by Sam McBride
On 17 June McCormick called another meeting of his top team to take a decision as to how they would address the difficulty. Energy Division advised those present that they had legal advice that said that closing RHI at that point was not an option – a claim which was incorrect, as RHI would later be closed within the space of about two months. Energy Division advised the meeting that it could take up to a year to cut the tariffs. As kindred spirits alarmed at what was unfolding, Murphy and Cooper had for several days been discussing tactics to pressure Energy Division at the meeting. Murphy later recalled Cooper bluntly asking them – he believed it was Wightman who was asked – whether ‘you can make money just by running these things’ and receiving ‘clear assurances from Energy Division that this was not the case’. He said that Wightman and Mills simply offered the explanation that it was a demand-led scheme, which was experiencing higher than expected demand. A series of proposals from Cooper and Murphy aimed at cutting expenditure were rejected by Energy Division as either impossible or unfeasible. Eventually in frustration Murphy asked: ‘Could you at least stop promoting the thing?’ That line would soon become of great significance.
Having been told by Energy Division that the only option was to take a less radical path – the implementation of tiered tariffs – McCormick and the others decided to pursue that route. From this point, the department was embarked upon a course of action that did not fully address the problem. But once that course had been set and significant work had gone into moving towards tiering, it would become increasingly difficult to alter the position. However, the facts were not quite as they were understood by DETI’s senior management on that day. In fact, Wightman and Hughes had only asked for legal advice on whether they could unilaterally move to suspend the scheme – and the advice confirmed that they could not because there was no such power in the legislation. However, they had not even asked the equally significant question of whether they could now move to introduce legislation to give them the power to suspend RHI.
Wightman’s concern was that Stormont had lost a series of court challenges where it had failed to engage in public consultation or give adequate notice to the public of a sudden change in course. Wightman said that he ‘knew from my experience’ that legislation would require a slow process of consultation and Assembly scrutiny. Although they were going to require legislation anyway to introduce tiering, Wightman calculated that this could be done more swiftly because there had been a public consultation on cost controls in 2013 – the one which DETI had subsequently quietly abandoned. There was one huge flaw in that explanation: the 2013 consultation had never been about tiering. Instead, it had involved a more complex mechanism, which had been drawn up by Peter Hutchinson. Therefore, the entire justification for proceeding to only tier the tariffs – rather than close the scheme or implement a power for DETI to close the scheme – was based on a false premise and one which could easily have been seen if they had gone back and read the 2013 consultation. It was a hopelessly confused situation where, yet again in DETI, the blind were leading the blind.
Yet the idea that the scheme might have been too generous ought to have been apparent to Energy Division for another reason. By the beginning of March, DETI had been told by Ofgem that more than 12% of boilers were being run round the clock, seven days a week, 365 days a year. One RHI boiler owner told the author that some people in his situation had just written down the highest number of hours available but were not actually intending to run their boiler flat out. This is backed up by usage figures later published by the Northern Ireland Audit Office which found that just ten boilers were running between 90–100% of the year. Beneath that, 65 boilers were running for between 80–90% of the year, a further 129 were running for 70–80% of the year and another 213 were running for 60–70% of the year. Regardless of whether the figures were accurate, they were what the department was being told at the time and were startling. But, as with myriad other warning signs, no alarm bell rang in DETI.
Referring to earlier data from Ofgem in late 2014, which also showed far higher boiler usage than expected, Wightman told the inquiry: ‘I can confirm that through these checks I was aware of actual average weekly operating hours in the order of 91 (54% load factor), but regrettably this did not alert me to the issue of potential overcompensation.’ It is not the case that all those running at such high levels were fraudsters. Some businesses have extremely high heat demands, and with no cap on usage it was lawful to claim for all their heat. The usage figures also dispel the erroneous perception, which would later develop among some of the public, that everyone on the scheme was a crook. The Audit Office figures show that there were 81 boilers running for less than 10% of the year and another 192 boilers running for between 10–20% of the year. Self-evidently, those individuals were not milking the subsidy for all that they could get.
An early June communication between two of the Stormont officials who had the greatest knowledge of RHI indicates that DETI was aware of extreme usage. On 9 June, Hughes emailed Cathal Ellis, the Department of Agriculture’s renewable energy technologist – a position which meant that he knew how valuable RHI was to farmers. Even before RHI launched, the Department of Agriculture had worked out that a boiler costing £36,000 could receive a £35,000 subsidy in its first year – meaning that during the second year the farmer would move into profit and continue there for another 18 years. The department – headed up by Sinn Féin minister Michelle O’Neill – promoted RHI at 58 events during the lifetime of the scheme. Referring to poultry farmers’ use of RHI, Hughes told him: ‘Anecdotally we are led to believe that some houses are running 24/7 and if this is the case we are seeking an understanding of why this is happening.’ Ellis replied to Hughes to tell him what would probably have been self-evident to the man or woman in the street. Repeating some of Hughes’s words back to him, he said: ‘There are rumours of houses running 24/7 (I don’t think in NI yet!) – the reason to maximise the output from the boiler for RHI.’
Wightman, to whom Hughes’s email was copied, said that he could not recall what Hughes was referring to, and he thought it was ‘much later’ around September that ‘I certainly remember hearing anecdotal claims of basically empty buildings being heated’. However, in his earlier interview with PwC – which he never expected to be public, so may have been less guarded, but which was based on not seeing very much of the material, so equally may have been confused – Wightman had said something different. Referring to a meeting with Ofgem around October 2014, he said: ‘I remember raising the issues … in passing [that] there [were] anecdotal claims that people were heating empty sheds.’
By spring 2015, it was clear to DETI’s senior civil servants that there was a significant problem. There had been a sudden increase in the number of applications, those who got into the scheme were running their boilers far more than had been anticipated – and as a result they were claiming huge sums. And, almost uniquely in government spending, the commitments were for 20 years, meaning that the total bill was going to be vast – even if the scheme could be shut immediately, which it could not. And yet, it took until 8 June before the minister – the individual who was the titular head of the department – was verbally alerted to the situation and a further month before he was given a written submission about the crisis. By involving the political side of the department, an entirely new problem was to emerge. For all that DETI was a dysfunctional department in this period, it was a paradigm of order and civility when compared to what was going on within the DUP. The ineptitude of the civil service and the scheming of some in the DUP was about to be united and would give birth to the monster that would topple the entire Stormont edifice.
CHAPTER 10
BELL AND THE BIG BALLS
It was meant to be a relaxed evening largely away from the immediate pressure of politics. Bell, not yet a month into his first full ministerial role, was in London for a meeting with his Westminster counterpart, DECC Secretary of State Amber Rudd. Sitting in an
unassuming London curry house on the evening of Tuesday, 9 June, Bell and his spad, Tim Cairns, along with the minister’s private secretary, Sean Kerr, were fortifying themselves ahead of the next day’s business. Dinner was not intended to be all work and the trio each relaxed over three pints of Cobra beer. Cairns believed that Bell rarely read his ministerial submissions and the best way to keep him informed, and to get him to take decisions, was through oral briefing. Therefore, as Bell and Kerr sat on one side of the table in Paradise Restaurant in Pimlico and Cairns sat on the other side, the spad took his minister through what he should say to Rudd. As that work element of the dinner came to an end and the starters were arriving, Cairns raised something that had been on his mind for more than 24 hours – RHI.
Bell and Cairns had first been told of the emerging RHI problem the previous day. During a routine departmental meeting between DETI’s top team and the minister, RHI was item six on the agenda. Bell was told the projected spend for that financial year was now £23 million and that the tariffs had not been reviewed as had been meant to happen. Cairns recalled that the tone from the permanent secretary, Andrew McCormick, was that officials had ‘dropped the ball’ but were working to put things right, and would soon be bringing proposals to the minister in an urgent submission. As was common in meetings, Bell said little but noted the position and asked to be kept informed.
As Cairns was leaving Parliament Buildings that day he decided to take the issue further. The Assembly office used by Bell and Cairns was adjacent to the one used by Foster and Andrew Crawford. After being told about the RHI problem and separate escalating issues with another green energy scheme, the NIRO, Cairns’s natural inclination was to talk to his colleagues who until a month earlier had been in charge of both schemes. Cairns’s political antenna had gone up when the civil servants had told him that the scheme’s approvals from the Department of Finance had lapsed. Knowing that Foster was now the Finance Minister, he asked her if she knew what was going on. Cairns later recalled that Foster had said: ‘I know nothing about that,’ before turning to Crawford to ask: ‘Andrew, do you know anything about that?’ Crawford similarly said that he was unaware of the issue. Cairns suggested that it would be helpful if Bell and himself met Foster and Crawford more formally to discuss RHI because they would know more about it as the team which had developed the scheme. Foster readily assented to the proposition.
Cairns, a trained lawyer in his early 40s whose family was steeped in the DUP, had been employed as a DUP policy officer for two years from 2002 before abandoning politics for nine years – a period in which he went to Canada to study theology and then work as a religious minister. Returning to Belfast in 2011, Cairns had returned to his old policy officer role at the DUP’s Dundela Avenue headquarters, but within a year had been asked to become Bell’s spad while he was a junior minister.
After his brief discussion with Foster and Crawford that Monday evening, Cairns had not discussed the issue with Bell. Now, relaxing over beer and bhajis, Cairns raised the subject. The adviser informed Bell that he had talked about RHI with Foster and Crawford who were keen to meet a proposal, which Cairns advised his minister to accept. Bell immediately took offence at the suggestion that anyone else should be involved in how he ran DETI. Cairns said that he ‘very quickly and aggressively’ made clear that ‘he ran the department, not Arlene’. Cairns tried again, telling him that while that was true it might still be best for them to meet and hear what their predecessors thought. Bell shut down the conversation, which moved on to other matters. Although Bell had been sharp with his spad to the point that Kerr had felt uncomfortable, it was a brief flash of steel and did not spoil the night. After the meal the three men walked along the embankment and Bell pointed across to the Palace of Westminster, telling his companions that he would be an MP by 2020. The trio knew each other pretty well by now, having worked together in Stormont Castle, where for the last two years Bell had been a junior minister – in effect an aide to the First Minister.
In the bar of the trendy Park Plaza Westminster Bridge Hotel they continued the conversation. Over more beers, Bell outlined his plan to become an MP and claimed that a senior DUP strategist was managing his parliamentary assault for 2020. When they headed to bed that night, there was little hint of what was to come. At breakfast the following morning, the curry house trio were joined by McCormick and energy division boss John Mills, both of whom began pressing Bell to take a decision that day over the future of the NIRO, another lucrative green energy scheme, which had seen vast subsidies travelling from GB to Northern Ireland but was now under threat from a Tory policy shift. Touching a nerve, which had been pricked the previous evening, Cairns got involved to tell the civil servants that Bell could not take such a decision by himself, and it would have to be referred to others in the DUP. The civil servants continued to press for an urgent decision, leading to Cairns re-emphasising to his minister that the decision was not his alone to take. At this stage Bell erupted. Furious, he saw his spad’s conduct as an attempt to undermine his authority in front of his most senior civil servant. Bell made clear that he would be making his own decisions. By now Cairns was talking over the minister who was his boss – all in the presence of officials and in the midst of a busy central London hotel room.
Bell later recalled that Cairns ‘frequently spoke over me and stated the department would take a different perspective [to] the one that I was considering … it was inappropriate and led to tension’. Cairns’s intervention ‘jarred’ with McCormick because it was ‘a sharper intervention with a minister than I had seen before’ and ‘right at the borderline of normal conversation, if not over it’. Eventually Cairns – in an attempt to defuse the situation, he later said – left the table and checked out of his room. But when he came back down some time later, Bell was still at the table and wanted to speak to him. By now the officials had gone. Cairns later told the public inquiry that Bell became ‘enraged’.
Cairns was waving – whether consciously or not – his finger in the direction of the minister. Bell later said that as his spad wagged his finger Cairns had told him: ‘Now you’re going to listen to me, big balls’. Bell said he was ‘shocked and taken aback at this outburst’. Cairns admitted that he had used ‘unsavoury language’ to the minister but said that as his finger was pointed at Bell the minister had made a grab for it and in a ‘very aggressive’ tone of voice told him: ‘If you wag your finger at me again, I’ll break it’. By this stage Bell was standing up and fellow diners were watching the unfolding scene. The minister demanded that his spad should apologise. Cairns refused and Bell said that he was fired. Bell rejected the claim that he had threatened physical violence, earnestly telling the inquiry: ‘I’ll say the allegation that I tried to break a finger or any other bone, or attempted to, is untrue, completely without foundation and has no basis whatsoever in fact. I have never tried to break anybody’s finger and never would.’ Whatever the truth of what went on in the Park Plaza’s breakfast dining room, it is clear that Cairns’s behaviour was unacceptable, and probably would have led to disciplinary action in any other walk of life. Cairns later freely admitted that it ‘isn’t the proudest moment of my working career’ and that it was ‘not a very savoury incident’ in which he had ‘made many mistakes’. He conceded that Bell was probably ‘right to be annoyed with me’.
Kerr was paying for the breakfast when Cairns approached him and told him that he needed to arrange a flight home because he had just been sacked. But before that could be done, the group had to leave for their meeting with DECC. After squeezing into a taxi, Bell shut down questions about the upcoming meeting and told those present that Cairns would not be attending. While the officials headed into DECC with their minister to meet Rudd, Cairns headed for Heathrow Airport.
After landing in Belfast, Cairns travelled straight to Stormont Castle – the real seat of devolved power. Inside the castle, Cairns informed the two most powerful DUP spads – Timothy Johnston and Richard
Bullick – of what had happened in London. During the meeting Johnston phoned Bell – who by now was at a function in the Japanese Embassy – and told him that he could not unilaterally sack his spad because spads were appointed by DUP party officers. This was an inversion of the legal position whereby the appointment of spads – figures who had to be utterly trusted by the minister, given their power within the department for which they were responsible – was meant to be entirely a matter for the minister. The system set up by the DUP gave greater central control to the party leader and meant that spads to other ministers knew that they ultimately owed their jobs to the leader, who was heavily influenced by Johnston – a factor which would soon become highly significant. Advisers were now telling ministers what to do – yet the advisers were barely known to the public and not democratically accountable.
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The day after the breakfast row, the two protagonists separately met with DUP leader Peter Robinson and Johnston. Sitting in the First Minister’s Stormont Castle office, the events of the previous day were rehearsed, first by Bell who told Robinson that his spad had acted defiantly by attempting to command him to follow his instructions in a way which Robinson would not tolerate from his own spads. Having given his side of the story, Bell emerged from Robinson’s ground floor room in Stormont Castle and Cairns entered.