RHI inquiry: DUP Spad's email on surge of applications a shock, says expert
A Government expert who advised a Stormont department ahead of the Renewable Heat Incentive said that if had seen an email between two DUP advisers about the botched scheme, he would have been worried.
RHI was intended to encourage businesses to convert to using green energy. But a lack of cost controls meant claimants could earn money by running the boilers non-stop.
The projected £490m overspend of the scheme sparked the collapse of Stormont and a political crisis that is still ongoing.
Stephen Moore worked for the former Department of Enterprise, Trade and Investment (DETI). His role was to advise DETI's energy team on how to follow regulations on state aid for the renewable energy sector.
When he started Mr Moore was the only member of DETI's state aid team. He said the department eventually appointed a second member to the team to help with the workload.
At the public inquiry into the botched scheme yesterday, Mr Moore claimed that not all the proper tax information about RHI was sent for approval to the European Commission.
The inquiry panel, chaired by retired judge Sir Patrick Coghlin, showed Mr Moore an email from July 2015 between DUP special advisers (Spads) Andrew Crawford and Timothy Cairns.
Mr Crawford said DETI had been "caught out with the profile of applications" as there had been a sharp rise in RHI applications in 2014/15 from Moy Park poultry farmers.
"This was very attractive, as farmers could get the RHI and write their investment off against tax as a result of the general investment allowances," the exchange read.
Mr Moore said it was the first time he had seen the email, and if he had been aware of it before it would have concerned him.
He added it would definitely have prompted "quite a bit of thinking" and he would have informed DETI lawyers and the Treasury in London.
His worry was that the tax break would have been seen as extra state aid, something the European Commission would need to approve.
State aid rules also explicitly stress that any overcompensation is forbidden.
In August 2011, months before RHI went live, Mr Moore read a copy of a state aid notification for the RHI scheme in Britain. He realised that the British scheme was state aid, and that it was likely to apply to the Northern Ireland version.
Mr Moore said he contacted DETI official Peter Hutchinson and other members of the RHI team.
His message read: "You should expect state aid approval will also be required.
"Obtaining state aid approval for our scheme in time for the scheme going live on April 1, 2012, will probably be a struggle."
Mr Moore told the panel that in the early stages the risk of applicants claiming too much money was "uppermost in my mind".
The state aid application was eventually sent to the European Commission just before Christmas in 2011, in the hope of hitting the April 2012 deadline.
Mr Moore said he would normally be given months to review such a document, but said he was only give 24 hours to skim over it.
At this stage, he said, he was aware of pressure from the top.
DUP leader Arlene Foster was Enterprise Minister at the time. While Mr Moore had not spoken to her directly, he said he was aware DETI officials saw it as an urgent ministerial priority to hit the April deadline. Despite this pressure, the scheme was still not launched until the autumn of 2012.
• Boiler owners who lost a challenge over reduced RHI payments face funding a Stormont department's full legal costs, the High Court has heard.
With the group's own bill believed to be in excess of £200,000, counsel claimed the "11th hour" bid to remove a £15,000 limit on exposure to their opponent's costs went against European law.
Over 500 members of the Renewable Heat Association NI Ltd failed to judicially review the Department for the Economy for cutting tariffs in the scheme.
Judgment was reserved.