BoM December 2019

Our December book of the month is Burned by Sam McBride. The book is a forensic investigation into the scandal of the Renewable Heating Initiative (RHI). It becomes a devastating exposé of the political dynamics and moral culture of the regime at Stormont. His verdict? “Rank dysfunctionality”, and “feckless profligacy – or worse”.

Foster as minister for the enterprise, trade and investment, introduced in the RHI in 2012 and it was set to run for 20 years. it rapidly became wildly out of control. There was a perverse incentive at the heart of the scheme which would become known as “burn-to-earn” and “cash-for-ash”.

As Susan McKay in the Irish Times writes:

A scheme which was meant to protect the environment led to the wilful wasting of energy, empty barns and empty churches roasting hot with open windows, egg collectors at poultry farms complaining they were so sweltered they had to change their clothes several times during a shift.

The legislation controlling the NI scheme was cut and pasted from the British – except that the 107 words dealing with cost controls were cut. When problems inevitably arose, instead of introducing cost controls, the department of enterprise, trade and investment expanded the RHI.

The scheme was set up such that approved fuel cost less than the renewable subsidy. The more you burned the more you earned.

By the time the RHI was closed in March 2016, it was set to cost well over a billion pounds. The overspend was estimated at £500M, perhaps more. Some individuals had made fortunes, many very close to the DUP. Moy Park, a multinational company based in Brazil, was indirectly to be a massive beneficiary.

The heart of the issue is that Stormont thought the overspend would be funded directly from London. Any extra monies from London are considered a bonus by both the DUP and Sinn Féin and electorally very popular. This proved a catastrophic error as the overspend would have to be funded directly by Stormont.

One can understand Sinn Féin wishing to “screw the British” for every penny. The DUP, however, believe in the Union and should wish to keep it strong. They need to prove that NI is an asset rather than a liability. The NI economy is so weak, however, it raises only about 50% of the taxation needed to support the public sector (c. £20bn spent but only c. £10bn raised). The extra 10bn comes directly from London. Even then it has some of the worst problems in the UK, with the NHS in particular approaching total systems failure.

Rory Carroll in the Guardian describes the book as:

“A compelling exposé of a system gone rotten. It’s about greed, sleaze & dysfunction, a saga of incompetence, nitwittedness & knavery by those who ran Northern Ireland until the scandal broke”.

Rogue One who was private-sector adviser to the NI Government since before the Good Friday Agreement looks at the root cause and has commented:

The root cause of RHI & Govt dysfunction, is a design flaw in devolution itself: being based on grant dependence. Why would we expect good government based on spending other peoples money? Until that changes there will be more dysfunction.

Rogue One (a nom de plume) has agreed to write an extended piece on the root cause of the RHI for Progressive Pulse, which has published on PP and available here.

Comments

  1. Bill Hughes -

    Thanks for enlightening us on this scandal. The NI authorities in cohoots with the UK Tory government were certainly very clever in concealing the truth from the British public. Whatever happened to the £1 billion bung that Arlene Foster and the DUP got from the UK Treasury to prop up Theresa May’s doomed government?

  2. Samuel Johnson -

    Two salient facts from this book:

    1. Moy Park’s benefit from this scam arose as follows:

    The company outsources the rearing of chickens to “growers” who take in day old chicks and rear them to killing weight. MP paid them a price that was a margin on top of allowed costs including a component for heating (day old chicks need a lot of heat). Once the scheme was in full swing Moy Park encouraged growers to take advantage of the free money and many rushed to do so. Then the company reduced the amount it would pay for heating expenses, effectively forcing non-participants to sign-up and also creaming off much of the benefit for itself.

    2. Arlene Foster flew to Rio to meet with the Brazilian owners and, like Priti Patel meeting Israelis off the books, had a private meeting there with no civil servants or govt officials. The DUP have form in taking money and covering up the source of it. Given the close connections between the party and Moy Park this, at the very least, looked grim.

    1. Sean Danaher -

      Thanks, there seems to be an extraordinary impunity in NI. As we saw with Ian Paisley Jn., provided you wave the Union flag you can as President Trump says shoot people in open daylight on 5th avenue and your core support will still follow you.

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