Burned

by Sam McBride

  Wightman said that he believed that Moy Park was so enormous that it ‘could potentially make life difficult for us’ if he did not give it a sense of what was coming. Wightman was asked whether – given Moy Park’s huge significance to the Northern Ireland economy – DETI felt that it had to let the company get some more chance to get into the scheme before they clamped down on it. Wightman replied: ‘I think there was a bit of that … because Moy Park were expanding – and they seen [sic] RHI and switching to renewable heat as a big part of their expansion. Of course, they are a major employer in Northern Ireland.’ The difficulty with that was that other firms not of that size or without those contacts were not getting the same chance. Even within the poultry-processing sector, the government was now prioritising Moy Park over its few remaining rivals. How could those firms hope to compete when the multinational meat giant was getting such preferential treatment? And if the officials believed it was important to give certain firms inside information, why not just issue a press release at the start of the summer to say that the scheme was soon going to be far less lucrative?

  Wightman said that ‘we just found ourselves in a difficult situation here in that people are coming back to you saying “well, nothing’s out yet; there’s been no announcement; are we still on for October?” It’s a difficult … you’re in a difficult situation there’. Inquiry panel member Dame Una O’Brien interjected to ask: ‘Why is it difficult? Why can’t you just say: When the minister’s decided, there will be an announcement?’ Wightman said he now agreed that was what he should have been saying, ‘but at that juncture, with everything else that was happening, to be fair, I probably didn’t give it as much credence as I should have’.

  When Mills was asked why officials had not simply resolved to give the industry no commercially sensitive information before it was agreed by the minister, he said that it was not a message which he recalled ever passing on to Wightman and Hughes. At one point in his evidence, he said: ‘I don’t think it’s particularly possible for me to defend a lot of decisions that were taken in this or any other period on RHI’. Wightman said that with hindsight ‘I accept that our engagement was ill judged and naïve and demonstrates a lack of commercial awareness on my part.’ But he also told the inquiry: ‘I still firmly believe that the industry was receiving information from a source other than Seamus Hughes and myself from early/mid June 2015 given the nature of queries the branch were receiving at that time.’ However, when Wightman was interviewed by PwC – before there was a realisation of how big the scandal would become – he gave an extraordinary explanation that undermines his later claims of naivety. Facing questioning around the inadequate response to whistleblower Janette O’Hagan, Wightman offered an inconsistent justification. PwC put to him that Hughes’s response to O’Hagan in March 2015 contradicted the suggestion that the department was already looking at tiered tariffs at this time. Wightman said this was because there was a ‘tip-off point there … we would never tell anybody that … because of the nature of the scheme and the demand-led aspect of it … we obviously hadn’t put anything past the minister at this stage …’ Here, when it suited Wightman, he claimed that they had deliberately not been upfront with O’Hagan – who was trying to rein in RHI – in case that tipped off the industry. Yet he would later, along with Hughes, freely hand out commercially sensitive detail about the looming changes to those who – unlike the whistleblower – were making a fortune from RHI.

  When DETI Deputy Secretary Chris Stewart was made aware of Wightman’s justification of not wanting to ‘tip-off’ the industry, he thought it was ‘ludicrous’ for another reason:

  I’m astonished at that suggestion being made because it defies logic – because of the reason given. If the reason given was, you don’t want to reveal your hand on something because someone could get a commercial advantage on it, but you think it’s OK to tell lies on foot of which someone will make commercial decisions and possibly lose money and who will then come back and say; ‘well you know when I heard there were going to be no tariff controls, I immediately went out and bought every 99KW boiler I could find on the face of the planet and got ready to install them and then you introduce these controls and I’m now out a load of money because people won’t buy them’, is ludicrous.

  It is also evident that at the time of Hughes’s response to O’Hagan in March 2015 he had already informed others in the industry of the proposed changes. Both Wightman and Hughes admitted that what they had done exacerbated the spike and therefore the huge cost to taxpayers. Their actions meant that potential claimants not receiving information either directly or indirectly from them were at a disadvantage to their competitors. It would not be until 8 September that DETI would issue a press release to say that changes were coming. There had never been any evidence of corruption on the part of Hughes or Wightman and they convincingly highlighted to the inquiry that they had never sought to hide their interactions with industry – which surely any individual acting nefariously would have done. Rather, they used departmental email accounts, recorded notes of some of the interactions and told their boss, Mills, about some of the meetings.

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  It was a frenzied period for boiler installers. From about July, Alan Hegan – a major RHI claimant, a major supplier of wood chip and a boiler installer – was receiving between 50 and 100 phone calls a day. His phone was unable to accept any more voicemail messages due to the level of demand for boilers before the uncapped subsidy ended. He said that ‘the whole industry became aware around early July – the phone started ringing off the hook’. He had been due to go on a foreign holiday but he rebooked a later flight, cutting the length of his holiday in order to do more work.

  But not everyone saw the spike. Brian Hood, the boiler installer who had been one of the first to spot RHI’s potential, said that he never saw any increase in work. However, he did not install in the agricultural sector. He believed that the spike was overwhelmingly driven by agriculture.

  The scheme was sufficiently lucrative to allow several enterprising companies to work out a system whereby they installed boilers for other companies for free – and agreed to service them for free for two decades – just so that they could take the RHI payments. One such firm installed 37 boilers in 2015 before the scheme was reined in.

  Some of those who managed to get into the uncapped scheme before it ended made a fortune. One business, which was only set up as the spike was starting, would soon be making almost £1,000 a day from taxpayers after it managed to install ten boilers just before tiering. Eco Biomass NI Ltd was only incorporated as a company on 1 September 2015 – seven days before cost controls were publicly announced. Even though the firm – which was set up by 65-year-old Thomas James Spence from Dungannon – only began operating right at the end of the scheme, within 16 months it had the fourth-largest total payment to a single entity on the scheme, pulling in £476,383. The boilers were used to dry wood chip – which could then be used in either the boilers themselves or sold.

  In January 2018, at the height of the scandal, Spence spoke to Ulster Herald journalist Ryan McAleer and defended his RHI claims – although the scale of the payments was not known at that point. Spence said: ‘We’re a legitimate business providing to power stations and other farmers and other local people … we simply availed of the opportunity that was there and presented to us. There is nothing illegal about that, there’s certainly nothing to be demonised or criminalised about.’ Every single one of the Eco Biomass boilers was 99 kW – the maximum capacity boiler for which the ‘burn to earn’ RHI tariffs could be claimed. By contrast, some individuals chose to install single massive boilers meaning that they received far more modest payments. Sainsbury’s Bangor store installed a 630 kW boiler and its Craigavon store installed a 580 kW version – between them, a greater capacity than the ten Eco Biomass boilers combined. The Sainsbury’s boilers were also installed at a much earlier stage in the scheme in 2013, meaning that it had a much
longer period in which to claim. But Spence’s boilers received payments which were almost seven times greater than the two Sainsbury’s stores between them. To put the scale of the claims in context, the two Sainsbury’s boilers were receiving an RHI payment of just £51 a day, while Spence’s ten boilers were bringing in almost £1,000 a day.

  But even Spence’s late grand foray into RHI was trumped by another late entrant. Dennison Commercials, the Volvo truck and bus dealer in Northern Ireland, managed to install 11 RHI boilers in 19 days after indirectly getting inside information from Stormont. The Ballyclare company had the multiple 99 kW boilers installed at the end of August after the contents of an email, which Hughes had sent to a boiler installer, were sent to it. Hughes had said that it was never DETI’s intention to allow ‘gaming’ of the system by installing multiple smaller boilers to receive higher payments and that it would soon be outlawed. Dennison Commercials had been pondering RHI for some time, and boiler installer FG Renewables used the email to get the company over the line, warning the business that it needed to act urgently or it would lose out. In the first 16 months of the scheme, Dennison claimed more than £340,000 for an installation that had cost it £650,000.

  However, having inadvertently tipped off a potential claimant about the looming end of the loophole whereby claimants could ‘game’ the system with multiple small boilers, DETI then failed to address that problem in its November 2015 legislation. Despite DETI having seven months from the point where it was clear that the scheme was out of control to the point where the scheme was altered, officials said that it had been impossible to agree with Ofgem a suitable way of addressing the problem.

  Late in the day, Wightman finally panicked. On 13 November – just five days before the Assembly would pass the reduced tariffs – he emailed Stewart, McCormick and other senior DETI officials. Now aware of the spike, Wightman said that ‘uptake has exceeded all expectations’. There had been 800 applications over the last six weeks, he said – off the charts from the hopelessly inaccurate forecast of 150 applications for all of October. This meant that RHI spending could increase to over £30 million in that financial year and to over £40 million the following year – even if both schemes closed in April 2016. Having expected to have about 3% of the GB application numbers, in line with Northern Ireland’s size, the Stormont scheme was now running at over 10% of GB applications. In bold and underlined type, Wightman told bosses: ‘I feel that in light of this situation regardless of what impact the amendment regulations might bring there is no choice now but to move to close both RHI schemes from 31 March 2016.’ He added: ‘I am presenting this for your urgent consideration. It will be important for the minister to be aware that further “unpopular” legislative changes are needed early in the New Year.’

  In a 13 November email, Wightman said that the delay from 4 November to 17 November had been due to ‘the progressing of legal and financial approvals’ – a delay which has never been fully explained.

  From late August there had been a major political crisis after the police had linked the Provisional IRA, the terror group out of which Sinn Féin had originally grown, to a murder in Belfast. The DUP responded with a series of rolling ministerial resignations, reappointing ministers briefly to take urgent decisions but overwhelmingly leaving departments in the hands of officials for almost two months. Cairns lost his job as a spad and was not in the post from early September until late October. The one exception was Foster who was retained as Finance Minister and made acting First Minister. As Foster’s spad, Crawford kept his post. With unintended irony, given the RHI chaos which was unfolding, Foster defended her party’s decision to keep her in post by saying: ‘I’m not going to put at risk to the people of Northern Ireland the possibility that rogue Sinn Féin or renegade SDLP ministers are going to take decisions that will harm the community in Northern Ireland.’

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  Having got the changes through the department, now officials needed to get them through the Assembly. The first stage was the enterprise committee, which scrutinised DETI’s work. On 3 September, Wightman wrote to the committee. It was a misleading piece of correspondence. In explaining the changes, Wightman presented more detail about the move to allow Combined Heat and Power (CHP) plants to apply for RHI than he did about the funding crisis which the legislation was primarily meant to address. The fact that at this late stage DETI was moving to expand RHI at the very point where it was supposedly reining it in was itself astonishing. With the budget seriously overspent and wider concerns about the scheme, allowing CHP plants – effectively small power stations, which under RHI would be claiming many millions of pounds each – was potentially going to undo any savings made by tiering.

  Tiering was presented benignly by Wightman as a measure ‘to ensure affordability and value for money’. There was no mention of the fact that RHI was now far over budget – giving MLAs less detail than Wightman and Hughes had given to the industry – and no mention of irregular spending. Whatever Wightman’s reasons for failing to give the legislature the full information, it meant that there was less scrutiny of his own failures. Wightman also showed limited attention to detail in the letter, misspelling degression in a way which then failed to convey what that GB policy was designed to do. He referred to ‘digression’ – a temporary departure from the main subject – rather than ‘degression’, a descent by stages or steps, despite the fact that degression ought to have been familiar to DETI if it had been keeping an eye on events in GB. It is difficult to justify Wightman’s failure to give MLAs the full gory picture. He and Hughes were well aware of the real purpose for the legislation. In an email to Ofgem as far back as July, Hughes referred to its purpose being to introduce tiering, with ‘other issues’ described by him as ‘minor’.

  Wightman later said that they had tried to ‘recoup some lost time’ by attempting to get the committee to approve the changes in the first week of November but that the committee clerk ‘refused to allow this’, pushing it back by a week. However, it is likely that Wightman’s – and DETI’s – withholding of information from the committee added to the bill for taxpayers. If he had been open about the crisis, it is likely that the committee would have agreed to discuss it immediately. However, Wightman was attempting to have the best of both worlds. He was presenting the changes to the committee as fairly mundane, which meant that they were unlikely to arouse suspicions and hard questions, while then later blaming the committee for delay because it had refused to suddenly be rushed into deciding upon legislation, which he had presented as technical and unexciting. When Wightman’s letter came before the committee in September, it triggered no discussion and was nodded through by MLAs.

  In a letter to other Executive ministers on 9 November, by which stage DETI knew of the calamitous overspend, Bell himself did nothing to convey the gravity of the situation. The changes were blandly presented as ‘primarily to provide for new tariffs for Combined Heat and Power installations and to introduce cost control measures for biomass’. In Bell’s defence, his ministerial style suggests that this was not a deliberate attempt on his part to mislead and was another example of where he was prepared to sign what officials put before him. Nevertheless, as a government minister it was his responsibility – and the responsibility of Cairns as his spad – to ensure that he was conveying accurate information to his colleagues. But the culture within Stormont was not one of openness with ministerial colleagues but of attempting to give as little hint of problems as possible – partly because mandatory power-sharing shackled together electoral rivals.

  But there was one more chance to give MLAs the full picture. On the morning of 17 November, Wightman and a junior official arrived at the committee to brief it about the legislation. Only five of the committee’s 11 members were present for a discussion, which followed consideration of the committee’s Christmas card list. Wightman seemed nervous. His hands shook slightly and he fidgeted somewhat as he spoke. What he was telling the committee �
�� both in his letter and verbally – seriously misled the committee to the point of being preposterous.

  During an appearance, which was shorter than a television ad break, Wightman led the committee to believe that stalling on the issue could halt investment, when in fact as he knew the critical problem was that further delay would lead to the already vast spike in applications increasing still further. It was unusual that the department was only bringing the request for committee approval on the morning that the legislation was coming to the full Assembly. The committee chairman, Patsy McGlone, began by asking Wightman: ‘So, why’s it so urgent?’ Wightman replied:

  The reason for the urgency was that we were originally aiming for the 4th of November and we’ve been very open with the industry about that date … so we’re keen that there’s not a hiatus out there in terms of the industry because I know because we’re changing the tariff banding there are a number of installers holding off on new installations. Also in terms of value for money, we’re obviously keen to obviously make the changes as soon as possible in terms of affordability of the scheme going forward [sic].

  Contrary to Wightman’s evidence, the original date had not been 4 November but early October. And although he mentioned value for money and budgetary considerations, there was no emphasis given to the seriousness of the situation. Wightman was effectively telling the MLAs that the department was attempting to facilitate turning on the tap of green investment when he knew that they were desperately trying to turn off the tap.

  Having been given a misleading impression of the situation, the committee did nothing to probe the glaring holes in his story. Thus, without a single question from anyone other than McGlone, MLAs unanimously nodded the changes through. Wightman’s appearance – which ought to have been lengthy and difficult – lasted just two minutes and 13 seconds. Less than an hour later – while the committee was still meeting – the legislation came before the Assembly. McGlone left the committee to head to the Assembly chamber where he was the only MLA other than Bell to speak briefly on the issue. Within a few minutes, the regulations had been unanimously approved.