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

Lord Lexden Excerpts

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

[Baroness Harris of Richmond (LD)]

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)]

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)]

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.

--- Later in debate ---

The noble Lord, Lord McCrea, asked whether we could maintain the rate as it has been set. The answer to that, unfortunately, is no, because that rate is still in excess of the 12%, which is a limit set by the European Commission. That is what sets our legality. For those civil servants in Northern Ireland—and let us remind ourselves that there are no Ministers to take this forward—

[Lord Lexden]

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

[Lord Duncan of Springbank]

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.