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

Part of Executive Committee Business – in the Northern Ireland Assembly at 7:30 pm on 23rd January 2017.

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Photo of Simon Hamilton Simon Hamilton DUP 7:30 pm, 23rd January 2017

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:

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