Sam McBride: Alarming elements of RHI subsidy proposal now need scrutinised – but can’t be

Elements of what the Department for the Economy proposes for RHI do not add up – and the department’s track record of incompetence makes that alarming.

The department (then known as DETI) bungled the setting up of the scheme to an extent which is still jaw-dropping.

Then, after the scandal had emerged to public fury, it rushed in legislation which amended the scheme in a way which it said brought it into line with the original policy intent. Now the department says that supposed temporary fix of the scheme was itself wildly over-generous and is proposing an entirely new approach.

In the meantime, the department has been incapable of doing what to the person in the street would be the most obvious way to root out fraud – inspect every boiler.

More than three years after the scheme closed, the department cannot even be certain that all of the boilers it has been subsidising actually exist because neither it nor its agents have ever been to see them – even though there are just over 2,000, and many of those involve multiple boilers at a single site.

But there are reasons to be particularly wary of what the department published yesterday. There is no question that the original scheme set up by Arlene Foster was wildly over-generous.

The boiler owners challenging that decision in court are attempting to establish that it should be reinstated. But even if they persuade the court that they have a legal entitlement to uncapped ‘burn as you earn’ tariffs there is a moral argument for them to voluntarily agree to a less lucrative scheme. Those who refused to do so could be named, leaving them open to the verdict of the public.

But, having overseen a scheme which was absurd in both economic and environmental terms, the department now seems to have gone to the other extreme.

The logic of the subsidy now proposed is that the department thinks this is how the scheme should have looked at the outset. But the whole point of RHI was to be an incentive. Would a payment of £21,000 – spread 20 years into the future – really persuade someone to install a biomass boiler costing up to £40,000, with additional hassle, higher maintenance bills and the uncertainty of a new technology?

If civil servants think that, they are out of step with what is happening elsewhere in Europe. Payments on the GB scheme are vastly above what Stormont is now proposing.

And the scheme about to be launched in the Republic – in a desperate late bid to stave off infraction proceedings because it has been so slow to phase out fossil fuels – is also lucrative.

A comparison drawn up by the RHANI lobby group shows comparative payments of over £19,000 for GB claimants with a 99kw boiler installed before July 2014, £12,000 for someone entering the GB scheme today and £20,000 for someone entering the Irish scheme when it launches later this year.

If, as Stormont claims, anything beyond £2,100 a year in Northern Ireland is illegal state aid, then the European Commission needs to investigate those other schemes – otherwise Northern Ireland firms are at a disadvantage.

This plan needs rigorous scrutiny, which cannot happen by MLAs without an Assembly. But civil servants have long known that this would have to be legislated for by Westminster. It is alarming that they are only now bringing this forward to be rushed through – probably in an almost empty Commons chamber.

If the RHI scandal tells us anything it is that legislation needs more scrutiny, not less.

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