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

Committee

Clauses 1 to 5 agreed.

Clause 6: Commencement

Amendment 1

Moved by

1: Clause 6, page 5, line 24, at end insert “subject to section (Conditions of commencement).”

My Lords, I apologise for being out of position, but things have moved so quickly. I have tabled two amendments which I would like to speak to together. Their purpose is to get some fairness into the renewable heat initiative in Northern Ireland. As many Members will know, it has been one of the worst examples and it is how not to do a renewable heating scheme. It has ostensibly been responsible for the collapse of the devolved institutions in Northern Ireland. I am sure that many noble Lords will have received a large volume of emails over the past few days and weeks.

I have two things to say to the Minister. First, it is inappropriate that regional rates and an energy Bill are combined in one piece of legislation: they are totally unrelated. Secondly, the plan was that two major Northern Ireland Bills would go through all their stages in this place in one evening, ensuring that no scrutiny of any description was conducted into the legislation. Apart from anything else, that is bad governance.

Members will be aware that legal proceedings continue and are perhaps due to come to partial fruition later this month. The proposals in front of us would probably result in further legal action, because the fact is that government Ministers in Northern Ireland made promises some years ago and, regardless of the intricacies of that or who was involved, people were led to believe one thing and have now been confronted with a new situation. That is bad from every point of view. These amendments try to ensure that there is proper scrutiny of the proposals.

Any noble Lord who has been looking at, and trying to respond to, emails from farmers’ unions and others will have been completely amazed at the complexity of this legislation: the new tariffs for different sizes of boilers, whether 99 kilowatts or 199 kilowatts—I am sure we are all learning as we go along. While the bulk of the boilers are 99 kilowatts, those who have larger boilers or micro boilers feel that their circumstances have not been taken into account.

I have no doubt that all the emails that I have received and the communications that other noble Lords around the Committee have received will be the same. I do not believe that all these people are simply telling lies or have in some way profited inappropriately from the scheme. There is no question that some people have done well, and that is fine, but my anxiety is that some people have not done well and are being treated in the same manner. Amending the Bill to return it to the other place and ask it to think again is one of the things that it is open to us to do.

The Minister, in fairness to him, has been very attentive. A number of us have attended briefings with civil servants, and we are deeply grateful for that. If anything convinced us of how complicated this scheme is, it was the involvement of the civil servants. The Minister kindly spoke to me yesterday and again today, and I understand that he is trying to be helpful, but our principal anxiety must be to ensure that people do not fall through the cracks and find themselves in a position where they are financially stressed and embarrassed as a result of this change to the tariff.

In that regard, the Minister made a number of suggestions, which I have been looking at in the past 15 minutes, because we have not had much time and business has moved so quickly. I just want to try to test him, because it is very important that we get this right. The compensation arrangements in the original proposals were to set aside £4 million per annum to assist people who got into difficulties because the scheme’s tariffs had changed since they were originally set. When people were told at the beginning that this would be for 20 years, they went to banks or finance companies and leveraged out loans and perhaps built new chicken houses. They have now found themselves with two sets of reductions: one in 2015, and the last one that the Assembly made before it closed in 2017. That has dramatically changed their financial profile and circumstances.

On top of that, this new proposal is radical in what it does to the payouts of the scheme. People will go from receiving £16,000, £17,000 or £18,000 a year down to receiving £3,000 or £2,000. In some cases, cash flow will be dramatically affected, because if boiler users have used a certain number of kilowatt hours in the current year, they will not even be eligible for any payments perhaps until the latter part of this year or early next year. For all these reasons, I wanted to ensure fairness for those people. If they find themselves in a financial straitjacket because of actions and intent that the Government set out and if they followed that in good faith, it is unfair that those people should be put in the position of being financially embarrassed and stressed.

Let us be very clear on what we are trying to achieve here. I understand that public expenditure has to be taken into account, but equally there is a moral issue, as the noble Lord, Lord Morrow, said at a briefing I attended. There is indeed a moral issue, because if people state categorically that they are guaranteeing this and grandfathering rights are being guaranteed, and then people make an investment in good faith, even if the Government were wrong and the scheme was wrong—which it clearly was—there is still an obligation to those people.

The question is: what can this Committee do to help mitigate the conditions in which those people find themselves? I think the Minister will have to convince the Committee that he will be able to achieve this by other means than these amendments. It is the end we are concerned about, not necessarily the means. We want to ensure that people are not left financially embarrassed or stressed.

We have to remember, of course, that the overarching objective all along was to reduce the United Kingdom’s carbon footprint, yet we are actually ending up putting forward a proposal for compensation that will probably lead to people reverting to fossil fuels. So the whole thing is perverse. That is the situation.

I would like the Minister to explain to the Committee what he would propose we do, as the Government, to ensure that these people are not financially embarrassed and suffering a reduction in circumstances. Even if there are people who have done very well out of it, we are concerned with people who have not done well out of it, who have honestly and in good faith taken the scheme on, borrowed money and installed this equipment in good faith. What can he say to the Committee that would persuade us that there is another way, other than going down the route of these amendments?

The amendments are merely a means to an end, and I believe that, with the investigation that is currently under way by the Northern Ireland Affairs Select Committee, in which I have very great confidence, I think we can look forward and devise a means whereby those people can be compensated adequately and appropriately and that justice will be done to them and to the taxpayer. We have to remember that, had it gone on unchecked, the amount of money that would have had to have gone into the scheme, if everybody had carried it through to the end, was £1.3 billion. It is almost unbelievable, but that is where it would have ended up.