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

Sammy Wilson Excerpts

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

[Karen Bradley]

That is why a buy-out scheme is available: so that boiler owners can choose individually. I cannot say exactly what the rate will be, because it will depend on, for instance, the subsidies that have been received to date. The calculations will be individual, but a buy-out will be available to boiler owners who do not believe that the subsidies now available will enable them to continue in business.

[Sammy Wilson (East Antrim) (DUP)]

rose—

[Gavin Robinson]

rose—

[Karen Bradley]

I do want to make some progress, but I recognise that many interests are involved. I will give way to the right hon. Member for East Antrim (Sammy Wilson) and to the hon. Member for Belfast East (Gavin Robinson), but then I will conclude my speech.

[Sammy Wilson]

Does the Secretary of State accept, first, that the terms of the buy-out scheme are not clear and, secondly, that a large number of people—probably those who are most affected by these changes—will not be able to avail themselves of it?

[Karen Bradley]

I will now give way to the hon. Member for Belfast East.

--- Later in debate ---

[Sammy Wilson (East Antrim) (DUP)]

It is a pleasure to follow the hon. Member for Lewes (Maria Caulfield). I thank her for her genuine interest in Northern Ireland affairs and for contributing to the debate.

As has been pointed out, this Bill contains two totally unrelated pieces of legislation. The reasons for that have been given, although I am not convinced that this is the best way of dealing with the issues at hand. Let me deal first with rates. I accept what the Secretary of State said; it is important that people in Northern Ireland contribute through their rates to some of the public expenditure required to keep services going in Northern Ireland. But when we impose those additional charges, whether on domestic or business rates, it is important that we bear in mind two things: the ability to pay and the impact that any taxation has on either the businesses or households concerned.

I have reservations about the level of the domestic rate increase, which is above the rate of inflation—it is the rate of inflation plus 3%. That will cause difficulty for households, as some people will not qualify for housing benefit on their rates but are still in low-paid employment and want to stay in employment. That will cause difficulty, but it is nothing compared with what was originally proposed. Let us not forget that the original proposal was 10% plus inflation. I am glad that the Secretary of State did not pursue that. The party of government, like my party, believes in leaving people with as much of their money to spend as possible. People know how to spend their money better than the Government. It would have been a travesty if the Government had proposed an 11.8% increase in the rates that people pay for their home, especially given the Government’s boast time and again—one they ought to be proud of—that they are seeking to bring down the level of taxation. I am pleased that my colleagues and I had a role to play in knocking that figure down.

On the issue of business rates, this is really a 0% increase in real terms. Nevertheless, business rates in Northern Ireland are, for a number of reasons, some of the highest in the United Kingdom. The Chancellor has announced some business rates relief schemes—incidentally, we did have a Barnett consequential for that in Northern Ireland—but because of the non-functioning of the Assembly, it was not possible to revise the small business rate relief scheme in Northern Ireland. While that money was made available to the general purse, it was not translated into reductions for businesses.

In the long term, I think we need to look at the whole issue of business rates. It is of course a tax that is not related in any way to the ability of a business to pay. It does not reflect the buoyancy of the business or, indeed, the income from the business; it simply reflects the size of the premises and the rateable value of the premises that businesses happen to be occupying. For some people, that will lead to under-taxation because they could afford to pay more, but for many businesses it leads to over-taxation because their overheads go up or stay the same even though their income and their ability to pay are going down, which affects so many.

I suppose it is not just an issue for Northern Ireland, but this is one of the reasons why we have so many vacant premises on so many of our high streets. As businesses have come under pressure from online retailing and from the changes in the way consumers spend their money, they find their revenues going down, but the overhead of rates still remains the same. In the longer term, I think we need to have a review of business rates. I am pleased that at least there has not been a real-terms increase in rates for businesses, although I know many of them will struggle even with the inflationary increase in this piece of legislation.

Let me turn to the second part of the Bill on the changes to the renewable heat incentive payments. I do not think anyone can say that this scheme has been a success by any means. In fact, it has been a disgrace, and the way in which it was set up and has been abused required there to be a change. However, I must say that when it comes to subsidies for renewable heat, I do not think that some of the practices instigated through this Parliament and in this part of the United Kingdom would stand up to scrutiny any more than the renewable heat incentive stood up to scrutiny in Northern Ireland.

We have a situation at present that makes the subsidy in Northern Ireland disappear into insignificance. At Drax B power station, the subsidy has climbed from £250 million a year when the Liberal Democrat Minister introduced it to £800 million this year, and it is going to go up to £1,000 million a year, when coal could be mined two miles down the road. And what do we do? We bring in wood pellets from America. We chop down trees in America, put them in a boat, bring them to England and burn them in a power station, and we pay a subsidy of £800 million a year for it. I wonder how many houses in the south of England are having their outdoor swimming pools heated with boilers for which people get a renewable heat incentive payment. Is that a good use of public money? The renewable heat incentive has not received the same level of scrutiny in other parts of the United Kingdom as in Northern Ireland, where it was seen to be abused. However, there are big questions to be asked about the scheme, not just in Northern Ireland but in any other part of the United Kingdom.

I have several points to make about the need for review. We have been told that the legislation has to pass today instead of being given the level of scrutiny required. Many hon. Members have asked detailed, probing and important questions, but we are told that if the Bill does not pass today, no subsidy regime at all will be available at the beginning of the next financial year, and that if we continue with the existing subsidies, we will be subject to infraction proceedings from the European Union.

Why was all this brought forward at the last minute? It is not that the review of the scheme has been forced on the Department in the past three or four months; it was initiated by the last Minister for the Economy before the Assembly fell, more than two years ago. What has happened in the meantime? Why has it taken two years, with a rush to pass the legislation at the very end? The joke in Northern Ireland is that evolution works quicker than some of our Departments. However, given that the review was initiated more than two years ago, I have to ask why, at the last minute, we are suddenly being presented with a piece of legislation that raises a lot of questions, instead of being given time to carry out the proper scrutiny, in Committee and so on, that the hon. Member for Lewes and the Chair of the Northern Ireland Affairs Committee have suggested.

[Maria Caulfield]

It strikes me, as an MP who is still fairly new in this place, that the attitude is often, “It’s only Northern Ireland, so we can whizz it through in a day.” It should not be right for any Bill to pass Second Reading, Committee and Third Reading in one day without any suitable scrutiny.

[Sammy Wilson]

The hon. Lady makes her point well, as she did in her speech.

Not everyone abused the scheme. Some did, and it is right that their subsidies were cut, but many people had the scheme sold to them by the then Sinn Féin Minister of Agriculture and by the Minister in the Department for the Economy. It was sold to farmers and many other businesses as a subsidy for heating their premises because they were using the kind of energy that was in vogue with the Department, which wanted to cut down on CO₂. I am not really sure how burning wood cuts down CO₂ emissions—I am told that it puts as much CO₂ into the air as coal, and some of the pellets are imported from miles and miles away—but that was the thinking at the time.

People undertook in good faith to install the boilers. They borrowed money, expecting a certain level of return and a flow of payments. They could have put in gas boilers and got cheaper energy, but because of the hysteria against fossil fuels, it was decided to subsidise wood burning, so people installed a more expensive boiler and expected to get money in return.

We are told that the sudden and very substantial reduction in the subsidy happened because the EU said that it was required to keep us to the average 12% level. There has been some dispute, in discussions with officials, about whether the rate of return can be between 8% and 22% so long as it averages out at 12%, or whether it is a maximum of 12%. If we had had the time or a mechanism to bring forward officials we could have probed into that, but we are told it is 12%.

In England, the subsidy per boiler is about five times higher than the subsidy per boiler in Northern Ireland. The scheme in the Irish Republic pays about six times more per boiler than in Northern Ireland. The question is this: how can you pay a subsidy five times more in England and still be within EU state aid limits? You can pay a subsidy that is six times more in the Republic of Ireland and still be within EU state aid limits. In Northern Ireland, however, it has to be at the level of £2,000 per boiler to stay within the state aid limits.

The explanation given—I cannot question it as I do not have enough information—is that, “Oh, the cost of boilers and the cost of fuel is different in Northern Ireland from the cost in England”. I could believe that if we were talking about, say, a 10% difference, but we are talking about a percentage difference in the hundreds here. Why does a boiler cost substantially more in England than it does in Northern Ireland? You might argue that it is because of transport costs, but then why does it not cost more in the Irish Republic? If a boiler has to come from England or another country, it has to be transported across the sea to the Republic of Ireland. Why should fuel cost substantially more in Northern Ireland than it does across the border in the Irish Republic? There might be some explanations as to why it costs less than in England, but why should there be such a huge difference between the two jurisdictions on the one island?

There could be perfectly good explanations for that, but given that the Department for the Economy got its figures so wrong for the initial scheme, you can understand, Madam Deputy Speaker, why people in Northern Ireland are sceptical about any figures that come out of the Department. The Department did not spot that the subsidy was substantially more than the cost of fuel and got its figures so wrong that there was a massive overspend. Figures for any scheme it brings forward need to be scrutinised properly. There is no opportunity to do that, despite whatever questions we ask Ministers today. A lot of these things come out through discussion, not through a question and a quick answer back from a Minister.

Those are the kinds of issues that need to be addressed. Unfortunately, I think we will have to vote for the Bill tonight, because there really is no alternative and it would be far worse to leave people with no scheme by voting against it. However, the Chairman of the Northern Ireland Affairs Committee suggested that there ought to be a commitment to allow the Committee, even after the Bill is passed, to have the opportunity to bring officials and anyone else necessary along, so that it can question them on the figures. If those figures are shown to be wrong, the scheme has to be amended to ensure that the level of subsidy paid reflects the true costs of the scheme. That is the one assurance we have to give to those who have been badly bitten.

I welcome the intervention and the fact that there was also some discussion on the budget, albeit late in the day. I think it was only two or three weeks ago that we were first given sight of what was proposed in the budget, but because the decision had to be made internally—purely by the Northern Ireland Office and the Department of Finance—there was time to revise the enormous increase that was being proposed initially for the rates. In the case of the renewables scheme, it had to go back to Europe. Thank goodness that after 29 March, we will not have to worry about state aid rules. We can make our own decisions. That is a good thing and another reason why the House should make sure that we get out on 29 March, so that we can decide on the kind of support that we want to give industry or the lack of support—

[Maria Caulfield]

rose—

[Sammy Wilson]

I knew that that would get the hon. Lady going.

[Maria Caulfield]

May we ask the Minister if—when we leave the EU on 29 March—we could look again at the subsidy issue, given that state aid rules will no longer apply?

[Sammy Wilson]

I agree with the hon. Lady. One of the reasons why we need scrutiny of the legislation, even after it has gone through, is so that we have a chance to revise it if we see that the figures are wrong. Since people have bought the boilers and had the infrastructure installed, would it be better to find a level of subsidy that enables people to continue to use them rather than just buying them out? The fact that we have a buy-out clause in the Bill shows that the Government and Department know that there will be hardship for people, although I suspect that the terms of the buy-out will be so draconian that it will not be worthwhile people doing that.

We will be supporting the legislation, albeit reluctantly, but on the basis that there will be an opportunity for the good questions that Members across the House have asked today to be looked at in more detail.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Before I call the next hon. Gentleman to speak, I have to announce the result of today’s six deferred Divisions on questions relating to regulations on exiting the European Union. In respect of the question relating to financial services and markets, the Ayes were 303 and the Noes were 250, so the Ayes have it. In respect of the question relating to electricity, the Ayes were 302 and the Noes were 44, so the Ayes have it. In respect of the question relating to gas, the Ayes were 300 and the Noes were 44, so the Ayes have it. In respect of the question relating to food, the Ayes were 303 and the Noes were 44, so the Ayes have it. In respect of the question relating to electronic communications, the Ayes were 301 and the Noes were 257, so the Ayes have it. And, in respect of the question relating to road traffic, the Ayes were 301 and the Noes were 251, so the Ayes have it.

We will recommence the Second Reading debate with Mr Vernon Coaker.

[The Division list is published at the end of today’s debates.]

--- Later in debate ---

[Ian Paisley (North Antrim) (DUP)]

It is good to follow the hon. Member for Gedling (Vernon Coaker). When he said, “Where there’s a will there’s a way,” I thought he was going to get into the Brexit debate, like my right hon. Friend the Member for East Antrim (Sammy Wilson), and say, “If there’s a will, there’s a way,” and we hope that in the next few weeks we find that will from our negotiating partners and then find a way out, truly, of the EU. But I digress by straying on to the Brexit debate.

The debate on the Bill has largely been masked by the debate around RHI, and it would be remiss of me not to pass some comment on clause 1 and what has been achieved. My right hon. Friends the Members for East Antrim (Sammy Wilson) and for Belfast North (Nigel Dodds) and my hon. Friend the Member for Belfast East (Gavin Robinson) have been heavily engaged for the last number of weeks on that point. As has already been alluded to, we would have been facing a massive rates hike if it had not been for that negotiation. If only it had been the same for the second part of the Bill: that we had had early sight of it and could discuss and challenge and probe it and therefore see a much more beneficial change than the one that has come forward on RHI. We must, however, congratulate our colleagues on their hard work in trying to significantly improve the rates issue.

The shadow Secretary of State, the hon. Member for Rochdale (Tony Lloyd), made some very kind remarks about the situation in Ballymena. I believe that there is an agreement today to see new opportunities created there by USEL, an employer that has set up a site on the Woodside Road industrial estate, and that is leading directly to the employment of 60 new workers in the constituency. Unfortunately, I was unable to attend the opening of that site because of duties here in Parliament, but I know that the Gallaher charitable trust, which I chair, led with key financial support to that building and that employer and that that has directly resulted in the employment of those people. Where did that charitable trust money come from? It is a legacy fund left over from when JTI Gallaher had to close its doors, and I am delighted that the first thing we have been able to do, through paying out money and resources, is to help to create 60 new jobs in the constituency. I hope that in the next few years we will see not only the charity that I chair but other employers adding to the local economy and creating new jobs and skills, leading to a revival in local employment.

I hope that the measures on the city deals will shortly come before the House, as they could apply very beneficially to the Mid and East Antrim Borough Council area, as could the Heathrow hub scheme. All those projects could see a huge increase in the employment and opportunities coming to my constituency, and I am delighted with the work that will be done in that regard. I want to ask the Secretary of State and her Minister to challenge Translink to hurry up and create more orders for the local bus building company in my constituency. It is great to see it getting orders from places all over the world, including Latin America and Hong Kong, but I would love to see more orders coming through to it from Translink, and I encourage the Secretary of State to push for those orders to come forward.

We now have to turn to the perplexing issue of the renewable heat incentive. The shadow Secretary of State was absolutely right to say that we are being presented with an amalgamation of two Bills. That is wrong; there should be a stand-alone piece of legislation on the RHI, because it is so controversial and far-reaching, and because the consequences of the issue will be felt by a lot of people in Northern Ireland for a very long time—indeed, probably for the next 20 years. Instead, these measures have just been stapled on to the back of this Bill, and we are now being expected to nod it through without serious, appropriate scrutiny. I do not believe in nodding through legislation; nor do I believe in the emergency process by which we are taking through this legislation. Northern Ireland deserves better, and this House has to demonstrate to Northern Ireland that we are going to give it better.

Officials in Northern Ireland have handed us these proposals, and I believe that they think we should accept them without challenge or scrutiny. That would be wrong, because it would be unfair on the people we represent. I think that people will understand and accept our caution, given that these are the very same officials who brought forward the first flawed scheme. We are now expected to accept the evidence they are giving us today as being good, beneficial, tested and rigorous and to accept that it will be all right on the night. That is not the case, however, because there are flaws in what is being put to us, and even in the manner in which it is being put to us, and they should be properly challenged.

Those in the Department are privately telling us that they would welcome the opportunity for further scrutiny. They do not want the debacle of the past to happen again; they want to learn from the mistakes of the past, rather than to repeat them. I believe that any such extra scrutiny would be very beneficial. A new clause has been tabled to the Bill—it stands in the name of the Chairman of the Northern Ireland Committee, the hon. Member for South West Wiltshire (Dr Murrison), and several other Members from across the House—and I hope that the you, Madam Deputy Speaker will be kind enough to select it and allow us to debate that issue properly.

Two wrongs never make a right. The obvious historical problems with the RHI tariff are the subject of an ongoing inquiry, and it would not be right to press those matters here today. However, the future ought never to be held to ransom by the past. Unfortunately, the Bill that the Secretary of State has brought to us today will hold the future of the RHI to ransom because of what has happened in the past, and that is wrong. We need to treat people fairly and honestly going forward. No matter what the RHI inquiry throws up, which will have to be dealt with on its own terms, we have a duty and a responsibility to treat the RHI owners in a way that is respectful, honest and fair, and equitable with the rest of the United Kingdom.

Everyone can look at the measures and the proposed cuts in support—from as much as £13,000 to about £2,000 per annum—and then at those same people who have bank loans signed up to on the basis of the original business plans and legal arguments. The banks, however, will not go back on the original plans. They will not say, “We’ll just forgive all that debt; it’s all over.” Banks do not operate like that, and why should they? They were given business plans guaranteed by the Government—legal guarantees—and they expect people to honour the payments agreed.

The Government have to accept that the way in which the issue has been brought forward tonight is not fair to 2,020 boiler owners in Northern Ireland. The vast majority of them, as the hon. Member for Gedling said, have done nothing wrong; they followed the rules, totally and absolutely, yet tonight they are being held to ransom by the system. Most of those RHI users are not abusers of the system, but they will all be punished by the system that is to be introduced now. Again, that is grossly unfair.

People can look across the channel to see the English system, or south to see the RHI system that has been proposed but not yet introduced in the Republic of Ireland, where support will be significantly higher than even here on the British mainland. The Bill will not only punish but in effect end for the next 20 years all renewable energy plans and damage forever anyone who claims a copper-bottomed guarantee from the Government, no matter the shade of that Government, because they will look back at this scheme and say, “Look how we were done over, treated shabbily and given no answers to our questions. This will lead us to a situation in which we are treated badly.”

Today, I tabled questions about levels of support and Barnett consequentials for RHI payments in both Scotland and Wales. The proposals in the Republic of Ireland will be so much more generous even than what will be made available here in England, as well as in Scotland and Wales. The only part of the United Kingdom that will therefore be treated unfairly is Northern Ireland. The cuts are to the bone, and through it.

The argument presented by the Department yesterday in a 15-minute presentation was that this would stop a breach of state aid rules. That simply is not good enough. We have to be given more substance and the legal arguments to demonstrate the precise nature of those state aid requirements, which do not appear to apply to another European Union member state—namely, the Republic of Ireland—or to the rest of the United Kingdom or any of its regions, whether Scotland, Wales or England. State aid rules are supposed to apply in the same way, yet Northern Ireland has been singled out to be treated differently.

The Department has a duty to make the case in public. It and the Secretary of State cannot give a 15-minute briefing to the shadow Secretary of State or us as Members of Parliament in a conference, and then expect us to sell it to the public. Do they think we are mad? That is not acceptable. The Department has a duty to stand up in public and to defend itself. Will the Secretary of State make herself and officials available to the Northern Ireland Affairs Committee for us to ask them the difficult questions? Let us at least have the opportunity to put those questions to the Secretary of State, because so far today we have had no answers to any questions.

For example, how did the Department come to the figure for the average cost of boilers in Northern Ireland? What was the basis on which that was done? The Department has given us a figure for the average cost, and are we just to accept it? We are not equipped to challenge that figure unless we see the evidence, but we are not allowed to see that evidence. We are just told that we have to accept it. We have the great sword of Damocles hanging over us—“If you don’t accept it by the end of the month, farmers will not be paid.” Blackmail is all that is, and it is wrong.

What is excluded from the cost assumptions in Northern Ireland? Are those same exclusions made to the cost assumptions here in England? We did not get any of that answer. We asked three or four times during the 15-minute presentation, and there were raised eyebrows, buts and tuts, and, “Ask someone down the video line. He might be able to tell you.” We were not able to confirm whether the £2,500 plumbing costs or the £1,000 electrical costs are included in the English scheme but excluded from the Northern Ireland scheme. If so, why? If they are, I am not the one to sell it to the general public in Northern Ireland on the basis of a 15-minute presentation; it is up to the Department to sell it.

When a person applies for one of these boilers, they have to seek planning permission, which is a costly exercise. They have to pay a lawyer and, usually, an architect. Is all that included in the English scheme but excluded from the Northern Ireland scheme? Apparently, it is included in the English scheme but excluded from the Northern Ireland scheme. If it is excluded from one on the basis that it is against state aid rules, I can tell the House there is an express train coming down the tracks towards those who try to include it in the English scheme. We have to address those issues.

Do the cost assumptions differ from what is permitted in England? If so, why do they differ? The Department and, indeed, the Secretary of State need to answer that question. If 12% is the rate of return, why can the rest of the UK work on a rate of return of between 8% and 23%, as my right hon. Friend the Member for East Antrim said? Why is there that differential? We were given an excuse yesterday. We were told 16 times that the European official had told the Department for the Economy that it could not move from 12%. Why can it not move from 12%? It is up to the Department to reveal the answer, if it has one. Why should I go out and sell it to my constituents when the Department told me that Europe has said it cannot do it? That might have been all right for the past 40 years, but from 29 March it will not be acceptable. Europe cannot tell us all those things, and it is therefore wrong, 23 days before we leave, that the EU is allowed to hold us to ransom on that point.

When we ask whether the state aid rules will still apply after 29 March, some lawyers say they will and others say they will not. Why should I make the case in public? It is up to departmental officials and the Secretary of State to make the case, and they have to answer those questions. Officials say that the EU does not allow them to stray from 12%. Why is that the case? A judicial review was lodged this morning, and the appeal will be heard in April. Is it really appropriate for us to change the tariff about 30 days before that judicial review hearing? I do not believe it is. I think that in itself could constitute knowledge that we were doing something wrong, and I think the Department needs to move.

The right hon. Member for Orkney and Shetland (Mr Carmichael) made the point well that the buy-out scheme is an admission that this scheme is flawed. If that is the case, the Government will pay out even more compensation if it goes to judicial review. Will the state aid rules apply after 29 March?

If we were successful in voting against the Bill tonight, would the payments stop on 1 April? The Secretary of State made that case. When we asked yesterday for evidence to back it up, we were told that it is just a legal opinion, but that legal opinion is being tested in the courts today because there is another equally valid legal opinion saying that it is a wrongful interpretation. We will know the outcome in the first or second week of April.

All those questions need to be answered in advance of our taking a decision. We are not being given the proper time to scrutinise this properly. It is little wonder that we have been inundated by calls, emails and personal visits from hundreds of constituents, businesses and farm families who are affected because this touches more than 2,000 owners in Northern Ireland. If those businesses go out of existence, that would be the equivalent of 60,000 or more small businesses closing here on the British mainland. That perhaps gives a sense of the proportion of what has been affected; we are talking about tens of thousands of families who would be affected if this was transferred over here. We have to address that matter properly. The Department has a duty to make that case in public. It is not our duty to make the case for it, because it is sitting on the evidence. I would therefore welcome the opportunity to scrutinise it properly; the Secretary of State and officials should come before the Select Committee. They should make themselves available instead of expecting us to nod this matter through.

I agree that if Stormont was in place tonight, this debate would be better placed there—that is where it should be taking place—but we have to deal with the cards as they are currently, and Stormont is not in place. It would therefore be a dereliction of our duty to do this in what we would describe locally as a “half-baked way”. Frankly, what we are doing here tonight is half-baked; this is not proper scrutiny, with Parliament at its best, but Parliament doing something and taking shortcuts. That will result in problems down the line. I fear that in a matter of months something will come out and people will say, “You really should not have taken that decision on 6 March 2019. It was a huge mistake.”

We are therefore right to be cautious about supporting this part of the Government’s proposal tonight. This House has a duty to carry out scrutiny, in the absence of the Assembly, and to do it properly. The Department, whenever we met its representatives, outlined how it came to its calculations, but the only conclusions I can draw is that if the Department for the Economy is right in what it has told us, the scheme currently operating here in England is unlawful. If that is the case, an even bigger question is raised. I have asked that very question of officials and looked at their answer. If officials know that that system was unlawful, they are on notice today that they had knowledge of it and, in effect, they let us know that they had knowledge of an unlawful system operating on the mainland. If that is the case, the scheme being proposed for the Republic of Ireland would, similarly, be unlawful under state aid rules. So the Government have a duty to allow us to scrutinise this properly. I welcome the fact that an amendment has been tabled, which we will get to debate later, and I hope the Government will be able to concede some of the points we have put to them and that we will be able to address those issues fairly.

I wish to end my remarks by referring to a couple of emails that I have received out of those from the hundreds of people who have been in touch with us. Whenever we boil things down to the actual person and family involved, we actually see what is happening. Jacqui and Thomas are from a farm family in my constituency. They said that the Department for the Economy has been “ignoring” them for months. They said that they have been emailing the Department, trying to make contact with it and sending it their questions about these matters when the consultation originally came out, but it has been ignoring “genuine RHI users”. Jacqui says:

“I totally object to be financially punished for adhering to the requirements of the Scheme and blame this department for putting my farming business at risk.”

That will have been repeated up and down the country, not just in my constituency, but across County Tyrone and in all of County Antrim, where we are a major food producer for these islands.

We must remember that this is largely about producing poultry that is sold in supermarkets up and down the UK. Most of the poultry eaten on this side of the channel is grown in County Antrim and County Tyrone. If this puts farm businesses at risk, it damages our food security and our biosecurity and everything is now at risk. That is the consequence of what we are doing; it damages businesses and it damages what we actually feed to our children. So let us address it and address it properly.

[Sammy Wilson]

Does my hon. Friend not think it is rather ironic that we have had all these debates in the House about the impact of Brexit on supply chains, yet here is a measure that, as he has rightly pointed out, could have a massive impact on the supply chain of the agri-food business in Northern Ireland and throughout the United Kingdom?

[Ian Paisley]

The consequences of and ripples out from this are so significant. It is not about cheap energy; it is about how we run our economy efficiently and effectively. What is our economy in Northern Ireland? It is principally small businesses that produce the best viable, traceable, tastiest food in these islands. We are putting that at risk, and we are putting those jobs and farm families at risk. We really need to pause, and the amendment tabled by the hon. Member for South West Wiltshire gives us that opportunity to try to get this right. I look forward to the second part of proceedings.

--- Later in debate ---

[The Minister of State, Northern Ireland Office (John Penrose)]

I will try to address a series of specific points that various Members have made during the course of this debate. I will also try to address some of the broader questions, some of them quite fundamental, about the RHI scheme and its many and manifest problems and shortcomings. That is partly because those issues were raised in the debate, but also because we are going on to consider an amendment in Committee and it may help to have a bigger shared fact base. This will not answer all the questions that will, quite rightly, be raised in Committee, but it may at least lay the foundations of that debate and help us to address them at that stage.

As the hon. Member for Bristol South (Karin Smyth) rightly said, we have had quite a narrow debate although with widely shared views across the House. I strongly agree with one point that she made at the end of her remarks, which is that it is easy to forget, amid all the concern about the flaws in the RHI scheme, that it was introduced for a very noble purpose as part of an attempt to decarbonise our economy by increasing the amount of renewable energy in Northern Ireland. That is part of a broader tapestry of other initiatives that are being introduced right across the UK and, indeed, in other countries around the world. We clearly should not lose sight of that—it is a vitally important point.

[Sammy Wilson]

Does the Minister agree that it is rather ironic that a scheme that is meant to decarbonise—for some people that is important; for others it is just an expensive burden on the economy—finishes up with wood being put into pellet form in North America, brought in ships across the Atlantic ocean, and then burned in boilers here in the United Kingdom? Does he really think that is a way of cutting down on carbon emissions?

[John Penrose]

The right hon. Gentleman said that he was not quite sure why burning wood was any better than burning other things, because the emissions are similar. If my hon. Friend the Member for Richmond Park (Zac Goldsmith) were here, he would make the point that we have to be extremely careful about how we calculate the carbon footprint of some supposedly renewable fuels, because if we cut down virgin rainforests to grow things that are then pelletised and burned, the overall genuine carbon footprint is much worse than people like to pretend.

However, my hon. Friend would also make a sharp distinction between what I think is called long-cycle carbon—in other words, fossil fuels, where carbon has been locked away for millions of years, are a net release that makes an overall difference to the level of carbon—and short-cycle carbon, which is a sort of short-term recycling whereby things are grown in the course of our lifetime and burned. I will not try your patience, Madam Deputy Speaker, by going into the detail of the level of greenery, but I hope we can all agree that this scheme, with all its manifest flaws, intended to pursue a noble purpose.

Before I go on to the details of the RHI scheme, I will address a few other points. The hon. Member for Belfast East (Gavin Robinson) asked a series of questions about Northern Ireland housing associations and, I think, was hoping to pin us down on when a piece of legislation might be introduced. I want to reassure him—my right hon. Friend the Secretary of State made this point, but I will repeat it—that the Government will take that forward as soon as parliamentary time allows.

The hon. Member for Rochdale (Tony Lloyd) asked about the stronger towns fund and said that he did not feel he had enough of an answer yesterday; I want to ensure that we try to provide that today. He will be aware that the Secretary of State for Housing, Communities and Local Government made an announcement yesterday. The Treasury will apply the Barnett formula in the normal way and confirm the funding for each region in due course. We do not know that yet, but it will come out, and we will seek to ensure that towns in Northern Ireland, Wales and Scotland can benefit, building on the success of the Government’s growth and city deals.

The hon. Gentleman also asked about the applicable costs of the RHI scheme. I will address that specific item before coming on to the broader points. The scheme guidance, which I am sure we are all itching to go through in huge detail, has been published, and it sets out clearly the eligible costs. They are primarily the costs of the boiler. He mentioned costs to do with installation, pipework and the like, and some of those are included as well. Interest costs on borrowing are apparently not included as an eligible cost in this scheme. I wanted to share that with everybody, so that we have a shared fact base before we go into Committee and discuss the detail of the amendment tabled by the Chairman of the Northern Ireland Affairs Committee, my hon. Friend the Member for South West Wiltshire (Dr Murrison).

Questions have been posed about the up-front payments and how they would be calculated for people who wanted to opt out of the scheme because they felt that if they remained in it, they would lose out too badly. Straightforwardly, an individual’s costs—that means the cost of installation, the capital cost of the boiler and other eligible installation and running costs—will all be included, and they will be reimbursed up to the 12% target rate of return for the revised scheme. All the additional costs of the renewable technology above a fossil fuel one will be reimbursed. That is crucial, because a number of Members have raised questions about what happens to people who are worried that they are going to lose out. The hon. Member for Strangford (Jim Shannon) read out an email he received from someone with precisely those concerns. If they are concerned that it will no longer be economic for them to stay in the scheme, they can opt out. It will be a free option for them, and they are guaranteed to have made 12% on their money if they decide to opt out at that stage.