18 Mar 20 

 

OFMDFM 

Cabinet Office 

 

Copy to: 

Min Fin 

Min Econ 

Min DAERA 

AG 

 

Economy Committee 

RHANI Members – please forward to each MLA and to all trade bodies. 

 

ISSUE:  SECURING THE SUPPLY CHAIN – AGRI FOODS & BUSINESS CASH-FLOW – IMMEDIATE ACTION 

TIMING:   Immediate. 

 

RECOMMENDATION 

That the Executive should seek the urgent repeal of Northern Ireland (Regional Rates and Energy Act2019 

 

BACKGROUND   

Cash—flow is critical to the survival of businesses.  Cash-flow was devastated by the introduction of regulations that had retrospective impact.  Security of supply of fresh food, whether mushrooms, dairy or poultry, is essential.  Rates do not apply to agricultural premises.  Repeal of the above legislation is the simplest mechanism for the delivery of the strategic aims of the Executive, approved by the Northern Ireland Assembly, for relief of rates and the release of cash to agribusiness and hospitality sectors. 

In absence of a functioning Northern Ireland Assembly, the above legislation was drafted by Senior Civil Servants in the Department for the Economy and sponsored through both Houses of Parliament, using emergency procedures.  This atypical process gave rise to a House of Commons Select Committee Inquiry and to the commissioning of two separate independent reviews by the responsible Department.  Whatever the prospective impact of the 1 April tariff review, only an adjustment of the 2019 rebate can have an immediate effect on the cash position of businesses. 

The Department for the Economy is poised to return £25m in AME to HM Treasury this month.  Last year, under the 2017 rebate tariffs, it returned almost £2m.  The Department estimates that the legislation that it had sponsored, will see an underspend (to 2036) of £400m.  This is a conservative estimate. 

Four or more sets of litigation are in train against the Department and the Secretary of State.  Further litigation and administrative action and investigations are pending.  All the while, the cash-flow shock for affected businesses, is real.  At a time of national emergency, some critical elements of agri-food sector are near collapse.   

The RHI Public Inquiry report has been issued.  The Inquiry found that “the RHI Scheme was a project too far for the Northern Ireland Government.”  The Scales of Justice have tipped.   

One year ago, Lord Mackay of Clashfern has observed what, in his learned opinion, are the inevitable next steps – attached.  

The people of the United Kingdom can not afford and will not tolerate the collapse of the food producing capacity in Northern Ireland.  Farm buildings are non-rateable.  This proposed action might avert that collapse. 

 

Yours sincerely 

Andrew Trimble 

 

Andrew Trimble 

Executive Chair 

Renewable Heat Association Limited  

NI643393 

Alexander House, 49 / 51 Church Street, Newtownards, BT23 4AN 

 

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HANSARD EXTRACTS 

Then the Government committed to never again introduce retrospective legislation.   

“In a House of Commons debate on 20 October 2011, the Secretary of State for Energy and Climate Change, was questioned by Labour Co-op’s Chris Leslie regarding a Financial Times report which indicated that the Secretary of State was about to “completely pull the rug from underneath thousands of people up and down this country who might have taken steps to invest in solar power for their own houses and who are now finding that their investment is being completely undermined by his decisions”. 

 The Secretary of State’s response was that the “Government are very committed to not having retrospection in legislation and legislative changes”.    

Lord Mackay of Clashfern (Con) 

  

My Lords, this is undoubtedly an extremely complicated situation, but I think the principle is that when a member of the public makes an investment in a government scheme, that member of the public is entitled to trust the terms on which the scheme was launched. Therefore there can be no doubt that those who invested in the scheme, relying on the Government’s statement of what was involved, are entitled to be protected by the Government from any failure on their part to meet the terms on which the scheme was set up. That rule applies to the United Kingdom Government, but also to the Governments of the devolved Administrations. That is the basic principle which cannot be set aside by any legislation that we may pass here, although the ultimate terms of the performance obligation are a matter that we cannot determine here, for various reasons that have been given. The principle seems to me absolutely clear and sound. 

Mackay of Clashfern 

  

I should like to be absolutely certain that there is nothing in the Bill that damages any legal right that people had in Northern Ireland as a result of dependence on the action of the Northern Irish Government taken on behalf of that Government by authorised officials or Ministers. Because that is the fundamental matter: if that is not affected by the Bill, the way in which matters should be brought forward to encourage that is perfectly reasonable as a way forward. The fundamental point is that the legal rights of those who may have been damaged by their contract with the Northern Irish Government, through Minister or official, would not be touched. 

Lord Duncan of Springbank 

  

My noble and learned friend makes a useful point. I can happily confirm that this will not affect the legal rights or standing of any of those who have been affected by the scheme thus far. 

 

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