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

Lord Kilclooney Excerpts

Committee: 1st sitting (Hansard): House of Lords & Report stage (Hansard): House of Lords
Tuesday 19th March 2019 Lords Chamber

[Lord Kilclooney (CB)]

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)]

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.

--- Later in debate ---

[Lord Duncan of Springbank]

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]

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]

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.