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

Lord McCrea of Magherafelt and Cookstown Excerpts

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

[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.

[Lord McCrea of Magherafelt and Cookstown (DUP)]

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]

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.

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[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.

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The Civil Service will act in good faith; I know that the noble Lord has had some issues with it in the past. This rests in the hands of the devolved departments in Northern Ireland which are responsible for it. We must ask them to take the lead in this matter, albeit, I hope, under the chairmanship of an independent individual. Rather than there being any sense of conspiracy within the department—as the noble Lord more than hinted at—this will, therefore, hopefully rest in the hands of someone who can gain trust from all. I am not sure if that is adequate for my noble friend Lord Empey.

[Lord McCrea of Magherafelt and Cookstown]

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]

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.