and comment more widely on the RHI scheme and the damage that that scheme, and, I would argue, more so, the manner in which it has been handled, has caused, I will not test your patience, and I will try to confine myself to the regulations.
The permanent secretary — an official thrust uncomfortably into the spotlight over recent weeks, but whose integrity and honesty has not seriously been called into question by anyone throughout this sorry episode — was adamant in his evidence to the Committee this morning that these regulations are required and that no ministerial direction has been issued.
Indeed, if the Minister had stalled on them, he would have sought a ministerial direction to deal with the issue.
We are not here to question whether action is required; we acknowledge, however, that this is only a patch for one year and is not a permanent fix to the issue of RHI. The potential long-term solution to it may end up being something very similar to this approach, subject to further policy reflection and public consultation, and it may be better than other approaches such as a windfall tax. Representations have been made, however, by some of the legitimate users of the scheme that the regulations may not be the best option, bearing in mind their legitimate business needs. Regardless of that, this remains a rushed process. The regulations have not been subject to public consultation, so the views that I referred to earlier with respect to those legitimate businesses have not and cannot be fully considered.
I want to linger on that point for a second. From a number of the speeches that we have heard today one might have got the impression that the overspend was solely due to abuse of the scheme: that is simply not the case. The lack of cost controls, tiering and degression, coupled with the level of the tariff, means that the scheme, when operated entirely lawfully and as intended, is much more generous than the comparable scheme in England and Wales. The blame for the overspend lies primarily with the failure of the Minister and the Department to design the scheme properly and include cost controls. Those who applied to the scheme fall, I guess, into three categories: those who are flagrantly abusing the scheme; those who are complying with the letter of the law but exploiting the loopholes in the scheme; and those who are complying with both the letter and the spirit of the law in an attempt to meet their business needs legitimately through the scheme. Suggesting that they are all to blame for the mess is unjust, and it runs the risk of the businesses that applied to and operate the scheme in good faith suffering reputational damage as a result. The scheme, when operated within the letter and spirit of the law, would still create an overspend. It is right that scheme participants ought to be audited, and those abusing or exploiting the scheme ought to be, at the very least, removed from it and potentially face criminal proceedings for fraud, when that is appropriate. However, businesses acting in good faith ought not to be unfairly castigated as a result of this mess.
Our second concern is that the regulations have not been subject to Executive approval; they were brought here by one Minister. The scheme is not coming to us with the agreement of the Executive. While the scheme itself is not a cross-cutting matter, the impact on our finances most certainly is. There is as yet no approval for the business case on which this is predicated, and there is no clarity on whether there will be agreement on that going forward.
Thirdly, we are concerned that the regulations have not been subject to any meaningful Committee scrutiny, notwithstanding the extra week that was secured. All things being equal, it was the Minister's intention to continue last week to press the regulations to a vote; it was others who asked for the adjournment of the debate, which has allowed some very limited scrutiny by the Committee. Sadly, however, the Minister was not in attendance at Committee this morning to answer questions, instead sending his officials. Given the political importance and sensitivity of the issue and the fact that the Minister is essentially asking Members to take him on trust, it is not an issue that should be devolved to officials.
I am aware of the traffic chaos across north Down and Ards this morning after last night's accident and a further one this morning on the diversion routes. However, my colleagues and others managed to be present at meetings here this morning regardless of that, so I would be interested to hear the Minister's reasons for not attending the Committee. It certainly does not create confidence at a time when Members are seeking that reassurance directly from the Minister, who, as the legal advice given to the Business Committee indicates, remains ultimately responsible for any consequences of the scheme.
That scrutiny, although very restricted, has, in fact, raised further concerns about how the scheme emerged. Under questioning today, the permanent secretary informed the Committee that the plan before us came from a special adviser. Under further questioning, it emerged that the special adviser who brought the proposals forward was not the Minister's special adviser but another one from a different Department. That raises really significant questions about what the roles of special advisers in this debacle have been. There is no justifiable reason for a special adviser from another Department to become so intimately involved in the business of a Department that is not his own.
I suspect that a public inquiry might get some clarity on that, though it seems that there was such a tangled web that it may be difficult to extract any clarity from it.
The fact that we have a special adviser from one Department putting forward a patch repair for a scheme that is in another Department's remit simply adds weight to the perception that it is the special advisers who are in charge of the Ministers rather than Ministers being in charge of their Departments, and that is despite special advisers not being accountable to the Assembly and the public, whereas Ministers now simply act as though they are not.
It was also indicated that the business case was commenced on 30 December when the scheme was brought forward. That is despite the fact that, on 19 December, Mr Speaker, you recalled us to the House under a promise that was made publicly — it was in the public domain and in the media, who have taken much criticism from some in the Chamber today — that we would get not just a statement about what had happened but the presentation of a comprehensive scheme that would reduce the cost implications to zero. Not only did that not happen on 19 December but it is clear that what was being said in public was at odds with the timeline in private, as no such scheme was presented until almost two weeks later and is not a comprehensive solution but a patch repair. It gives further weight to the perception that the scheme and the timing and content of this repair are being driven by political considerations rather than considerations of good governance. There is genuine concern that this is less a patch to prevent the continued leaching of public funds over the next year and more a political fig leaf to cover the DUP's embarrassment over the RHI shambles ahead of the elections. It is one that carries significant risk, on which I will elaborate. Therefore, we have serious reservations about supporting such regulations.
Fourthly, the regulations have been given only limited scrutiny by the Examiner of Statutory Rules. Whilst the Examiner was able, in a very restricted manner, to look at the rule in the last week, that was not as complete and thorough an examination as would be expected, particularly of something that carries such risk. In fact, the Committee was, I believe, unable to agree the Examiner's report this morning, as it did not have confidence that it had been given sufficient time to consider the limited response that the Examiner was able to produce or to have full confidence that those would be the only remarks on it.
Fifthly, there is a major risk of legal challenge, primarily focused on the lack of consultation on the scheme. I realise that the intention is to consult during the first year of the scheme, but the risk of legal challenge is immediate. It is exacerbated by a lack of consultation with the sector and by the lack of Executive and Committee scrutiny. That approach, far from being cost-neutral, could place us at significant risk of incurring legal costs and, at the end of the process, still being liable for the £85,000 a day overspend.
There is, as a result, also an absence of analysis of the impact of a change in the scheme — in particular any sudden change — on a range of sectors including, for example, poultry and mushroom production. It was said earlier that I would not know much about poultry, but, from being in the Assembly, I know quite a lot about the cultivation of mushrooms. I have to say that, at times, when you sit in Committee, you feel that that is exactly how you are being treated. That may open up further opportunities, however, for legal action around the fairness of the measures that are being introduced and the impact that they could have on specific sectors and businesses.
Sixthly, there is a risk of the European Commission not endorsing what has been proposed as it may breach state aid rules. That places Northern Ireland at risk of infraction proceedings. I suspect that, in real terms, Europe has bigger issues to wrestle with over the next weeks and months. However, we are, essentially, looking for them to be generous towards us at a time when, perhaps, our Government have been less than generous towards them.
Why is all this being done in such a rush? I know that the DUP will focus on the fact that the resignation of the former deputy First Minister has added pressure to complete this process quickly, and we accept that to a point. However, whilst the collapse of the Assembly may have added to the pressure to complete it now, it does not explain why the action that is being taken today was not taken at any point in the last couple of years. We are now being told that this is the most straightforward and off-the-shelf solution to the problem. However, the Department did not actively consider this approach until the very end of last year. It was as a result of public and political pressure, not concern to protect the public purse, that this belated burst of activity was brought forward. The lack of action from February 2016 when the scheme closed and now is inexplicable. Arguably, if his had been initiated even in June 2016, we could have saved around £15 million in this financial year alone. That £15 million would have been adequate to introduce the cancer drugs fund, which costs £13·6 million.
In his comments earlier, Mr Frew was very critical of the media. He said that, at some point, the media had moved from reporting the news to wishing to be the news. It is called investigative journalism. Had it not been for the pressure of investigative journalism and the public and political scrutiny that followed it, I doubt very much that we would be standing here today discussing this solution, because it was that pressure and not foresight or protecting public resources that has driven this scheme.
The Minister is here today seeking our trust in the absence of the normal rigorous scrutiny to which issues of such importance rightly ought to be subjected. We have a duty to judge the regulations on their merits and the Minister on his record. Despite the lack of opportunity for Members to properly scrutinise this and the need for him to engender confidence and go the extra mile, if you will, he refused to take a single intervention when he introduced these regulations to the House last week. Further, as I referenced earlier, the Minister was not available to attend the Committee this morning to answer questions, leaving it to his officials to answer questions that are of a politically sensitive and urgent nature.
Last week, when the Minister sought my party's support in his bid for an independent public inquiry into the matter, we responded in detail to that request. We set out our grounds for supporting such an inquiry and contacted the Minister's private office to take Minister Hamilton up on his offer of a meeting to discuss it. We called for a public inquiry and we are willing, despite reservations, to support that were it to meet certain conditions. We were not seeking a scalp, as some in the Chamber have suggested today. We were seeking the truth on behalf of the people who employ us and who will pay for this mistake: the public. Their money is at risk. Their services are being jeopardised. Their confidence in these institutions, which are here to serve them and not party or self-interest, is being eroded. I want to set out what happened as detailed in the last paragraph of the letter that I hoped to give to the Minister at that meeting but ended up having to email to his private office.
"In conclusion, we welcome your offer of a meeting to discuss this matter. Having sought to arrange a time through your Private Office, we were advised that you would not be attending, but that the meeting could proceed with your Permanent Secretary and a lawyer. Given the time pressures and sensitivities of these matters, it is our view that a meeting at ministerial level is required in order that you can indicate directly whether you would be satisfied with the terms that we have outlined."
Again, we see a Minister happy to assume the trappings of office but appearing too readily to leave the heavy lifting, the jot and tittle if you will, of serious issues to officials and advisers. It is that eagerness to assume power but unwillingness to take responsibility that is at the very heart of this sorry mess.
The Minister's own record of avoidance of transparency and robust decision-making processes extends beyond this scheme. When we look at the manner in which a rushed decision was taken with respect to United Airlines without all the due diligence, only for it to unravel in an unholy mess later, we have serious reservations about the robustness of the scrutiny to which he, personally, will have subjected this statutory rule. The cynical view in the public mind remains that this is primarily a ploy on the part of the Minister and his party to give the appearance of having acted ahead of these elections. Given the antics of the Minister and his colleagues and their poor record on accountability and transparency, I have to say that, with the best will in the world, it is difficult to conclude otherwise. Ultimately, however, we believe that we need to try to stop the leaching of cash on this scheme, so we will not stand in the way of this passing today.
I want to take the opportunity, through you, Mr Speaker, to remind the Minister that he will be responsible for what is decided here, not me, not my colleagues and not any other Assembly Member in the Chamber. No amount of buck-passing, muck throwing or ducking of responsibility will change that fact. These are his proposals; they came from his Department; he is responsible for them.
In answer to Edwin Poots, I have to say that no one is suggesting that any Minister alone devises every scheme, every policy and every action of their Department, but every Minister is legally responsible for the actions of their Department, and it is good governance and leadership to step up when that occurs. The real scandal here is that, while we have people unable to heat their homes and struggling to feed their families, we have barns being raided by the police — empty barns with steam rising off them in the snow. I want that to stop.
We will not block these proposals today, despite our serious reservations. I hope that these proposals are a success, not for the Minister or his party but for the sake of the public who ultimately are paying the price for this debacle though they carry none of the responsibility for it.
I think that it was Mr Smith who asked a little while ago how we got here and what brought us to this pass. It is worth going into it, because you cannot understand this scheme and the flaws in it, and the regulations and the flaws in the regulations, other than in the context of the internal politics of our two major parties and, indeed, of the entire system of governance created under the Good Friday Agreement.
We have had a very good debate in one sense. A lot of it was fascinating. The most fascinating thing that I discovered — at least one of them — during the day is that — you were not here, Mr Speaker, for this bit, so I wonder, did you know that day-old chicks prefer woodchips? I did not know that until Mr Poots explained it to us. I am taking it seriously. I am sure that you are right. It is something I know nothing about. What I am really wondering is, how did we get here in relation to the major items; how did our debate get to a position where we have to be informed and take on board the preferences of day-old chicks with regard to particular fuels used for heating their sheds? How did that happen?
One of the reasons it happened is, of course, because a lot of people in here and a couple of parties in here cannot deal with the matter in a straightforward manner. And because they cannot deal with it in a straightforward manner and face up to all the issues which are raised, we get taken into all sorts of meandering, winding paths and into the netherworld and the fringes of the Assembly.
For a start, I would like to demonstrate the way in which the internal politics and the ideology, if you like, of the DUP and Sinn Féin have played a role in generating this present situation with the renewable heat incentive scheme. It may seem a very far distance from political ideologies of parties — do not worry, Mr Speaker, stick around and I will demonstrate it now. The fact of the matter is that, in the course of this debate — it is relevant, I am picking up things that have already been said in this debate. Mr Bell made the second fascinating statement that he has made in the House. At the end of it — I am sorry about the pun — there is no need to ask any more for whom the bell tolls; it tolls for Arlene Foster. We learnt that after Mr Bell's statement.
I was very struck when, the last time we had a debate on this subject — I am dealing with things that have already come up, Mr Speaker — Mr Bell told us, and he may well be right, that if the Reverend Ian Paisley were here, he would be sitting alongside him and not with the other DUP colleagues further along the Bench.
I am sure that he is right about that. One of the reasons why I am sure that he is right is that, a couple of days after that, I happened to be watching my television set and there I saw Ian Paisley junior making some remarkable statements about Mr McGuinness. I thought to myself, " There is something up. There is something happening here". Is the dissident DUP claiming the Rev Ian Paisley? And, of course, is there a leadership bid? It also demonstrates the ideological chaos in the DUP. It is the chaos arising from the fact that their traditional ideology does not meet the material realities of Northern Ireland society any more. In that situation, we have the politics of opportunism and the politics of — I hesitate to use the word "corruption", so I will not. There is a questionable and murky behaviour conducted in that dark territory where SpAds and spivs infest the system of government in Northern Ireland. You cannot understand the way the entire scheme emerged and the regulations — the inadequate regulations — that we are invited to vote for unless you take that into account.
Why did the scheme cause the collapse of the Executive and then the Assembly? How did that happen? Just a few weeks ago, everybody will remember the remarkable scenes in which you had Members looking across the Floor from the Sinn Féin Benches to the DUP Benches. They were gazing at one another doe-eyed; now, they are looking daggers at one another. That was just a week later. How did that happen? Again, there are ideological problems for Sinn Féin, as they know — I have talked to their Members about it. It is a party that is dedicated to a united Ireland or nothing, yet they were locked into an embrace with the DUP. It is hard to explain that to people who believed that they were supporting or joining the party to make a drive for the full realisation of the ideals of 1916 and all that business. There was a contradiction there and, as I said, the ideological contradiction in the DUP that was brought about by the fact that, by coming together to form a government, they were contradicting the stated reasons for their very existence. In that situation, you are bound to get internal turmoil and, as Sinn Féin found when they went back to their grassroots, people were telling them "No, nay, never".
I thank Mr McCann for giving way. When you talked about the doe-eyed gazing, there were smiles from those on the Sinn Féin Benches, but do you not think that the fact that Conor Murphy said earlier that they knew that the scheme was falling apart in January 2016 but chose not to make it an election issue proves your point?
That is fair enough, Mr Speaker. I will. I have to say to you that in the course of the debate — it has been a lengthy one — we have had passages of debate in which the regulations, or anything associated with them, were not mentioned for five or 10 minutes. I have certainly said nothing so far that was as far removed from the regulations as other Members have been — repeatedly — in the debate. However, I will leave that particular aspect of it there.
Mr Speaker, you will be aware, as we all are, of the extent to which — I think that it was Mr Smith who referred to the fact that he had never encountered anger like it. I have to say that I have; I have encountered more anger on the streets over other issues over time. Nevertheless, I take your point. There is a lot of anger and dismay and a widespread belief that the RHI scheme is a racket, and that is not good for any of us. I am not saying that I endorse that belief, but people are disgusted, and anyone who has talked to people in the community about it will know that the RHI scheme is seen as a racket. That is what people believe it to be. Everything that they hear about it — what they hear is accurate — is about dodgy practices and people being secretly or confidentially alerted to the fact that a scheme existed and were told to fill their boots with public money. When people hear that and consider it against the background of all the things that have led up to it — anyone can rhyme them off. There was Research Services Ireland a few years ago. That was a 'Spotlight' production too, was it not? If I am right, that was in November 2014.
Incidentally, there were attacks on the media here. If it was not for 'Spotlight' shining its light, we would still be in the dark about many of these things. I pay tribute to Stephen Nolan, Sam McBride, Allison Morris and all the other journalists, who have given great service to this community, far better than that given by some people in parties in here over recent weeks, by bringing these shocking events and situations to the public mind. We would not have been here, as someone remarked, if it had not been for honest, investigative journalism in this part of the world. Everybody would be trundling on in a complacent manner. Far from attacking the media, we should be giving it credit and praise. Some of the remarks about the media from the DUP Benches reminded me of a Donald Trump press conference, in which he called out people and asked them, "How dare you tell the truth? We have got an alternative truth that we are promoting. How dare you tell the facts!" That was the tone of some of the remarks from the DUP Benches.
At the end of the day, we have to ask ourselves what are we going to do about all this? What is "all this"? "All this" is not just RHI. We all know that one of the reasons for the seething anger that Mr Smith referred to is that it is not the first such thing to come before the public. It was the last straw, not the first example. It came after Research Services Ireland and then — all these incidents have something in common — Red Sky, NAMA and all the rest, and on those you cannot say, "One side is as bad as the other". You cannot; it is not the case.
I thank the Member for giving way. Just on that last point, the Minister was reluctant to attend the Committee this morning, and Sinn Féin has been absent from the Health Committee over the last two weeks. That is an amazing correlation. Does the Member agree that it is a demonstration of power before people?
Power before people. When I was coming in this morning, I was accosted by Mr Allister, who said, "I believe that you are from People Before Pellets".
So, power before people I will accept too.
Where was I?
Does the Member agree that civil servants have an obligation to act in a non-partisan, non-political fashion and that the public, because of all the scandals that SpAds have been involved in — Red Sky, NAMA and all the others — believes that the culture in the Civil Service is that officials are overruled by SpAds and that they do not take their codes of conduct, codes of recruitment and ethical codes with any great seriousness, which means that the two main political parties have the biggest say in what happens in the Departments? Mr Allister brought before the Assembly an opportunity to curb the role of SpAds, and Sinn Féin blocked it, after saying initially that they would support it. There are serious issues to clean up in this House, and not just on the role of the SpAds but on giving back correct procedures to civil servants.
No sensible person could object to anything that Jenny Palmer has just said. The role of SpAds in our system — why they have this role and influence — is a very interesting one. We keep hearing it, and it is true, that there are so many SpAds in this little place, serving the Executive Office and other Departments, compared to Wales, Scotland and even Westminster. Why is that? Is it just people filling their boots again and saying, "We will create jobs for the boys"? There are hardly any girl SpAds, are there? There is a reason why we have so many SpAds. What their job is really is to police the Departments for their parties. They are not there to help in the administration or to make it more efficient. Given the nature and the structures of these institutions, which are based on the Belfast/Good Friday Agreement, it is quite understandable that that should be so.
If you set up a system of governance in which every Department is a silo operating independently of all the others, it makes perfect logical sense to have groups of SpAds to make sure that every silo is secure and a particular party's perspectives, policies, desires and interests are vindicated in that Department rather than any general overall interest of the people or the political system. That is what lies behind that, and that is why they need all those SpAds. It is why SpAds feel entitled, as they do in this part of the world — they do not across the water — to tell permanent secretaries and Ministers what to do. In this jurisdiction, if senior civil servants are having a discussion with a group that has come in to talk to them and a suggestion is made, one senior civil servant will say to another very senior civil servant, "We'll never get that past so-and-so", naming a SpAd. That is a grotesque system. It all comes from the nature of the structures. Tomorrow we are discussing the spirit and values of the Good Friday Agreement. Perhaps we will go into some more detail at that point. All that provides the context in which these problems have arisen.
Mr Bell talked about the £85,000 a day and what that could do in the health service and so forth. It is an easy argument to make, but there is a bigger one. I am not objecting to that argument; it is just an obvious one to make. When I say "ordinary people", I mean people who come from the area where I come from. Raymond McCartney comes from the same area. Loads of us are from areas where people struggle day to day. They know that, if they ripped off the state for a relatively small amount of money, if they claimed and took more in social security than they are entitled to under the rules and regulations, they might well be up in court being named and shamed in front of their neighbours as reprehensible people for a couple of hundred quid. They then read in the newspaper that relatively vast sums of money are sloshing about at Stormont and are being siphoned into the pockets of particular individuals. They also read that people here, whether politicians or officials, are tipping off their mates to join the scheme. What are they supposed to think? Of course they are raging mad. That is what has given rise to the chaos in the DUP and the pressure from below on Sinn Féin, which has led to the collapse of the institutions. That is what caused it.
This is not an election meeting, but the fact is that, if we have another Assembly with the same relative result for the major parties and so forth, we will have solved nothing whatsoever. You advised me, Mr Speaker — you were absolutely right — to stick to the point. When it comes to dealing with this matter, is it sticking to the point to say that all this is an attempt to weaken unionism or for Sinn Féin to make a similar point in reverse to the DUP? How is that relevant to the debate? That tells us that those parties have suffered and are uncertain about whether their ideology has been maintained and is still as strong as it was. They are retreating to particular positions in advance of 2 March. The DUP says, "You're damaging unionism. Vote DUP or the Union is under threat". Sinn Féin says, "Vote Sinn Féin for progress towards a united Ireland", which it claims will be achieved —
Does the Member agree that the scheme has done serious damage to the valid and legitimate case for renewable heat energy? Alternative forms of energy are really needed, given the threat of climate change. Does he find it ironic that the RHI scandal, which has done serious damage to the case for renewable energy, was the fault of a party that has long and often denied the existence of climate change?
Absolutely. It is one of the sadder aspects of all this. As anyone who has campaigned on environmental matters will know, one of the big hurdles when you are arguing for the need for something like the renewable heat incentive scheme in terms of energy efficiency, controlling CO2 emissions and all the rest of it is that people think that environmental things are just too expensive, are not practical or do not bring jobs and all the rest of it. The little saga that we have had here will make that much more difficult. The RHI scheme was, on the face of it, intended to make a contribution to protecting the environment and might well have done so. The controversy that has arisen, mainly because of the DUP — I keep saying, "Sinn Féin and the DUP", but let us be clear about it: there is no equality of arms in this. The DUP is the star of this production. Sinn Féin may be in line for an award as best supporting actor, but this whole thing is a DUP production. They are responsible for it and for the damage done to environmental campaigning.
It seems to People Before Profit that we do not need just a proper investigation into what happened or just the regulations, although they are a little better than nothing. We can deal elsewhere with the question of the 2005 Act under which there will be an inquiry. That is not a perfect document either — far, far from it.
Can I just throw this in, with your indulgence, Mr Speaker? No, I will leave it.
We need a different type of politics here if we are to avoid debates, scandals and issues like this in another mandate. I know that I have said this before, but the perception that RHI was a racket has added and contributed to a perception that Stormont itself is a racket. That is what is out there. People have a cynicism about this place. We might have thought a couple of months back that it could not get any deeper or darker — well, it just has because of this. We are undermining trust. I am not too worried about undermining the status of the Assembly because of the regulations and the RHI. Every time you look down, Mr Speaker, I mention the regulations to remind you that I am being relevant with all this. What I am saying is that we believe that we need a different type of politics that does not need the separation of Departments into silos or to be policed by SpAds and spivs. We need a system of government in which the interests of the people come first. To my mind, that requires a socialist approach; others might disagree and will not go the whole hog with me. The fact of the matter is that we need a different type of politics in Northern Ireland, and, if we do not get that after 2 March, we are doomed — doomed — to go through this little circle of hell yet again and to make no progress. Surely after all these years and all this time, we can say to the people, as we say to the people — Catholic, Protestant or anything else — "Vote for a change. Voting the way you have always voted is how the problem arose. That is where the problem is rooted in the first place".
I believe that we are better than this. I believe that the people of the North are better than this. The working class of the North are 10 times better than the sordid shenanigans going on here. Give the people working-class politics, as People Before Profit is trying to do, and we may not have to go through this nightmare again.
You are very welcome.
Are the regulations a fig leaf, or are they a solution, even an interim solution? I hope that they are the latter, but I fear that they are the former. They show many signs of being a fig leaf for the DUP to get it through the election arising from, in the terminology of one of its members, the "omnishambles" of RHI and to create the aura and impression of something being done about it: "It is sorted. Nothing to see here. Move on". The suspicion that it may indeed be a fig leaf comes from two sources: the timing and the dubious nature legally of what is being tried.
The problem has been known about for months upon months upon months in the Department and maybe even longer than that.
It is only now, however, in the teeth of an election, that a proposal — any proposal — has come forward to attempt to ameliorate it. Indeed, if we had not had the BBC 'Spotlight' programme, would we be having this debate? I suspect not. If we had not had the vigorous, persistent, necessary, worthwhile investigative journalism of Sam McBride, Stephen Nolan, Conor Spackman, Allison Morris and others, would this matter have continued to be swept under the carpet because it was too embarrassing to deal with? I suspect so.
The fact that the regulations come at the time that they come at suggests to me that they are indeed more of a fig leaf to get us beyond 2 March, but fig leaf or not, the regulations contain a mammoth embarrassment for the DUP. Belated beyond description, they seek to put into the Renewable Heat Incentive Scheme Regulations (Northern Ireland) 2012 the very thing that Arlene Foster, when she was Enterprise Minister, took out of the GB template. The regulations put in what should have been in there in the first place. They put in what was in —
In a moment.
They put in what was in the GB regulations, which was tiering in the tariff. That is the essence of the regulations now before us: to put in retrospectively, with impact for one year and one year only, for now, that tiering. Of course, that is the most crucial thing that gave rise to this scandal: the taking out of tiering in the first place. We are told by some, "Well, that was not the Minister's fault. That's how she was advised". If it is how she was advised, what sort of a Minister is it who, when given advice that you do not have to bother with the tariffs that are in the GB scheme and that you can run it at the top-tier tariff in perpetuity, does not ask, "Why would we want to do that? Why would we not want a safety net in case this scheme runs away with itself? Why would we want to over-incentivise the scheme in such a way?" What sort of a Minister would not ask that question? It would have to be one asleep at the wheel. Even if some dim-witted civil servant advised that we need not bother with tariff tiering, a Minister with any wit would have known to interrogate the issue and not to let it rest there, and, if she did not, the Finance Department would, because this scheme, before it ever got off the ground, had to be approved by the Supply officers in DFP. The Supply officers in DFP had to consult their economists and ask this question: is this scheme value for money? That question has to be answered. Not only did the Economy Minister fail on the most fundamental component of this scheme, but it seems that the Department of Finance also failed by approving this scheme through its Supply division.
In a moment.
Is it not amazing that, in all of this, not a single civil servant, if they failed, not a single consultant, if they failed and certainly not a single Minister has paid any price whatsoever? What a contemptuous approach to this scandal towards the public, who are expected to pay the price.
Thank you very much indeed for giving way. I ask the Member to reflect on the fact that, if incompetence is a defence for what has gone on, maybe we should reflect on the complete incompetence of this whole Fresh Start Sinn Féin/DUP Government. If incompetence seems to be the lead for what we are trying to achieve going forward, it is best gone and gone now.
Albeit belatedly because the point has rather moved on. The Member stated a number of times that Arlene Foster removed the tariff tiering from this. The evidence thus far to the PAC and elsewhere has absolutely clearly indicated that that is not the case. The recommendation to the Minister did not have tariff tiering in it. On what the Member — who sits in the Chamber also as a barrister and as somebody who has been in the courts for a very long time — has just said about people paying the price, he knows that the proper process should be that the evidence is heard, the judgement is given and, after the judgement, there are the consequences. That is the appropriate way to deal with this, not for people to be hounded before that evidence is heard and due process takes place.
There are two points there. On Mrs Foster's culpability, the reality, indisputably, is that the GB scheme that was first produced had within it tiering in the tariffs. The Northern Ireland scheme, based on that template, is almost identical in every dimension save the tiering in the tariffs. Therefore, a conscious decision was taken in Northern Ireland to remove from the template that they had from GB the tiering in the tariffs. The one person, the one Minister, the only Minister who is accountable for that is the Minister who signed off the scheme. The Minister who signed off the scheme is Arlene Foster. There is no hiding place for her on this. That is indisputable, and it is no excuse to say, "No civil servant told me that I should not sign off a scheme that had taken out the tariffs". If she had been across her brief at all and was asking questions at all and was not just thinking of the next photo opportunity but was thinking about what the job was about, she would have been interrogating the issue of why we were doing this. Surely, she did not fall, as was the contention that was made somewhere, I think to the PAC, for the juvenile belief that there was that this was free money.
Surely, as a Minister, she knew that once you tamper with a national scheme to make it more expensive regionally, you pay the difference. There is no such thing as free money in those circumstances. Surely she did not fall for that, or did she?
I had the opportunity, along with Mr Girvan, to sit through most of the PAC hearing in the Public Gallery on Wednesday. He will note that, on at least three occasions, various members of that Committee asked the permanent secretary, Mr McCormick, "Did Mrs Foster act honourably, or did she do anything untoward throughout this entire process?". His reply was that she did not do anything untoward; she acted honourably throughout the entire process. How does that tie in with the accusations he is making at the moment?
I do not think the word was "honourably". I do not think that was what was in the scripted questions that were asked of the permanent secretary. I noticed his rather hesitant reply but, yes, he agreed that there was nothing untoward. I must say that I beg to differ with the permanent secretary. Unless the whole Civil Service is in such an embarrassment about this that they do not want to put the finger on anyone, I do not understand how a permanent secretary, as accounting officer for his Department, could say, "It was OK; it was not a fault and it was not a failing to sign off a scheme which had this huge massive flaw in it". By anyone's book, that is a fault.
I thank Mr Allister for giving way. The question that Mr Wells refers to actually used the word "wrongdoing". The person who I cannot name was asked if he thought that Mrs Foster was guilty of wrongdoing, which has a completely different connotation.
I thank the Member for giving way. One of the most frustrating elements of this — I am sure the Member will agree — has been the complete inability for people to accept that, while there may be no evidence that the Minister did something that was inappropriate and wrong, there is every evidence, given that this scheme went through, that the Minister did not do what was required of her in office, which is to properly scrutinise the advice, to weigh that advice and to make her own judgement as to whether or not it was an appropriate way forward. That is a fault in itself. It does not require her to have acted out of any improper motive for it to be a failing on her part.
I think the Member puts it accurately; that is correct. A Minister's job is not just to sign off whatever is set in front of them. They are there as guardians to interrogate the issue, to make sure that the right decision has been taken and to ask the hard questions. My goodness, if you have a situation where the tiering is being taken out of the tariffs and the hard question is not asked as to why we would want to do that and not keep a safety net, then that is a failing by a Minister. In my book, it is, and that is what has led to this sorry pass that we are in today.
I thank the Member for giving way. I take note of what you are saying. I referred earlier to Emma Little Pengelly's contribution that we are all human and error can happen. Does the Member, travelling through this logic, then raise concern when somebody — a member of the public — actually takes time out to point out the errors that have been made? Is that not a continued failing and a deeper, darker hole that this Minister fell into?
Yes. The whole aspect of the whistle-blower and, particularly, the second email to the Minister's personal or political office account — whichever it was — the failure to convey that to the Department. I would have thought that was something that might have struck the permanent secretary as a failure which put the Minister at fault in failing to do that. That robbed the Department of the opportunity to waken up to this issue and to get proactive with it. Yet, that email, which seems to have been fairly explicit about the fault lines in the scheme, never made it out of the Minister's inbox. Surely, that is a significant failure.
I thank the Member. I will try to make this my last intervention. Will the Member acknowledge that there was a further opportunity to introduce cost-control measures when her Department consulted on the proposal to introduce regression? As was confirmed to me by the head of energy division in a February 2016 meeting of the Committee for Enterprise, Trade and Investment, the Minister made a policy decision — I am paraphrasing here — that we wanted to get the domestic scheme up and running. That, and not regression, was the priority.
I think that regression was another missed opportunity, and that has compounded the situation. There was also the missed opportunity that when DFP originally signed off on the scheme and approved the business case, it declared that it needed to be reapproved by 1 April 2015. It did not happen because DETI did not send it back to DFP, and DFP did not ask for it. It only came back belatedly to DFP in the autumn of 2015 and was then, amazingly, signed off for a second time at the height of the spike in October 2015, by which stage Mrs Foster was then the Minister of Finance.
There were repeated failures in this, and that is what has led us here. Yet, to listen to some, it is no one's fault. It is certainly not a Minister's fault. We could not have that. It is no one's fault. Well, it is, and the public knows that, in government, the buck stops with the Minister or, at least, it should, but there have been such contortions in this to avoid the buck stopping with the Minister that, frankly, it is embarrassing that, as politicians, there cannot be a facing up with the public on this issue.
I asked whether this was a fig leaf because of the genesis of it and how it was delayed. I also wanted to ask whether it was a fig leaf because of the dubious legal nature of it. Never mind being a fig leaf, these regulations, in the heat of litigation, could turn into a chocolate fireguard; they could melt very quickly because they defy a number of principles ensconced in this area of law.
What is involved here is the state seeking to derogate from something that it has granted to members of the public. There is a legitimate expectation created with the beneficiaries of the scheme that they are tied into a scheme upon which there is commitment to deliver: if they fulfil their side of the bargain, the Government will fulfil their side of the bargain. Indeed, article 3 of the original 2012 regulations expressly says that the Government must — must — make these payments. So not only do you have a contractual-type situation created in the acceptance of the letters of offer, but you have, in the statute, a solemn obligation on the Government that they must make these payments.
That has created contractual rights and legitimate expectations, which were of course underscored by Mrs Foster's letter to the banks. In her letter to the banks, Mrs Foster went out of her way to highlight just how guaranteed these schemes were. She stated:
"Tariffs are 'grandfathered' providing certainty for investors by setting a guaranteed support level for projects for their lifetime in a scheme, regardless of future reviews."
"Regardless of future reviews" — guaranteed. In the letter's penultimate paragraph, she states:
"The government support, on offer through the incentive schemes, is reliable, long term and offers a good return on investment."
Not only have we got letters of offer and regulation 3, which says that the Government must pay, we have the very Minister promoting the scheme by lauding it to the highest and underscoring the certainty of the guarantee of payments. It is indisputable that legitimate expectation has been created in respect of the beneficiaries of the scheme.
Yes, it used to be the case that, in the law, Parliament could do what it liked, so to speak, and, yes, if you go back to some of the older legal authorities, you will find, for example, quite a well-known statement by a legal scholar called Greenberg, which says that no person has a right to demand compensation for something that was done by or under the authority of statute. That is how it used to be, but then we signed up to the European Convention on Human Rights. Article 1 of protocol 1 came in, which indicates:
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law."
That introduced a radical change and constraint on the right of Parliament to do what it liked with regard to dealing with the property and possessions of individuals. It is indisputable that the rights and possessions that people have under the RHI scheme qualify as property rights in the law.
I remind the House that, back in 2013, I brought a special advisers Bill to the House to remove some people from office. The House will recall that, of necessity, within that Bill, were two safeguard provisions. One guaranteed compensation to anyone who was removed. Why? They were having removed from them property or possession rights, so they had to be compensated. Indeed, the Attorney General gave evidence during the hearing of that Bill in the Finance and Personnel Committee that it would be unlawful to remove possession rights without compensating. Unlawful; that was the evidence of the Attorney General. That is because of article 1 of protocol 1 of the European Convention.Yet, these regulations have no compensation within them.
This is a genuine question, as opposed to some of them.
I am happy to bow to the Member's obviously superior legal knowledge. Can the Member outline for us, in the context of what he has said, how the actual mechanism of vesting exists, if people's land and property can be vested by the state within the framework he has outlined?
No one's land can be vested without compensation. Indeed, you bring me on almost to the second point. Where you are not satisfied with what is offered to you in the vesting, you have the right of appeal to the Lands Tribunal.
The second thing, I remind you, that was in the SpAd Bill, was not just that there had to be compensation for anyone removed but that anyone so removed had a right of appeal for what they had lost to the arrangements set up by the Bill. Again, there is no right of appeal within these regulations for anyone, on hardship or other grounds, such as Dr Capper has suggested, in consequence.
So, it does seem to me that these regulations are very likely to be challenged, and they are not obviously judge-proof. We will see what happens to them, but I would be fearful about their probity, because they so directly negate the rights that come from the protocol to the European Convention — it is just not there. We will see what happens.
I fear that the regulations are further at risk because of the process that has been deployed to get us to this point. We know in this House — I raised it — that we have essentially bypassed Standing Order 43, in large measure. We know, and the Minister certainly knows, that there is a document that governs these matters. The Minister will be familiar with it from his time in the Department of Finance, if not before. It is the document, 'Managing Public Money Northern Ireland'. It is quite a volume that sets out the requirements including for when you are changing the law. At A.2.2.1, it says:
"In preparing all legislation, departments must always consult and get DFP agreement ... before any proposals for legislation with financial implications are submitted to the Executive for policy approval".
These regulations, whether it is positive or negative, have financial implications. Certainly, they have financial implications for the beneficiaries. They fly in the face of the requirements of 'Managing Public Money', which requires that in their preparation the Department of Finance must have been consulted and must have agreed. Perhaps it was consulted, but it does not seem to have agreed. We have a flagrant breach of 'Managing Public Money' arise. Where that is relevant is that, when it comes to a legal challenge to these regulations, the court will be entitled to look behind how they were made and at whether they were adequately and properly made.
This also arises where it says, within that same paragraph of 'Managing Public Money', that you must prepare, consult and get DFP agreement on an explanatory and financial memorandum. They have not done that either.
"The financial implications of subordinate legislation should be explained in the Explanatory Memorandum".
Just let me finish this point. Let us go to the explanatory memorandum that has been issued with these draft regulations. Under "Financial Implications", the very thing that 'Managing Public Money' says must be articulated — "explained" is the word — in the proposals, it says:
"The Financial implications will be further examined as part of the next stage."
There is nothing whatsoever in the explanatory and financial memorandum that deals with financial implications, something that, according to 'Managing Public Money', is required to be there.
I thank the Member for giving way. On that point, it was suggested in Committee that that agreement may still be forthcoming. Does the Member share my opinion that, before any vote is taken on this, the House should be fully updated on whether such an agreement has been arrived at and, if not, when and where communications broke down?
It is very disappointing that the Finance Minister, who has a critical role of having an input to this, has ignored the House on the issue. I read on Twitter today that he is still not happy with these proposals. Why are we not being told that in the House? The Economy Minister can tell us, when he comes to respond to this debate, whether he has received clearance or approval from the Department of Finance. We really should have been hearing it, I would have thought, in these circumstances from the Minister. The Minister who is here needs to tell us that.
Another potential weakness in the process of the regulations is the fact that there was no consultation. The stakeholders have a common law right to be consulted before their circumstances are changed, yet there has been no consultation whatsoever with them. <BR/>I fear that the regulations will be rigorously tested, and I do not have the confidence of some that they will pass that test. It might be said that they are only for one year, so we will invite the court to ignore, as it were, our failings, breach of property rights etc. It will be interesting to see whether the court is prepared to go down that road. They have all the signs of draft regulations that may not deliver. I said at the outset that I hope that they do because this situation needs to be resolved, but I have severe doubts as to whether they will.
The one group of people whom the regulations will greatly affect are bona fide applicants to the scheme. I have no interest in any rip-off merchant who abuses the scheme, but there are genuine people who did no more than become aware of a Government scheme and applied for it in good faith. Now, Government is about to say, "Never mind all our platitudes, undertakings and promises, we are about to pull that rug from under you, in the public interest". Some of those people are at their wits' end. I had one of those farmers with me last week. Interestingly enough, this farmer was introduced to the scheme by the then DUP special adviser Stephen Brimstone, no less. I will come back to Mr Brimstone. This farmer — a genuine, large-scale farmer in the poultry industry in the north Antrim area — applied in the early days of the scheme, made his commitment, spent tens of thousands of pounds and, assured that he had a 20-year return, used the collateral of that with his bank to increase his investment in his farm. Now, he finds that the rug has been pulled from under him, yet his scheme is a perfect operation of this. He goes through the seven- or eight-week cycle of rearing day-old chicks through to the broiler stage. The audit shows that in the first week, when the heat is needed the most, his use is at its highest, and it begins to dwindle as the chickens need less and less. By the time you get to the end of the cycle, the heat use is significantly less than what it is in the first week, thus confirming that he is a bona fide user of the scheme. When that person asks me, "What about us?", I do not have an answer for him. When that person asks, "What's going to happen to the fact that I am relying on this promised return to pay off my bank? What am I to say to my bank manager, Mr Allister?", I do not have an answer for him. That is replicated many, many times across this country.
There are others, of course, who saw this as a way of making a quick buck or as a means to heat their house. One of the flaws in this scheme is that there is a right to use the heat, it seems, for what should be an ancillary purpose of heating your home —
How ridiculous it is. That is the scheme that our Ministers approved and signed off, and that is the scheme that Mr Stephen Brimstone is benefiting under — heating his house on the non-domestic boiler scheme. Did he claim that he had a few sheep and was a sheep farmer? Does he have sheep? One thing is for sure: he is heating his own house. Is that right? Is that how things should be under this scheme? Was this scheme so lax and so perforated that that was an OK thing to do? Even if the individual thought it morally the right thing to do, does this scheme permit that? If it does, is that not one of the loopholes that the Minister should have addressed in these regulations? It is scandalous that someone can purport to qualify for the non-domestic renewable heat scheme and devote the greater bulk of the heat that they produce to heating their own house, and to do it with considerable forethought. Mr Brimstone built a new house some years ago. He had a biomass boiler in it, but he took it out to qualify for this scheme, because you had to have a new boiler.
He put in a new non-domestic scheme boiler under the scheme in order to qualify. That is the sort of rip-off that brings disrepute to all of the scheme and, sadly, causes great injury to the bona fide users.
This is a scheme that, in a collective sense, covers the House with shame, because it brings the entirety of the process into disrepute. It is quite shocking that this squander, made not by some distant, uncaring, disconnected direct rule Minister but made in Stormont, has inflicted upon us this mammoth potential financial loss — and then to pretend that it is nobody's fault to the point that anyone should pay with their job.
The clear purpose of the regulations before the House this evening is to introduce cost control for the non-domestic renewable heat incentive scheme. The reason for these regulations — I want to make this clear from the outset and remind the House of why we are here — is to prevent a budgetary shortfall in the region of £30 million in the next financial year. There are many other issues surrounding the RHI scheme that absolutely need to be investigated, and I join other Members of the House in welcoming the announcement of a public inquiry. I look forward to that getting under way soon and concluding as quickly as possible. Today, though —
It is a good question and it is one that I am happy to address now. I have not yet received approval for the business case that underpins the regulations before us, and that is deeply troubling. I submitted the business case to the Department of Finance some 11 days ago, which, I appreciate, is shorter than is usual. It was, though, given priority by the Finance Minister — comments that he has made in public and in the House. My understanding is that it was making good progress in the Department. Indeed, I understand that departmental officials recommended it to the Finance Minister for approval. I and my Department have cooperated fully with the Department of Finance. We have answered all questions and queries, and we have provided all requested information. Yet, no approval has been forthcoming.
The business case process is there to assess value for money and regularity. I understand that there have been no issues raised in respect of either. I know that the Finance Minister is just coming into the House, and I would be happy to give way to him if he were to offer approval for the scheme. The question that the Member and, I am sure, the House will want to ask is this: why is there no approval? That is a question that only the Finance Minister can answer. Unreasonably withholding approval could be unlawful, and it is certainly contrary to the commitment that was made to make the assessment politics free. I have been told that it will likely be approved but not today. I think that that says it all, and the House can reach its own conclusions.
I would like to be more helpful tonight, but we are not there just yet. The area of concern remains that we do not have state aid approval. I know that the European Commission has been contacted, and I have some concerns in that regard. The scheme cannot kick off on 1 April without the state aid approval. That is an added difficulty for us, and we need to do more work in that regard. I am committed to speak to Colette Fitzgerald again tomorrow, and I hope that we can make some progress there.
As the Minister knows, there are also major concerns around the inspection regime. He will accept — I am sure it will be in his narrative later — that without rigorous, robust, 100% inspections, this interim solution will fall. I do not have a business plan for the inspections regime. I think that it is like a horse and carriage; both go together. I am confident that I am applying myself today, tomorrow and the day after that, if necessary. Without repeating what I have said previously, the assessment, as the Minister said, will not only be politics-free but will be accurate and will stand up. When I sign off on the business plan, I will be able to say not only to Members but to the public that it stacks up financially and legally and that I can have confidence that it will be implemented. In that regard, those two stumbling blocks remain. I hope that we can make progress on the lack of clarity around state aid and, of course, on the fact that I still do not have in my possession or on my desk a business plan to approve the inspection regime.
I commend the Minister for highlighting and illustrating, once again, his flair for the dramatic. He knows that state aid approval cannot be sought and will not be given unless there is approval from the Department of Finance and approval from this House. I am reluctant to say that it is almost a chicken-and-egg situation, given the issue that we are debating, but it is. The Minister is also well aware of our intentions in respect of bringing forward a tender for a 100% site inspections regime. I will give him a commitment to continue to work with his officials, so long as he responds to that in good faith and keeps this issue politics-free. Unfortunately, at this stage, that is not a conclusion that I can reach.
I will go back to what I was saying —
No, let me make some progress.
Today is about bringing in cost controls that are outlined in the regulations that are before us. To permit the current situation to continue would be grossly irresponsible. We have a situation where an average rate of return for recipients of the non-domestic RHI scheme is 60%. It is estimated that over 80% of recipients are earning over 12% rate of return. That is more than the original state aid approval for the scheme. I do not believe that any of us can allow that to continue, especially when we know the consequences to the public purse. I accept that the process has not been perfect, but we need to act urgently.
I want to address the range of questions and points that have been raised by Members today and last week. The first point that I want to touch on is the issue of timing and why we are coming forward with the proposals when we are. There have been all sorts of suggestions as to why that is the case. It has been described as rushed, fast-tracked and a frenzy. In the Committee last week, Mr Chambers described it as going at a rate of 100 mph. I absolutely and fully accept that it is not ideal to bring forward regulations in the way that they have been. The haste in bringing them forward is not, of course, of my doing. I would have by far preferred to do so in the normal process. That is what was originally intended. I originally intended to bring these regulations to the Committee and the Assembly in the normal fashion, and I was planning to do so. Circumstances, though, have clearly changed.
Some argued that we were going too slowly; now they argue that we are going too fast. I would argue that Members who make those arguments cannot have it both ways.
The Minister said that you cannot have it both ways, but you can. You can contrast the pace of change in February 2016, when the scheme closed and nothing appeared to happen, with the period since the 'Nolan Live' broadcast and the 'Spotlight' show, when suddenly there was a frenzy of activity to address the underspend. Members can have it both ways, because on one you dragged your heels and on the second you rushed into this. That is why we are now up against time. If this had been started in February of last year, we would not be in this situation.
What I was going to say before the Member's intervention was that the Department for the Economy had not been inactive in addressing issues with the RHI scheme — far from it. I want to give a flavour of some of the things that the Department has been engaged in on the issue. When I took up post, I initiated site inspections on behalf of the Department by PricewaterhouseCoopers to investigate and examine accusations of fraud and abuse. Some 20% of installations have been inspected; that is a total of 295 installations. That work has been greatly useful in informing our work on cost control, particularly on the modelling of use. We also commenced an internal fact-finding investigation looking specifically at why warning signs were not heeded and particularly at what happened with the concerned citizen. That has impacted on the Department's capacity to undertake this important work. There has been a need to rebuild that team, and I outlined last week how we intended to do that. There has been ongoing, almost constant, work on a range of cost control options that has conversations with the Department of Finance and the European Commission, and, at times, that work has focused on different options. Options were favoured and worked up, and other options were then considered and moved above them. The accusation that the Department has been doing nothing on RHI, never mind in respect of working on cost control measures, is nonsense. It was always my intention to bring forward regulations such as these at around this time of the Assembly session, although I accept that it would be preferable had it been earlier. Obviously, circumstances have changed, and we are now doing so in a fashion that, I freely admit, is far from ideal.
Another issue raised is that this is a short-term solution. This is a two-stage approach, and it is deliberately that for good reason. First, we need to stop the losses to the public purse; hence the time-limited solution before us. Secondly, it creates the time and space to work on and agree a suitable long-term solution to the problems with RHI. That will be done initially by a consultation to commence very soon. It will examine, as you would expect it to, the full range of long-term solutions that could be brought forward. I believe that there are benefits to a two-stage approach. First, we can consult those who are affected to find the right long-term solution. We can look at a full range of options. We can test them, model them, take account of things and decide on the best way forward. Secondly, I believe that it improves the legal robustness of this approach rather than proceeding, as some have advised me, to a long-term solution now. The Examiner of Statutory Rules points out that benefit in paragraph 6.12 of her report.
Another point raised is that the costs of the scheme are not zero. I would be the first to point out that I never said that they would be zero. My public comments on the plan were that it would reduce costs to effectively zero or, in effect, zero. The estimated cost to the Northern Ireland Budget in 2017-18 is £30 million. This plan will have a cost of between £2 million and £2·5 million.
Some Members might not want to hear it, but that is a 92% reduction in the cost to the Northern Ireland Budget. I have said that it is "effectively zero", because I do not believe that that is where it stops. First, I believe that there will be behavioural change. The business case that underpins this has a conservative estimate of the behavioural change that will be caused by the introduction of tiering. I believe that that could go further and, indeed, may already be happening. Secondly — this is the very important point — I believe that the cost of just over £2 million will be reduced significantly further because of the bearing down on fraud and abuse. There will be a further bearing down on fraud and abuse that will produce cost benefits through the 100% site inspections that I referred to in response to the Finance Minister.
I am grateful to the Minister for giving way. I will park making a flippant comment about the difference between "zero" and "effectively zero", but will the Minister recognise that the comment that he is making is highly speculative and is, in fact, at odds with the evidence that his officials gave to the Committee last week, when they were very clear in saying that the figures presented did not take it down to zero and there would be a residual £2 million to £3 million and, indeed, that they were presenting a model and, in practice, there is a margin of error in that model that could go either way by quite a considerable margin? That is what they stated at the time. Therefore, he is in danger of overstating the prospects of this becoming zero on the basis of the factors that he is suggesting, and that is at odds with the caution that his officials gave to the Committee last week.
I do not believe so. The important point — I will reiterate it for the Member and for the whole House's benefit — is that we have already undertaken significant work on site inspections. As I said, 20% of sites have been inspected, and that has produced some interesting results. As a result of that, some 33 companies on the scheme have had their payments suspended. I caution that you cannot take that 20% and multiply it, because the initial inspections were heavily targeted, but there is substantial work still to be done even on the 20% that have been inspected and on the remaining 80% that will be inspected, and I believe that that will highlight further potential fraud, further abuse and other things that should not be happening in the scheme. We will bear down on that, and that will reduce costs even further from the £2 million.
No. I accept that it is not as low as we would want it to be, but it is significantly lower than the £30 million that the cost overrun will be if nothing is done. If the House does not support the regulations that are before us, the cost will be £30 million, and that will be no laughing matter at all. What is before us is a significant reduction with the potential to have it reduced even further. I am very hopeful that those inspections will root out fraud and abuse and, indeed, save us much more.
In her contribution, Claire Hanna — it seems a long time ago; it was last week — talked about Her Majesty's Treasury and the potential loss of the money that comes through annually managed expenditure. As well as turning off the tap of the flow of public funds, the intention of the regulations is to continue to keep the scheme in place and to take the scheme back to the original intention of the scheme living within its annually managed expenditure envelope. Over the 20-year lifetime of the scheme, the Barnett share of the Great Britain scheme is estimated to be £660 million, and the importance of having a scheme continue in place by whatever means that is in the long term is that that will be utilised and will not be lost to Northern Ireland.
Some have suggested that we should focus on the audit that I talked about in response to Dr Farry's intervention and said that, to reduce costs, we should focus on audit and inspection rather than tariff reduction. I will make several points in that respect. First, in my view, they are not mutually exclusive and nor should they be. Secondly, audit and inspection are essential if we are to stamp out abuse, which we cannot tolerate. As I said, the PwC inspections have inspected 20% of sites, which is 295 installations in total, and I repeat the point that I made some moments ago that payments to 33 installations have been suspended. Work is advanced on issuing a tender for 100% site inspections. That is much needed to further instil public confidence.
It would have happened as part of the scheme administration over the lifetime of the scheme anyway, but I believe that it needs to be accelerated.
Thirdly, no one should expect the sort of supernormal profits that they are getting from the scheme as it is currently constructed — that is, returns of 30%, 40% or 50%-plus. As I said before, over 80% are earning more than a 12% return, which is above what was in the state aid approval, and the average rate of return is 60%. Trevor Lunn made the point about bona fide operators and that was repeated by, I think, Mr Allister. I agree with the comments that they made about bona fide operators. There are many. There are some who are not, but many — indeed, probably the majority — are bona fide. In my view, it is not bona fide to have returns of 50%-plus from the scheme.
I was troubled by comments made by Michael Doran from Action Renewables in 'The Irish News' on Saturday. When asked by the newspaper why no one in Action Renewables relayed concerns about the operation of the scheme, Mr Doran said:
"That's not what we were employed to do."
What we have is an organisation that helped 550 applications and that is now on the public record as saying that it would be:
"improper to then undermine that application by trying to have it withdrawn".
I think that there is something seriously wrong if an organisation that helped with over a quarter of applications knew that there were flaws but ploughed on and did not, as far as I am aware, alert the Department.
Another argument that has been made is that the proposals do not stack up economically for those who are on the scheme —
I thank the Minister and acknowledge the comment that he has just made about Action Renewables. I and, I am sure, many others were very concerned about the remarks that were made in 'The Irish News' on Saturday. To that point, Minister, I inform you that I have today written a letter to the chief charity commissioner for Northern Ireland to ask him to investigate that charity in respect of those comments.
I thank the Member for his intervention. I think that the action he has taken is sensible, and I thank him for doing that. I think that he and, I am sure, most Members, if they reflect on those comments and go away and look at the article, will agree that it is deeply troubling. The implication of the comments is that there was an understanding that there were serious flaws, yet nothing was done to alert the Department to those.
Some have argued that the proposals do not stack up economically for those who are on the scheme. That point was raised by the Renewable Heat Association and some Members during last week's debate, if not today. To reiterate the point: the proposed tariff is not new. It is the same as that which was introduced in November 2015. The proposals put all participants on the scheme onto the same regime. The November 2015 tariff was still considered an attractive incentive for many, and over 300, including many in the poultry industry, applied for the tiered-tariff scheme in the three- to four-month period that it was available before the scheme's ultimate closure in early 2016.
Whilst the Renewable Heat Association has said much and given evidence to the Committee, it has offered no real solutions beyond the audit and inspection point that I made before, which is, of course, going ahead. They have made no suggestions to tackle overcompensation or the fact that the rate of return is well beyond what was approved in the state aid approval and there are supernormal profits of above 50%. None of us can allow that sort of overgenerous subsidy to continue.
Some have asked why the measures contained in the regulations are not being introduced immediately. I would like to have had an immediate implementation of the regulations, so that we could immediately start to bear down on the cost to the public purse, but there are two practical considerations. First, Ofgem, the current scheme administrators, need some time to make the necessary administrative changes for enacting the new tariffs. Secondly, there is the issue of EC state aid approval. The proposal seeks to reduce state aid and better align it with the level originally intended. Discussions with the European Commission are ongoing and have been positive to date. It is likely to be approximately two months before approval is received. A long-term solution would take longer for state aid approval to be given. A slight delay in implementation is inevitable, which is why the dates are in the regulations.
This is probably an opportune moment to talk a little bit more about state aid approval. I know that I have already addressed it in response to the Minister of Finance. The proposal, as I said, seeks to reduce state aid and better align it with the level that was originally approved. I believe, therefore, that it is compatible with state aid, and all the advice that I have received would suggest that it is. Officials have been working hard with their EC counterparts to ensure that state aid approval is secured. Those discussions have been positive, but, obviously, we will not know for sure until it is submitted. The clear message from informal discussions with the Commission in December was that doing nothing was not an option, and I agree with that. It is important to stress that it is clear in the regulations that they come into effect only if the Commission gives state aid approval.
The regulations mean that the initiative will come into effect by 1 April or on the date it receives state aid approval, whichever is the later. The Member will recall that last week, before the Secretary of State announced the date of the election and, therefore, the date of dissolution, one of my concerns was that any delay in passing the regulations would impact on the time frame for getting state aid approval. My understanding from the positive discussions that we had with the EC is that it takes around two months to get approval. I still fully imagine and believe that it will be 1 April when the regulations are enacted. I do not foresee any reason why state aid would be denied, not least because of the point I made at the outset that this is in effect reducing state aid. State aid was sought because it was an incentive. Support being given to businesses is reducing that, so I do not envisage any particular problem.
I do not disagree with the Minister that it is reasonable to anticipate that there will be approval in respect of state aid. However, did he not tell the House earlier that you cannot even seek it or obtain it without Department of Finance approval for the scheme? Therefore, it could fall at the first hurdle. Without Department of Finance approval tonight, is he content to ask the House to approve the regulations? If they proceed without Department of Finance approval, whatever the politics of it, has he any concerns about what that does to undermine the probity of the regulations?
Rather than turn this into some party political pantomime — we have had enough of that — I will take the Minister of Finance's intervention at face value — some might caution me against doing that — and assume that work is ongoing and that approval will be granted. I regret that that approval is not in place this evening; I see no reason for it not to be in place. It is deeply regrettable that it is not. Clearly, it would be ideal to have that approval in place, which would allow us to go to the EC with some confidence. I welcome the fact that the Member agrees with me — I note the date and time — that it will not have any difficulty in receiving state aid approval. However, he will understand and appreciate that, until it is formally approved by the House — clearly, we want Department of Finance approval as well — we cannot proceed to go to the EC formally. We have had informal discussions, and they have been positive.
I turn to another area that Mr Allister laboured in his contribution, which is the legalities of the proposals. I have taken extensive legal advice on the regulations, and that supports their robustness. Work started on cost controls some time ago, contrary to what some have suggested or may believe that this has been done only in the last number of weeks. It has been done over the last several months.
Two particular areas have been considered. They were both the focus of Mr Allister's latter contribution. The first was legitimate expectation.
The regulations are consistent with the well-stated original intention of the scheme in terms of its rate of return, even if that original intention, in its construction and how it worked through the scheme, was wrong. Excessive returns and supernormal profits, such as those that some are receiving, are not, were not and could not have been a legitimate expectation.
Mr Allister talked about article 1 of protocol 1 of the European Court of Human Rights (ECHR). My understanding, from the advice that I have received, is that the court has been much less solicitous over the future income loss than taking away currently owned property. There is — the Member did not focus on this in his contribution — a public interest override. I believe that that is clearly the case. In a situation in which we are losing between £20 million and £30 million to the Northern Ireland Budget, there is a clear public interest for the Assembly to act in the way that I am advising this evening. There is a clear imbalance between public and private interests. The Examiner's report deals with this issue in paragraph 16.1.9:
"It may be argued that these regulations are nonetheless a proportionate means of achieving that legitimate public interest objective."
Mr Allister quoted from article 1 of protocol 1 of the ECHR but stopped short. Beyond what he read into the record, the article states:
"The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest".
There is a right to property, and the court is much less solicitous about income derived from that property than the taking away of property itself, but, importantly, the same article in the ECHR states:
"The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest".
Mr Allister and other Members raised the point about compensation. Recipients of the non-domestic RHI scheme are being, and will continue to be, compensated. They will get a return in the range of 12%, as was originally intended. It is not in the region of the supernormal profits that the flaws in the scheme permitted. It is not like taking property off someone and not compensating them. The scheme remains in place, and members of the scheme are compensated as originally intended in terms of the rate of return.
It was Mr Aiken, I believe — it was that long ago; I think that it was last week — who mentioned, as he did at the Committee last week, the need for a renewables audit. Whilst the focus of this debate has been on the RHI scheme, some have raised issues or concerns about other schemes. Whilst there is no evidence, or none has been produced, I understand the supposition that some will make that, if mistakes have been made in one renewable scheme, that could be the case in others as well. I have ensured that some concerns that have already been brought to my attention have been investigated, but I will formalise that by initiating an audit of all renewable schemes. I have also signalled my intention to establish, in my time left in post, a new strategic energy team in the Department. That will draw on experience from the public and private sectors to strengthen the quality of the advice that the Minister — whoever that is — receives.
The details of the businesses in receipt of the non-domestic RHI scheme should be published. I understand the concerns of many recipients, but there is also an overriding public interest in the matter. Last month, I wrote to all non-domestic RHI recipients, indicating my desire to publish details. The Department had to undertake a process that was consistent with section 10 of the Data Protection Act to assess the objections that were received against a public interest test. That work has concluded, and I wrote to all recipients again today indicating that it is the intention of the Department to publish details this Wednesday. I want transparency on the names — on the details, rather — of non-domestic RHI scheme recipients. I imagine that it will reveal members and supporters of — I just caught Mr McCann's eye, so maybe not quite all parties — many parties in the Assembly. Indeed, I note that today the UUP indicated that Sandra Overend has an aunt and uncle who are recipients of the scheme and that former MLA Neil Somerville is a recipient. I believe when publication happens it will show that it is not just, as some would seek to portray it, DUP members or supporters who are benefiting from the scheme.
In conclusion, the way in which these regulations have come forward is not ideal. I would far prefer full scrutiny and more time and to take them through the House in the normal way. The imminent dissolution of the Assembly has necessitated the approach I have adopted. I was planning to do it conventionally, but circumstances have dictated otherwise.
A lot has been said about various aspects of the RHI scheme, and there will be a time and a place to address and answer all that. That time and that place is the public inquiry. The choice today is simple: bring in the cost controls these regulations allow for; or fail to take this final opportunity — indeed, this is the only opportunity — to control the costs of the RHI scheme.
The House can support the regulations, or it can permit up to £30 million to be lost to the Northern Ireland Budget next year. I hope Members view the regulations in that context and support them. I commend the regulations to the Assembly.
Question put and agreed to. Resolved: