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

Lord Maginnis of Drumglass Excerpts

2nd reading (Hansard): House of Lords
Tuesday 12th March 2019 Lords Chamber

[Lord Maginnis of Drumglass (Ind UU)]

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.

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

Lord Maginnis of Drumglass Excerpts

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

[Lord Maginnis of Drumglass (Ind UU)]

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]

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.

--- Later in debate ---

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

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]

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]

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.

--- Later in debate ---

[Lord Duncan of Springbank]

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]

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?