Lord Duncan of Springbank

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That the Bill be now read a second time.

The Parliamentary Under-Secretary of State, Northern Ireland Office and Scotland Office (Lord Duncan of Springbank) (Con)

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My Lords, I will speak to both Motions standing in my name on the Order Paper. When I last brought forward a budget Bill for Northern Ireland, I stated that it would be the last time. Events have made a liar of me. I apologise for that.

In the absence of devolved government in Northern Ireland, the UK Government have a responsibility to ensure good governance and to safeguard public services and public finances. I therefore ask your Lordships to give a Second Reading to two pieces of necessary legislation.

The Northern Ireland Budget (Anticipation and Adjustments) (No. 2) Bill will have all its stages in your Lordships’ House today. However, following engagement with a number of noble Lords, the regional rates and energy Bill will have only its Second Reading here today. All further stages will take place on 19 March, primarily to allow time for further discussion and reflection.

With your Lordships’ permission, I will discuss each Bill in turn, The Northern Ireland Budget (Anticipation and Adjustments) (No. 2) Bill would put Northern Ireland finances for the 2018-19 financial year on a legal footing and enable Northern Ireland’s departments to continue to deliver public services into the first half of 2019-20. Your Lordships will recall that the UK Government legislated for the 2018-19 budget for Northern Ireland last year. This legislation was necessary to provide a clear legal basis to Northern Ireland departments, enabling them to manage their resources. The resulting Northern Ireland Budget Act 2018, which passed in July, did not direct any spending but rather allocated funds to departments to be spent by the Permanent Secretaries according to departmental commitments. As we approach the end of the financial year, those spends need to be placed on to a legal footing, as is standard practice in any budgetary process. That is what this Bill does.

In addition, the Bill provides for a vote on account for the first half of next year, which will give legal authority for managing the day-to-day spending in the run-up to the main estimates process. This year, following discussion with the Northern Ireland Civil Service, the Bill provides a higher than normal level of vote on account, some 70%. This is in recognition of the known increased spending pressures and the lack of Ministers in place to react and respond to emerging or escalating pressures. It also recognises the uncertainty of the political situation in Northern Ireland in the coming months. A higher level of vote on account funding is prudent, providing the practical and legal certainties to protect public services in any and all circumstances up until the point that legislation on the Northern Ireland budget for 2019-20 is taken forward.

Your Lordships will recall that my right honourable friend the Secretary of State for Northern Ireland published a draft budget for 2019-20 in February. It is important to recognise that this budget Bill does not legislate for that budget position. Those allocations will require their own legislation later this year. The vote on account in this Bill and the draft Northern Ireland budget position for 2019-20 provide the necessary clarity and certainty to Northern Ireland departments to enable them to plan and take decisions in the coming year.

I will briefly turn to the Bill’s contents. In short, it authorises Northern Ireland departments and certain other bodies to incur expenditure and use resources for the financial year ending 31 March 2019. Clause 1 authorises the issue of £16.8 billion out of the Northern Ireland Consolidated Fund. The allocation levels for each Northern Ireland department and the other bodies in receipt of these funds are set out in Schedule 1, which also states the purposes for which these funds are to be used. Clause 2 authorises the use of resources amounting to some £20 billion in the year ending 31 March 2019 by the Northern Ireland departments and other bodies listed in Clause 2(3). Clause 3 sets revised limits on the accruing resources, including both operating and non-operating accruing resources, in the current financial year. Clause 4 sets out the power for the Northern Ireland Civil Service to spend from the Northern Ireland Consolidated Fund some £11.8 billion for the forthcoming financial year. This is the vote on account provision I outlined earlier. It is linked to Clause 6, which does the same in terms of resources. The value is set at around 70% of the sums available in both regards in the previous financial year. Schedules 3 and 4 operate on the same basis, with each departmental allocation simply set at 70% of the previous year. Clause 5 permits certain temporary borrowing powers for cash management purposes.

The Bill would ordinarily have been taken through the Assembly. As such, at Clause 7, there are a series of adaptations that ensure that the Bill will be treated as an Assembly Budget Act once approved by this Parliament, enabling Northern Ireland public finances to continue to function notwithstanding the absence of an Executive.

Alongside the Bill is a set of supplementary estimates for the departments and bodies covered by the budget Bill, which was laid as a Command Paper in the Library of the House on 28 February. These estimates, prepared by the Northern Ireland Department of Finance, break down the resource allocation in greater detail. For those who wish to delve in, they are thoroughly set out in the document of which I have a copy here. As your Lordships will recall, this process is different from estimates procedure at Westminster, where the estimates document precedes the formal Budget legislation, and is separately approved. However, this would also be the case were the Assembly in session.

I also ask the House to give a Second Reading to the Northern Ireland (Regional Rates and Energy) (No. 2) Bill. This Bill would deliver two essential measures: it will enable the collection of regional rates in Northern Ireland, and will ensure fair and appropriate tariffs and cost-capping measures are in place for the renewable heat incentive scheme in Northern Ireland. The bills are not without their controversies, as noble Lords will be aware. However, the measures are necessary.

The first clause of the Bill addresses the issue of regional rates. In the absence of an Executive, the UK Government have set this rate for the past two years. My right honourable friend the Secretary of State for Northern Ireland intimated the rate—an increase of 3% plus inflation on the domestic rate and an inflation-only increase on the non-domestic rate—in her budget Statement of 28 February.

The second section of the Bill, specifically Clauses 2 to 5, concerns the administration of Northern Ireland’s renewable heat incentive scheme. I need to be clear that this is a devolved matter. We are taking forward legislation at the behest of the Northern Ireland Department for the Economy. Without legislation, there will be no legal basis to maintain the payments to participants in the scheme.

The tariff levels set out in this legislation are based upon analyses of the additional costs and savings of operating a biomass boiler in Northern Ireland following extensive consultation, assessment and analysis under- taken by the devolved Department for the Economy and through detailed discussions with the European Commission. These rates are significantly lower than previous tariffs. The European Commission is clear: the tariff rate cannot deliver a return higher than 12% per annum. For participants with lower usage needs or higher capital costs who have returns below 12%, the Bill introduces a voluntary buy-out scheme.

As I have said, these tariffs, and indeed this scheme, are not without controversy; I appreciate the desire of noble Lords to consider this significant and complex subject in more detail. There will be a Committee stage, on Tuesday of next week, where these proposed RHI measures and the amendments that noble Lords have tabled can be addressed separately. I will ensure in the intervening period that my officials, together with officials from the Northern Ireland Civil Service, are available to engage directly with issues that your Lordships may wish to raise on this matter. In addition, my officials will issue a detailed question-and-answer script addressing commonly asked questions; this note will be distributed to interested Peers shortly.

In conclusion, I hope your Lordships will recognise the necessity of the actions that I have presented today. On that basis, I beg to move.

Lord Bruce of Bennachie (LD)

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My Lords, noble Lords will of course understand why, as he said, the Minister has made a liar of himself and had to come back to the House. It is fair to say that it is not the Minister who has made a liar of himself but the circumstances in which we find ourselves. But to be asked to pass these two Bills—and certainly the budget Bill—at Second Reading, through all their stages, only a week or so after the documentation became available and where the detailed publication, as he says, is very hefty indeed, falls way below what I would regard as any acceptable level of scrutiny. It starts to cause real concern as to who is checking what is going on with respect to the money allocated to Northern Ireland.

Will the Minister consider whether steps could be taken to provide some comfort—and more than that, oversight? For example, the Public Accounts Committee could have a specific role to look at the follow-through from what we have voted. I do not believe that the Select Committee in the Commons has the resources to do that. It was not set up for those purposes; indeed, the second Bill may in any case be the subject of an inquiry being conducted by the House of Commons committee. It will probably have its hands full. I say that to the Minister in all seriousness; many of us are concerned that £20 billion is being voted on for Northern Ireland. We understand that it is necessary, but we have no clear, detailed oversight as to how that will be spent and whether it will be spent properly. Given the problem of the renewable heating scandal, we have every reason to be concerned about scrutiny.

That is my first point. The second concerns more specific questions on issues that do not appear in the budget, which people might have hoped to see: for example, the Hart inquiry into historical institutional abuse, which has cross-party support, and which people had hoped would make progress. I would be grateful if the Minister could say something about that. There is also the issue of pensions for severely disabled victims. The last time this was raised, the Minister said that he had asked for a report from the Victims Commissioner. Can he give us some feedback on whether that report has been received? Let us bear in mind that these are elderly and sick people who, sadly, are dying, and need early action rather than considered delay.

A broader point is that there are issues not in the budget for which there appear to be all-party consensus. Might it be possible in the circumstances to see whether other decisions could be taken? When I raised this matter with officials they said that they could in principle but, before committing to something, one has to identify where the money is coming from or what else is being cut. I raise as an example—as it has been raised with me—the medical school at the McGill campus in Derry, which people had hoped would be progressing by now. The site and buildings are available, but students are leaving Northern Ireland to go to other universities, mostly in Scotland. As the Minister will know, the problem when students go outside of Northern Ireland for training, is that very often they do not come back. There is a need for places within the Province.

On the rates Bill, we accept that a simple decision has been taken to increase the business rates by inflation and the domestic rates by 3% plus inflation. Most of us recognise that as a fairly understandable formula and I suspect most people will accept it. Regarding the RHI, it is clear that, since the scheme was set up, the tariff has been set on two separate occasions at a value well outside either value for money or state aid criteria. This has led to the situation in which we now find ourselves. I am sure that all Members engaged in this debate will have received similar emails to the ones that I am receiving, from people who fear they will be substantially damaged and, indeed, distressed by the proposed cap. We will debate that in detail next week; I just make the point that it needs to be determined.

The fact nevertheless is that the Minister and officials encouraged people to take up high borrowing. The banks participated in that encouragement, relying on a comfort letter from the Minister and the support of officials. Understandably, people are saying, “We took decisions in good faith on the basis of 20-year guarantees from government Ministers, which are now being reversed”. Naturally they feel angry. Having said that, I suspect some people were quite fly at the beginning, saw a good deal coming down the track and took advantage of it. This raises a second question: why were these deals not cross-checked in any way? Why were there not investigations to ensure that they were compliant with both the spirit and the letter of the scheme? That seems a legitimate concern.

I have two final points to raise. The first is one that officials explained to us but it would be helpful if the Minister could do the same: how does the Northern Ireland scheme differ from those on mainland GB? Certainly, all the letters and emails that I have received express concern that people in Northern Ireland feel disadvantaged compared with those in GB. I know there are reasons for it, but it would be good to have them put the record. The second point relates to the buy-out scheme, which the Government are proposing to introduce. On the face of it, it could resolve the problems for some people by enabling them to get a capital sum that could discharge their liabilities. But, given that the circumstances of different contracts are variable, there may well be people for whom that buy-out is not appropriate; I mean people who have acted in good faith and not unreasonably. The question is whether the Government may at some point have to consider some kind of distress help for genuine cases, although I appreciate that how you establish what is a genuine case might be quite difficult.

With these remarks, my message to the Minister is that I understand the reason this has been brought forward and I recognise that services in Northern Ireland have to be maintained, but I hope he will agree that quite a lot of questions need to be answered.

Lord Browne of Belmont (DUP)

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My Lords, I start by thanking the Minister for bringing forward these essential Bills today. They ensure that public services continue to be provided in Northern Ireland and give departments some certainty going forward. In the unfortunate continued absence of decision-makers at a local level, I welcome the Government taking these necessary steps but I know that they too will recognise that this is far from an ideal situation. Regrettably, this is the third consecutive occasion that expenditure in Northern Ireland has been considered through an unusual, fast-track process in your Lordships’ House, with little scrutiny or knowledge of how allocations to specific departments have been decided. I would much prefer that Bills such as these were being presented in a fully functioning Stormont Assembly by a locally accountable Minister. Equally, I wish that local representatives were able regularly to debate, scrutinise and analyse specific spending, and raise matters relating to their areas. Unfortunately, this is impossible to the same degree right now.

One political party aside, all the other parties want to get back into government and into a functioning Assembly. MLAs were elected to serve the people, but unfortunately they are prevented from doing their jobs. None of us wants to be in this situation, but the people of Northern Ireland must not be punished further because of a political stalemate.

As with any budgetary allocations, challenges are presented—and specifically when allocations are based on historic decisions. When allocations are made by individual departments, we cannot always be certain that the finances will go towards areas that the public might expect to be prioritised. In addition to looking at the amounts being allocated, we must also look closely at how effectively that money is being spent. For example, significant additional money was secured for education as a result of the confidence and supply arrangement. This money was originally meant to go towards front-line services in education. After numerous inquiries, it was eventually revealed that the department allocated this money to finance the Education Authority, which was running a deficit. After further such inquiries to the department relating to spending, a number of my party colleagues met with a series of principals in the education sector. These principals were unanimous in the view that action, in the form of ministerial involvement in the decision-making process, needs to happen soon to rescue their sector from what they describe as an impending crisis.

While the current situation presents considerable challenges, those have been reduced significantly by the welcome additional money obtained for the reform of the health service and for front-line services. On health transformation, the Permanent Secretary to the Department of Health recently made it clear that £100 million was invested in health transformation funding last year, and a further £100 million will be invested this year, as a result of the confidence and supply arrangement. This must be welcomed by all, because it provides an opportunity for the rolling out of multidisciplinary teams and other measures that will save money in the long term. These substantial amounts of money are going directly into transforming the health service, and I welcome that.

While always remaining challenging, there is positive news for our schools, with increased spending on front-line services. I trust that key services such as health and schools can also benefit from regular monetary round allocation in year. For homes and businesses struggling with slow—or no—broadband, the ultra-fast broadband project is also moving forward, along with a clear pathway for spending the £150 million secured through the confidence and supply negotiations. I look forward to the tender process starting and the infrastructure being laid. This investment will make a real difference—according to independent estimates, it could be worth over £1 billion for our local economy.

There is also good news for areas of deprivation, with £20 million from the confidence and supply deal being allocated to help some of the most vulnerable communities. This budget reflects the priorities of an Executive of more than three years ago. Indeed, if we look closely at the heads of spending for 2018-19 and 2019-20, we see that they are virtually identical. Very little is new, because of the current situation.

This legislation allows permanent secretaries to take decisions that could redirect spending. Senior civil servants have been tasked with taking the majority of the decisions within departments for over two years. However, in a number of instances key decisions are still not being made. A growing number of key decisions still need to be made on health, education, infrastructure and public services. In many cases, these decisions are about prioritisation—for example, decisions still need to be taken on school places and teaching staff.

Given all available information, it is clear that further action is required in order to deliver good government for Northern Ireland. Can the Minister provide some assurances to the departments that the relevant ministerial direction and involvement in the decision-making process will be provided? The people of Northern Ireland require further assurances, because at the minute, they are only receiving the bare minimum level of governance. We cannot allow the decision-making process to grind to a halt.

My party will continue to work towards a return to locally accountable government. I am of the firm belief that, with political will on all sides, it is possible to see local government back up and running. In its absence, my party will continue to work hard, here and in the other place, as it has done in relation to the confidence and supply arrangements. We will continue to press the Government on all of these matters in the weeks and months ahead.

Turning to the Northern Ireland (Regional Rates and Energy) (No.2) Bill, I have reservations about the level of the domestic rate increase, which is above the rate of inflation. In fact, it is the rate of inflation plus 3%. In some cases, this will cause considerable difficulty for households that do not qualify for housing benefit on their rates but are still in low-paid employment and wish to stay in employment. However, it was initially proposed that the increase would be much higher, and in that regard I am grateful to the Government for listening to the concerns expressed by my colleagues in the other place.

I welcome and appreciate the efforts made by the Government in relation to city deals. These projects could lead to a potential increase in employment and opportunities for local businesses; I hope and trust that the relevant measures will shortly come before the other place and your Lordships’ House.

On the renewables scheme, I thank the Minister for arranging briefings on this very complicated matter. The issue is controversial and far-reaching, and its consequences will be felt by a lot of people for a long time. I honestly do not know of anyone who can say that this scheme has in any way been a success. In fact, the way it was set up and ultimately abused by some was disgraceful; fundamental change was required. Why was this not stand-alone legislation?

It is important to say that the scheme was not abused by everyone. As we all know, some certainly did abuse it and their subsidies were rightly cut. However, many people entered into the scheme in genuine good faith and, as a result of the information they were given, ultimately installed more expensive boilers, expecting to get a return at some point in the future.

The historical problems associated with the RHI tariff are the subject of an ongoing public inquiry, so it would be wrong to press those matters in too much detail today. However, the Minister will be aware of our concern that there has been a lack of proper scrutiny of the new proposals. There needs to be further scrutiny, even after this has gone through, so that there can be an opportunity for revision if at any point the figures are proved to be wrong.

While we await the report of the public inquiry, one of the issues on which it makes recommendations may be how we scrutinise measures such as this going forward. We would have hoped that Parliament could set an example on that. Will the Minister address the concern about the timing of this proposal, coming as it does so close to the end of the financial year?

My Lords, I give my support to these Bills.

Lord Empey (UUP)

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My Lords, when the business Motion was being discussed last week, I made the point that the method of dealing with Northern Ireland legislation in this place is entirely unsatisfactory. I support the views expressed by the noble Lord, Lord Bruce of Bennachie, to that effect. We know that budgets are annual events and we know that the setting of a regional rate is an annual event. Therefore, there are no surprises, and it is not as though the legislative business that we have had to deal with in the last few weeks has been so pressing that we could not have made time for these Bills to be dealt with in a proper way.

The other significant point made by the noble Lord, Lord Bruce, was on the absence of any meaningful scrutiny. This is concerning, because for years—literally years—now, nobody has been looking at any of these things, other than the examinations conducted from time to time by the Auditor-General in Northern Ireland. Given that enormous amounts of money are going from this Parliament to Stormont, nobody there is accountable to anybody here, and there is nobody there for them to be accountable to. It is probably a new version of “accountable but not responsible”. Therefore, we have developed this limbo land, where the Government trundle on but without the checks and balances that are the hallmarks of a democracy. I appeal to the Minister, as I appealed to the Leader of the House last week, to prevail upon his colleagues that legislation dealing with Northern Ireland should at least be dealt with in a respectable way and at a respectable time, when we can scrutinise it to the best of our abilities, in the hope that it will find its proper place back in the devolved institutions.

The noble Lord, Lord Bruce, spoke about the estimates for the Executive Office for the next financial year. As they have for some considerable time, those estimates contain the phrase,

“actions associated with the preparation and implementation of the Historical Institutional Abuse Inquiry Report and Findings”.

That report came out three years ago. I am aware that there has been a consultation, which has now closed. We have had a report and now a consultation, and so it goes on. These people were abused 40 or 50 years ago in some cases, and due to the political limbo that has been created—let us not blame whoever it is—they are being abused all over again, because they are not getting any help at all.

I know that, apart from the state having a responsibility, some of the churches and orders whose members were responsible for some of this abuse also have a responsibility, and their insurers clearly do as well. I appeal to the Minister to ensure that in the financial year about to begin, there is, at the very least, provision in that budget for interim payments to be made. These people are getting on in years and they are suffering again. There is unanimous support in the political parties for this matter to be resolved—not a single elected Member objects to this—yet we are still confronted by the fact that nothing has happened and these people have received nothing. It is inhuman and entirely unsatisfactory, and I appeal to the Minister to ensure that some progress is made in the financial year about to begin.

I agree with the point made by the noble Lord, Lord Browne, about bringing together the rates Bill and the RHI matter. They are two entirely separate matters, and they should not be in the same piece of legislation. I do not know how the Public Bill Office allowed it, and they should be separated; there is no reason for them to be linked.

Another issue in the estimates is that the Permanent Secretary in the Department of Health announced that he was going to start work on the development of a cancer strategy. This is something that Northern Ireland sorely lacks, and I welcome it, but as he said, there is no reason to believe, unless a Minister or somebody else is responsible at the end of the process, that decisions can be taken. I have repeatedly given statistics to this House on waiting lists—they are growing and growing and growing. In every category they are worse each quarter than they were the quarter before. They would not be tolerated in any other region of the United Kingdom. We are now up to 289,000 outpatients waiting for a consultant’s appointment. Of those, 95,000 have been waiting for over 12 months. For some procedures that are not life-threatening, people were told last week that they may have to wait 10 years. Where are we going with this? There is nobody there in a position to implement the many reports that have been produced and deal with things as they have been developing.

Another matter the Minister might address is that we are now getting into the habit of turning capital into resource, whereby we are taking money out of the capital budget to put into the revenue budget. The Treasury used to go mad if anybody proposed doing that, but now it seems to be the done thing—it is commonplace. On top of that, we are borrowing through the RRI initiative, and the interest payments in this budget are now up to £51 million a year. That is becoming a burden in itself. Something is radically wrong when we are in the position of having to move money from a capital budget into a revenue budget when we have huge infrastructure issues to resolve, such as our road system and many others. We are also confronted with large sums of money being allocated to the legacy proposals—£150 million is supposed to be ready to support the historical inquiries unit, which is a catastrophe, and that would not cover even half its life. Yet we are short of nurses: this week we are flying people from England into some of our hospitals in Belfast because there are no nurses to look after the wards. Think of the cost of that. We have got our priorities entirely wrong and I hope we can get some accountability and scrutiny into this place.

I appreciate that at least the RHI committee stage will be taking place next week, which will give us an opportunity to go into more detail because it is a complicated subject. It was a catastrophic failure of administration and incompetence, against the background—as the noble Lord, Lord Bruce, said—of people being given guarantees by the Government. I do not quite know how we get out of this. It is a big problem, and it requires scrutiny.

We are dealing with such a complicated matter, with two Bills and all their stages being taken in one evening. I do not know about those who may have looked at it, but it is exceptionally complicated, and not something you can deal with on the hoof. It requires a committee to examine it in detail and resolve it, because there are big issues of principle involved. In all of this, there will be casualties if we do not watch how we handle this. I welcome that we will have a further opportunity to go into this in more detail next week, but I appeal to the Minister to prevail upon his colleagues to treat legislation regarding Northern Ireland with some parliamentary respect, so that at least in the interim, when we are waiting—we hope—for devolution to be resolved, people can feel that somebody is looking after their interests.

Lord Lexden (Con)

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My Lords, it is a great pleasure to follow my noble friend Lord Empey, and I will be reiterating some of the points he has made in relation to proper scrutiny.

Our debates on Northern Ireland inevitably evoke feelings of the deepest concern and great sadness in all parts of our House. There is no prospect of a swift resumption of devolution, and politicians of all parties shrink from the prospect of direct rule for reasons that are frequently rehearsed. Over a year has now passed without the slightest glimmer of serious optimism regarding the restoration of devolution, and an end to the political limbo—unprecedented in our modern history—into which our fellow countrymen and countrywomen in Ulster have been cast. Even the principal public services that are the responsibility of local councils elsewhere in our country lie beyond their democratic control. In Northern Ireland, Stormont is the upper tier of local government as well as a devolved legislature—something I have often urged the Government to bear in mind.

It was in February last year that the last serious hope of progress came and went. Yet, astonishingly, the Budget Bill before the House today has been presented to Parliament accompanied by comments that anticipate the imminent return of devolved institutions. The Bill’s Explanatory Memorandum, prepared by the Northern Ireland Office, tells us that the Government,

“sought to defer legislation as long as possible to enable the final decisions on the allocations to be made by a restored Executive”,

and to avoid,

“distracting from and undermining the work towards talks aimed at restoring an Executive”.

What work? What talks?

Fantasists must dwell in the Northern Ireland Office. Only they could believe that a breakthrough on devolution was possible while the Bill was in preparation. The House will surely decline to enter the office’s world of make-believe, and accept that, on the ludicrous grounds that it has given, the Bill should now be rushed through Parliament without serious scrutiny, in defiance of our long-standing opposition to unnecessary fast-track procedures, against which our Constitution Committee has so frequently warned.

How have financial allocations to the Northern Ireland departments been determined? How will increased spending affect those public services to which extra resources have been given? Above all, to what extent will this Bill help reverse the current “decay and stagnation” in the public services, of which Mr David Sterling, head of the Northern Ireland Civil Service, has recently spoken. These questions cannot be answered because the necessary information has not been made available to Parliament, and the Northern Ireland Office’s unacceptable delay in producing the Bill has prevented its examination in committee. The Explanatory Memorandum states unapologetically:

“Due to the need to implement the Bill urgently, the Commons Northern Ireland Affairs Committee has not scrutinised the Bill in draft”.


It is extraordinary that the Secretary of State should have approved such conduct.

The same criticisms apply, perhaps even more forcibly, to the other Bill being rushed through Parliament. It will make drastic changes to the Province’s renewable heat scheme, adding still further to the huge controversy with which the scheme has been surrounded since its start. The livelihoods of small businessmen are being placed in jeopardy. Yet this Bill is to be denied full examination by Parliament. However, it is good news that there is to be a separate Committee stage in this House next week. The Government should give an unequivocal pledge today that these are the last major Northern Ireland Bills that they will bring forward without making adequate information and time available to enable both Houses of Parliament to carry out their work of scrutiny and debate, which is all the more essential in the absence of devolved government.

I referred at the outset to the feelings of sadness with which the affairs of Northern Ireland are surrounded. I feel especial personal sadness this month. On 30 March it will be exactly 40 years since Airey Neave was murdered. I had been his political adviser for nearly two years. Those who killed him have never been brought to justice, and the crime has taken its place alongside so many other terrorist atrocities for which no one has been punished. Forty years ago, efforts to restore power-sharing devolution had failed. Thanks to Airey Neave, the Conservative Party had a plan to put the public services vested in Northern Ireland as the upper tier of local government back under the control of elected representatives, pending the return of devolved government. After the 1979 general election, the Northern Ireland Office scotched that plan. It would not necessarily serve as an exact blueprint for Ulster today, but perhaps the initiative that Airey Neave proposed should spur us to contemplate new approaches to the government of a part of our country which meant a great deal to him, and which deserves better government than it possesses today.

Lord Kilclooney (CB)

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My Lords, I will speak on the Northern Ireland (Regional Rates and Energy) (No. 2) Bill in particular. I declare an interest, as shown in the register, as the owner of two non-domestic properties in the cities of Armagh and Belfast and the chairman of a company that owns 14 properties in different towns across Northern Ireland. The issue of rates is, therefore, important to me and those who work with me.

The subject of this Bill should, of course, be for the Stormont Assembly, as several noble Lords have already stressed. I am a strong supporter of devolution and was very much involved in the negotiations that led to the Belfast agreement. I believe in shared government at Stormont—a cross-community Government comprising Catholics and Protestants, Unionists and Nationalists. That is the best way forward for Northern Ireland. The imposition of GB rule on Northern Ireland is not a solution, but Sinn Féin makes this devolution unlikely. For at least one year it has stalled the creation of devolution. It does not want responsibility for unpopular decisions at Stormont as it prepares for the southern Irish general election, which could be within the next year. The campaign for equality of Irish with English is only an excuse for delaying the restoration of the Executive at Stormont, as only 1% of the people of Northern Ireland speak Irish daily—much less than those who speak Chinese, Polish and Portuguese. It was wrong to link rates and the renewable heat incentive scheme together in the Bill. The RHI scheme is a major and controversial subject in itself and I am glad that the Minister—I hope that he still is a Minister because I have just heard that the Government were heavily defeated by 149 votes in the House of Commons—has decided that the Committee stage of the Bill will be next Tuesday and not rushed through tonight. That is appreciated.

I welcome the decision to keep rates on non-domestic properties to zero plus inflation, as some retailers in Ulster towns—like elsewhere in the United Kingdom—are suffering from online competition and closing down. In contrast, life is buoyant in border cities such as Newry and Armagh, as the Irish cross the border in their thousands each day to do their shopping. The reason for that is, of course, the change in exchange rates following the Brexit referendum. Last year, Irish shoppers spent £415 million in Northern Ireland. It is expected that this year they will spend a further £500 million on daily shopping in Northern Ireland.

Has the reorganisation of local government, from 26 councils down to 11 super-councils, resulted in savings, as was suggested at the time? There seems to be a growing democratic deficit in local government in Northern Ireland. People no longer know who their local councillors are; it used to be that they were known individually. Some of the new super-councils are making major decisions in committee, where even the media are often excluded. Approval of the committee’s decisions is at monthly council meetings by a nod of the head, without proper public debate. There needs to be greater transparency in the affairs of some of the 11 new super-councils in Northern Ireland.

The RHI scheme is a problem area, due to a decision of the European Union. Here I quote the Secretary of State, Mrs Bradley, in the other place:

“As I said, this situation has resulted from a decision of the European Commission on state aid rules, and failure to do this”—


to pass the Bill—

“will mean no subsidies being paid to anybody”.—[Official Report, Commons, 6/3/19; col. 1012.]

The European Commission, therefore, is very much a problem when we discuss the whole of the RHI scheme. As the decision on the scheme must be made by 1 April 2019, as we have been told, but we are leaving the European Union in advance of that on 29 March 2019, will the Minister say whether the EU rules on state aid still apply after 29 March 2019?

Finally, the problem with the RHI is that almost 2,000 businesses feel that they were badly misled by decisions made by both the DUP and Sinn Féin at Stormont. Both were involved, not just one. The problem appears worse, as people in the rest of the United Kingdom will be getting £20,000 per year for a biomass incinerator, whereas their equivalents in Northern Ireland will be getting only £2,000 per year. Likewise, the scheme in the Republic of Ireland will be more favourable than that in Northern Ireland.

People in Northern Ireland who got involved in this scheme on the recommendation of politicians now feel very aggrieved at this unfair treatment. These RHI proposals are very complicated and we will debate them at greater length in Committee next week. However, many feel that they were misled. A number might be forced into bankruptcy—it is as serious as that. The form in which the changes in the RHI scheme are presented, almost as an afterthought to announcing the annual rates, is mischievous, to say the least.

I oppose this Bill, and should either Her Majesty’s Opposition, who are not particularly present this evening, or the Liberal Democrats, who also are not noticeable by their presence—there must be something going on in the other place—propose amendments next Tuesday, I will probably vote with them.

Lord Alderdice (LD)

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My Lords, like other noble Lords, I am grateful to the Minister for his presentation of these Bills. He commands considerable respect and affection in this House because he is assiduous in his work, he is committed to the business and he is a man of integrity. He clearly demonstrates that by what he says. At the start of the debate, he admitted that the commitment that he had made last year was not one that he was in a position to deliver. We all have some sympathy with him. However, I associate myself with comments made by the noble Lord, Lord Cormack, when we last discussed some of these matters just a week or so ago. He said that he would be persistent in raising the same question and the same issue in respect of Northern Ireland until the Government addressed it.

The truth is that there is nothing at all surprising about the tragic state of affairs in which we find ourselves in the politics of Northern Ireland, because most of us here have been predicting it time after time, debate after debate, for almost two years now. The noble Lord, Lord Kilclooney, pointed out that there is not a huge array of people on all the various Benches, but this is not a question of this House. Not only noble Lords and other representatives here from Northern Ireland but the people of Northern Ireland need to understand that the lack of presence is a representation of how people on this side of the water feel about things. I see on the other side of the road hundreds of EU flags, lots of union flags, and flags of Scotland, Wales and lots of other places. In the last few weeks, however, I have not seen a single flag of Northern Ireland, and it is not because we are short of them in Northern Ireland.

Lord Rogan (UUP)

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On a point of information, I have seen two Northern Ireland flags recently.

Lord Alderdice

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The noble Lord must have brought them with him himself, because certainly nobody over here would even have known what they were, never mind be displaying them. The truth is that the interests of the people on this side of the water have moved on for a whole series of reasons, and we have to take this extremely seriously, because when people are frustrated, disadvantaged and do not have the opportunity of making a difference—and many people over here feel they have no chance of making a difference to the difficulties in Northern Ireland—then they move on in their minds and in their feelings. This is a very real danger in Northern Ireland.

We have no devolution and we understand the reasons for that. It would be perfectly possible, however—as the noble Lords, Lord Trimble and Lord Empey, and I have pointed out repeatedly in this place—for the Government to permit the Assembly to sit and debate these issues, and that would inform the conversations that we have on this side of the water in two ways. First, it would mean that there was some holding to public account, if not to legal account, of the Northern Ireland Civil Service. When I was growing up, I had a relatively implicit trust in both the competence and the integrity of the Northern Ireland Civil Service. That has been shattered and blown apart repeatedly over the last number of years, as a combination of incompetence and a lack of integrity has been demonstrated over and over again. If there were Northern Ireland politicians from right across the parties demonstrating in debate their concern for these issues, that would hold Northern Ireland civil servants to account in a way that has not been the case for a long time.

Secondly, if Northern Ireland representatives in Belfast were having to hold the discussion and the arguments in public, even if they were not able to make decisions, people from Northern Ireland would start holding them to account for the fact that many of these adverse decisions were made by those very representatives. When they are not meeting and there is no debate, it is far too easy to pass it across the water to somebody else. I do not, for the life of me, see why the Government are not prepared to allow that degree of accountability, even though it does not have legal force. It would also say to many people in Northern Ireland that those who are being paid to be Members of the Legislative Assembly should be doing not just constituency business in their offices but constituents’ business on the Hill.

Lord Empey

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Is the noble Lord aware that there was no greater opportunity than to use the MLAs in the run-up to this budget? Instead, there were two or three very brief and perfunctory meetings, of little import, between the civil servants and representatives of the parties. Surely it would have been a golden opportunity to let them go through the process, even if it were for guidance, if for no other reason.

Lord Alderdice

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The noble Lord knows that I agree entirely with him. I simply cannot see that there is any sound reason at all for the Government to hold back on this. My noble friend Lord Bruce of Bennachie has insisted, quite rightly, that there is now deep concern that large amounts of money are being allocated and spent in Northern Ireland without proper accountability and with increasing concerns that they are not being properly dealt with, spent and accounted for. It is not possible for us in this place, in the absence of direct rule, to hold to account, and even if we had direct rule, it would not be a satisfactory holding to account. Why? It is because neither in this place nor in the other place is there a representation of the nationalist community.

Now, one might well say that some of that is the nationalist community’s own choice; that is not the point. The point is that there is not satisfactory representation and therefore the degree of accountability is not one that is going to be acceptable to large proportions of the population. Many of the arguments will not be satisfactorily adverted and adduced. I do not want to see direct rule, but I also do not want to see a continued drift and I have to say that, not just on this issue but on the issue that has just been debated and voted down at the other end of this building, the Government have shown an absolutely clear habit of kicking the can down the road and not making the decisions, even when it is manifestly clear that it is long past the time when the decisions should be made.

So we come to these Bills. Why do they go through some kind of emergency procedure? Was it some great shock or surprise that these Bills were going to have to be brought forward? Of course it was not, but it looks like every piece of Northern Ireland legislation is now going through an emergency process, even when it is known six months in advance that the matter must be dealt with in this place. This is not an acceptable way of going about things. Why do we have democratic processes? We have them because it is the way that we find to disagree with each other, as much as to agree, but to do so democratically and without violence. If people are left with no way of affecting process inside the democratic process then they will be encouraged to look beyond it, and that is not something that we should preside over.

It is not enough for Governments to suggest that strand 1 of the Good Friday agreement is the key strand and is not being implemented because of political disagreements in Northern Ireland. Strand 3 of the Good Friday agreement, the British-Irish Inter- governmental Conference, did not meet at a top level for 10 years and neither of the Governments asked the other, or insisted on having it. So when people talk about the Good Friday agreement not being implemented, it is not being implemented by the two Governments who are still in operation, in some fashion or other, and that has led to a deterioration in their relationship and in the whole process that we were supposed to be trying to make work. I say it not to the noble Lord, because I suspect he has some sympathy, coming as he does from north of the border himself, but it is really important to be clear to the Government: they are not governing in a satisfactory way, neither in this place, nor in terms of insisting on devolution, nor in the relationship between the British and Irish Governments.

I ask the Minister one specific thing in respect of RHI: I ask not that we have a debate next week and put material through, but will we have a serious debate in this place when the report of the RHI inquiry comes out, when we will have a serious piece of business to address which will make public, in this place and elsewise, the kind of exceptional inefficiency and perhaps even corruption that has gone on in Northern Ireland? Will he undertake that we will have that debate and that we will not be told that it is a devolved matter and not something that we should be debating in this place?

Lord Morrow (DUP)

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My Lords, it is with some regret that I speak on this issue today. Indeed, I feel that this is the sort of debate that we should not have to have. I find myself in general agreement with everyone who has spoken and with some of the things that have been said, if not all of them. However, I think the Minister knows and understands clearly where we are coming from, those of us who reside and come from Northern Ireland, when we see this type of debate. This debate should be taking place either not at all or in the Northern Ireland Assembly, but regrettably that is not the case. I recognise that the Minister has to do what he has to do. I am not sure that he has to do it at the 11th hour, but it has to be done nevertheless. He may be the one in the firing line—if that is a bad choice of words, I apologise—and has to take the flak here today, but it can come as no surprise to him or to this House that we find ourselves debating this issue this evening.

I could commence by saying, “Here we go again”. We have been here on other rushed pieces of legislation at the 11th hour, which is something I do not understand. I cannot understand why it is that way. We accept, of course, the reason for this Bill because we do not have a functioning Executive and Assembly. That is most regrettable. I was interested to hear the noble Lord, Lord Alderdice, say that he is not a fan of direct rule. Neither am I, but it would be infinitely better than what we are getting at the moment, because, basically, we are not getting rule. My first choice would be to have a devolved Administration in Northern Ireland with a functioning Executive. I suspect that even those who have yet to speak would say that that would be their first choice too.

We were told quite expressly that the Belfast agreement was a great compromise, that it was how Northern Ireland would be governed in future and that all future decisions would be made around the table, either in an Executive or in the Northern Ireland Assembly. Everyone signed up to it, some perhaps more reluctantly than others, but nevertheless we were told that this was as good as it was going to get. Hence, we had devolution for upwards of 20 years. Was it perfect? Not at all. Were there aspects of it that I did not like? There were many aspects I did not like. Indeed, it was the most convoluted and complicated piece of work that I ever witnessed in my political life, but we do not have an Executive today, we do not have a Northern Ireland Assembly, and I make it very clear to this House that I tire of people saying, “Oh, they are all to blame—they could never agree on anything over there”. I make it very clear that we have no Assembly today because Sinn Féin walked out of the Assembly and brought it crashing down. It was a calculated and deliberate piece of work. Surely there have been greater crises that have to be got over, but you do not bring government crashing to the ground to stress your point. You sit down, you debate it and you get on with it.

What have we been asked to do here this evening? The noble Lord, Lord Bruce, it was who put his finger right on it. He said that we are being asked to wave through £60 billion of budget with no scrutiny and virtually no questions asked. We are supposed to suck it up and get on with it. Would this happen in any other region of the United Kingdom? Would it be tolerated in any other part of the United Kingdom? I suspect it would not. Why does it have to be tolerated in Northern Ireland? Do we not deserve better?

Northern Ireland has gone through turbulent times, 30 or 40 years of horrendous times, and there was then a breath of fresh and a sigh of relief that maybe we were going into better times. Should we not be allowed to get on with that? If we cannot have devolution, let us have the second best, which is direct rule. I am not a fan of it any more than is the noble Lord, Lord Alderdice, so let us have it on a temporary basis, until we get the restoration of devolution. Surely the Minister can tell us today; the previous time he was here, he said that it would be the last. I am not saying this to embarrass him—I know he said it in good faith—but I noticed he did not say that this time will be the last; he has learned his lesson. Someone has to take the initiative and inject some urgency into the whole situation and debate in Northern Ireland.

The noble Lord, Lord Lexden, is correct when he says that prospects of a swift return to the Northern Ireland Assembly do not look promising. That might not be what we want to hear, but it is very factual. The Government need to move with some degree of urgency and say, “Enough is enough; we can’t continue like this, we have to deal with the particular problem here”. That problem lies in the Belfast agreement: it allows a single party to pull down the whole edifice of government at a whim. That has to change; if we do not get that change, we will go in perpetuity into this uncertainty.

Lord Maginnis of Drumglass (Ind UU)

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My Lords, very much along the lines of the previous speakers who have addressed this issue, I will start with a word or two about rates. The inequity is that domestic rates have yet again risen by 4.8%, whereas commercial rates have risen by 1.8%. While we continue to pay Members of the Northern Ireland Assembly for being idle as far as their public impact is concerned, the ordinary ratepayers—not least those on minimum wage—are being exploited by our so-called streamlined local government. We reduced 26 local councils to 11 in order to save money but, as my colleagues have already pointed out, local councillors are barely known; they are detached, and their decisions are made in enclosed committees and are merely accepted as faits accomplis in full council meetings.

When I was a councillor during direct rule, things were different. We had Secretaries of State—experienced politicians, such as the late Jim Prior, Peter Mandelson and Tom King, to name but three—who knew their councillors and worked through them, and who, bluntly, took no nonsense. I thought I was in a minority, but I am relieved to find that I am not, when I say: let us stop this current pandering to Sinn Féin and let us reintroduce active direct rule with the likes of those three I have just mentioned—there were others—for periods of 12 months, with an obligation on Assembly Members to give four months’ indication if and when they are prepared to assume the responsibilities for which they sought election. That means that if, on 1 June, we decided to have direct rule—the noble Lord, Lord Duncan, knows I have some ideas as to how Members of this House could assist the Secretary of State in the interim period—things would begin to turn around. Common sense might dawn on some of the people who are playing a very dangerous game.

A second point that has not been made tonight is on the issue of accountability, concern and caring about our nation—that, sadly, has been missing, at least in that part of our nation to which I belong and from where I come. Why have I not yet received straight answers to my Written Parliamentary Questions of June, September and December 2017 about the scandalous proxy voting scandal that saw the number of applications for proxy votes rise from just over 2,000 in 2010 to almost 12,000 in 2017—a 555% increase? It was a ploy that succeeded in Sinn Féin unseating all the SDLP sitting Members—Durkan, McDonald and Ritchie—with respective proxy vote increases of 806%, 677% and 434%, and in Ulster Unionist Member Tom Elliott losing in Fermanagh and South Tyrone.

Bluntly, it is fairly obvious—I do not include the noble Lord, Lord Duncan, in this—that, in general, the Government did not give a tinker’s curse. They dismissed the outcome to some vague and never followed-up exclusive responsibility that was passed to the Chief Electoral Officer and the PSNI, without, as far as I am aware—no one has ever bothered to update me on this—a single successful prosecution; that is, if any even occurred. How could they when few were pursued and those whose votes were violated were informed that they—elderly ladies—would be obliged to appear in court to give evidence against Sinn Féin? Most would still see that in historical terms as the Provisional IRA camp. No doubt, the noble Lord, Lord Duncan, will endeavour to enlighten our Chamber—if not today, by next week.

Of course, the most hurtful element within the debate this evening is that of the renewable heat initiative. That brings me to the infamous RHI con game being played against bona fide farmers who were induced to invest huge sums of mainly borrowed money. I will not enlarge on what my colleagues, the noble Lords, Lord Empey and Lord Kilclooney, and others have so graphically explained, except to point out that I was shocked to find Northern Ireland Members in the other place being so utterly mealy-mouthed in their acquiescence to this proposed legislation a week ago.

I will, however, put on record the letter written to the banks by the Minister of Enterprise, Trade and Investment, when she encouraged and endorsed the very scheme that the current Secretary of State for Northern Ireland is blithely dismantling. I will also acquaint your Lordships with one brief letter of the dozens I have received from despairing farmers who literally fear for their and their family’s futures.

First, the Minister wrote to the banks in these terms and I think it is important that this goes on the record so that next week we will know exactly what promises were made—promises now being broken. The Minister of Enterprise, Trade and Investment wrote:

“I would also like to draw your attention to the Renewable Heat Incentive (RHI) which my Department launched in November 2012. This scheme supports the installation of renewable heat technologies in businesses throughout Northern Ireland. Under the RHI, eligible and accredited technologies can expect to receive quarterly payments for the lifetime of the technology (to a maximum of 20 years). The level of payment will be dependent on the heat output of the installation and the eligible tariff for the specific technology. The tariffs have been calculated to cover the cost difference between traditional fossil fuel heating systems and a renewable heat alternative. The tariffs account for the variances in both capital and operating costs, as well as seeking to address non-financial ‘hassle’ costs. In addition, a rate of return is also included on the net capital expenditure to ensure the renewable energy technology is attractive to investors. The rate of return has been set at 12% for all technologies incentivised under the NI RHI (barring solar thermal which has a rate of return of 6%). These rates of return reflect, amongst other things, the potential financing costs of the investment. 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. However they will be amended on a yearly basis, for existing installers and new schemes, to reflect the rate of inflation. DETI believes that the RHI is a real opportunity for consumers and investors to install new renewable heating systems and enjoy lower energy costs and ongoing incentive payments. Traditionally the operating costs of renewable systems have been less than conventional oil systems however the capital costs have been somewhat prohibitive. The RHI aims to bridge that gap and provide a return on investment.


It is intended that the NIRO and the RHI will help to incentivise the market to achieve the ambitious renewable targets mentioned above. However, I am aware that in many cases the uptake of the schemes is dependent on potential installations being able to access the appropriate finance to cover the initial capital outlay. I am therefore writing to encourage you to look favourably on approaches from businesses that are seeking finance to install renewable technologies. The government support, on offer through the incentive schemes, is reliable, long term and offers a good return on investment. If you would find it useful, DETI officials would be happy to arrange a seminar for financial institutions, to explain further the current and proposed financial mechanisms.


Your support in working towards a more secure and sustainable energy future would be much appreciated”.


That was signed by the Minister.

In contrast to that, I will conclude by mentioning one letter that I received from a farmer who I know and trust—a middle-aged man with a young son who hopes to succeed him on the farm. He wrote:

“It was this time last year I emailed you regarding last year’s cuts. I know you did your best to try and stop it. I believe the latest bill is going before the House of Lords on Tuesday. This one must be stopped. It will be nothing but mental cruelty to hundreds of participants and their families. I haven’t had a full night’s sleep since the first cuts in 2017. I also have had to get the help of Rural Support. My costs (bank repayments, servicing and extra electricity) not including wood pellets are approx. £65,000 per year, and now I will receive approx £8,000”—


he has four burners. He continues:

“Could you please lobby other members of the House of Lords on our behalf as I am not great at using the computer”.


He borrowed £205,000 over a five-year period. Noble Lords can work it out; he is paying about £47,000 or £48,000 per year to repay that. He has been hoodwinked.

I will stop there but will add only that as a Parliament, we cannot do other than meet our moral obligations to RHI investors.

Lord Cormack (Con)

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My Lords, unlike most of the speakers in this debate, I do not come from Northern Ireland. It is a part of our United Kingdom that I got to know and love when I was chairing the Northern Ireland Affairs Committee in the other place. The people are marvellous; the countryside is beautiful and I fell in love with it.

I shall always have two particular memories, because 2005-10 was a very interesting, formative time. One was in 2008, when Ian Paisley—the late Lord Bannside—retired. I was at Hillsborough. Perhaps some of your Lordships were as well. It was a remarkable occasion. The Prime Minister, Gordon Brown, was there to pay tribute. The Taoiseach was there. The most moving and amazing part of that evening was the wonderful address, delivered to his friend and mentor, by Martin McGuinness. We have come a long way since then—and not in the right direction.

There is another event I shall always remember and which is printed on my mind. There was a particularly brutal murder of a young man called Paul Quinn. His parents came to see me and some members of the committee and we were invited to Crossmaglen. I was informed that I was the first British politician from this part of the United Kingdom to address a meeting in Crossmaglen since 1901. The warmth of the people, suffused on that occasion by very considerable anger, was palpable.

I feel very sad indeed that neither the Executive that was created nor the Assembly that met regularly exists for the moment. I do not go along with the desire for direct rule. I believe this would be a terribly unfortunate development. I do, however, associate myself with those who have talked about the way in which we are dealing with Northern Ireland legislation in this place and in another place. It is nothing less than an insult to the people of Northern Ireland for us to fast-track the two Bills that are before your Lordships’ House tonight. Frankly, there is no need for it. I am delighted and grateful that we have another day next week on the second of these Bills. I will endeavour to be present and to take part in the debate. I am sure that your Lordships who are here will all do likewise.

It is not good enough. Billions of pounds are effectively being nodded through. There is nothing approaching scrutiny or detailed examination. If we are to have another year like this—and I suspect that we are—this must not be allowed to happen again. There must be proper, adequate scrutiny, even if it has to take place not on the Floor of your Lordships’ House but in the Moses Room, in Grand Committee. We must engage. The people of Northern Ireland are as deserving as the people of Lincoln—where I now live—or of my former constituency of South Staffordshire. They are not getting the government they deserve. They are being short changed. Unless and until the Assembly and the Executive are restored, we have to shoulder—and willingly—the burden of government. This does not mean an early imposition of direct rule.

In his speech, the noble Lord, Lord Alderdice, took up a cry that we have made separately and jointly on many occasions. Why, oh why is the Assembly not meeting? He and I accept that it would not have legal, executive authority. Time and again, I have asked my noble friend why the Assembly cannot meet. I attach no blame whatever to him. My noble friend is an exemplary public servant. He conducts himself with great dignity and is exceptionally well-briefed. When I said it to him again last week, he was kind enough to say that he would try to give some sort of definitive answer this evening. I wait with real interest because it is very important indeed.

I want to touch on a couple of issues, one of which—this renewable heat incentive—has been touched on many times. I am not going to read anything into the record, because that has been done. I have received, as have many of your Lordships, a number of pleas—cris de coeurs—from people in Northern Ireland who believe that they have been badly let down and misled, encouraged to do things they would not otherwise have done and placed themselves in penury as a result. One of them was cited by a noble Lord a moment or two ago. We have all had those letters and I dare say that we will be referring to them again.

The noble Lord, Lord Hain, was unable to be here this evening because of a long-standing previous engagement, but he talked me beforehand because I was one of a group of former Secretaries of State and others who went to see the Secretary of State some weeks ago. I also had a private meeting with the victims’ commissioner, who was over here. We were particularly concerned about the plight of those who, through no fault of their own, had their lives shattered—effectively destroyed—as a result of injury during the Troubles. Most of them are in their 60s or 70s. Many, alas, have already died. We have been told that there is a desire to give them pensions, but as my grandmother used to say, fine words butter no parsnips. These are people who are often living in the most straitened circumstances: their bodies pulverised, their futures destroyed decades ago. They deserve help, and I very much hope that when next we have a Bill before us, it will be a very short one that we can indeed fast-track, and which will enable those people to be recognised.

I finish where I began. It is very wrong that this legislation should be fast-tracked in this way. There is no excuse for it, there is no need for it and the people of Northern Ireland deserve better.

Lord Bew (CB)

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My Lords, I support the two Bills and thank the Minister for arranging the briefing from his officials in the Northern Ireland Office yesterday. During that discussion, I was struck by a point already raised by the noble Lord, Lord Bruce, this evening: the possibility of a University of Ulster medical school in Magee. The cost mentioned in yesterday’s meeting was £30 million. I asked officials about the cost of the current inquiry into the Scappaticci affair, which according to press reports has cleared £35 million, but no one knew the answer.

I am here making a point made by the noble Lord, Lord Empey, which is that the expense of these legacy inquiries really mounts up. In principle, at least, obvious social goods for the future of Northern Ireland might be obtained if money was not going in that direction on the dramatic scale it has in the past. The Bloody Sunday inquiry, for which I was proud to be an historical adviser, has cost £200 million and is still going on. At the time of the Bloody Sunday inquiry, I did not believe that we would still be having these inquiries, and there are many more to come unless, somehow or other, we get a grip on this. Otherwise, there will not be a medical school in Magee or many other social benefits in Northern Ireland in future.

I have one more point to make to the noble Lord the Minister. I think he is perfectly aware that Northern Ireland housing associations are restricted in their operation by a definition from the Office for National Statistics. This issue was raised in the other place when the legislation was debated, and on 6 March the Secretary of State seemed to hold out the prospect of legislation, although the situation was not made completely clear. I am pressing the noble Lord on the issue of timing. Can we have action before the summer? I understand that he may need to write to me. This is a way to expand social housing, affordable housing, in Northern Ireland without putting any pressure on the block grant. It would therefore be very helpful if progress could be made in that area.

Lord Hay of Ballyore (DUP)

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My Lords, there has been a wide range of speeches on the Bills here this evening, all very much with a similar theme: the lack of transparency, scrutiny and certainly accountability. We might get a few hours in this House to debate a budget for Northern Ireland—a very unsatisfactory situation for all the people of Northern Ireland—with no real scrutiny or knowledge of how the allocations to departments have been reached. As the noble Lord, Lord Browne, said, this is the third year that expenditure in Northern Ireland has been debated through this House. Surely the people of Northern Ireland deserve better; they are in a very difficult position. We were told that the Bill has been fast-tracked because there was hope that an Executive, an Assembly, would have been restored to make these provisions. Over the past number of months, was there any real prospect of an Assembly being restored to go through the process of setting a budget? I think not.

While I believe that we have the mechanisms here within Parliament to scrutinise such Bills, I just do not know why those procedures are not used. We will all have known over the last several months that this Bill was coming. We also know that the Assembly would not be meeting to process such Bills. I think this is something the Northern Ireland Office needs to answer, because this is not the way to do business. It is just not possible. Yes, I understand that in the absence of a working devolved Government in Northern Ireland, the United Kingdom Government have a responsibility to safeguard public services and public finances in Northern Ireland. I know that the Bill is putting spending on a statutory footing; that has already taken place. Of course, this is more or less a spending Bill giving departments in Northern Ireland the ability to continue to spend money with a higher than normal level vote on account of 70%. The tragedy of this process is that the Secretary of State cannot direct the spending with these departments or what programmes they can spend money on, so there is no real control over how our Civil Service in Northern Ireland spends money.

Of course I welcome the £140 million of new funding that will go to the health service, education and other projects in Northern Ireland. I place on the record my gratitude to the Minister, the Secretary of State and the Treasury for finding that extra £140 million. Education especially is in dire straits at the moment in Northern Ireland. The various principals of all our schools will tell you the seriousness of the education situation right across Northern Ireland. Our health service in Northern Ireland, which has been mentioned continually in this House, continues to suffer, and our waiting lists get longer and longer. Why? Because we have no Minister in place to lead and to decide policy. It is a total and absolute tragedy. Of course, the £140 million is on top of the £330 million of funding that comes from the Government’s confidence and supply agreement with the party.

I will move on quickly, because the evening is getting on, and raise the issue of a city deal, which has already been raised by the noble Lord, Lord Browne. I specifically raise the city deal that is very much ongoing in my own city of Londonderry and the region. The Minister will know that I have raised this with him on several occasions. My understanding is that there may be an announcement within the spring estimates. I am not too sure; I do not want to pre-empt that decision. He will know that it will certainly regenerate the region and create employment, economic development and inward investment. A city deal for the region has all of that connotation. Certainly, on two or three occasions someone has mentioned a medical school for the city, which is very much part of the wider city deal. It is something that the Minister knows about and that I have spoken to him about.

I also want to quickly raise the issue of RHI, which comes under the rates and energy Bill for Northern Ireland. The Bill deals mainly with the RHI scheme. We have all received emails and letters from individuals who feel aggrieved by the proposals in the Bill—and rightly so. They went into the scheme very much in good faith and now feel that they are being unfairly treated. I agree with them, and I will not stand here and defend the scheme: it was flawed from day one. We need to be honest enough to say that.

The Minister will be well aware of our concerns about the lack of proper scrutiny for these proposals, which will change the tariff to 12%. The Minister knows that MPs have challenged the figures that the civil servants have come up with. These, of course, are the same civil servants who got the scheme wrong from the start. They are now telling us that the figures are right. I am glad that the Northern Ireland Affairs Committee has decided to launch an inquiry into the figures and has called for representations; I hope that we can move forward that way. It is, however, a tragedy, and there will be a number of people out of pocket from all this.

The rest of the United Kingdom set a rate of return from the scheme of between 8% and 22%. Here we are told that because of the whole issue of legal aid and the European Commission, Northern Ireland can have only the 12% tariff. There are a number of questions about this. I hope that the ongoing Select Committee inquiry will tease out all these issues, because I and others are concerned that the figures presented to us are not correct and need to be challenged.

In finishing, I mention the issue that the noble Lords, Lord Alderdice and Lord Cormack, and others raised about why the Assembly is not meeting. There is some suggestion that the Assembly should meet in shadow mode. If all the parties could agree, we would be there in the morning, because at least that would be a start towards getting the Assembly to function as a fully devolved Government in Northern Ireland.

The answer to dealing with these issues is devolved government in Northern Ireland, and I hope that this is the last time that we deal with such important business—budget-related business in particular—for Northern Ireland. We should not give up hope of Stormont being brought back, perhaps sooner rather than later. Direct rule—and I know that at some point we may have to go to direct rule—has not been good for Northern Ireland. We had direct rule Ministers flying in and out of Northern Ireland with no accountability, making decisions that affected the lives of people in Northern Ireland with no responsibility to them. That cannot happen again. We need to get the Assembly and a workable Executive up and running, because direct rule Ministers, as good as they are, make decisions that affect the lives of all the people in Northern Ireland with no accountability. For me, therefore, it is devolution back at Stormont, and I hope that we redouble our efforts to get the Executive and the Assembly up and running.

I place on record my appreciation for the meetings, short as they may have been, that the Secretary of State and the Minister held to discuss these Bills. He and his officials took time out of a busy schedule to brief us as best they could; I thank him and the Secretary of State.

Lord Rogan

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My Lords, I will speak briefly with what is, I hope, a simple message, one which has been expressed many times but needs to be repeated. The Explanatory Notes for the legislation before us this evening begin with the following statement:

“The Bill deals with matters arising from the continued absence of a Northern Ireland Executive, and the consequent inability of the Northern Ireland Assembly to pass legislation to provide the authority for departmental expenditure following the Assembly election on 2 March 2017”.


It is clearly important that we support the legislation because, in its absence, government departments and public bodies in Northern Ireland will be unfunded; no one in your Lordships’ House would want that. However, the people of Northern Ireland should not be placed in this invidious position, with no prospect of the establishment of an accountable, devolved Administration anywhere in sight.

Last Saturday, I attended the Ulster Unionist Party’s annual general meeting in Belfast. It was standing room only, although I am happy to say that my noble friend Lord Empey and I were given seats. The mood was vibrant as candidates and supporters listened to an excellent speech from our party leader, Robin Swann, in advance of the council elections in May. There is real enthusiasm for the democratic process in Northern Ireland, and the absence of a Stormont Assembly and the ability to engage with locally elected Ministers is causing ever-increasing frustration, anger and dismay. As an aside, if we had devolution and the noble Lord, Lord Duncan, was Minister, I have every confidence that a bloody good job would be done.

I reiterate the comments of the noble Lords, Lord Bruce of Bennachie and Lord Hay of Ballyore, on the proposed medical school in Londonderry. In Northern Ireland, we are short of both doctors and nurses. Can special arrangements be put in place to at least allow this facility to become operational? On a personal note, last Friday I had an examination by a specialist for a minor ailment. Minor though it was, nevertheless an operation is required. It is expected that I will have that operation in two years’ time.

This morning it was announced that four viable parcel bombs targeting London and Glasgow over recent days were sent by a group calling itself the IRA. The perpetrators are thought to be so-called dissident republicans. I remind your Lordships that it was dissident republicans who were responsible for the 1998 Omagh bomb attack, which took the lives of 29 people, including a pregnant mother with twins. As the noble Lord, Lord Alderdice, said, such evil terrorists exploit political vacuums for their own murderous ends, and always will do so.

I have a simple message for the Minister. I will support the Bill, but the current democratic deficit in Northern Ireland must be closed without any delay, and before the men of violence—according to their own sick mindset—get “lucky”.

Lord Murphy of Torfaen (Lab)

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My Lords, I very much agree with the noble Lord, Lord Rogan. Where there is an absence of democratic government, particularly in Northern Ireland, that gap will be filled by the men of violence. That is an interesting point on which to start this final but one speech in your Lordships’ House.

There has been a theme throughout this evening’s short debate concerning the way in which we scrutinise legislation, particularly of this sort, in Parliament. It was a theme in the other place as well. I hope the Minister will take back to his boss that constantly relying on emergency legislation for Northern Ireland, when we know the timetable in front of us, really is not good enough. When we consider that the meetings that apparently were held with the political parties in Belfast were rather perfunctory, that adds to the difficulties we face.

Northern Ireland is now the least democratic part of the United Kingdom—possibly the least democratic part of the European Union. The local authorities will be elected in a few months’ time but they have very minor powers in comparison with their British counterparts. All other decisions regarding education, health, planning and the rest are now taken by a bureaucracy. I suspect that there is nowhere else in Europe where such huge decisions, involving billions of pounds, are taken by unelected administrators and civil servants. I do not envy them because whatever they do will be criticised. But it is not their job. In a democracy, such decisions should be taken by elected politicians, which has not been the case in Northern Ireland.

A number of your Lordships mentioned the possibility of the Assembly being used for deliberative purposes. Brexit would have been an ideal subject for the Assembly to discuss, as the budget would certainly have been. I might have mentioned before in your Lordships’ House that when I was Minister of Finance in Northern Ireland before an Executive was set up, I took the budget to the new Assembly that had only just been elected. All Members of that Assembly were able to question me about that budget. Such an arrangement would not have legal standing, other than the fact that the Members have been elected legally, but the Assembly would have a deliberative function. I am sure that two of its former Speakers who are here, the noble Lords, Lord Alderdice and Lord Hay, would agree that the opportunity would be enormous and that the people of Northern Ireland would regard it as a first step, particularly given that Members of the Assembly are still being paid. It is a proposal worth considering.

The Opposition will not oppose these Bills. As regards the budget, a number of your Lordships have raised different issues. I echo the point made by the noble Lord, Lord Cormack, about the interest of the noble Lord, Lord Hain—we are all interested in this issue—in pensions for the victims of the Troubles, and the fact that a lot of those people are now old. Indeed, some have died. Around 500 would qualify. A tiny handful would be people about whom there may be controversy. We must not allow that vast majority to be affected by issues of definition of victim; rather, we must address the mental and physical problems that those people face.

The proposal regarding the rates is fair. It is on a level with those affecting my local authority in Wales. There is nothing outrageous about the amount but the point has been made by some Members here that we should consider those who still cannot afford the rates. Although non-domestic rates are smaller, in Northern Ireland, as in the rest of the United Kingdom, there are small towns in difficulty and where business rates are a burden. I ask the Minister whether the new small towns initiative will apply to Northern Ireland, by way of the Barnett formula.

A lot of Members rightly raised the RHI, and it is good that next week we will have an opportunity to look at it in detail. We await the results of the inquiry. There might be a judicial review of the issue, which the Northern Ireland Select Committee will deal with next week. Although some people benefited a lot from the RHI, everyone who applied did so in good faith. A lot of farmers and small business people in Northern Ireland will be affected adversely by the results of this legislation. It has to go through, otherwise nothing would come to them at all; but we should scrutinise this issue in greater detail. It was a scandal and I hope that we will be able to rescue some of the people who have been caught up in it. However, I still come back to the fact that none of this should be happening. There should be an Assembly, an Executive, north-south bodies and indeed the British-Irish Intergovernmental Conference. The east-west aspect of the Good Friday agreement should be operating.

We are 312 hours from the first deadline for legislation—which this House approved, by the way, not long ago. I very much doubt that we shall achieve what we want by that time. The involvement of both Prime Ministers has been peripheral. The Government —to put it diplomatically—were less than energetic in this matter. I cannot see a plan ahead of us. There should be a plan for talks about talks, if nothing else, and there is none. There is no hope of it. We have had over two years without an Assembly or an Executive.

A few hours ago, the Government were defeated by 149 votes on an issue about Northern Ireland, effectively. The proper argument put in the other place was that the Good Friday agreement must not be affected by a hard border. The hard border would adversely affect everything that was agreed 20 years ago. Of course that is right. But here we are today in this Chamber discussing Northern Ireland and the restoration of the Assembly and Executive, and in reality this issue is as great a threat to the Good Friday agreement as that of the existence of a hard border, which has just resulted in a vast government defeat. The two are linked. Had an Assembly and Executive been functioning, a resolution of the backstop issue between both the nationalist and unionist communities in Northern Ireland might well have been possible. These abject failures in negotiations, in both Brussels and Belfast, have had tragic consequences not just for Northern Ireland but for the whole of our country. The crisis we are currently in is partly about Northern Ireland and, frankly, the Government should do something about it.

Lord Duncan of Springbank

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My Lords, no matter how much homework I do before I come here, I am always confronted by new questions, so I will try as best I can to do justice to all of the questions that have been presented this evening. I also stress that the opportunity next week to examine in greater detail the renewable heat incentive will give us a further opportunity to discuss that issue.

I start on a positive note and I will try to weave my way through all of the other questions. A number of noble Lords mentioned the medical centre in Derry. Derry/Londonderry will secure significant funding through the city deal initiative. Noble Lords will be aware that the Belfast city deal has been set at around £350 million. There will be substantial funds going into Derry/Londonderry and into the medical centre. If it is able to secure the correct construction of its bid, that is exactly the sort of thing that the city deal should be able to move forward. I am not across the details, but I will be, and I will report back when I have more to say. It is a useful initiative to take forward.

The common theme from noble Lords this evening was to ask why we always seem to do this at the last moment and at short notice. It is important to place this in context. The Bills before us are, in a sense, a reconciliation of the moneys broadly spent in the financial year soon to close. The budget for that was set before and we are now reconciling it. It is happening now because we had to wait until the figures were available, and that happened only within the last month. That is why we are doing this today.

On the question of the rates, again, noble Lords were right to flag up that this could have been examined at a different time, but the two issues have been put together in this package. The heating initiative concept also falls into this debate because we face a time limit of the deadline by which we must introduce an adjustment to the scheme because of the grandfather clause that will bring it to an end.

The point noble Lords are making is different: if this is how we are doing things, why are there not more opportunities for further scrutiny by different parts of this House and others, either through committees or elsewhere? I am going to take that away from the discussion this evening because I agree. We should be looking at how to move that forward in a fashion that does not rely on the methods we have used thus far. I do not think they are adequate. When we are spending such sums of money, there should be thorough, careful and detailed scrutiny—not in one evening, not even spread over the two opportunities we have—to ensure that those who are tasked with examining these things are capable of doing so.

I will try to move forward on several of these smaller but important questions. I have had several meetings with the noble Lord, Lord Hain, about pensions. I recognise how important this is and that we need to move forward for the very reasons that a number of noble Lords have struck upon this evening, not least the noble Lord, Lord Murphy. These people are ageing and dying off. We are awaiting the information from the Victims Commissioner. We believe that it will come very soon and hope that we will be able to move forward on this initiative once we receive that. I will come back when I have more details and am in a better position to do so.

The noble Lord, Lord Bruce of Bennachie, raised the wider question of the Hart inquiry. I wanted to get the exact wording, so forgive me if I read it out. My right honourable friend the Secretary of State for Northern Ireland has made it clear that, in the absence of an Executive, she will consider the next stages when she receives advice from the Northern Ireland Executive. We need to move this forward—I recognise how urgent and important it is—and we will do so when we have received that information. Even if there is no Executive, we will not let this settle. We need to make progress now.

I will touch on one of the other, bigger issues, the role of an Assembly, not necessarily as a generator of legislation but as a place where debate and discussion can take place. There is no impediment to the Assembly meeting. It would have to select and elect its own Speaker and its own Presiding Officer, but it could do so. One noble Lord flagged up one of the difficulties: to be an appropriate place for this discussion to take place, it would need to bring together all of those parties. I am aware of the challenge that that may represent. Perhaps noble Lords here gathered can do something to help. On a cross-party basis, they could write to each of the MLAs and ask if they would be willing to sit and meet in such an Assembly now.

There is no doubt that the noble Lord, Lord Murphy, has flagged up an important point. Just along the corridor in the other place, an extraordinary event has unfolded. It has centred on Northern Ireland, yet the voices of Northern Ireland have been remarkably quiet in this process. It is not just about flags outside but voices in here. Any small progress will be a step in the right direction.

Lord Alderdice

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I am very grateful to the Minister, but it feels as if he is giving a veto to one party. When Lord Prior was Secretary of State, an Assembly was able to meet for some years without any nationalist representation at all. We are not talking about that in this situation. I understand what he is saying very well. The Government would be very ill advised to hand out a veto in that kind of way.

Lord Duncan of Springbank

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The noble Lord is absolutely correct. That is why I am trying to be very careful in putting this forward.

Lord Cormack

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I am most grateful. I would like to follow up: I think we see this as one. I appreciate the suggestion that we might take part in some way. However, I would ask that the Secretary of State herself writes to every single elected Member, saying that there will be a meeting on a particular day and inviting them to come. It would be wrong to allow any single segment or group to veto that initiative. It has to be taken at the highest level, by the Prime Minister or Secretary of State.

Lord Duncan of Springbank

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I accept the words of my venerable and noble friend. I am trying to find a way of moving this forward as best I can. I wonder whether there might be an opportunity for us to meet collectively in a different forum to discuss that very thing. I do not think I will be able to resolve it on my feet. I do not doubt that in a few moments or so I will be getting little notes from my assistants in the Box.

Lord Hay of Ballyore

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To follow the remarks of the noble Lords, Lord Alderdice and Lord Cormack, has there been any discussion on the idea of a shadow Assembly within the talks at any time? Has it been put by the Secretary of State to the parties? What has their reaction been, if any at all?

Lord Duncan of Springbank

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The noble Lord raises a question to which I do not have the answer, I am afraid; I do not have it to hand. That is why if we are in a position at a date soon hereafter to sit down and explore some of these issues in an effort to move them forward as best we can, that would not be a bad initiative. Let us revisit that. I am not trying to park it in any way.

I hope noble Lords will forgive me for being a little disorganised: I seem to have an awful lot of papers spread in front of me. I will try to take the points raised by each noble Lord in turn. The noble Lord, Lord Bruce, asked about the RHI situation and how it compares with other parts of the United Kingdom. We are broadly agreed that the scheme in Northern Ireland was not well constructed; we can probably all accept that. The unfolding inquiry into that will set out clearly exactly what has gone on. In response to the question from the noble Lord, Lord Alderdice, yes, we can have that debate should your Lordships desire to have one at the stage when a report emerges; I am happy to say that.

The scheme set out a 12% return; that was at the heart of what was meant to be achieved by the initiative. It is indeed 12% in Great Britain itself; the scheme that we anticipate in the Republic would be 8%. One of the reasons that we end up with different figures is that there are different ingredients going in. For example, the scheme in Great Britain is a 20-year scheme, whereas that anticipated in Northern Ireland is a 15-year scheme. Some of the capital costs involved in the scheme depend on when the emergent technology became more cheaply available. The scheme in Northern Ireland that commenced in earnest in 2015—although it opened earlier—contrasts quite clearly with the scheme which opened in Great Britain in 2012, during which there were significant cost reductions.

The scheme construction also differs significantly between Great Britain and Northern Ireland, not least the element of “tiering” which exists in British schemes but not in Northern Ireland and the digressive component. I will not go into greater detail on that; we will have an opportunity to do so next Tuesday evening. In the intervening period, I recommend that any of your Lordships who are minded to find further details meet my officials so that those who have serious concerns can have them addressed.

To put this into context, the 12% return that we talk of is the needful part within the state aid rules. The scheme in Northern Ireland as it initially emerged had a return rate of 55%—noble Lords will see the contrast between 55% and 12%. It is not difficult to see how those individuals, who, through clear guidance, accepted a scheme with its various component parts and invested on that basis, now find themselves in the invidious position of all their calculations being blatantly wrong, based as they were on incorrect information. It is important for me to stress that those who were responsible for the wrongness of that scheme, I do not doubt, will emerge from Patrick Coghlin’s report; we will have an opportunity to discuss that further.

I stress that those within the Northern Ireland Civil Service undertaking the work on the current proposals are not the same people. This has been conducted in a very different fashion, based on significant investment in looking at the actual data rather than forecast data. Rather than trying to anticipate what the figures will be, the report itself and the consultants who examined it looked at the actual data. Again, it might be worth getting into the detail of that at an opportunity that will be provided by my officials and by others, because noble Lords will be surprised how quickly this moves from a high-level discussion into extraordinary technicalities.

I have written at the top of this page: “still a Minister”. I think that must reflect on what was going on down the Corridor. I will check when I leave, obviously.

A noble Lord

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It is only 9.05 pm.

Lord Duncan of Springbank

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The night is still young, exactly.

Returning to the remarks of the noble Lord, Lord Empey. In stressing the notion of the cancer strategy, he placed his finger on one of the more important questions: in the previous Act we set out our ability to offer guidance to civil servants in Northern Ireland but at what point does a civil servant in receipt of information feel he is comfortable to implement it or not? There is no doubt in my mind that there is a strong difference between a civil servant who feels so empowered and a Minister who wishes to move things forward, and there is no point pretending that one is the same as the other. I recognise that a cancer strategy is only as valuable as it is implemented in all its manifest forms, and I also recognise how important that will be.

The noble Lord asked about turning capital funding into resource funding. In the current arrangements there will be £130 million of that, and he is absolutely right that the Treasury has in the past not been overly fond of this approach. This particular approach is one method of trying to balance out that budget, but I recognise that there will be other challenges. He rightly points out that there are enough capital projects in Northern Ireland to keep Northern Ireland busy for some time, which is again why there will be £200 million from the confidence and supply arrangements, focused primarily upon infrastructure. That should in some sense help to recognise how we can balance out these particular aspects.

My noble friend Lord Lexden was very critical, and I accept his criticisms in the spirit in which they were given. We deserve some criticism in this area. We should be doing better, so I will take that on board. Again, he flags up the vital role undertaken by the Northern Ireland Affairs Committee, which should have a stronger role in all the things which we are discussing. There is no point in having a Northern Ireland Affairs Committee if the only thing it does not discuss is what you are up to in Northern Ireland in this context, so I shall take that on board. He was right also to remind us of the role of Airey Neave, and the tragic circumstances in which he died. There is much to learn from that period about how we can move things forward.

The noble Lord, Lord Kilclooney, asked several questions. The first one, which he has touched upon previously, was: has the reform of the council structure had any benefit? I do not have an answer to that but I am going to find one and report it to him directly. He also asked what the role of state aid will be after the point at which we depart. The reality is that the state aid approach will be adopted broadly by a UK-based entity called the Competition and Markets Authority, which will apply common rules. I will write to him with more detail so that I can set out at greater length the information which I am here slightly gliding over the top of.

I hope I have answered the questions raised by the noble Lord, Lord Alderdice, so I will glide over the top of those and move on.

The noble Lord, Lord Morrow, like many others, raised the very serious point of scrutiny. I hope we can find a way of doing this differently. This time last year, I somewhat foolishly made a bold promise, which I will not be doing it again, as I have discovered that Northern Ireland is not the place to make bold promises—certainly not as far as I am concerned. However, I believe we need to find a different way of scrutinising. It is right and necessary that the people of Northern Ireland have faith and confidence in the way that their money is being administered, and that is going to be done only if they have genuine confidence. The notion of using expedited or emergency powers creates this sense of emergency, which in itself is self-defeating, so we want to move away from that as best we can.

The noble Lord, Lord Maginnis, asked certain questions on proxy voting. I will chase up the responses tomorrow and ensure that the noble Lord gets them. He read into the record one of the letters from the responsible devolved Minister, reminding us again that all those individuals who have written to each of us about the RHI scheme did so on the basis of very clear, simple, straightforward guidance. They did the right thing, and so it is important that is on the record and part of the wider discussions that, I do not doubt, will follow on from the report which will be published. That echoes the points raised by my noble friend Lord Cormack, and I am pleased he was able to raise the issue of pensions on behalf of the noble Lord, Lord Hain, which we should be able to move forward on, once we are receipt of that information from the victims’ commissioner.

The noble Lord, Lord Bew, asked about how much the Scappaticci affair cost. I do not know, but I will find out and report back to him. I hope I was able to give him some comfort on the Derry medical school.

Lord Bew

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I am also interested in whose budget it comes from.

Lord Duncan of Springbank

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I will make sure the letter covers that point as well. On the housing association aspect, I have assurances from my right honourable friend the Secretary of State for Northern Ireland that we will find time, and this will move forward as quickly as we can. Whether it will be by the summer will slightly depend upon events, but there will be an ambition to move forward quickly. The longer we delay in moving this aspect forward, the greater the cost to the Exchequer, as the noble Lord will know. If we do not make progress by the end of the financial year, it will have cost us £45 million, which is money we could better spend on a thousand different areas.

The noble Lord, Lord Rogan, reminds us of the challenges we face if we are not able to deliver, and he is right to point out the challenges of a vacuum, and who will fill it. It is a stark reminder, and we are living through that reality now. We need to make sure we can make some progress, because it is too important an issue for it to fall into that particular abyss, from which it will be harder and harder to extricate ourselves.

The noble Lord, Lord Murphy, as ever, brought forward a useful summary, and trenchant criticism, which lands upon us as the Government. It is important that we recognise the issues we have tried to take forward, and how we can improve the way we do business. He asked a specific question about the small towns initiative, to which I do not have an answer, but I will get an answer and I will write to him, lodging my answer in the Library for those who wish to have that information at their disposal.

The noble Lord, Lord Bruce, posed a question on scrutiny, and the noble Lord, Lord Empey, touched on this. The actual spend is scrutinised by the Northern Ireland Audit Office, but there is a difference between scrutinising post facto spend and the other way around. I take that on board, as I hope he will understand. The noble Lord, Lord Bruce, also asked why the flaws in the RHI scheme were not caught earlier. It is a good question, and there have been attempts throughout the process to ameliorate what has become a significant problem. When the scheme was set up, the figures being discussed were in the £20 million range, but when we look at the simple costs now for this scheme, were it to have run the full distance, we would already be at £500 million, which is a significant overshoot. The reason why the judicial review, which is going to appeal and will report soon, found that there should be reform of this is because we need to balance the commitments we make to individual participants in this scheme, and the wider sense of common good and public finances, which are challenging in this regard.

The noble Lord, Lord Maginnis, also raised proxy voting. It is important that we get clarity on this, and I will write to him and will share that information with others.

I think I have answered all the questions I can. If I have not answered particular questions, noble Lords should grab a hold of me, and I will answer them. If I cannot do that, we will arrange a meeting where I can answer properly.

Lord Empey (UUP)

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My Lords, I apologise for being out of position, but things have moved so quickly. I have tabled two amendments which I would like to speak to together. Their purpose is to get some fairness into the renewable heat initiative in Northern Ireland. As many Members will know, it has been one of the worst examples and it is how not to do a renewable heating scheme. It has ostensibly been responsible for the collapse of the devolved institutions in Northern Ireland. I am sure that many noble Lords will have received a large volume of emails over the past few days and weeks.

I have two things to say to the Minister. First, it is inappropriate that regional rates and an energy Bill are combined in one piece of legislation: they are totally unrelated. Secondly, the plan was that two major Northern Ireland Bills would go through all their stages in this place in one evening, ensuring that no scrutiny of any description was conducted into the legislation. Apart from anything else, that is bad governance.

Members will be aware that legal proceedings continue and are perhaps due to come to partial fruition later this month. The proposals in front of us would probably result in further legal action, because the fact is that government Ministers in Northern Ireland made promises some years ago and, regardless of the intricacies of that or who was involved, people were led to believe one thing and have now been confronted with a new situation. That is bad from every point of view. These amendments try to ensure that there is proper scrutiny of the proposals.

Any noble Lord who has been looking at, and trying to respond to, emails from farmers’ unions and others will have been completely amazed at the complexity of this legislation: the new tariffs for different sizes of boilers, whether 99 kilowatts or 199 kilowatts—I am sure we are all learning as we go along. While the bulk of the boilers are 99 kilowatts, those who have larger boilers or micro boilers feel that their circumstances have not been taken into account.

When it was proposed in the other place that the Northern Ireland Affairs Committee would conduct an investigation, I felt that this was the one and only piece of parliamentary scrutiny that this legislation would receive. That committee has a good reputation in the Houses of Parliament. A former distinguished chair, my noble friend Lord Cormack, is sitting here. Laurence Robertson MP, the previous chair, conducted his business exceptionally well over many years. The current chair, Dr Andrew Murrison, whom I had the opportunity to speak to last week, is also determined and he has already started work: he has sent out notices seeking assistance and gathering evidence from those involved. He said that he was intending to do this very quickly, and that is an excellent piece of news.

I am trying with these amendments to ensure proper parliamentary scrutiny, so the new tariffs would not be introduced until the Northern Ireland Affairs Committee report comes forward. At that point, the Secretary of State would be permitted to introduce a revised tariff, should she deem it to be necessary. That could be done by secondary legislation, approved by both Houses, without having to revert to primary legislation, which is so difficult.

What is the point of all this? First, the scheme is so complex that Parliament—at either end of the Corridor—has not had the opportunity to assess it. Secondly, is it wise to go forward with something that dramatically affects people’s livelihoods just as it stands?

The Bill contains clear proposals for a buy-out scheme, and an amount of £4 million per annum has been set aside in the Budget to allow that to happen. The European Union has an involvement in this through state aid, but because a 12% return is anticipated from the very beginning this scheme has been outwith that particular proposal. The European Union has a target, and the whole purpose of this was to ensure that the UK’s carbon footprint was reduced. This was part of Northern Ireland’s contribution to that UK target, but it has gone sadly wrong.

Lord Cormack (Con)

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My Lords, I support what my noble friend Lord Empey said: this is a question of fairness, justice and equity. As my noble friend said in his powerful and persuasive speech, those of us who take an interest in the affairs of Northern Ireland have had many communications from people who, frankly, are at their wits’ end as to how they can survive financially. I have had letters from poultry farmers, hoteliers and others who, in good faith, with a written ministerial assurance, made an investment. It is not for us to say whether that was wise or not, but we have to recognise that these people were acting on government advice. I do not want to quote a lot of letters but I shall quote just one sentence from a poultry farmer: “Is it fair for the Government to renege on tariff payments that had been guaranteed?”

The system is incredibly complex—my noble friend Lord Empey made that plain— and I do not pretend that I understand all of it but, as a former chairman of the Northern Ireland Affairs Committee in the other place, I am delighted that my successor but two has decided to take this on. I hope his committee will be able to conduct a thorough, expeditious inquiry. I know not what it will say, but I know that this particular scheme, however well intentioned, was certainly not well designed. However pure the motives, the results have been catastrophic; they would have been even more so had something not been done. As my noble friend said in his speech, we would have been talking of a sum in excess of £1 billion for a part of our country which I love dearly but is not the most populated part.

I share my noble friend Lord Empey’s faith and confidence in our Minister. He is a man of totally good intent and I hope that he will be able to come up with a solution that will persuade my noble friend not to press his amendment. I hope there is another solution to that.

I come back to one simple point. We are dealing with citizens of the United Kingdom who have been—maybe inadvertently, although I am not entirely sure of that—misled, who have made financial decisions, who have in some cases, in good faith, borrowed and been lent very large sums of money, and who now find their very livelihoods on the brink of collapse.

We have lamented time and again in recent debates, particularly last Tuesday when we were critical of the fast-tracking of Northern Ireland legislation, the fact that for over two years neither the Assembly nor the Executive have met. In all parts of your Lordships’ House, this is something that we deeply deplore. It means that, temporarily at least—I very much hope it is temporarily—a great weight of responsibility rests on our shoulders for the people of a much loved and, over the years, much troubled part of our United Kingdom. I hope we will be able to do them justice.

I hope above all that my noble friend the Minister, who is both determined and sensitive—we know that in this House—will be able to satisfy the points raised so admirably by my noble friend Lord Empey. I have great pleasure in supporting him.

Lord Rogan (UUP)

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My Lords, I find it interesting that I am addressing your Lordships this evening from these Benches.

Lord Cormack

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The noble Lord is very welcome to stay.

Lord Rogan

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I support the two amendments in my name and the name of my noble friend Lord Empey.

I have said this several times over the last two years and will continue to say it, but it is a matter of deep regret that we are debating this at all. Rather than in your Lordships’ House, it should be taking place in the Northern Ireland Assembly, with local representatives defending the Bill’s provisions rather than the Minister—much as we enjoy seeing a master at work.

Of course, the scandal surrounding the RHI scheme itself has much to do with why we are discussing the subject here rather than the MLAs debating it at Stormont. Noble Lords can argue about whether RHI was the principal reason Sinn Féin/IRA chose to collapse the Executive when Martin McGuinness resigned as Deputy First Minister. What is beyond dispute, however, is that the scheme has been a catastrophe. There must surely be consequences for those responsible for its many failings when Sir Patrick Coghlin and his excellent team produce their final report.

The RHI inquiry also exposed deep failings in the system of governance at Stormont, which must be addressed if the Assembly’s eventual resurrection—should that happen—is to be sustainable and lasting. One must live in hope if nothing else.

Baroness Harris of Richmond (LD)

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My Lords, I too thank the noble Lord, Lord Empey, for his powerfully persuasive speech, as the noble Lord, Lord Cormack, described it. This is a very complicated matter, as we all know. We are very happy to support his amendments.

We have been asked to pass the Bill virtually blind, as the noble Lord, Lord Empey, said. There has been no scrutiny whatever in the other place, and we know that this scheme was turned into a disaster by a mixture of incompetence and inappropriate political interference. Let us hope that this will be sorted out as soon as the Northern Ireland Affairs Committee gets down to business. Of course, I join in with all the praise for the Minister, whom we all greatly admire. We hope he will be able to consider this amendment and take it in, so that the other place has another chance to vote for it.

Lord Lexden (Con)

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My Lords, I strongly support this amendment, introduced so powerfully by my noble friend Lord Empey and supported so powerfully by my noble friend Lord Cormack and others. I expressed my general concern about the issue at Second Reading last week. By that time, I had received a few emails from deeply troubled farmers and small business men in Ulster. Since then, the trickle has become a flood of deeply worried people who accept that a reduction in grants is just and right, but seriously question the justice of the extent of the reductions to which they will be subject.

It is good news that the Northern Ireland Affairs Committee in the other place—I sometimes wish we had an equivalent body in this House—under its highly respected chairman, Dr Andrew Murrison, will be conducting a full investigation. This has given comfort to those from Ulster who have been in touch with us. It would be unfortunate, to say the least, if that inquiry, which is now under way with, I understand, every intention of its rapid completion, should be pre-empted by decisions taken in advance of it.

The noble Lord, Lord Empey, is a personal friend of mine. He is also deeply respected on all sides of our House as a wise, well-informed, moderate voice for the people of Ulster, and we should particularly bear in mind that he speaks too as a former Energy Minister in the Northern Ireland Executive.

Lord Hay of Ballyore (DUP)

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My Lords, I welcome the debate in Committee this afternoon. I wonder, as I listen to some—not all—of the speeches whether this is all about having a go at the Democratic Unionist Party, or perhaps because there is a local government election on the horizon. I say that very clearly. I wonder whether, in trying to resolve a serious situation, this is about politics more than anything else. At the outset, I thank the Minister for the many meetings we have had with him on this complex situation, as the noble Lord, Lord Empey, said.

The Minister will be aware of our deep concerns over the lack of proper scrutiny of these proposals; we have made him aware of that on several occasions. I said in the House last week that if people entered the RHI scheme in good faith and feel that they are now being treated unfairly, it is certainly not the fault of the people who entered the scheme. But, of course, we know that this situation has resulted from a decision by the European Commission on state aid rules; it is very clear on this. Maybe the Minister could clarify that the Commission has indicated that it is not in a position to approve a tariff that delivers a rate of return of higher than 12%. Can the Minister confirm that this is a way of putting this scheme on a strong legal footing? There are legal issues with this scheme. Certainly, the failure to go down the road of looking at a scheme with a rate higher than 12% would make the scheme illegal. That is an interesting point, which I would like the Minister to clarify as well.

I am certainly led to believe that the failure to agree this scheme would mean that payments would not be made to anybody, and the closure of the scheme. These issues deeply concern us, and certainly concern many of the people who bought into the scheme and who now feel very aggrieved—I can understand all that. However, the Minister tells us that if we do not go down this road of agreeing this scheme, there is no scheme, and if we agree the amendment in the name of the noble Lord, Lord Empey, it will make the scheme illegal. All these issues need to be clarified by the Minister.

I welcome the Northern Ireland Affairs Committee’s inquiry into the scheme; it will be interesting to see where it sits on this issue. I welcome the Secretary of State for Northern Ireland, who has undertaken to consider carefully any recommendations regarding the scheme from the Northern Ireland Affairs Committee. However, once again, we are told that this scheme must be approved by 1 April, because if it is not, nobody will be paid and there will be no scheme. There is therefore a conundrum here for all of us as we try to find a way through this difficult issue. When you are told about that information, and all that comes together, it is a conundrum. It is either this scheme or no scheme, and it is important that the Minister clarifies all those positions and issues when he winds up.

We are all getting emails and letters from individuals about the scheme and how they entered it, and so on. Will the Minister also undertake that he will investigate the cases of individuals who came to him directly, or who come to us and we pass on to him? That might help us to resolve some of these problems, because people are sending everyone emails—I think we have all received a number of them—but it is difficult to guide them to where they should go for further investigation. If the Minister could say that he and his department will take that on, it might be a way to get people who have deep concerns about the scheme to where they need to go for full investigation.

With the Northern Ireland Affairs Committee’s investigation going on as well, my problem is that if we wait until the committee’s report is published, it will be too late. The scheme must be operational by 1 April or no one will be paid and the scheme will be gone.

Lord McCrea of Magherafelt and Cookstown (DUP)

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Surely the Minister needs to clarify. Can he not find a legal way to keep the tariffs as they are until the Northern Ireland Affairs Select Committee has concluded its deliberations? It is difficult: this axe will fall because the date of 1 April has been set. Surely the Minister can find another way to fulfil his obligations to Europe but allow the present situation to continue until a proper investigation is concluded into this matter.

Lord Hay of Ballyore

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I was coming to that point. I know that the Minister is around this brief—he is around every brief, but this one in particular—because we have had so many meetings with him. I think my noble friend Lord McCrea is saying: yes, he can still do what needs to be done, but is there any way legally that might help us to move all this on? The issue is ensuring that whatever is done from here on is legal. Let us try to take the politics out of this, because this is too serious a situation to involve politics. Let us take the politics out of it, deal with this serious situation and try to find a way forward.

Lord Mackay of Clashfern (Con)

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My Lords, this is undoubtedly an extremely complicated situation, but I think the principle is that when a member of the public makes an investment in a government scheme, that member of the public is entitled to trust the terms on which the scheme was launched. Therefore there can be no doubt that those who invested in the scheme, relying on the Government’s statement of what was involved, are entitled to be protected by the Government from any failure on their part to meet the terms on which the scheme was set up. That rule applies to the United Kingdom Government, but also to the Governments of the devolved Administrations. That is the basic principle which cannot be set aside by any legislation that we may pass here, although the ultimate terms of the performance obligation are a matter that we cannot determine here, for various reasons that have been given. The principle seems to me absolutely clear and sound.

Lord Trimble (Con)

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My Lords, I think we have just heard a contribution that settles the issue to a large extent and indicates what should be done by the Government when the various reports become available. I say “the various reports” because there are two. There is the statutory inquiry conducted by Patrick Coghlin and the inquiry to be held by the Northern Ireland Affairs Select Committee. But there is no overlap here: the first looks to the past and how the scheme was framed and administered, whereas I hope the Northern Ireland Affairs Select Committee report will be more focused on the future and how one sorts out the problem beneficially for people. I am a bit worried to see the DUP nodding their heads at this stage; I will not say anything more in case I am accused of being political about the matter, which of course I am not.

The only other point I make is to thank the Government and the Chief Whip for giving us this evening to discuss this matter. It has been commented earlier, and on earlier legislation, that the way legislation is handled here during the regrettable absence of the Northern Ireland Assembly is not itself satisfactory. It was heart-warming to see the spontaneous revolt on the Floor of this House last week against the provisions to rush through this legislation in a way that would not have enabled us to discuss it in the way we have this evening. I am glad the Chief Whip listened and gave us the time, and I also thank the many noble Lords who have come in to listen to this discussion. That too is heart-warming for us.

Lord Maginnis of Drumglass (Ind UU)

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My Lords, I would be more than happy to be a signatory to the amendments, and I am particularly pleased that two of my Belfast-based colleagues are responsible for tabling them. Someone like me—representing, as I did for many years in the other place, the south-west of the Province of Northern Ireland—knows what it is like for farmers to find themselves misled and encouraged to participate in a scheme such as this. I am seeing this happen to those who were my constituents. We get some change and, like many, I have some hope that the Minister will have a means towards resolution.

I go back a long way in farming in Northern Ireland. Moy Park, which grew from very small beginnings, is now an internationally known farming enterprise. As a teenager—when Dungannon Park, as it was originally known, was establishing its breeding stock—I had the annual job of going to Dungannon Park and testing every single breeding stock for BWD. Members will not know what BWD is, but I will not go into the finer details. I saw Moy Park grow from small beginnings to the firm it is now. The people who helped it grow were the ordinary farmers, the people who have been misled.

Noble Lords will remember that last week I read on to the record the letter sent to the banks by the then Minister of Enterprise in Northern Ireland, which grandfathered—to use her word—the scheme that encouraged ordinary farmers to take out loans to be repaid over a five-year period. Remember that farms in Northern Ireland are small enterprises compared with farms in GB. That will now become impossible because of the reduction—I may not have these figures right—from £13,000 per burner per year to a mere £2,000. This new biomass scheme encouraged farmers to look to the future, to the son who would inherit their small farming enterprise and carry it forward as part of the backbone of the Northern Ireland economy.

I hope that noble Lords will look very carefully, not at the emotional dilemma that I face—noble Lords will understand why—but at the moral dilemma that the Government should face when they allow things to move forward without maintaining a firm hand on the tiller. In Northern Ireland, we have endured years of non-government by the Assembly, yet we find the money to keep that afloat when many of us believe that a more radical solution—a return to direct rule—is a way forward. When speaking here, we would feel that we had a direct influence on what the Government thought and did. Instead, I had what was intended to be a helpful briefing yesterday evening from the Northern Ireland Civil Service, the people who conspired—I should not use the word, but I will, for want of a better one—with the Minister in charge of this scheme to bring forward what has proved to be a flawed scheme. I do not believe that there can be any moral justification whatever in leaving Northern Ireland’s farmers to carry the can for that error.

I hope that the Minister will address how the Civil Service can be allowed to concoct something that perhaps frees it from an inquest into its behaviour and, at the same time, leaves our farming industry in a dilemma which I fear it will be difficult for it—and impossible for some—to survive.

Lord McCrea of Magherafelt and Cookstown

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I feel that some facts need to be stated. No one in the political establishment in Northern Ireland comes out with any glory whatever from the RHI scheme. I remind Members that the Northern Ireland Executive, who represented a large range of political parties, passed this scheme unanimously. The Northern Ireland Affairs Committee, which scrutinised this scheme from the Northern Ireland Assembly, passed it and so gave its backing to the scheme. The idea that somehow one person or one Minister decided on the scheme is not factually correct. It was the Northern Ireland Executive who passed the scheme, and they include the range of major political parties in Northern Ireland.

The heart of the scheme was a good one, because—as it says in the title—it was an incentive scheme. No one will be surprised to hear that those who entered into the scheme were being granted an incentive to do so, and found that incentive attractive. For many of them, things have turned out to be very different, but they entered into the scheme in good faith. I too have received a number of emails because, like the noble Lord, Lord Maginnis, I was a Member of another place, in my case representing for 25 years Mid Ulster and South Antrim, both of which have large farming communities. I am also a farmer’s son and own land—I declare that interest; however, I point out that I have nothing to do with the scheme. We ought to await the report of the public inquiry into the overall scheme. Irrespective of who may be identified as having made mistakes in the development of the scheme, the vast majority of participants did not. It may be that a few abused the scheme, and no one in your Lordships’ House can justify anyone abusing such a scheme, but I reiterate that the vast majority of those who entered into it were hard-working, honourable people, who now face uncertainty at a time of tremendous economic challenges.

I know there are those who seek to point fingers. However, as the noble Lord, Lord Trimble, indicated, we should move forward to see how we can assist at this time. It should be said of this scheme, because it seems to have been obliterated from the record, that the then Minister at the Department of Agriculture—now the leader of Sinn Féin in Northern Ireland—sent officials around Northern Ireland to have clinics and meet farmers to encourage them to get into the scheme. That ought to be put on the record. There are those who seem to forget that involvement in encouraging people to take up the scheme.

I am deeply saddened that, in the light of the proper inquiry launched by the Northern Ireland Affairs Committee, the Government have stated that they cannot delay making changes to the present tariff until the inquiry is completed.

We also need to find out, in detail, information concerning the tariffs in operation in the scheme in England and the proposed tariffs for a scheme in the Irish Republic. Remember, these are all under EU rules, and therefore we need to ensure that the participants in the scheme in Northern Ireland—who are not only farmers—are not disadvantaged compared to the rest of the United Kingdom, especially England, or the Irish Republic.

It is a sad reality that this has been tagged on to the end of a rates Bill. That causes anxiety, because it means there is no appropriate and proper scrutiny of this situation. No stone should be left unturned in finding the appropriate way forward so we can ensure that, under the present EU rules, Northern Ireland participants in the renewable heating scheme are not treated less favourably than anyone in the Irish Republic or in England.

In closing, I want to ask the Minister these simple questions. Is it definite that the Government have no legal way to continue the present tariff until the Public Affairs Select Committee concludes its work and issues its finding? That, in my opinion, would have been a decent and honourable thing to do.

If these proposals are not actioned, and no matter how the Members of this House might feel, is it a fact that on 1 April the participants in the scheme will cease to receive any payments under the RHI scheme? Can the Minister give a cast-iron guarantee that, should the Northern Ireland Affairs Select Committee identify an injustice under EU state aid rules between what operates in England and what is proposed in the Irish Republic, the Government will immediately rectify that situation and remove that injustice, with repayments being made accordingly?

Can the Minister give further details of the proposed buyout scheme for those who feel trapped and are unable to continue in the renewable heat incentive scheme because of the major drop in tariffs being paid to them? Will the amount offered under such a scheme be sufficient for farmers to get out of the scheme and not face financial hardship?

I feel that there are many questions still unanswered. I trust that the Minister will be able to clarify some of them, because they are very important. I agree with noble Lords that there are people who are genuinely hurting through no fault of their own. They should not be left to pay the penalty.

Lord Kilclooney (CB)

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My Lords, I support the amendments and, as I said during Second Reading, I feel inclined to oppose the Government on this Bill.

The position we are in has arisen due to people having been somewhat misled, as the noble and learned Lord, Lord Mackay, said. They were given guarantees by government that are now not being honoured. People feel very aggrieved about that, and not just farmers. Someone said that it was an act of faith, and I notice that some gospel halls were also involved in this heating scheme. They feel aggrieved because there is no Assembly, as Sinn Féin, the DUP, the Ulster Unionists and other parties have not reached an agreement about an Assembly. This is a devolved matter, and we are debating it here in this Chamber because the other opportunities have come and gone. The Stormont Assembly failed.

The other place did not make a decision favourable to those involved in the scheme. Those who now feel aggrieved—there are thousands of them—and who will be hit financially very hard are holding up the House of Lords as the last place in which they might be rescued. Therefore, this is a very serious matter for this Chamber.

As the noble Lord, Lord McCrea, said, there is a deadline of 1 April. The European Commission ruled that the present scheme was contrary to the European Union’s state aid rules, and therefore—I do not like saying this phrase in relation to Northern Ireland—we basically have a gun to our head. We have to reach a decision. It has been suggested that there will be an interesting report from the Northern Ireland Affairs Committee in the other place. I keep asking myself: is it far too late for that committee to discuss this matter? This issue has been going on for well over a year. At this late moment, the Northern Ireland Affairs Committee will eventually—I am told promptly—consider this subject.

There is great praise for the Minister, and deservedly so. He is embarrassed by the praise that he gets from Northern Ireland, but he takes a genuine interest in our problems across the entire community. My question to him is this: since we have a deadline of 1 April from the European Commission, should the Northern Ireland Affairs Committee come out with different proposals in a month or two, will it be possible to rescue this scheme and save the farmers and the other people who are suffering as a result of doing what the Government asked them to do?

Lord Browne of Belmont (DUP)

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My Lords, I said at Second Reading that this legislation is controversial and far-reaching. We all know it is regrettable that there is a lack of scrutiny. The legislation is extremely complicated and, indeed, was flawed from the outset. People genuinely entered into the scheme in good faith; they deserve to be treated fairly so that they do not suffer hardship.

However, we have to pay attention to the legalities of all this. The tariffs in the Northern Ireland (Regional Rates and Energy) Act 2018 are sunsetted. Therefore, if this Bill does not pass today, the department will have no legal authority to make payments in respect of boilers accredited under the scheme before 18 November 2015—some 1,800 boilers are, I believe, involved. So there are legal aspects to this that we must pay attention to. The other thing is that an independent review—the Ricardo report—said quite clearly that, under European Commission state aid rules, we had to stick to a rate of return of 12%. Can the Minister confirm that the base case tariffs or a compulsory buy-out have to be compliant with European state aid rules?

I can be brief—I think my other points have been made—but I hope that noble Lords will pay attention to the legalities involved in this scheme. We do not want anyone to suffer hardship, but we have to be very careful that these payments can be made. If we stop them there will be more suffering.

Lord Murphy of Torfaen (Lab)

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My Lords, I support the amendments in the names of my noble friends Lord Empey and Lord Rogan. I call them both my noble friends of over 20 years, despite the eccentric seating in place today.

This is a sorry business, all of it—a terrible mess. The whole situation in Northern Ireland for the last two years started with the collapse of this appallingly planned scheme. We cannot get away from that. Sir Patrick Coughlin is currently conducting an inquiry into the scheme, the courts are ready to pounce and the Northern Ireland Affairs Select Committee has been asked to look at it as well. The difficulties go back to the way the legislation first came to us. There should not have been a Bill that, on the one hand, decided the regional rate in Northern Ireland and, on the other, decided the details of the RHI.

Equally wrong was the length of time taken by the department in Northern Ireland to deal with its consultation process. As a result, apparently, all the details that we need to consider for the Bill did not arrive until January, even though it was known full well that the previous Bill put forward was sunsetted to end at the end of March. This meant there would be totally inadequate scrutiny of the Bill by Parliament. What is done is done, but it means that we are in a mess. The noble and learned Lord, Lord Mackay, referred quite rightly to the fact that some of the people who, in good faith and on the advice of the Government, went to their banks and decided to take out loans to deal with this issue are now in a terrible mess. What happens to them? The Government are in a dilemma—partly one of their own making, because of what I have just referred to with respect to process.

If we do not pass the Bill, there will be no regional rate in Northern Ireland and the scheme will collapse, so people who are currently benefiting from it, in whatever sense, will not have any money to deal with it. At the same time, in the other place, the Secretary of State welcomed the Select Committee on Northern Ireland looking at it. Perhaps she did not realise that, under the circumstances of the Bill, it would have just under two weeks to consider it, which of course is impossible.

The Government and the Minister in particular, who has been rightly praised by all sides of the House on this and other issues, have to come up with a solution that will satisfy my noble friends Lord Empey and Lord Rogan, and the rest of us, about what can be done. They to ensure that the rates are collected and that the scheme does not collapse but, at the same time, looks after the people who took part in this scheme in good faith. There may well be ways the department could look sympathetically at cases in Northern Ireland. There may also be a way, although I cannot see what it would be at the moment, for the Northern Ireland Affairs Select Committee’s recommendations to be taken into account after the legislation has been improved, unless further primary legislation could be brought before this House to amend the Bill we are considering—it may come to that.

A general point has to be made: so long as there is no devolution in Northern Ireland, with no Assembly or Executive, we cannot have Northern Ireland legislation coming to us in bits or as emergency legislation that denies proper scrutiny. The dilemma that all of us, and the Government in particular, are in today results from the fact that the business managers have not taken Northern Ireland legislation seriously. That has to change, until such time when the institutions are revived in Northern Ireland, which I hope will not be that long away.

These Benches will support a Division, if my noble friend Lord Empey calls one. I hope that can be avoided with what the Minister is about to tell us, because we want to ensure that the legislation goes ahead. However, we also want to ensure that the hundreds of people in Northern Ireland who are now in a sorry state because of this RHI can be dealt with in a proper, decent, humane manner.

The Parliamentary Under-Secretary of State, Northern Ireland Office and Scotland Office (Lord Duncan of Springbank) (Con)

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My Lords, I will begin in a slightly eccentric way. I have to make a correction of one of my earlier statements. In the debate last week, I stated that,

“the scheme in Great Britain is a 20-year scheme, whereas that anticipated in Northern Ireland is a 15-year scheme”.—[Official Report, 12/3/19; col. 1009.]

Noble Lords will no doubt realise that I meant to say that the anticipated scheme in the Republic of Ireland, not Northern Ireland, is a 15-year scheme.

That was the easy bit. I will see what I can do to take us forward. Let me begin at the beginning. All the points made by noble Lords this evening on the amount of time and the manner in which scrutiny has been facilitated in this House have landed, and landed well. It is not acceptable that this House is treated like a rubber ball to be bounced gently into some sort of decision. I accept that. It should not happen. There needs to be proper scrutiny in this House and in the other place—now more than ever, in the absence of an Executive.

On combining the two elements of the Bill—namely, the regional rates and the heating incentive—there is no doubt that they do not fit comfortably together. There is also no doubt that, depending on your Lordships’ will this evening, the situation regarding the heating incentive will have an impact on the regional rates. These rates remain an important element of the overriding Northern Ireland budget. That combination was a mistake and I do not think we should ever find ourselves in a situation with two elements which clearly do not fit comfortably together. I need to reflect on that. There should be opportunities for this House to look at them separately and, where appropriate, give endorsement to that which it seeks to endorse, and criticism and understanding to that which requires further work.

Lord Maginnis of Drumglass

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I apologise for interrupting the Minister. In reference to the mistake he just alluded to, would I be right in saying that this was not a mistake but a tactic which emanates from the Northern Ireland Office and which, despite the good offices of the noble Lord and others, has landed us in this situation?

Lord Duncan of Springbank

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The noble Lord makes an interesting point. Unfortunately, I will not comment on it at this particular moment. The reason the noble Lord, Lord Empey, and I seemed to be scrambling to get in here at the beginning of this debate was because we were sitting next door trying to work out how we could find a way through some of the challenges encountered this evening. I am blessed that he managed to find his way to his place and that I did too.

Lord Lexden

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When did the European Commission’s limit of 12% become known?

Lord Duncan of Springbank

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Interestingly enough, this was always known; it was just never fully understood or applied. What the Government here have sought to understand is exactly what information the Northern Ireland Executive has been in receipt of. We have been very clear about pinning that down, because the 12% was always there; it was simply not used correctly, which allowed it to spiral massively, up to and in excess of 50%. We have had sight of correspondence from the European Commissioner that tells us very clearly that, were we to maintain the rate as it stands, we would be in breach of state aid rules. Civil servants in Northern Ireland—noble and diligent as they are—cannot move forward on the basis of an illegal rate. That is why we find ourselves where we are today.

I will touch on a couple of points made by the noble Lord, Lord Empey. He notes that this proposal really covers the medium-sized boilers. He is correct that it does not affect the larger boilers or the micro boilers. These matters were to be considered after we had settled this question, which covers the bulk of boilers in Northern Ireland. That said, the issue is a very simple one, and the noble Lord, Lord Cormack, put it very well: it is fairness, justice and equity. That is the issue we need to address tonight.

There is no question that the individuals who have emailed us, setting out their case and their distress in black and white, must get an adequate response. I am hopeful that I can put forward a proposal to the noble Lord, Lord Empey, and the noble Lord, Lord Rogan, that will help us move this matter forward, but your Lordships must be more of a judge of that than I am. My proposal is that the Department for the Economy in Northern Ireland—not on our instruction but because it believes it to be the right course of action—sets up a unit within the department, under independent chairmanship, that will be responsible for examining the case of every individual who has received funds from the RHI initiative and believes that they have experienced hardship. I propose that each element of their case is considered in thorough detail and with their participation, in order to understand exactly what that hardship looks like.

As a consequence of that, and with the Northern Ireland Affairs Committee inquiry running alongside that, those two elements should together help inform the part of the Bill that covers the issue of the voluntary buy-out. Currently, the voluntary buy-out is more or less a statement that lacks mechanical details. If we construct the buy-out to adequately and appropriately meet the needs of the farmers who rest within it, it could be adjusted in accordance with these elements. At the same time—and necessarily—the Northern Ireland Affairs Committee will consider future issues, and this should inform the overall functioning of this—not just the buy-out but the wider questions that rest within it.

Now, I will not try to sell your Lordships a pig in a poke, so what I will need to do to make this function properly is lay a written report before your Lordships’ House, so that your Lordships can see what this would look like in practice. There is no point in pretending that this can be achieved in a fortnight—there are too many cases that need a thorough and detailed examination. The point is, however, that we need to be in a situation where the compensation element is adequate and informed by these elements. If we can move forward on that basis, we can go some of the way towards meeting the issues raised by the noble Lord, Lord Empey.

Lord Cormack

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My noble friend is obviously trying very hard to be helpful, for which we are grateful. Would it be possible, on Third Reading, to add a short schedule to the Bill that would refer to this proposal?

Lord Duncan of Springbank

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I always like to be asked a question, and I turn my eye gently and think: I have no idea of the answer to that. I will, however, find out the answer and report back to the noble Lord in real time as soon as it is available.

The reason that I am putting this proposal before your Lordships’ House tonight is because it would be unfair to pretend that we can treat all those individuals as an average; we need to see each in their own terms, understand how their world fits together and how this invidious scheme has been constructed to their detriment. It is unfair of this or any Government to expect those acting in good faith to be penalised for that. We must also be cognisant of the draw on the public purse—there is no point pretending that there is a bottomless pit of money for our approach to this matter. The noble Lord and I have, however, had discussions about what moneys might be required.

It says here, “No to bringing back on Third Reading”. I am afraid, therefore, that the answer to the question from the noble Lord, Lord Cormack, is no. I can, however, put on record that we will need to understand the timing of this to be able to deliver it—without the timing there is a risk it will drift into the long grass. I give an assurance that we will be able to—

Baroness Harris of Richmond

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While the Minister is looking at that for Third Reading, can he also indicate how much will probably need to be put aside for this independent review?

Lord Duncan of Springbank

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The noble Baroness asks a question to which I once again do not have an adequate answer, but I think that it would be fair to say that appropriate funds must be set aside to address these issues. That might seem a vague assertion, but it need not be. I recognise that, where those hardships have been iterated and are evidence based, there should be support for the individuals concerned. I am afraid that I do not know what the overall sum would be; I know that the sum set aside under current arrangements is £4 million. Clearly, if there are to be adjustments to those arrangements, there will need to be adjustments to that figure, and I suspect that they would be in the upward and not the downward direction. As to the exact figure, I am afraid that I do not have that information. If I am to report back to the House in a Written Statement, I think that I will be able to put the figure to the House very clearly, because, by that stage, we would know exactly what this looked like.

I do not know whether that satisfies the noble Lord, who is sitting on the friendly Benches behind me, but I hope that it is. I hope that both he and the wider community recognise that we are seeking to ensure that we make progress.

A number of noble Lords have raised the issue about what happens with the grandfathering clause. The grandfathering clause of 1 April creates serious problems for us. Moving forward on that basis would mean that we were unable to ensure the functioning of the scheme full stop, let alone at any rate which noble Lords might wish to see or set. In addition, as we see the scheme moving forward, we need to make sure that it is fully compliant with the base of the law. We have also to recognise that expecting civil servants in Northern Ireland to act in a fashion which they know to be illegal is simply not possible nor a fair request of that service. It is for those reasons—and I am loath to say it—that we must move forward within the basic structure and parameters of the Bill but allow for the adjustments that I have outlined, which I believe will take us some way to address the genuine hardships which have been reflected to all here gathered.

Lord Maginnis of Drumglass

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I apologise for interrupting the Minister again, but will not his solution lead to a divide-and-conquer situation? Do we have any idea of how many individuals will require to give evidence, what the length of time will be and whether that will again be manipulated to take us out of the time limits that have been placed on us?

Lord Duncan of Springbank

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The noble Lord is correct to ask about the parameters. I cannot say with accuracy what the exact numbers are. I am aware of how many emails I have received—that number is 75—but I suspect that there are many more. I am not sure whether we are all copied into the same 75, so there may be considerably more even within this round, but there are a significant number. There will be those whose participation in the scheme is not subject to the various issues which we are taking forward today because they are functionally comfortable within the returns that they have been able to expect, but there will be those—the 75 may be a reflection of that figure, but it could be higher—who find themselves in the invidious and unpleasant position of being in financial constraint and hardship as a consequence of simply being faithful to the guidance given by Ministers and civil servants in Northern Ireland. It is to those we must turn our attention.

As many noble Lords will be aware, the scheme was such that there will no doubt be participants who have sought to benefit from a remarkably generous scheme. To those, the notion of hardship will not necessarily apply in the way that it does to those who have written to us setting out in some detail the pain and disaster they face as a consequence of this situation. I hope that there will be adequate time for this. We need to ensure that we move in a more appropriate fashion; we cannot allow this to be delayed.

Lord McCrea of Magherafelt and Cookstown

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Can the Minister clarify the position on a question which I asked? Should the Northern Ireland Affairs Select Committee find that an injustice or inequality has been done, given the tariffs received by those in England or those in the Irish Republic under the state aid rules, will the department ensure that that will be rectified immediately and further repayment made accordingly?

Lord Duncan of Springbank

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One of the challenges in trying to compare the schemes across these islands is that a like-for-like comparison of the various elements is hard. However, the rate of 12% is broadly the constraint within which all must operate, because that is the state aid rule. Were the NIAC to discover a particular inequity which breaches beyond that point, they would be compelled to act in that regard. However, the 12% being applicable to all should mean that there is fairness. The noble Lord should be aware that, because the earlier scheme in Northern Ireland set its returns at such an extraordinary rate—upwards of 50% —the challenge remains that any adjustment thereafter down to 12% on the basis of averages would take that 12% higher than it would otherwise be, had it been 12% at the outset. I do not wish to make any particular point about that issue, I merely note that the challenge is now to remain within the law as specified by the European state aid rules.

Lord Kilclooney

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One of the problems with the Bill, which has already been underlined during the debate, and which the Minister has been honest enough to state himself, is that it is wrong to link rates—which is council tax in England—with this heating scheme. They are two totally separate subjects and should not be in one Bill. Should the Bill be rejected, would it then be possible to introduce urgent legislation for rates only?

Lord Duncan of Springbank

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The noble Lord is right to raise that. I dearly hope that we do not reject the Bill now because, even if we were to act with a certain degree of urgency, it would still be a delay to what we need to deliver in terms of the rates themselves. If we are unable to address the rates question in real time, we are talking about a substantial loss to the revenue of Northern Ireland.

I hope that noble Lords will recognise that the endeavours this evening have been solely for the purpose of trying to address the genuine hardships experienced by those in the scheme. The purpose of the Bill is to make sure that nobody is considered to be part of an average and that each individual is seen as such. That data will then be used to inform the development of an appropriate element of the overall bill which will then be determined and placed before noble Lords in written form, so they can see it. There is no attempt on my part to mislead the Committee or to sell noble Lords something in a poke that you cannot put your hand into.

I hope that this is adequate for my noble friend Lord Empey. I know how much effort he, and all the Northern Ireland Peers, have rightly put into this matter. It concerns them on their doorstep, but it concerns all of us in these islands. Equity, fairness and justice must be the cornerstone of any Government. I hope that we have been able to reflect this evening on what this Government can do, within the constraints of state aid rules and the wider timing question. I hope that, on that basis, the noble Lord will be able to withdraw the amendment.

Lord Empey

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My Lords, I am grateful to the Minister for his contribution. I also thank the noble Lord, Lord Murphy, from the Labour Party, and the Liberal Democrat Benches, for supporting these amendments alongside other colleagues on this side of the House. I just want to repeat my interpretation of what I think the Minister is saying, because if you withdraw amendments at a point such as this, it is your last throw of the dice and you lose control of the whole process.

First of all, the Minister is not in control of the Northern Ireland Department for the Economy; that is a fact. Therefore, in the Budget, £4 million was set aside in each of the next three financial years to deal with the buyback or buyout scheme. If that was simply looking at the individual burner in isolation, I could understand why such a sum of money might be payable. But, of course, many users used the profit on the boiler, perfectly legitimately, to lever out additional borrowing to do other things. The point that my noble and learned friend Lord Mackay of Clashfern has made all along is perfectly true: there is a moral issue. There is also, of course, a legal issue, but that will follow its proper course.

If I recall correctly, the facts, according to the Minister, are these. One point I understood him to make is that, as of 1 April, there is no ability for the state to pay subventions for these boilers—the point made, I believe, by the noble Lord, Lord Browne of Belmont. On the European issue, I would argue that the scheme has been ultra vires state aid for a long time, not just now. It has been wrong from the very beginning, when payments in excess of a 12% return were made. As my noble friend Lord Lexden said, the 12% figure was set in the original letter in 2012 by the European Commission, approving the scheme in the first place. From that point, the 12% was always there but, of course, it went astray.

Let us get back to the point of fairness, justice and equity, because that is the key to all of this. We want to ensure that people get fairness, justice and equity, bearing in mind that the taxpayer has a big stake in this as well. Originally, a compensation or buyout scheme was planned. This is my interpretation of what the Minister is saying; if he disagrees with anything, perhaps he will let me know. He is saying that the status of that group will be upgraded to the point where it will not be an internal issue within the department but will be chaired by an independent, outside person who is not a member of the Northern Ireland Civil Service. He is saying that he will put forward, in writing to this House a Statement setting out the terms of reference. The question I need to ask him is: how does he do this when he is not in charge of the department? At the end of the day, my anxiety is that if we let the thing go, it will slither away, and somebody somewhere will say, “Well, I’m not doing that. The Minister can give an undertaking to the House of Lords, but he doesn’t rule me”. There is a genuine opportunity here to ensure that what is taken into consideration is not only the cost of the boilers versus the revenue that they would now be getting, but the leverage they used to ensure that the borrowings they undertook for further activities on the strength of that. That is the key issue, which was missing—if I may say so—from the original suggestions.

Can the Minister confirm those two points? Can he also reiterate for our benefit the answer that he gave—either to the noble Lord, Lord Browne, or the noble Lord, Lord McCrea of Magherafelt and Cookstown—about the legality and so on? I do not worry about the state aid issue because, in my view, we have been wrong on that from the very beginning, and it has gone on for years without any legitimacy. But could he just clarify those points before I conclude?

Lord Duncan of Springbank

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My Lords, I thank the noble Lord for affording me the opportunity to make some points of clarification. He is absolutely right to say that I am not in charge of that department. My comments are based on conversations earlier today with senior officials in the department. I cannot instruct them, but the discussions led to that proposal, which I believe would be a step forward for noble Lords this afternoon and this evening, on that basis—not my instruction but rather an acceptance on their part that this would be the right way to move this aspect forward. On the terms of reference, yes, these need to be very clearly understood. Financial hardship must be understood in all its manifest forms and I believe it would be incumbent on all those who are investigating and considering to ensure that all aspects of financial hardship, whatever their source or their cause, are examined in detail to ensure that there is a fair and equitable understanding of the situation. So I think the answer to that is yes.

As for what happens on 1 April if we have not made progress, it is very simple: we will not be able to move forward on this scheme, because as a number of noble Lords noted, we have grandfathered in the clause to end on 1 April. At that point, irrespective of our desire to be able to offer or afford support, without the legal underpinnings we will not be able to do so.

On state aid, there has clearly been a kerfuffle, for want of a better word, in Northern Ireland over what that rate should be, but the one thing that has been clear throughout is that the European Union Commission has had no dubiety about what it should be: it has been very clear that it should be 12%. That this has been, one might argue, misinterpreted by certain individuals in the Province is the reason we are having this wider discussion tonight and why there is a particular scandal being investigated across in Northern Ireland. None the less, we are still bound by that rule—namely, state aid at 12% return—and we cannot move away from that.

I hope those points of clarification help the noble Lord to move forward.

Lord Mackay of Clashfern

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I should like to be absolutely certain that there is nothing in the Bill that damages any legal right that people had in Northern Ireland as a result of dependence on the action of the Northern Irish Government taken on behalf of that Government by authorised officials or Ministers. Because that is the fundamental matter: if that is not affected by the Bill, the way in which matters should be brought forward to encourage that is perfectly reasonable as a way forward. The fundamental point is that the legal rights of those who may have been damaged by their contract with the Northern Irish Government, through Minister or official, would not be touched.

Lord Duncan of Springbank

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My noble and learned friend makes a useful point. I can happily confirm that this will not affect the legal rights or standing of any of those who have been affected by the scheme thus far.

Lord Empey

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I thank the Minister for those points of clarification. He will be aware that everybody who spoke in this debate was basically on the same page: we want to help these boiler operators and owners. We want, as he put it, fairness, justice and equity. I have to say to him that if we accept these assurances—if I withdraw the amendment—and we were to find subsequently that these conditions were not being honoured, in spirit as well as in letter, there would be a great deal of anxiety and angst in this Chamber. The Minister needs to be very clear about that, because there are more people in this room tonight than I have seen here on a Northern Ireland issue for years. He knows, and his colleagues in the Northern Ireland Office and in the Department for the Economy who are watching this know. I had the honour to be Minister for the two departments that were merged into this department, so, to coin a phrase, I know who they are and I know where they live.

We are talking about the livelihoods of good, honest, decent people and it is the will of this House to see that justice, equity and fairness is delivered to those people. If there is any variation or moving away from that, there will be a lot of very angry parliamentarians. On that basis, I beg leave to withdraw the amendment.

Viscount Younger of Leckie (Con)

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My Lords, it may assist the House if I say a word about the further stages today of the Northern Ireland (Regional Rates and Energy) (No. 2) Bill. We are about to move the Motion that the Report be now received. From that point, the Public Bill Office will immediately be accepting amendments ahead of Third Reading, and will do so for the next 30 minutes. There will then be a further 30 minutes before Third Reading begins. We are about to move on to two repeated Urgent Questions. I anticipate that the House will need to adjourn during pleasure after the second repeated Urgent Question. We will not resume before 7.01 pm; that is, 60 minutes from now. Timings will be displayed on the annunciators.

Lord Duncan of Springbank

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That the Bill do now pass.

Lord Cormack (Con)

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My Lords, I want to speak very briefly to reiterate something that we said last week at Second Reading and touched on again earlier this evening in Committee. When there is no Northern Ireland Executive and no Assembly in session, it is quite wrong for Bills touching the lives of virtually every citizen in Northern Ireland to be disposed of so unnecessarily quickly in this House. I know my noble friend has some sympathy with this point of view—if I may say so, he was magnificent in Committee. I would be grateful if he discussed it yet again with the powers that be through the usual channels. I am delighted to have seen the most senior representative of the usual channels, take a place—not his place—while I have been speaking.

There is one other point I would like to make. At Second Reading last week, my noble friend said that he would try to come back when we were dealing with the Bill today with any further information on the plea that many of us have made for the Assembly to be called into being and on the desirability—which I think we all share—of having some mediator figure to convene the various parties in Northern Ireland. It is now well over two years since we had an Executive or an Assembly. People in Northern Ireland have been short-changed by their politicians.

It is also deeply unfortunate that, when the real stumbling block over Brexit has been the border, we have had no opportunity to hear what the politicians elected to the Assembly in Northern Ireland think or for them to put anything into the debate. Although none of us knows whether this would have made any significant difference, given the fact that 56% of Northern Ireland voted to remain in the European Union and none of the elected representatives in the Westminster Parliament take that view, it would have been an opportunity that might just conceivably have produced some interesting ideas. So for every possible reason—and I am glad to see the noble Lord, Lord Murphy, nodding assent—I hope, as we all do, that we have an Assembly and Executive in being before long; but that we devote more time in this Chamber, where so much responsibility does and should lie, in the absence of a devolved Administration. I look forward to my noble friend’s response in due course.

Lord Bruce of Bennachie (LD)

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My Lords, like other Members, I was somewhat compromised by the early business and not able to be here in time for the start of it. I do not wish to repeat the debate. I want to show appreciation for the amendment in the name of the noble Lord, Lord Empey; the fact I was not able to speak to it was for no reason other than that, although I supported it, I wanted to observe the courtesies of the House—which I noticed not every other noble Lord did.

In those circumstances, I want to say two or three things. First, this Bill presents this Chamber with a choice between a rock and a hard place. Most of us are, I think, very unhappy about the fact that rates and the renewable heat incentive scheme were lumped together in the Bill. While the Minister did not acknowledge that that was a tactic, he did say it was something he did not approve of and hoped would not happen again.

My second concern is that we were faced with the situation—it probably determined why the noble Lord, Lord Empey, withdrew his amendment—that if we passed the amendment, there was a danger people would receive no payment on 1 April, which is a consideration. At this stage, it is important to acknowledge that the Minister has clearly presented a constructive compromise—but, as the noble Lord, Lord Empey, pointed out, one he does not have the authority to guarantee. The House has accepted that in good faith but with real concerns as to where it might lead us. Had we supported the amendment from the noble Lord, Lord Empey, the consequences might have been difficult.

Like most other Members, I have received emails from a number of different businesses across Northern Ireland—not all of them farmers—expressing their angst and concern. I have engaged with them, responded to the emails and forwarded them all to the Minister. I do not need to repeat it, but we need to acknowledge that we are passing a Bill that effectively—how can I put this?—gives authority to the denial of ministerial responsibility for giving guarantees and assurances on which people relied and on which they have been betrayed. I am not comfortable with giving a Bill that does that a Third Reading, and I do not think your Lordships should be either.

The thought that has occurred to me throughout the whole process around the renewable heat incentive scheme is this: the 12% return was known from the beginning, as the Minister acknowledged. I find it difficult, if not impossible, to believe that on two separate occasions the Northern Ireland Executive introduced tariffs which could not conceivably have come close to representing a 12% return on the investment and which were, as anybody providing any objective analysis would very quickly have observed, in breach. That raises the most fundamental questions of propriety, honesty and integrity, of both politicians and, I am afraid, civil servants too. My instincts, however, are that civil servants did not understand what they should have, but I do not think that lets them off the hook.

People will look for a price to be paid, and the two prices to be paid are these. First, will the people who genuinely relied on this and suffered get compensation? Secondly, in the process of doing that, are we in danger of compensating people who took advantage of the system and who could get an extra twist out of it? That, I suggest to the Minister, is something that we need to avoid.

Having said all that, we have no choice but to pass this Bill tonight. However, we should record that it is being passed under duress, at speed, without adequate consultation and with consequences to follow both in the courts and in the political arena that will probably haunt Northern Ireland for many years to come.

The Parliamentary Under-Secretary of State, Northern Ireland Office and Scotland Office (Lord Duncan of Springbank) (Con)

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My Lords, perhaps I may touch upon the remarks of my noble friend Lord Cormack. My team will reach out to him very shortly on the question of the Assembly and what we might well be able to do to go forward. There is no doubt that there are lost voices in Northern Ireland. Perhaps now more than ever those voices would have been appreciated and might well have been instructive, and they must be heard. I will return to my noble friend in the next few days, I hope, but certainly very soon.

The noble Lord, Lord Bruce, and my noble friend Lord Cormack talked about the notion of being bounced into this situation. In the absence of a Northern Ireland Executive, we must ensure adequate scrutiny in this place and the other place of issues that have a significant impact on the lives and livelihoods of the people of Northern Ireland. Of that, there is no doubt. We must ensure that we, the Government, do better at allowing for that scrutiny and at allowing time for questions to be asked. I fully appreciate that. I accept every point that has been made. I will take them away and do all that I can to change the way in which we do business, which is inadequate for this moment and for the times that we are in.

As the noble Lord, Lord Bruce, pointed out, we are between a rock and a hard place—between a deadline and a necessity. We are between the hardships that we have witnessed through the emails and letters that we have received, and the reality of the challenge of an impending grandfather clause that would place everyone else who is in that situation in a far worse predicament. Therefore, I accept again that this is ill timed.

The noble Lord, Lord Bruce, is right to point out that I cannot give a guarantee on behalf of the Northern Ireland Executive—I am not equipped to do so, constitutionally speaking—but I could not in good faith return to this House if I were not able to live up to the statement that I have made today. I hope that noble Lords will accept that statement and the intent with which it has been given. I hope they will recognise that it has been given on my word of honour, and I will not come back here unless we can live up to the statements that I have made.

Today, as in every situation when we look at Northern Ireland, we have to tread as carefully as we can. On one hand, we are bound by state aid rules, which place upon us a responsibility. On the other, we are bound by the realities faced by many individuals who have written to us about the hardship they are experiencing. I hope that the noble Lord, Lord Empey, who is now in his correct place, will recognise that his efforts and labours on behalf of those individuals have been well landed and well understood. I also hope that, on the basis of the withdrawal of his amendment and my promissory note about what we can do, we will be able to move forward to achieve that fairness, equity and, ultimately, justice.