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

Part of Executive Committee Business – in the Northern Ireland Assembly at 5:45 pm on 23rd January 2017.

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Photo of Naomi Long Naomi Long Alliance 5:45 pm, 23rd January 2017

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.