Northern Ireland (Regional Rates and Energy) (No. 2) Bill

Andrew Murrison Excerpts

2nd reading: House of Commons
Wednesday 6th March 2019 Commons Chamber

[Dr Andrew Murrison (South West Wiltshire) (Con)]

These are unusual times for Northern Ireland and this is an unusual Bill. It is difficult to avoid the conclusion that what we have today is something of an essay crisis; that is to say, something presented as being urgent and in need of consideration by the House in one day that could in fact easily have been considered more electively.

It has been said that we should decouple the two elements of the Bill. In truth, most of the Bill relates to the renewable heat incentive. The regional rate issue is largely unobjectionable and would pass with the greatest of ease through the House on a bipartisan basis, but we have to accept that politically the renewable heat incentive is an extremely toxic issue. After all, it has brought us to the sorry pass that we are currently in, with the collapse of the Executive and the Assembly. It is absolutely central to the political chaos that currently afflicts Northern Ireland and that is adversely impacting on the lived experience of people in Northern Ireland, so it demands that we look at the legislation closely and in a considered and measured fashion, of the sort that usually involves a proper Committee stage. That is not being offered on this occasion. I share the surprise expressed by the hon. Member for Rochdale (Tony Lloyd) that these two completely different issues have been conjoined in this rather unusual Bill. I have sympathy with his suggestion that the two might be separated so that we can pass that which is unobjectionable and straightforward and consider on a more elective basis those bits—those clauses—that are more complicated.

A 12% return is pretty good by any standards. A casual observer of our proceedings would wonder, I suspect, what the fuss is all about—I would love to have a 12% return on my investments—but the fact of the matter is that those small businesses that invested in this technology did so on the copper-bottomed understanding that they would get a different rate of return. The institutions that lent on that basis would have been similarly advised, and the investment would have been procured on that basis. We now have to unpick something of a disaster on the part of the Department for the Economy in Northern Ireland, and I understand the Secretary of State’s dilemma. This is not easy; something has to be done. However, when Bills are before us in this place, we must consider those people who will be inadvertently disadvantaged. Like most hon. and right hon. Members in this House, I have been lobbied by such people who point out that they invested in good faith and that their small businesses might be brought to the edge because of the change in circumstances over which they have no control.

[Mr Carmichael]

Does that not go to the heart of the matter? The existence of a voluntary buy-out scheme seems an implicit recognition to me that exactly the situation that the hon. Gentleman identifies is one that is likely to occur. That surely means that the legitimate expectations of the recipients of the subsidies are so adversely affected that any legal challenge would be successful.

[Dr Murrison]

I share the right hon. Gentleman’s concerns in that respect. As a lawyer, he will know better than me that there is every prospect of a judicial review in this matter. It would be very surprising, given the propensity of individuals and organisations in Northern Ireland to seek judicial review on a range of things, if that were not the case in this instance. Indeed, that includes their representative organisations. Clearly, the Government need to do everything in their power to ensure that they are protected against such an eventuality, including, I suggest, ensuring proper scrutiny of this Bill, as inadequate scrutiny will surely be cited as a reason for such a review to result in a judgment that is in favour of those bringing the case forward. However, fear of judicial review is one thing, but what we need to do in this place is to ensure that individuals are not disadvantaged. That means scrutinising this Bill properly and trying to ensure that, if possible, those hard cases are avoided.

I understand the rules on state aid and I understand that the buy-out is a mechanism of trying to be generous to those who may be disadvantaged, but within the rules that have been set. I also have concerns because the Department that has advised on this matter—the Department for the Economy—is, of course, implicated in the mess in the first place. I would be worried if the Secretary of State were being overly reliant on the advice that she is receiving from that Department and, in all candour, I suggest that she needs to be extremely careful about that.

Scrutiny—challenging advice—is what we do in this place. It worries me that this controversial Bill on this most toxic of issues is not undergoing such scrutiny. It would seem to me to be entirely sensible for Ministers to ensure that this measure has all possible scrutiny to hedge against the possibility that what it is doing, on advice from the Department for the Economy, is in fact erring in some important respect, as indeed the advice to Ministers has been from that Department in the past.

I also worry—this has been touched on already—about what confidence institutions will have in these sorts of Government schemes in the future, given that they will have assumed that anything backed by or instituted by Government is copper-bottomed, safe and triple A rated. They now find that that is not the case, and that any loan they may have made on the basis of an expectation of, admittedly, fantastically high returns—nevertheless, backed by Government—will in fact result in a return much less than that. Indeed, in the event that some of these businesses go to the wall, these investments may have to be written off.

We have to reflect on the fact that many of these businesses are marginal concerns. Many of the 1,800 businesses are farms, and we know that farming in Northern Ireland is quite different from farming in the rest of the United Kingdom. They tend to be small, marginal farms. The people from those farms who have invested in this scheme may find themselves embarrassed financially by this particular decision. It is quite possible that we might be able to design some sort of scheme that is based around hardship for special cases. There is no recommendation to that effect in this Bill other than the buy-out scheme. I commend the Secretary of State for that, as it is absolutely right to bring such a scheme forward within the constraints of state aid, but there is very little beyond that, and there will be cases of hardship. In the context of Northern Ireland—a small place with lots of small businesses and small farms—would not it be tragic if we found some of those businesses going to the wall as a result of this change in policy?

Of course, this legislation has to go through because if it does not, on 1 April people will be faced with getting nothing, but I gently suggest to Ministers that this is an imperfect Bill that needs further scrutiny and input. I hope very much that my new clause 1 will catch your eye, Madam Deputy Speaker, and that we may debate this matter further in Committee. It would be extremely good if we could do so, because the new clause makes some sensible recommendations about how we can ensure that this difficult part of a Bill that is otherwise unobjectionable is given the scrutiny that it deserves so that people can therefore have greater confidence in it.

In general, the Secretary of State is quite right to bring this legislation forward. It is a pity that we have not had the scrutiny of the whole Bill that it really deserves. Given the issues that currently apply at Stormont, we need to be particularly careful in this place that we give matters that relate to Northern Ireland all the scrutiny we can possibly can. This represents something of an essay crisis that was absolutely avoidable had we brought the measures forward in a more timely manner and decoupled these two very different elements of a particularly unusual Bill.

Northern Ireland (Regional Rates and Energy) (No. 2) Bill

Andrew Murrison Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 6th March 2019 Commons Chamber

[Karen Bradley]

We have had significant debate on this matter on Second Reading and I do not wish to prolong proceedings any further at this stage. I look forward to hearing from right hon. and hon. Members.

[Dr Murrison]

I am grateful to you for calling me to speak in this stage of our proceedings, Sir Lindsay. The complexity of the Bill, apart from clause 1, has been demonstrated by the level of discussion that we have had. That really underscores the need for full and proper scrutiny of this Bill. Forcing this through all its stages in a day is a challenge, and I fear we have not explored sufficiently the complexity of this matter. It is a matter that bears on the lives of many people in Northern Ireland and we must get it right. I know the Secretary of State is as keen as I am to ensure that that happens.

I am grateful to the parliamentary draftsmen for their assistance in crafting my new clause, which is available in manuscript form. It turns what I thought would be a simple matter—that of dividing the largely uncontroversial part of the Bill from the more difficult bit on the RHI—into something that, in my mind, is really quite complicated, but that is the nature of this place and of parliamentary draftsmanship. We cannot consider these two parts separately and be sure the matter will be finalised in time for people to get their money on 1 April, so in consultation with parliamentary draftsmen, we have devised a new clause and an amendment to clause 6, which is the commencement clause.

I am grateful to the members of the Northern Ireland Affairs Committee who have co-signed the new clause and amendment. I have appended to the new clause what I hope is a helpful explanatory statement. It explains that the new clause is essentially a patch-up job that I hope will help to facilitate consultation and fuller and better scrutiny of proposed changes to the renewable heat incentive scheme to ensure that current participants are not disadvantaged by changes to the scheme. I appreciate that this is imperfect—I would have preferred for it to be dealt with separately and for the Bill to have been divided into two parts to allow for a proper debate on the RHI clauses and schedule—but I accept that we are faced with the choice of supporting the Bill or not and that if we do not support it many people will be financially disadvantaged, which is not acceptable. I hope that the new clause provides a mechanism for scrutinising this matter, albeit imperfectly, and for making recommendations that the Secretary of State might implement to ensure that as few people as possible are disadvantaged.

I am not in the business of job creation, and I gently point out that my Select Committee is the most productive in the House of Commons, according to figures I have seen—we are pretty busy, particularly at the moment—but it might be thought a proper Select Committee to undertake this work. If so, I will discuss it with my Committee, but I make no prescription. I am quite clear that this complicated element of our business needs proper detailed scrutiny and that we need to see and examine the data produced.

Several right hon. and hon. Members have been a little critical of the Department for the Economy. It is after all implicated in this situation, as the informatics it produced and the advice it gave are partly to blame for where we are, and that means we are doubly obliged to examine closely any material it has produced. That is fair and proper scrutiny. I gently suggest that whichever Select Committee undertakes this work focus heavily on that information so that we can be clear what is being recommended to the Secretary of State and are better able to make recommendations to minimise the hard cases that we are all concerned about in the course of this legislation. I hope she will consider the amendments carefully, and I look forward to hearing what she has to say.

--- Later in debate ---

[Karen Bradley]

I cannot continue with those, because the advice that I have is that to continue with them would be illegal. Under the ministerial code, I cannot, as a Minister of the Crown, legislate for something that I am advised is illegal. So I am left in a very difficult situation. I understand how people feel about this. I empathise with people and I understand the implications for them of a reduction, but as Secretary of State, legislating for something that none of us wants to be legislating for in this place, I am faced with the choice of legislating for something that is legal, to allow some subsidies to continue, or not legislating, which would result in no subsidies happening after 31 March. The legal basis on which the reduced subsidies, as set out by the Executive, are paid expires on 31 March.

[Dr Murrison]

I appreciate the Secretary of State’s dilemma. She is having to act on the basis of advice that she is getting from the Department for the Economy, a Department whose advice has been shown to be flawed in the past. Does she understand that we need to examine this closely? She has been told that, legally, she has to do this, and we in this place have to accept that, but we also have to scrutinise the legislation. I hope that she can give me sufficient reassurance that she will note our examination of this matter and our recommendations on it, and that she will not take at face value the advice that she has been given from a Department that has erred in the past. I very much hope that she will be able to tailor her remarks accordingly, and I am all agog as to what commitment she can give to providing the scrutiny that I have described in my amendment.

[Karen Bradley]

I thank my hon. Friend for his questions, and I will come on specifically to those points in a moment.

I want to come back to the question of whether there is an option to delay. I agree with the principle and intention behind the amendment, but it is not the solution to the wider problem. As I have said, the tariffs set out in the legislation are the only tariffs available that will bring the returns on the scheme into line with the 12% approved by state aid. The tariffs strike a fair balance between the interests of scheme participants and the wider public interest, in ensuring that the Northern Ireland budget and public services are protected and that taxpayers’ money is spent to achieve value for money. The only lawful alternative would be the closure of the scheme.

--- Later in debate ---

[Dr Murrison]

I thank the Secretary of State for listening to the concerns expressed and articulated through my amendments. I note her remarks from the Dispatch Box that she will carefully consider the result of further scrutiny of this Bill and any recommendations that my Committee, or any other Committee, might make on how to ensure that this necessary measure does not disadvantage businesses in Northern Ireland. I look forward, if my Select Committee agrees to undertake this work, to the scrutiny that the Bill deserves, so far as we are able to provide it, and to making recommendations to her in very short order. I particularly look forward to her response to any recommendations that we might make.