Wednesday, 1 October 2008
Dáil Eireann Debate
Prior to addressing the motion I will set the context as to why this debate is necessary. In the past year we have seen international gas prices increase by 130%, international oil prices increase by 85% although they have increased and decreased a great deal recently, and international coal prices increase by 100%. Recently, domestic gas prices increased by 20% while domestic electricity prices have increased by 17.5% plus VAT, which is the largest increase in the history of the State. In real terms, what this means is that every average bill received by households on a bimonthly basis will increase by between €30 and €45. The average yearly ESB bill will increase from €870 to €1,020.
Last month alone, 10,000 people lost their jobs and become unemployed. We have seen a dramatic increase in the numbers accessing mortgage interest support and a rapid deterioration in consumer confidence and the ability to pay and spend money. On top of all this, September 2008 was the coldest September in 15 years. At a time when people do not have income to spend, energy prices are rocketing. At a time when people are uncertain about their future they must spend more and more money paying for basic heating and power in their homes.
This motion asks for something very straightforward. It is not complex or overly demanding on the Government. It calls for a national strategy to address energy or fuel poverty. It calls for a timeframe for costings and a targeted approach that we can see in writing so we can judge the Government against the commitments it makes.
Instead, what we get from the Government is a counter motion which claps the Government on the back and congratulates it on its great performance in this area. It shows no recognition whatsoever that there is a problem and that further Government action is needed to address energy poverty in people’s homes or businesses. The Government motion opens by taking a defeatist approach, essentially stating there is nothing it can do in terms of energy pricing because of international factors. Where have we heard that recently? Domestically, there are plenty of actions we can finance and take to improve the lot of people who are struggling due to the dramatic increases in the cost of their basic energy requirements.
To be fair to the Government, it has taken a number of constructive and positive actions in the energy sector in recent times. Unsurprisingly, it outlines all of them in detail in its motion. Items such as smart meters, ongoing investment in energy infrastructure, opening the gas and electricity markets to competition, schemes such as the warmer homes scheme and developing a national energy efficiency plan are examples of a Government doing its job, for God’s sake. Why should we congratulate and commend it on that?
At present, the cost of electricity is a specific problem and families and homeowners need immediate assistance. The Minister for Communications, Energy and Natural Resources has the correct vision of where we need to go in terms of diversifying our energy market and making the shift away from carbon-based fuels towards more sustainable ways of powering our homes, businesses, cars and country. However, this does not solve the immediate problems of a family that must spend €50 more on its next ESB bill.
This is what we are discussing this evening. This is a fuel poverty debate and not a debate on energy, greenhouse gas emissions or climate change. This is the problem with the Government at present. We have an obsession with discussing climate change despite the fact that we are performing appalling in the area. We need to have that discussion but we also need to have a discussion on more basic levels as to how we can support low-income families at a time when they simply do not have the money to heat their homes.
In some areas, the Government has made a positive impact, such as the fuel allowance which has increased by 16%, and that is welcome. However, the number of people who can access it is limited. The reality is that the greener homes scheme is no use to a person living in a low-income house trying to provide for his or her family because one must spend €7,000, €8,000 or €9,000 to be able to access €2,000 from the SEI.
More than likely, one will not qualify for the warmer homes scheme. Today, my office rang the Department to establish the criteria for successfully applying for the warmer homes scheme. We were told one must be either on a disability benefit or be a lone parent. What about the rest of the population who are not in those categories and who want to reduce energy requirements and improve energy conservation in their homes? Where do they stand? It is not much good to a person in that category that the Government is securing investment in a future electricity infrastructure or that it is promoting wind farms in the west. All those are necessary and correct but they do not impact on the debate we are having this evening.
The Government motion continues to discuss the role of the CER, which has a crucial role in energy pricing. I will make some suggestions because I know the Minister likes to hear positive suggestions rather than political criticism in debates such as this and I do not want to disappoint him. The main point made with regard to the CER effectively congratulates it for securing a rebate for consumers of €300 million from the ESB this year to try to make a positive impact on their electricity bills — big deal. This is money given by the consumer to the ESB and other energy generators for no return.
At the start of January, the Government introduced a system through regulation whereby every household in the country pays approximately 10% extra on top of its electricity bill to pay for the cost of carbon because this is the policy we are following. However, energy generators are given carbon allowances for free so they are making a windfall they have not earned. Most energy generators are pocketing it. In fairness to the ESB, at least it is giving something back. This is not how it should be structured. This is not leadership from the Government.
If companies make windfall profits on the back of consumers who are already hard-pressed to meet their electricity expenses, the Government should take that money back and pump it into alleviating fuel poverty and other schemes, which I know the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, is so keen to promote in terms of reducing greenhouse gas emissions and making a positive impact on meeting our targets on climate change, on which I will support him. Let us not pretend that there is no money there, however. One of the great scams at the moment is that people around the country have no idea that they are paying 10% extra on their electricity bills because of the cost of carbon. They think it is because of the international cost of oil and gas, but it is not entirely due to that. Some 10% of those bills, which in the next four years will amount to approximately €1.6 billion, will be spent by consumers in paying for the cost of carbon and to pay for allowances that generators get for free.
Deputy Simon Coveney: After 2012 companies will have to purchase their own carbon allowances on the open market and then the consumer should pay. Look at what they are doing in this sector in the United Kingdom. In recent weeks it has been announced that they are providing free cavity-wall and loft insulation for pensioners and other poor households, 50% off insulation for all households and a freeze on this year’s bills for 500,000 poor consumers. In addition, they are reversing a cut in an allowance that was previously paid to provide free central heating for the poorest pensioners. A special cold weather payment is being provided if the temperature falls below zero degrees for more than seven consecutive days. The UK has a targeted approach to alleviating the pain of those who are suffering the most, including those who must switch off heaters because they cannot pay their electricity bills and other energy costs. All we are asking for is what most other European countries have already done, which is to produce a co-ordinated, structured energy poverty document so that we can judge the Minister on her commitments.
Deputy Olwyn Enright: I welcome the opportunity to bring this motion before the House together with Deputy Coveney and my other Fine Gael colleagues. In the current climate this debate is both appropriate and necessary and I hope that, if nothing else, it will concentrate the Government’s mind on the anxiety being faced by people across the country, particularly those on low incomes. The motion has been worded in a non-confrontational manner and in that regard it is disappointing that the Government could not accept it.
There is a serious lack of current Government statistics available on this topic, as well as a complete lack of any coherent Government strategy to deal with energy poverty. This point is clearly illustrated in the Government’s amendment to the motion, which refers to the small initiatives taken to date while effectively ignoring the scale of the problem we are facing.
The Government claims to have established an interdepartmental agency or energy utilities group earlier this year. However, we have received no further information about what Departments, agencies or groups are represented on the group, when it has met, what its targets and objectives are or within what timeframe it hopes to make changes. It is probably as close to a real strategy that we are likely to get from this Government, but it is most unusual for the Minister, Deputy Hanafin, to establish anything of this nature without massive fanfare. There was no mention of this group in any of the Minister’s statements over the summer. In the one somewhat relevant statement issued, she said she was working with the Minister for Finance and the Minister for Communications, Energy and Natural Resources. It will be interesting to see what her work with the Minister for Finance reveals, but the lack of co-ordination is evident from the exclusion — or at least the non-inclusion — of the Minister for the Environment, Heritage and Local Government and the Minister of State with responsibility for housing.
If ever there was an opportunity for the Government to attempt to justify the proliferation of junior Ministers by putting someone in charge of this area, this was it. Earlier today, we received an e-mail at the Committee for Social and Family Affairs stating that this group was set up on 11 July. I can only question why in the intervening period no communication of any kind has been made with the Combat Poverty Agency, which is currently evaluating the impact of the Sustainable Energy Ireland’s warmer homes scheme. Perhaps this says more about the Minister’s view of that agency than her views on tackling energy poverty; it is certainly one or the other.
The Combat Poverty Agency has made some valuable recommendations: improving and increasing the fuel allowance scheme; including all its recipients in the warmer homes scheme; the provision of smart electricity and gas meters; and adopting national energy efficiency standards for all social rented housing.
At its simplest, fuel or energy poverty means not being able to heat and fuel one’s home adequately. Age Action Ireland, which has done good work in this area, has said that this winter many elderly people will have to choose between food and fuel. To put it even more starkly, they are making the choice between heating and eating. That is a terrible indictment of the Government.
The United Kingdom’s definition of fuel poverty is drawn from the World Health Organisation’s health analysis. According to that definition, a substantial number of households are actually suffering some form of fuel poverty. We quote the statistics in the motion. The World Health Organisation has stated that some 17% of households in Ireland are fuel poor. One can pick whichever statistics one wishes to use because the Government has no figures of its own. Whatever statistics are chosen, however, they constitute an indictment of the Government.
The Institute of Public Health, which published the most recent work on this area last December, reported that the level of fuel poverty on the island of Ireland remains unacceptably high. The lack of action by the Government in tackling this issue is demonstrated by the fact that it does not even have a definition of fuel poverty.
There are both direct and indirect effects of living in fuel poverty. The direct effects include colder indoor temperatures placing a thermal stress on the body, thus affecting the immune system and the blood and cardiovascular system, as well as cold, damp houses harbouring mould and aggravating respiratory and allergy problems. It is also believed that living in cold, damp housing can have negative effects on mental health. Members of this House regularly come across examples of such problems from their constituents. The indirect effects of living in fuel poverty include cutting back on spending across other areas such as food, clothing and transport. This clearly leads to further social exclusion for those who are most vulnerable.
When I raised these issues with the Minister for Social and Family Affairs in June, I quoted the statistics from the institute’s study on winter mortality rates and the clear effects of fuel poverty. The Minister attempted to disagree but then admitted that “some 40% of those deaths relate to housing”. That is a clear admission of failure in this regard. This is exactly the point that Fine Gael is making in this motion. We wish to see the matter addressed, yet we have no evidence that the Minister has even involved the Minister for the Environment, Heritage and Local Government or the Minister of State with responsibility for housing.
Each time the issue was raised here, Opposition Deputies have received similar responses both from the current Minister and her predecessor. In many cases, the ministerial replies are identical, whether oral or written. It is quite clear that there is no national strategy to deal with this issue. Each Department is doing a small amount in its own way but there is no real cohesion.
The Minister, Deputy Hanafin, has admitted herself that “it should not just be a case of giving pensioners money to heat houses if that heat is going straight out the window”. Nonetheless, we have seen no response from the Government to deal with that. Her admission is contradicted when she constantly claims credit for increases in the fuel allowance that bear little or no relation to the dramatic increases in energy costs. In the vast majority of instances — to take the Minister’s comments to their logical conclusion — that heat is still going straight out the window, door or roof.
We have heard enough from individual Ministers who say it is important for Departments to work together, while there is no evidence of any action plan, targets or timescales for delivery. By contrast, as Deputy Coveney said, the United Kingdom has a clear and costed plan of action, with targets and timescales for delivery.
I disagree with the Minister when she says that a primary contributor to fuel poverty is not the absence of money to pay for fuel, but the inefficiency of household heating systems. The two are inextricably linked, not separate. Over the course of the past year, however, the huge rise in fuel costs has meant that there is an absence of money to pay for fuel and this is causing anxiety for thousands of people. The Minister’s response a number of months ago also ignored the issue of insulation and how poorly insulated much of our housing stock remains.
The Government’s amendment to this motion also adopts some creative licence, and that is putting it politely. This is particularly so in commending its commitment to the 358,000 households which benefited from increases to the fuel allowance and the smokeless fuel supplement. In the latest statistics given to me by the Department, there are in fact only 299,327 households receiving these allowances and not 358,000, as suggested in this motion. The Government should amend this inaccuracy, which tries to paint a prettier picture than is actually the case.
There is no doubt that energy poverty is complex and the solutions will not be found in any single Department, which is why the need for action is all the more urgent. The issue of an adequate household income is a matter for the Minister for Social and Family Affairs. The issue of high cost energy for household users is a matter for the Minister for Communications, Energy and Natural Resources and the issue of high rate consumption linked to energy inefficient housing and appliances falls between the Minister for Communications, Energy and Natural Resources and the Minister for the Environment, Heritage and Local Government and the Minister of State with responsibility for housing. The European Anti-Poverty Network has also pointed out that people on lower incomes spend proportionately more of their wages on energy than those on higher incomes, which is how they fall into the realm of fuel poverty, but many of these people spend more time at home because of their age, sickness, lack of money for socialising, unemployment, young families or disabilities. With prices rising so dramatically, these people are hardest hit. It is frequently people under these same categories who have poor quality housing and inefficient heating appliances.
We are likely to hear plenty of self-congratulatory speeches for schemes that have been initiated. I think we need to look behind self congratulation and evaluate the adequacy with which these schemes are dealing with the issue at hand. Let us look at the warmer homes scheme, which received €2.5 million funding this year and which I welcome. The number of low income households expected to be assisted this year is 4,000, yet the most up-to-date independent analysis states that approximately 227,000 households are experiencing some degree of energy poverty. At this rate it will be over 56 years before the problems in every household are addressed and that will be 56 more years of Irish taxpayers’ money, to quote the Minister for Social and Family Affairs, going out the window. Nonetheless, the Government is putting down an amendment congratulating itself on this.
The central heating scheme provided by the Department of the Environment, Heritage and Local Government has been quite effective. However, the issue of wall cavity insulation has still not been addressed and is still contributing to inefficiency. In addition to this, it again ignores the many thousands of people on low incomes who are not in local authority housing or who have purchased their houses but are on low incomes and are not able to provide central heating and insulation for themselves. The only effective method of dealing with this, both from a cost and conservation point of view, is for all relevant Departments to come together and develop an adequate strategy so that we see real investment. This is an opportune time to do so.
I also believe that the Minister should give people the option of receiving their fuel allowance in two lump sums rather than on a weekly basis. This would be particularly important for those with oil-fired central heating systems. It might cause a little bit of angst for a few days in the Department of Social and Family Affairs while its officials work out the detail, but that is nothing compared to the angst being felt by elderly people and lone parents with young children at home all day in cold, damp accommodation, struggling to stay warm this winter.
Deputy Paul Connaughton: I congratulate Deputy Coveney and Deputy Enright on bringing this to the floor of the House. When we talk about fuel poverty or energy poverty, we must mention the sham that is going on in this country as far as elderly people are concerned. They are certainly not likely to get the same attention as the bankers are getting in the House this week.
I wish to provide a graphic outline to the House about how crazy this bureaucracy can go. The Minister for the Environment, Heritage and Local Government announced a new grant scheme for older people which we all welcomed a few months ago. This scheme was supposed to ensure that people continued in their own house in slightly better conditions than they were used to until the end of their days. Every public representative is fully aware of those schemes. The local authority provided an essential repair grant and the disabled persons grant, while the local health board, as it then was, had something similar running in conjunction with these grants. We were told that the schemes would be rationalised and that the local authority would take over everything. The grants were increased a small bit and we were told that this was the right way to do things.
Since then, I do not think that a single grant has been drawn down under the new scheme, for no other reason than the fact that the county councils and the health boards were starved of cash. I know several elderly people aged between 75 and 80 who are waiting three and four years to replace their window or door, the very things that would save the energy we are talking about today. How can there be any sort of reasonable comfort for people if the basic parts of a house are damaged? If the roof is leaking or the door is falling down, how can we expect to conserve energy, no matter what scheme is in place? It simply will not happen.
There was a meeting last week of the HSE West and Galway County Council. It was hoped that agreement would be reached that the 365 applicants who were two years or more on the health board list would be transferred to Galway County Council, even though they were in arrears. When the meeting took place, the health board claimed it had received an extra 400 applicants for 2008, so it decided simply to hand them all over to the council. The council informed HSE West that it could not look after its own existing applicants, some of whom had applied three or four years ago. There are now almost 1,000 people in Galway who cannot get their windows or doors fixed, yet we talk tonight about a heating policy for the elderly.
There was a sort of increase in the fuel allowance when it was extended by a week. However, the cost of home heating oil has increased by 47% in the 12 months up to May 2008. How is it that if this increase was implemented when oil cost $147 per barrel, there has been no reduction since it dropped to $96 per barrel? I cannot understand how the regulator works this out. Surely one price would track the other. There is much work to be done, and the elderly need a great deal more attention than they are getting.
Deputy Tom Hayes: I am glad to have the opportunity to speak on this important issue. Our motion notes that 227,000 households experienced some degree of energy poverty, which is considered to be almost one in five people living in this country. This is a level of fuel poverty that is deeply distressing and is simply not acceptable. We need to tackle it as a priority.
So much of our low income housing is without central heating and is poorly insulated. This area has been neglected by budgets in recent years. Now those vulnerable members of society who are most affected by the rising prices in energy provision need help to get through this tough period. A tough period for many means going cold, getting ill and endangering their health. Oil costs a great deal more now when compared to this time last year. One constituent of mine told me he spent the same amount of money in recent weeks for 550 litres of oil less in his tank. That is the reality. People can no longer afford to fill their tanks with oil. The warmer homes scheme which is currently only patchily available is invaluable and is recommended by Government and many agencies. I remind the Minister for Social and Family Affairs, Deputy Hanafin, that the scheme is not available in County Tipperary even though it is urgently needed to allow older people and those living alone in colder and older houses to make their homes warmer. The scheme should be extended. Deputy Enright quoted the number of homes in the scheme. An increase is required in the fuel allowance scheme if even as a temporary measure to cover the phenomenal increase in energy prices in the past 18 months. Urgent measures are required from the interdepartmental group on fuel poverty.
I recently visited a wood pellet burning factory in Tipperary town. Older people are unable to avail of this fuel. I suggest that smaller packs of renewable energy fuel should be available in local shops so that older people can buy them at a modest cost of €8 or €10 per week.
Deputy Lucinda Creighton: I too commend the work of both Deputy Coveney and Deputy Enright in this area and for proposing this evening’s motion. I find it amusing to read the Government amendment to the motion in which it commends itself for its commitment to improving the quality of local authority housing through the provision of €71.4 million towards the operation of the housing adaptation grants scheme for older people and people with disabilities. We all know that a tiny fraction of this amount is related to the reduction of fuel poverty and it is disingenuous of the Government to include it in the amendment in the hope of diminishing the seriousness and gravity of our motion.
I am astonished at the rise in the cost of fuel in the past few months. The Government sanctioned a 17% increase in the cost of electricity in August. We are heading into a cold winter following a cold and wet summer. This is a serious shock to the system for vulnerable members of society, those struggling to meet their electricity bills in the first place and, as has been outlined by previous speakers, for the elderly who require greater warmth and insulation than others in society. In addition, the cost of gas has increased by 20%. These increases must be considered in the context of an economic downturn, widespread job losses at a rate of almost 350 a day and severe economic conditions. The impact of these increases on the lives of ordinary people cannot be underestimated and should not be glossed over by the Government.
The Commission for Energy Regulation is something of a disaster and is another example of the Government devolving responsibility to a State agency in the context of the many quangos established in the past number of years since Fianna Fáil has been the lead party in various Governments. I want the Government to accept responsibility for the hardship being experienced by people as a result of fuel poverty. I predict we will see a serious level of fuel poverty this winter. Older people in my constituency are much more concerned about fuel poverty than was noticeable in previous years.
The national fuel scheme allows for an allowance valued at €18 per week for a mere 30 weeks. This is not even the tip of the iceberg in terms of the costs being faced by people. The Government’s warmer homes scheme only applies to 4,000 households across the country. It is not making an impact. These are good and meritorious schemes but they are not widespread enough and they do not provide adequate assistance to the people who really need it.
Deputy Enright spoke about the choices people will be forced to make this winter between food and fuel. This is a stark choice which nobody on the Government benches, indeed nobody in these Houses, will have to make. People who are on the poverty line and those who are subsisting face these stark choices. I ask the Minister to outline the Government’s plans to deal with this issue. If these choices are juxtaposed with the increase in the cost of the grocery bill for an average family this year, it will be seen that the cost of buying basic food supplies for a household has increased beyond inflation. The annual household expenditure on energy in 2006 was just over €1,700, a 70% increase on the figure for 1990.
I commend the proposals outlined by Deputy Coveney and Deputy Enright. It is my firm view that the monopolies should be broken up and there should be access to the east-west interconnector. Energy costs must be reduced and there must be security of energy supplies for the future.
Deputy Catherine Byrne: I congratulate Fine Gael Deputies on tabling this motion and I thank the two Ministers who are here. I will speak about charitable organisations. During my term as Lord Mayor of Dublin I became aware of the coal fund. This fund was started in the 18th century by a Lord Mayor at the time. The people of the city donated small sums of money to help those people who could not afford to buy coal, which was the main fuel in those days. This fund is still in existence and it is administered by a voluntary group. Last year alone, more than €100,000 worth of vouchers were distributed to people below the poverty line living in the Dublin area. Recently, the Society of St. Vincent de Paul gave a stark reminder that last year it spent €3.4 million helping people to heat their homes. In its pre-budget submission the society states it is concerned that this cost will rise out of control. It is not good enough to ask people to rely on charitable organisations to provide basic necessities such as fuel. The Government has a responsibility in particular to the 227,000 people living below the poverty line, as stated this afternoon by the Combat Poverty Agency at one of our meetings.
Dublin City Council built the fabulous senior citizen housing complex, Memorial Court. Last year, however, the council decided the heating for the complex would be turned on at 7 a.m. and turned off at 11 p.m. Many of the older people living there wake up in the middle of the night due to the cold and have to turn on an alternative source of heating, often just a two-bar electric fire. We know from the work of Willie Bermingham and ALONE of the many older people who have died from hypothermia in poor living conditions. We must reflect on these stark figures and ensure that in the forthcoming budget the Minister makes enough funding available to the Department of Social and Family Affairs to adequately cover fuel and heating allowances.
ongoing volatility in energy prices is an EU wide problem with the EU being the largest importer and second largest consumer of energy in the world and that some Member States have substantial indigenous energy resources unlike Ireland;
its commitment to delivering on energy policy priorities, including ongoing investment in energy infrastructure, ambitious targets for renewable energy, a substantive increase in energy efficiency, the national roll-out of smart meters and the continued opening up of gas and electricity markets to competition, with resultant benefits to business and domestic consumers;
its commitment to 358,000 pensioners and other households by providing over €170 million via improvements to the fuel allowance and smokeless fuel supplement in 2008 which help towards their heating, light and cooking costs throughout the year;
its continued commitment to the warmer homes scheme, which has supported community-based organisations to provide nearly 18,000 energy efficiency improvements in low-income households over the past eight years and the doubling of the grant award this year;
its commitment towards improving the quality of local authority housing through the initial provision of €71.4 million in 2008 towards the operation of the housing adaptation grant schemes for older people and people with a disability;
the power of one national energy efficiency awareness campaign which has demonstrably raised consumer and business awareness and educated consumers since 2006 about the financial and environmental benefits of energy savings;
its commitment to the development of European regional energy markets, underpinned by the ongoing delivery to schedule of the east-west and North-South electricity interconnectors, and building on the successful introduction, in partnership with the Northern Ireland authorities, of the all-island single electricity market and current development of common arrangements for gas;
Commission for Energy Regulation’s (CER) wide-ranging mandate which includes protecting the interests of energy consumers, particularly vulnerable customers, as well as ensuring security of energy supply and developing competition in electricity and gas markets;
actions taken by the CER to cushion the impact on consumers of unprecedented volatility in international fuel price increases, including the agreement by the CER with the ESB, in the context of the interim price increase from 1 September, on the provision of a rebate of €300 million for all electricity customers, thereby reducing the impact of the next round of price increases and largely addressing the question of windfall gains;
CER’s approach to cost reflective tariff setting which is designed to ensure the short and long-term financial viability of the energy sector and to ensure adequate investment in energy infrastructure;
CER’s stated intention to hold a public forum as part of the public consultation process on the next round of the ESB and Bord Gáis Éireann (BGE) tariff decisions and its ongoing attendance at Oireachtas Committee hearings, including a scheduled appearance before the Joint Committee on Communications, Energy and Natural Resources on September 30th to discuss energy prices;
major investments in critical energy infrastructure being undertaken or planned by the ESB in electricity distribution, by EirGrid in electricity transmission and by BGE in gas transportation networks, all of which are designed to ensure security of energy supply, underpin economic growth and enhance the delivery of renewable energy, and which are subject to regulatory review by the CER to ensure cost efficient delivery; and
Deputy Eamon Ryan: I commend Fine Gael on putting down a motion on this crucial matter which is the most important and fundamental social issue facing the country in the coming winter. It is recognised as such on this side of the House and it calls for action and consideration as to what additional measures we can take to help people through that difficult time.
Earlier this year I attended a presentation by an environmental colleague from the United Kingdom, Jonathon Porritt, who argued the central point in sustainability is social sustainability, as part of a wider environmental picture. That measure should set our work in the Departments of Communications, Energy and Natural Resources and Social and Family Affairs.
Regarding forces at play with the crisis in energy and fuel affordability, one central issue is that we are facing into a fundamental geological reality that will mean this is an ongoing problem. There will be an imminent peak in global oil production which, as one American commentator said, is a down escalator we will have to get up. We are facing a peak in global oil production followed by contraction. It is a real problem in a world in which our use of oil has expanded each year. It is one of the main factors behind the energy price increases cited by Deputy Simon Coveney. It has a knock-on effect on gas and coal prices because energy resources are interrelated. Gas, for example, can be used as a substitute for oil in certain circumstances and coal can be used as a substitute for gas. A fundamental energy price shift has occurred due to the supply constraints that are becoming evident in the oil market.
There has been a welcome reduction in recent months from the highs in the summer of $145 a barrel. I believe such volatility in oil prices will continue. While not pretending to be exact, my fundamental analysis is that we are unlikely to see the price of oil below $100 a barrel for a prolonged period. We may see further spikes and increased volatility as we come to that point of real conflict when it is difficult for supply to expand to meet contracting supplies.
The International Energy Agency has done useful work in recent years in setting out that reality. Previously it was a cautious agency with regard to supply issues but it is now increasingly alarmist with regard to the fundamental analysis on availability. This autumn it will produce a further 2008 world energy outlook which will include, crucially for the first time, a field-by-field analysis of 700 of the largest oilfields around the world. We should heed with interest the advice the agency gives and take it into account in our policies across a range of Departments.
It is important that people understand some of the fundamentals behind the energy price rises we are facing and that we must deal with. Our approach to energy price rises must be twofold. The first and most important approach is in the provision of social welfare protection in schemes, such as the fuel allowance, paid under the household benefits package. The Minister for Social and Family Affairs, Deputy Hanafin, will outline the details of the Government’s response in targeting low-income households and providing protection for them. As well as providing support to cover the cost of fuel, we must also examine how we help recipients to use energy in a more effective and efficient manner and reduce their need to purchase fuels. Evidence shows that such behavioural changes, which may seem less significant than some of the physical changes that can be made, are central to cutting fuel bills. That requires concentration on a number of key areas. We must increase the level of energy efficiency in residential buildings, particularly for those on low incomes.
I accept Deputy Simon Coveney’s point that sometimes it appears these changes are long term and do not affect people’s everyday lives. The reality Ireland faces consists of vulnerability to oil supply shocks and our geographical location at the end of gas pipelines from Russia. We must change our fundamental energy infrastructure so we are not reliant on fossil fuels which will become increasingly expensive. Instead we must have local and renewable supplies which will create jobs, cut our fuel import bill and keep money in the country.
Deputy Eamon Ryan: Deputy Olwyn Enright asked about the committee’s membership. It has a wide membership, including representatives from the Departments of the Taoiseach, Finance, Social and Family Affairs, the Environment, Heritage and Local Government and Health and Children. It also comprises representatives from the Office for Social Inclusion, the Commission for Energy Regulation and Sustainable Energy Ireland, and crucially the ESB and Bord Gáis which have an active role in how they help their customers on low incomes to cope with what will be difficult times due to the price increases in gas and electricity.
Deputy Eamon Ryan: The budget is in two weeks time and the work it is doing must feed into that process. It will continue to meet over the autumn and report to the Cabinet committees on social inclusion, climate change and energy security.
One of the first areas that must be tackled is the legacy of older buildings with poor energy efficiency standards. Sustainable Energy Ireland’s low-income housing programme was established to address this problem. Its primary focus is the warmer home scheme providing attic insulation, draft-proofing, lagging jackets, energy efficiency lighting, cavity wall insulation and energy use advice at little or no cost to eligible householders. These can have a significant effect on people’s fuel bills.
The scheme is targeted at householders in receipt of fuel allowance, disability or invalidity benefits. It is provided free of charge or for a nominal fee of less than €100 to a target audience of 300,000 households suffering from fuel poverty. The houses are identified by community-based installers who work with the Society of St. Vincent de Paul, the HSE and local GP networks. It is a good example of how we can target investment at low income housing.
I doubled the allocation to the low income housing scheme, bringing the total allocation for this year up to €5 million, allowing the SEI to fund energy upgrades for some 5,000 vulnerable householders. At the end of this year the scheme will have delivered energy improvements and energy efficiency measures to some 18,000 households in total.
My colleague, the Minister for the Environment, Heritage and Local Government, Deputy John Gormley, introduced a housing aid for older people scheme on 1 November 2007, with the similar aim of providing targeted support to improve conditions in existing households of older people. The scheme assists with works that can improve the energy efficiency of homes, such as insulation, the provision of central heating and the repair or replacement of windows and doors.
The central heating scheme has been allocated some €26 million in 2008 and provides funding to housing authorities to upgrade their rental homes, including providing attic insulation to building regulation standards and draught-proofing windows and doors. It is estimated that an additional 5,000 local authority households will benefit from improved conditions and lower energy bills as a result of this year’s investment in that scheme.
The Commission for Energy Regulation, CER, has a crucial role in protecting vulnerable customers in the energy markets. Under the European Communities (Internal Market in Electricity) Regulations 2005 the CER was charged with ensuring that adequate standards to protect vulnerable customers are in place, including measures to help customers avoid disconnection. The CER sets out the guidelines for the protection of household electricity and natural gas customers, particularly the elderly, customers relying life support equipment and those with disabilities.
Another innovative development in the building area which this Government introduced is the new home energy saving scheme which we piloted this year. It is aimed at improving existing housing stock by introducing either wall, roof or attic insulation or other measures, which are assessed by an energy adviser. Such advisers are supported by the Government to assess a building, arrange a contractor to do the work and then to return to carry out a further energy assessment so the householder has a clear knowledge of what is possible. I am glad to say that while this is a complex scheme that requires a lot of collaboration between local energy agencies, energy assessors and local authorities, it is proving both popular and effective. During this pilot phase of the scheme, we are seeing energy savings of approximately €500 per year on typical energy bills. These figures do not take into account recent rises in oil prices. The pilot scheme is working and I hope to expand it to a wider range of existing housing stock.
The above mentioned changes relate to the built housing stock but we need to go beyond that. One of the key areas in which we will arrange such a policy of extending our work is the new national energy efficiency action plan, which is designed to deliver on the Government’s target of a 20% improvement in energy efficiency by 2020, which fits in with our overall European commitments in the energy area. The national energy efficiency action plan was put out to consultation in October last year. I expect to bring it to Government shortly and then bring it into action because action is needed in a whole range of areas to enable us to cut back on our fuel bills.
We have already taken action in the behavioural area, which is crucial, and we have been successful in that regard. The power of one campaign contained a series of different advertisements aimed at the householder, people on the street and businesses with very simple examples of ways to help people to save money on their fuel bills.
Deputy Eamon Ryan: That behavioural approach, while not as high profile or well recognised as some of the other physical measures, is acknowledged by those with an interest in this area as being crucial.
There are a number of other schemes in operation but I do not intend to go into all of the details on them now. I appreciate that Deputy Coveney recognises certain measures, including the introduction of smart meters. Such meters will go out to 20,000 householders this autumn and eventually to all householders to help them to cut down their electricity bills. I intend to go further with the introduction of energy efficiency obligations on electricity and gas supply companies, similar to those that exist in other jurisdictions. An obligation will be placed on companies to invest in energy efficiency measures that will assist their customers. That has proved hugely successful in other countries and has directed investment from the companies to their customers to help them to save money. I am currently working on this issue with the energy companies.
All of the aforementioned measures are part of the response we need. However, it is not just the Government which has a role in this regard. The CER has a regulatory role to play in terms of how customers, and particularly those on lower incomes, are treated. It also has a crucial role in terms of price regulation. It has a statutory responsibility for setting ESB electricity and BGE gas prices. The CER informed me that its decision to raise prices this year was a direct result of the sharp and sustained increase in international fuel prices. At the time of its decision, the price of gas had increased by over 130%, oil by 85%, while the price of coal had doubled.
The CER has a statutory responsibility to consider the impact of its tariff decisions on consumers. Given the difficult economic situation and the severe impact of fuel price increases on Irish consumers, the CER decided it was responsible and appropriate, in the circumstances, to adopt a two-phase approach to price increases. Hence, despite the unprecedented rise in global fossil fuel prices in 2008, ESB tariffs for domestic and small business consumers increased by an average of just 17.5% from 1 August. BGE tariffs for domestic consumers are increasing by an average of 20% from 1 October.
Under the two-phase approach, the ESB and BGE will make further submissions to the commission in late October. These submissions will be published for consultation on 3 November. This will be followed shortly thereafter by a public forum where interested parties will have an opportunity to engage directly with the ESB and BGE on their price submissions. The CER will publish its final decision at the start of December and the new tariff rates will apply from 1 January 2009.
In addition, the CER has proactively engaged with the ESB to identify mechanisms by which it will be possible to mitigate the price impact for customers. In this regard, the House will be aware that the ESB will provide a rebate of €300 million, applicable to all electricity customers, irrespective of their supplier, which will reduce the impact of any price increases by approximately 8% and largely address the windfall gains earned by the ESB in 2009.
Deputy Eamon Ryan: That is a matter for the other generators. Deputy Coveney’s motion calls for a €1.5 billion rebate to apply over the five year period, which amounts to €300 million per year. I agree with the Deputy that it is still important for us to put the cost of carbon through the market, even though that is a difficult decision. That will change after 2012, as the Deputy pointed out, when auctions will apply and the companies will have to bear the cost. In the interim, the CER and the ESB have taken a very responsible position in at least mitigating that rise, where possible, to the extent of bringing about an 8% lower rise in electricity prices than would otherwise have applied. I commend the CER and the ESB for their actions in that regard.
The CER carries out extensive consultations on all its tariff decisions. The tariffs are designed to be fully reflective of the actual cost of supplying electricity and gas in the Irish market. Cost reflective tariffs eliminate cross subsidisation, facilitate competition and ensure that vital investment in critical energy infrastructure can be delivered to ensure security of supply and underpin economic growth. The CER is completely independent in the performance of its statutory functions.
In terms of the wider picture, this must be examined in the context of price increases in the European Union during the same period, which have been up to 38% in certain countries. In the United Kingdom, suppliers have increased end-user electricity tariffs by over 26% on average and gas tariffs by over 40% on average in 2008 and further price increases are probable over the winter months. This clearly indicates that this is a crisis. Northern Ireland has also seen similar price increases, with a 14% increase in electricity tariffs announced on 1 July, followed by a further 33% increase in September. Gas prices in Northern Ireland rose by 28% in May and a further 19.2% increase was announced in September.
I commend one detail in the motion tabled by Fine Gael, namely the recognition that tackling this problem requires institutional investment so we have a diversity of supplies. We will need to switch to renewable generation if we are to avoid the volatile fossil fuel price increases that are the likely scenario in any energy future.
I again commend the ESB on the decision it made earlier this year in terms of setting its course in a €22 billion strategic plan aimed at making it a zero emissions low-fossil fuel company which will protect the Irish public in the long run from fossil fuel price increases. I hope we all can commend and work with our transmission company, EirGrid, to deliver some of the infrastructure — east-west interconnectors, North-South interconnectors and other interconnection and grid developments — which will be the crucial mechanism by which we reduce our reliance on those fossil fuels——
The success last year in the setting up of the single electricity market was of fundamental importance in this regard. It is a change from which we can get real efficiencies as we start to operate on an all-island basis in a truly effective manner. That, for people on the lowest incomes, will be important. Anything that brings down our prices in the long run is of benefit to those people.
It is that task that I set as my key goal in Government, to protect the Irish people from what I see as an uncertain and highly volatile energy future by improving the affordability of energy, by improving the efficiency by which they use energy and increasing the diversity of supply so that we are not exposed to further price increases.
Minister for Social and Family Affairs (Deputy Mary Hanafin): I, too, thank the Deputies for putting down this motion. It is particularly opportune, not only on the day where we heard that September was the coldest month for a number of years, as Deputy Coveney stated, but also as we prepare for the budget. Deputy Enright asked the point of talking to the Minister for Finance.
Deputy Mary Hanafin: When one is two weeks out from a budget, there is every point in talking to him, particularly when everything that we do on the payments in my Department is directly related to what will happen on 14 October.
I share many of the concerns about the impact of rising fuel and energy costs. No doubt they have impacted on the people who are most vulnerable. My priority, as Minister for Social and Family Affairs, is to ensure that Government assistance is available to those who most need our help. They are older people, those with disabilities or serious illnesses, and people on low incomes.
Over the past number of years, people will be aware that quite substantial increases have been given at budget time on the various payments. The concentration, based on the best advice, was to increase the primary social welfare rates so that people would be able to meet their basic living costs, including their heating costs throughout the year. That is why, rather than increasing some of the additional benefits, increases of €10, €12 and €14 a week were given on the primary payments. Unfortunately, with the way the finances are at present, there is no prospect of being able to give increases of that level, but I am conscious that fuel is a particular problem for people this year.
There has been some debate here about inflation and the rising costs. It is important to record the increases in the payments over that period. Since December 2001, overall inflation has increased by 28%, but energy product prices have increased by 74%. However, increases in social welfare payments have been between 71% and 88% in the same period. The increases were quite significant and designed to help people meet all their basic living costs, including heating costs.
Included in those numbers would be approximately 100,000 pensioners, 43,000 widows, 55,000 one-parent families, 40,000 persons with disabilities and 31,000 long-term unemployed. The total cost is approximately €340 million a year. That is an additional cost, over and above the primary payments. Quite a number of people are benefiting from it. Some of them are getting the fuel allowance directly and others, those over 70, are getting it through the household packages. Some €340 million is a very significant amount. However, I accept that this is a particular pressure on people, particularly given the prices this year.
We have also responded to the prices in the improvements that have been made. The value of the fuel allowance has been doubled since 2005 to €18 per week or €21.90 for recipients living in designated smokeless areas.
Deputy Mary Hanafin: The number of weeks for which the fuel allowance is paid has been extended to 30, and in January 2007, the number of units covered by the electricity allowance was increased from 1,800 to 2,400.
Even more significantly, from 1 August 2008, the value of the electricity allowance per household increased from €465 to €540 per annum in line with electricity price increases. In order to continue to maintain the value of the electricity and gas allowances at the same level, the value of the gas allowance was also increased to €540 per annum from the same date. I increased the value of these allowances to ensure that vulnerable customers would continue to receive the same amount of energy under the household benefit scheme. In reality, where we saw that the price of electricity and gas went up over the summer, those on various schemes under household benefit did not suffer in that they did not have to pay any extra.
Deputy Mary Hanafin: The State bore the cost of the increased units. Because we give people units rather than an amount of money, all of those on the household benefit scheme continue to get that but the State quite rightly bore the extra cost for them. While the fuel allowance is intended as a contribution to heating costs for part of the year, the electricity and gas allowances help people with their heating, light and cooking costs all year round. In addition, about 4,000 people who have specific heating needs due to infirmity or a particular medical condition are currently receiving a heat supplement through the supplementary welfare allowance scheme, which is administered by community welfare officers nationwide.
Deputy Enright will also be aware that the Money Advice and Budgeting Service which is funded by the Government provides practical help to people who are experiencing difficulties paying their bills. There has been quite a demand for its service this year and it has provided valuable assistance.
As has been stated by a number of speakers throughout the debate — indeed, Deputy Enright was quick to quote me — income support and advice, while important, are only part of the answer in terms of reducing fuel poverty. Proper household insulation is absolutely vital. Initiatives, as outlined by the Minister, Deputy Eamon Ryan, such as the warmer homes scheme, operated by Sustainable Energy Ireland under the aegis of his Department, have a valuable role to play in that regard, as does funding from the Department of the Environment, Heritage and Local Government through the pilot central heating scheme, for example. Co-ordination of the work of the relevant Departments and agencies is crucial to ensuring the effective delivery of a comprehensive approach to tackling fuel poverty. While various bodies have significantly increased the resources they are directing at fuel poverty initiatives in recent years, the establishment of an interdepartmental group on energy affordability has helped to ensure that we are working closer together to maximise the potential of our collective efforts.
The Minister, Deputy Ryan, has already outlined meetings that have taken place. There have been discussions, at both a formal and informal level, with the various Ministers to see how we can improve on the schemes that are likely to help with insulation, windows and heating. That has also included the Minister for Finance in the context of the budget and the Minister for the Environment, Heritage and Local Government. There has been a good deal of research done on this which is also feeding into work that we are doing. Sustainable Energy Ireland has been responsible for some research in this area because everything we do must be evidence based.
We are trying to tackle fuel poverty from a number of different angles. Income support is a valuable part of that. The significant increases in payment rates have helped. Further improvements in payments will obviously be a priority for me should funding be available. Unfortunately, everything must be looked at in the current budgetary context. Of all of the demands that are being made by the various groups, energy is one of those that keeps coming to the fore. It came to the fore at the pre-budget forum I held only last week, which was attended by approximately 30 organisations representing different strands of society, particularly the most disadvantaged and the vulnerable. While each group was seeking increases in its own area of interest, the need to which most attention was drawn was the need to support people in paying the cost of their fuel this year. That will be my major priority this year.
Deputy Liz McManus: The Minister for Social and Family Affairs stated this is a good day to raise this issue, with which I agree. Today I received a letter from her stating an old age pensioner in my county was being refused a fuel allowance because his pension exceeded €100 per week. Today is also the day on which the Government has proposed to change the law to protect the wealthiest in our society, bankers who recklessly pandered to greedy property developers. In this motion, Fine Gael, with our support, seeks to protect and safeguard the poorest and the elderly, such as my constituent who cannot afford to keep warm this winter. The policy of Fianna Fáil and the Green Party is clear.
Deputy Liz McManus: Since the Government of the Minister of State, Deputy Seán Power, got us into this situation, we must support a measure to protect the public interest. That does not mean that what the Government has done or the manner in which it has done it is commendable. The reality of the decisions made today and last night is that multimillionaires in this country are being looked after.
Deputy Liz McManus: The policy of Fianna Fáil and the Green Party is clear. Powerful multimillionaires get what they want but the poor and the elderly are denied what they need. If there was doubt about the need for change in Irish politics, we have proof positive of the need today.
Many people hoped that, with the new configuration of parties in the Government, we might see a fairer and more compassionate kind of politics but I imagine they are now disillusioned. Sheltering the rich while leaving the poor out in the cold may be an acceptable policy to the Green Party and Fianna Fáil but it is not acceptable to us. I welcome and fully support, on behalf of the Labour Party, this timely motion. I had hoped the Minister for Communications, Energy and Natural Resources would ensure acceptance of its content by the Government. Instead, the Government has tabled an amendment. Rarely have I seen such a self-serving and shameful litany of statements that ignore the issue that needs to be addressed; I am not surprised.
The Minister has an extraordinary ability to cocoon himself away from the reality of the daily struggles of many people. He does not see the thousands of people about whom we are talking who simply cannot pay their bills. He does not seem to understand the stress and anxiety they experience. These are the people who go to the Money Advice and Budgeting Service, the Society of St. Vincent de Paul and the community welfare officer in an effort to manage. However, they are faced with a tsunami of household bills and their problems are becoming more acute.
We know and understand charges for electricity and gas will escalate, as the Minister reminded us again tonight, but this is why we need to see a real response. This winter will be a significant challenge for thousands of people. The Minister’s response today was revealing. He spoke about renewables, interconnectors and changing behaviour but did not speak about cutbacks or Government schemes that have collapsed. The Government amendment to the motion congratulates itself on the funding of the local authority adaptation grants for those with disability. In my county and, I believe, others, there is no longer any scheme; it ran out of money months ago. Regrettably and shamefully, in some instances people had grants approved but when they got the relevant work done they discovered the grant simply would not be paid. This is the responsibility of the Minister for the Environment, Heritage and Local Government.
Let me outline one case in this regard. A grant was approved for an elderly woman in hospital and €30,000 was spent to adapt her house to enable her to go home. When the work was carried out, she asked for the grant to be paid but the cupboard was bare. This is the reality and the Minister for the Environment, Heritage and Local Government is responsible. This is the fuel strategy in place at present. A stressed old lady in hospital in a bed that should be vacated and a small builder on the threat of bankruptcy comprise the reality of fuel poverty in Ireland and the reality of adaptation grants that the Government cites as part of the solution in its countermotion.
These issues do matter, as do the people affected. It is the responsibility of the Government to assist and support them and not just its responsibility to bail out the banks. In terms of the motion before us, there are practical measures that must be adopted if there is to be real improvement. There have been massive increases in electricity and gas bills and fuel prices are an issue for us all.
The problem of fuel costs is much more serious for some than for others. From the Government’s point of view, rising costs have made a significant difference. In four years alone, VAT returns on energy have leapt by 50%, from €611 million in 2003 to €970 million in 2007. The figure has increased significantly even since then. The impact on those with low incomes has been disastrous and we therefore must have change and recognise the realities. We must hear the truth from the Minister.
I noted with great interest the Minister’s statement today on the role of the energy regulator. Last weekend, I heard him say on radio that he was responsible for ensuring the €300 million the ESB had would be used as a cushion to protect people against escalating costs. I thank the Minister for putting the record straight tonight. The hubris he showed on that programme only feeds people’s cynicism and it is to his credit that he has come to the House and set the record straight. The more honesty, the better.
The Labour Party saw we had to do something and last May it published its own legislation, the Fuel Poverty and Energy Conservation Bill. Its purpose is to require the Minister for Communications, Energy and Natural Resources to implement a strategy and be accountable to the House for both the setting and implementation of the targets. This is the way to proceed because it is important that there be a statutory basis for the strategy to protect the most vulnerable and ensure they achieve their basic rights.
It is important to state that Age Action Ireland has run a campaign on this issue. It has not done so for the good of its health but for the good of the health of those it represents. It desires a significantly increased fuel allowance, proper insulation schemes and the targeting of those who need to be looked after and supported.
Ireland’s level of debt in winter is significantly higher than that in many other European countries. This debt can be related to fuel poverty. We either disregard this and simply suggest that it be addressed as part of all the other measures to save the planet or else we recognise that the citizens concerned, who have contributed to society over their lives and have grown old, are not now looked after and protected although we have the resources to do so despite all the economic turmoil.
Deputy Arthur Morgan: I thank the Labour Party for sharing time and for giving me the opportunity to address this important and tragic issue which, like most public representatives, I see first-hand among my most vulnerable constituents on almost a weekly basis at this time of year.
It is apparent that low and average income households use a greater proportion of their income on daily necessities such as food, heating, housing and transport. The poor spend on average twice as much on fuel as a proportion of their income and inflation hits these households hardest. Fuel poverty is the inability to afford adequate warmth in a home or the inability to achieve adequate warmth because of energy inefficiency in a home. It is exacerbated by poor energy efficiency in housing stock, poor insulation and inefficient heating systems. Many of the fuel problems faced by pensioners and lower income families could have been avoided if the Government had decided long ago to build social housing that was energy efficient instead of allowing developers to cut cheap corners. We are paying for this now.
In the 12 months leading to May 2008, liquid fuels such as domestic heating oil rose in price by 47%. Oil is the most common type of fuel used by older people and, while its price has fluctuated in recent times, very few of the decreases have been passed on to customers, or were passed on slowly, whereas fuel providers are always quick off the mark to pass on increases.  Bord Gáis has applied to the Commission for Energy Regulation for a 17% to 19% price rise from October and the ESB is also believed to be seeking a double digit increase.
Groups such as Age Action and other organisations working with older people are concerned that thousands of older people will suffer unnecessarily this winter because they will be unable to afford to heat their homes properly. The cost of all types of fuels has surpassed the means-tested fuel allowance which the poorest receive. Considering the inflated cost of living in this State, many older people, social welfare recipients and people on low incomes could face this winter with a choice of either food or fuel.
All of this we know. It makes this motion timely and I commend Fine Gael for bringing it forward. However, we are debating this against a surreal background. On Monday, the Taoiseach told the public he would not increase taxes to cope with the soaring budget deficit. I might add that the decision yesterday to underwrite the banks for such a large amount will have come as a shock to the most vulnerable people in society who are being told there is no money to help them. None of us should kid ourselves about the Government’s intention to deal with fuel poverty. If it had wanted to do so, it could have dealt with it and sorted out the problem when the Exchequer was in surplus.
Despite prices rising at a soaring rate, no significant increases in the means-tested fuel allowance were made over the past two years. Budget 2007 gave pensioners an extra €4 per week, bringing the fuel allowance to €18 per week for the 29-week period of the payment. Budget 2008 left the fuel allowance unchanged but extended the payment period by one week, which equates to a 60 cent increase per week for the 30-week period of the payment. The fuel allowance currently covers just 42% of the cost of fuel for pensioners during the 30-week period it is paid. Over 52 weeks, it covers just 24% of a pensioner’s fuel bill. Those budgetary adjustments were made before the Government blew the State coffers.
When the Government made the minor increases in fuel allowances, it did so knowing that Irish winter mortality was among the highest in Europe. The majority of winter deaths are among older people and due to cardiovascular and respiratory-related illnesses. While there is a need for a national fuel poverty strategy to provide medium and longer-term solutions to these problems, there is an immediate need for urgent action before this winter. Those who work with people suffering from fuel poverty would have welcomed the announcement of an early budget in October because they have long pointed out that by the time the December budget kicks in, more people suffer unnecessarily dire winter conditions. However, against the current climate of spending cuts speculation, they are probably dreading what they will hear in the budget in two weeks’ time. We all remember the savage 16 cuts.
Knowing this, it is with hope but not much expectation that I set out Sinn Féin’s proposals for what must be considered an absolute priority in this budget. The Government may think it is a priority to give their developer friends a leg-up in budget 2009 — there is speculation they may do so — but it is wrong. Not letting people freeze to death should be the priority for public policy in any economic circumstance.
Bearing this in mind, Sinn Féin wishes to see an increase in the fuel allowance. We want the value of the gas discount in the household benefit package to reflect the rise in the price of gas. The extra VAT generated by rising fuel prices must be ring-fenced to fund the increases in fuel allowance. We also suggest, as advocated by a number of groups dealing with the vulnerable, that the option of receiving fuel allowance in two lump sums in October and January is made available.
Following this winter, the Government must develop a national strategy to address fuel poverty. Wider issues such as the position of the Commission for Energy Regulation must be examined. The ability of those on low incomes to adequately heat homes is affected by CER’s decision to sanction increases in electricity and gas prices. This independent body responsible for the liberalisation of Ireland’s energy sector has an objective to bring competitors into the electricity market. Over the years we have seen the commission push up ESB prices to entice others into the market to compete with the ESB. Prices were pushed up, we were told, to bring in competition, which was supposedly to bring prices down again. However, the increases announced by the ESB hit those on low incomes hardest. The increases demonstrate that the regulator is not upholding its duty to take into account the needs of rural customers, the disadvantaged and the elderly. The role of the regulator must be reviewed to ensure that serving the common good, not the agenda of liberalisation, underpins its work.
My party is also proposing a new scheme based on the residential renewable energy grants introduced in budget 2006 specifically for low income households. Under the scheme proposed by Sinn Féin, anyone assessed as being entitled to the fuel allowance and having an entitlement under the free energy scheme would be entitled to a grant to cover the full cost of installation of sustainable heating alternatives, with the scheme to be open to both local authority tenants and homeowners who are entitled to fuel allowance. The introduction of this scheme will have the added benefit of further boosting the renewable energy industry while contributing to the State’s drive to reduce CO2 emissions. We also support an extension of the warmer homes scheme.
Deputy Róisín Shortall: I am happy to speak on the motion. With my colleagues in the Labour Party, I commend and strongly support Fine Gael in this regard. It is a timely issue given that anybody walking over from Leinster House 2000 this evening will have noticed the nip in the air and the fact that now, on 1 October, it has become quite cold. We are all in the fortunate position that we can go home to our warm centrally-heated homes and the cold is never really an issue for us at home because we can afford to provide adequate heat. Unfortunately, that is not the case for many people in this country, which is why there is such concern among a number of different groups about the major issue of fuel poverty.
It is an issue the Government needs to address. Having listened to the Minister, Deputy Hanafin, I will not be holding my breath waiting for her to deal with it. She displayed a distinct lack of appreciation of the extent of the problem and the extent of the poverty which many people are suffering. I will go into that later. There is undoubtedly an argument for putting in place a good anti-fuel poverty strategy. We need to tackle this in a cross-departmental way, as the problem has been ignored for far too long. Without a fuel poverty strategy, poor people will continue to die prematurely from the cold. In the context of an economy that has been booming for the past ten years and a situation where there was more money than the Government knew what to do with, it is absolutely scandalous that so many people live in poverty and that this year so many people will die because of their inability to provide enough fuel to heat their homes. Age Action Ireland indicates that the country experiences between 1,500 and 2,000 more deaths in winter than in summer. The Institute of Public Health in Ireland estimates that approximately 44% of the excess number of deaths can be directly attributed to poor housing standards. In real terms that amounts to 652 deaths on an annual basis. That is 652 people who die predominantly because of their poverty and because they are unable to provide for their own heating needs.
The latest poverty deprivation statistics indicate that one in 11 people who lives alone went without heating at some stage in the previous 12 months because of a lack of money. That amounts to a whopping 28% of lone-parent households. By any standards that is a scandal. The most recent analysis conducted by Sustainable Energy Ireland has put the fuel poverty figure at around 10% of homes. The ESRI has indicated that the percentage of houses in fuel poverty is currently between 15% and 20%. The Money Advice and Budgeting Service has recorded a massive increase — almost a doubling — in the amount owed by its clients to utility companies. When one looks at the detail, one discovers that in the first quarter of 2006 that figure amounted to €864,000 but in the first quarter of this year it amounted to €1.5 million. The situation would be much worse if it was not for the Society of St. Vincent de Paul, which has reported an increasing number of people approaching it who simply cannot manage to heat their homes because of the increase in fuel costs. Were it not for the work done by the Society of St. Vincent de Paul that figure of 652 premature deaths per year would be even higher.
The situation is likely to get worse because electricity costs have increased by 25% since December 2006 and 11.2% in the past year alone with another increase of 17.5% from this month, and the possibility of further increases. The figures trotted out by the Minister for Social and Family Affairs, Deputy Hanafin, and the response from speakers on the Government benches seem to completely ignore the increases across all fuel types. Home heating oil is the worst. It has increased by 40% in the past year and by 50% since December 2006. Gas has increased by 20% in the past few weeks alone, with the possibility of further increases.
There is a glaring need for a clear strategy. It is not enough to just compartmentalise the issue as the responsibility of one Minister or another, because it crosses a number of different Departments. That is why so many different agencies working with the poor are calling for a national fuel strategy. The Government seems to be all over the place on the issue. The Department of Social and Family Affairs, the Department of the Environment, Heritage and Local Government, the Department of Communications, Energy and Natural Resources, the Department of Health and Children, the Commission for Energy Regulation, Sustainable Energy Ireland and countless other organisations all have a role to play in such a strategy but, currently, all act in isolation and often in contradiction to each other. The White Paper on energy recommended that an interdepartmental group on fuel poverty be set up by the end of 2007, but progress is painfully slow.
The emphasis of current pensions policy is to encourage people to save for the future. The idea is that people put away money during their working years in order to provide for their retirement. However, when people retire now those who are on modest incomes find they are denied the fuel allowance because of the very pension the Government wanted them to take out in the first place. That flies in the face of good pension policy, which is about providing for the future. It seems the way the fuel allowance rules operate is that where people have tried to be self-sufficient to the greatest extent possible and where they have a relatively small occupational pension in addition to their social welfare pension they lose out on a fuel allowance. That is very unfair because of the low level of income disregard that currently applies.
Earlier this year my colleague, Deputy McManus, produced a Bill to compel the Minister to draw up a strategy on fuel poverty and to set targets. A strategy is all the more important now as it could tie in with the need to find work for thousands of construction workers who have recently been laid off. There is a perfect match between available workers and the large number of homes that leave much to be desired from the point of view of insulation and energy efficiency. In many poor quality homes that were built in recent decades the heat literally goes out the window, the walls and the roof. There is an imperative to provide greater insulation, especially in older people’s homes. The Labour Party has already referred to the matter on several occasions and we, again, urge the Government to consider taking on that proposal to set up a national insulation scheme in order to tackle the poor insulation standards in many homes. That would deal with the rising levels of unemployment by providing alternative work for many construction workers who find themselves out of work. It would also be very cost effective in terms of conserving energy in people’s homes and helping them to reduce their energy bills.
The Government must increase the fuel allowance by €12 per week and extend the payment for a greater part of the year. The threshold for the allowance must be tapered so that the current poverty trap is eradicated. Pensioners should have the option of receiving the allowance in two lump sums to help those with high home heating oil bills. That is a big issue where people are dependent on oil, where, for example, no gas is available. It is very difficult for people to pay their oil bills and two payments could facilitate them to do so.
Another relevant issue is the inequity in the current assistance provided by the Government to people with high home heating oil bills. The Minister needs to re-examine the rules for the household benefits package. Currently, the system works to the disadvantage of people with oil-fired central heating, as they can only avail of free electricity credits. However, people with gas central heating can avail of either free gas credits or free electricity credits. Depending on energy prices, gas credits can be worth far more than electricity credits so the amount of State assistance offered to one pensioner can be less than to another. That is a ridiculous situation when home heating oil has risen by 40% in the past year. The Minister needs to re-examine the benefit so that where bills are high all pensioners can avail of the same amount of assistance.
We need to give attention to properly financed local authority home improvement schemes. Only claims by pensioners with a disability or other medical condition will be entertained by most local authorities. Pensioners who enjoy any degree of fitness — regardless of the condition of their home, whether they have central heating, double glazing and so on — will not have their applications for home improvements accepted. This is because the new grants scheme that was set up earlier this year has not been funded by central Government. As a result, people cannot access grants to improve their heating provision. Likewise, Energy Action does excellent work in insulating attics and homes generally, but there is a long waiting list for its services.
We cannot await the implementation of budgetary measures for changes to be made. The Minister, Deputy Hanafin, has provided cold comfort to people who are hoping for improvements. Unless action is taken, more than 652 people could die this year simply because of the failure of the Government to prioritise this issue. In a country in which there is so much wealth, that is an absolute scandal.
Deputy M. J. Nolan: It is timely that we should debate this issue on 1 October as winter approaches. We are all aware of instances of fuel poverty in our constituencies. Fuel poverty occurs where a household must spend more than 10% of its income on energy in order to maintain an acceptable level of heat throughout the home. Those most likely to be affected include elderly couples and elderly individuals, some of whom have lost a partner and now find themselves alone in the family home. I am aware of people who have downsized to smaller houses or apartments where maintenance and heating costs are substantially less. People who have spent 30 or 40 years in their home and have a great sentimental attachment to it should not be obliged to move somewhere smaller because of concerns about fuel affordability. It is incumbent on the Department of Social and Family Affairs to look after such persons in their latter years.
Fuel poverty arises as a result of the relationship between household income, energy efficiency and dwelling and fuel prices. Living in cold, damp conditions has an adverse impact on health, particularly so in the case of the elderly. The consequences of fuel poverty include social exclusion, poor health and a general feeling of helplessness. Fuel poverty is, therefore, a social issue and must be dealt with as such. People living in cold, damp houses as a result of fuel poverty are at increased risk of respiratory illness, increased blood pressure and stroke, worsening arthritis, accidents in the home, social isolation and impaired mental health. Such adverse living conditions can also have a detrimental effect on children’s education and on the quality of nutrition enjoyed by householders. There is anecdotal evidence that elderly people may do without food in order to pay fuel and electricity bills to keep their homes warm. Fuel poverty is also associated with significant debt to fuel companies, resulting in financial exclusion for the householder.
I have been concerned for some time about the adequacy of existing welfare supports in addressing fuel poverty among low income householders, mainly social welfare recipients. The primary tool used by the Department of Social and Family Affairs for assisting low income householders is the fuel allowance. Last year, more than 300,000 householders were in receipt of this payment of €18 per week for 30 weeks of the year. In addition to the fuel allowance, the Department of Social and Family Affairs provides several other fuel related benefit schemes, including the free electricity allowance, free natural gas allowance and free bottled gas allowances.
Also of assistance to low income families have been the schemes run by local authorities whereby people are assisted in improving their houses by installing new insulation, windows or doors. Unfortunately, in the past two years in particular, local authorities, for whatever reason, have not had sufficient funding to finance these particular schemes. In my own county of Carlow, for example, while the local authority is accepting applications for the disabled person’s grant scheme, they are not being processed because the funding is completely exhausted. The authority will not be in a position to process the applications until early next year.
Deputy M. J. Nolan: I ask the Minister for Social and Family Affairs to look seriously at this issue. Figures published today indicate a year-on-year increase of 50% in the numbers on the live register. In the current economic downturn, increasing numbers are likely to fall into the net of fuel poverty. The Department must take serious action to address this. In the context of the upcoming budget, I ask the Minister to remember those less fortunate than ourselves.
Deputy Mary Alexandra White: I am pleased to have an opportunity to discuss this issue. As the days get shorter, we observe the annual rise in electricity usage at this time of year. Many elderly and vulnerable people absolutely dread the winter evenings, afraid to turn the heat on or even up a notch and obliged to monitor their electricity usage. Some spend their time sitting in rooms that are unhealthily cold. As the Government finalises its budget for 2009, with all the implications inherent in it for people’s capacity to heat their homes, and as we experience the first effects of recent increases in energy prices, we must ensure that the less well off are looked after in this budget. That is our priority.
Unfortunately, Ireland is not immune to the repercussions of oil price changes abroad. We can lessen our exposure only by increasing our energy independence through the use of renewable energy. It is not fair to criticise the Minister for Communications, Energy and Natural Resources, Deputy Ryan, given that the Opposition did little in this regard in the past, even though we have been warned of the implications of climate change and energy price hikes for the past 15 or 20 years.
Deputy Mary Alexandra White: I am pleased with the new measures we have been able to introduce. We in this House are all agreed on the need for the upcoming budget to make progress on helping those who heretofore have been caught in the fuel poverty trap. In previous years, agencies working in this area have claimed that as many as 6% of Irish people went without heating at some stage in the past two years. We must put an end to that. A recent World Health Organisation report on social equity and the social determinants of health indicates that 17% of households were unable to provide adequate heat in their homes due to a combination of low income and energy inefficient housing.
However, this is beginning to change. We must ensure that no elderly person is reluctant to ensure an adequately heated home because of concerns about the cost. Findings show that improved central heating and insulation are the keys to cutting down on household expenditure on fuel. The Government provides a considerable allocation each year for the provision of electricity and gas allowance to those on social welfare. Some 2,290 households benefit from the national fuel allowance. However, more can be done, particularly at a time of high energy costs when priorities come into sharper focus because of diminished revenue.
Many speakers have observed that one of the root causes of fuel poverty is poor standards of energy efficiency. Many measures are being introduced by the Minister, Deputy Ryan, in this regard, including the expansion of the home energy saving schemes, particularly for low income households, through Sustainable Energy Ireland, and the roll-out of smart metering which will help people calculate and calibrate the quantity of energy used. People, even those on low incomes, are keen to get involved in these energy saving initiatives. There are well thought out measures such as the new building regulations introduced by the Minister, Deputy John Gormley, which will ensure 40% greater energy efficiency, and will prevent householders from being subjected to the threat of fuel poverty. I hope that local authorities, even on their diminished budgets, will be able to retrofit much of the poorer social housing which certainly needs to be upgraded in my constituency of Carlow-Kilkenny.
We are putting behind us the three jumper winter, the scrimping on electricity use and the fear of spending income on basics such as heat and food. These sentiments should be relegated to the past and I hope this year’s budget will help by increasing spending on those issues. That is why others in the Green Party and I will not allow fuel poverty and the raiding of pensions to be part of any recession. That is why with smart energy efficient measures these initiatives are making real improvements in the quality of life. There are warmer and better homes.
Deputy Dara Calleary: Everyone in the House is agreed on the implications of fuel poverty. They have been accentuated this year in an era of crazy energy hikes. As well as calling on the Minister for Social and Family Affairs, Deputy Mary Hanafin, to consider fuel allowances, I ask the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, to focus the resources of the National Consumer Agency on the prices being charged. It seems that as oil prices increase our daily fuel prices increase in tandem. However, when oil prices decrease the speed of decrease does not seem to match what is occurring in the world markets. The National Consumer Agency and the Competition Authority should prioritise these matters in the coming days and weeks as we come into a time of maximum use.
Another issue that will assist the alleviation of fuel poverty is the increase of energy supply. In the past few years the Government and its predecessor have done much work to increase the availability of gas supply throughout the country. In County Mayo, this is manifested by the gas west project which, with the work of local communities and local councils, ensured that the regulator was in a position to change the rules on the eligibility of towns to qualify for gas supply. Such supplies have been taken for granted for many years. This project is coming on stream as we speak. I pay tribute to Bord Gáis Éireann for its management and roll out of the project, which serves as a model for other State organisations. We now have choices in our energy usage. Previously we were completely dependent on the ESB for business and domestic fuel, but we now have a choice between electricity and gas. Gas is considerably cheaper. There needs to be a good deal more promotion of the benefits and relative cheapness of gas for domestic users. This will address the fuel poverty issues identified by previous speakers. There must be continued expansion of the project to include towns such as Belmullet and other towns across east Mayo. The viability in these areas is no longer in question. A speedy roll-out is required now to give customers a choice, the power to use that choice to reduce their regular fuel bills and alleviate the difficulties caused by fuel poverty.
Our daily energy management has been referred to by previous speakers. The smart meter project will be very important and I have heard much talk about that project since I became a Member of this House. However, to date there are no meters in any houses. A pilot scheme is due to be announced and rolled out shortly. Do we need a pilot scheme at this stage? We know how beneficial smart meters are and we know the information and choices they provide to consumers. Let us roll out the project. Since it has worked internationally there is no reason it should not work in Ireland. We should design the meters to be user friendly, so that people can examine them and understand directly what they mean for the energy bills at the end of every month, rather then referring to units which nobody understands. When a person receives his or her ESB bill, the number of units means nothing. What matters is the cost at the bottom of the bill. Unless the cost is displayed on the meters they will not have the desired impact.
Other technologies such as wind energy are becoming available. Investments in wave energy should come on stream as soon as possible. We are very reluctant to adopt wind energy. We seem to be moving very slowly towards using these forms of energy to meet part of our day-to-day electricity requirements. There is considerable dissent around the planning process for wind energy. There must be a good deal more education on wind energy and turbines by the Department and the energy providers. It is remarkable that we are so slow in rolling out the wave energy projects, given that we are an island nation. We are surrounded by the Atlantic, one of the most powerful seas in the world. This too has the power to increase the sources of supply and thereby reduce the bills at the end of the month.
The Minister for Social and Family Affairs, Deputy Hanafin, should alert her welfare officers to the fact that many people who qualify may not look for the fuel allowance. Those who previously qualified for the allowance may need that help this year. Community welfare officers should be given the discretion to help out on a one-off basis.
Deputy Mattie McGrath: The Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, has proposed that we commission an independent analysis of the transmission transfer, including costs, benefits and regulatory impact assessment. This is set in the context of EU developments and the all-island single electricity market. There is a need for engagement with all relevant stakeholders in the process of implementing Government policy on electricity transmission assets. Government policy is clear and ensures the strategic future of both EirGrid and ESB as strong viable semi-State bodies with vital roles to play in delivering our national targets for emissions reduction, renewable energy and energy efficiency as well as security of supply and energy competitiveness.
Earlier this year, the ESB announced its new strategic framework to 2020, which will see an unprecedented capital investment programme by the company at home and abroad in support of our goals for renewable energy, energy efficiency, emissions reduction and energy security. EirGrid’s development strategy 2025 will be published shortly. This will set out an ambitious national strategy for critical investment in the transmission system over the next two decades in support of economic, social and regional development and the integration of renewable energy generation.
Financial supports are available to homeowners under two schemes funded by the Department of Communications, Energy and Natural Resources to improve the energy efficiency in existing homes. We would like to see more funding in place for these schemes. However, for households on low incomes, such as those in receipt of fuel allowance, invalidity or disability benefit, the warmer homes scheme, which I commend to the House and which is managed by Sustainable Energy Ireland, will install cavity wall insulation, attic insulation, a boiler lagging jacket, draught proofing measures and so on. Advice is also provided to householders on minimising energy use, which is important. These measures are provided free or at a token cost. The Minister, Deputy Ryan, has made €5 million available to this scheme in 2008.
Other householders can avail of grants of up to 30% of the cost of energy efficiency improvement measures under the home energy saving scheme. The Minister launched this scheme in 2008 on a pilot basis, in a limited number of areas, and with a budget of €5 million. The home energy saving scheme has been designed to encourage and incentivise house owners to improve the energy efficiency of their homes in order to reduce energy use and carbon dioxide emissions. The pilot scheme sought to aid approximately 2,000 homes in 2008, operating in four separate components. The first three components were defined geographic areas. To qualify for the supports which were made available, applying households and the subject houses had to be located in counties Limerick, Clare or Tipperary.
I believe the fuel allowance scheme must be increased in line with the rising cost of fuel. I encourage the Minister for Social and Family Affairs, Deputy Hanafin, to do her level best in view of the circumstances in which we now find ourselves to have a meaningful increase in the allowance to cover the cost of all forms of heating in our homes, especially for the most vulnerable. With many previous speakers and members of the communications committee, I am very disappointed with the lack of response from the oil companies in reducing the price of oil when the cost of a barrel of oil on international markets has returned to its cost eight or ten months ago. The cost of oil at the coalface must be decreased also.
Deputy Áine Brady: I welcome the opportunity to contribute to the debate this evening. Along with many other Members in the House, I fully recognise that the rising cost of energy, seeking alternatives to existing sources and the security of energy supplies are real challenges not only for our country but also for many other countries across the world.
It is worth pointing out that in 2000, crude oil prices were between $10 and $20 a barrel. In July of this year, crude oil reached $147 dollars a barrel and while prices have eased in recent weeks, they are still close to $100, which is far ahead of last year’s prices. As other speakers have pointed out, the consumer does not benefit from any drop in these prices as quickly as they feel the price hike.
The global demand for oil products remains relatively strong, with the emerging economies of China and India still consuming record levels of oil. The geopolitical uncertainties in many oil producing countries, coupled with the current disorderly conditions in the global markets, contribute to the continued uncertainty in global oil markets and hence their prices.
As policy makers, we must try to focus on how we can reduce our dependency on oil. We must continue to formulate policies that reduce our dependency on fossil fuels and increase the supply of alternative energy sources.
In recent years the Government launched a number of worthwhile schemes to assist in reducing our domestic reliance on fossil fuels. The green homes schemes, which I strongly supported when they were introduced, provide support to home owners to invest in a range of domestic renewable energy heating technologies, including solar panels, biomass boilers and stove and heat pumps.
The warmer homes scheme is another example of how we can reduce our dependency on oil. That scheme provides attic insulation, draught proofing, lagging jackets, energy efficient lighting, cavity wall insulation and energy advice at little or no cost to eligible householders. The scheme is targeted at householders in receipt of the fuel allowance, disability benefit or invalidity benefit and is provided for a nominal fee.
This Minister has redirected, within Sustainable Energy Ireland’s 2008 allocation, additional funding to the warmer homes schemes. It is up from €2.5 million to €5 million this year, which I welcome. It is anticipated that by the end of the year, over 18,000 homes will have been fitted with energy efficiency measures and I would welcome a further extension of this scheme, given the benefits that are derived from it.
One of the most important ways for people to offset energy prices is to improve the level of energy efficiency in their homes, either by changing their behaviour and usage patterns or by improving the fabric of their homes. I commend the Minister on the recently launched home energy saving pilot scheme which encourages householders to improve the energy efficiency of older housing. This scheme has the potential to significantly improve the energy efficiency of our housing stock. Sustainable Energy Ireland has estimated that those upgrading the energy efficiency of their homes, with the support of this scheme, can expect to save up to €500 per year on their energy bills.
The Power of One national energy efficiency awareness campaign to which the Minister referred earlier, which commenced in September 2006 and is scheduled to run until December 2008, has put the emphasis on using energy more efficiently in our daily lives. That comes very easily once one gets started. The Power of One campaign has captured the imagination of the Irish public. It demonstrates how changing our behaviour in small ways every day will help to save energy while also saving money. This campaign encourages us to recognise our own power and use it. I would welcome the development of further initiatives in improving our energy efficiency.
Energy costs for business are a key concern for this Government, and the cost of energy is a key competitiveness issue. Keeping our costs down for businesses in Ireland is essential to maintaining competitiveness in this challenging economic environment. For us to maintain our current foreign direct investment and attract further investment, our energy costs must be affordable and environmentally acceptable.
Our ability to insulate ourselves against the impact of global energy trends is obviously limited. Under the Energy Policy Framework 2007-2020, however, a range of actions are under way to address the three urgent imperatives of competitiveness, security of supply and environmental sustainability. The energy policy framework, together with the programme for Government, has created energy policy certainty in the short, medium and longer term, with the over-arching objective of creating a supportive, sustainable energy environment for the economy and for consumers. That certainty is important for businesses trying to compete in global markets.
I understand also that significant progress has been made with the east-west connector, which will be owned and operated by EirGrid. EirGrid has secured the connection points in Meath and Wales for the interconnector, which will help secure a more competitive energy supply. In addition, the Government is committed to increasing competition in the energy market. The all-island single electricity market, active since November of last year, is designed to create a more attractive energy market for international investment. I commend the Government on its work in this area and encourage continued Government action.
I would also encourage the Minister and the Government to consider additional incentives to farmers to invest in forestry, in particular the road infrastructure in forests, and ensure we have a sustainable supply of wood for our wood pellet industry. Farmers now have the potential to become key stakeholders in our energy market and build on the progress to date.
Working together using our own power, Government initiatives to reduce our home energy costs and implementing our energy framework policy to ensure a competitive energy supply, we have a comprehensive policy mix to minimise the worst effects of our rising energy costs. I congratulate the Minister on his work and enthusiasm in driving the Government’s agenda and commend the amendment to the House.
Deputy Joe McHugh: This evening we are discussing how the Government can address fuel poverty in this country. This discussion and this session of Dáil Éireann takes place against a backdrop of severe national economic and financial difficulties. The Republic of Ireland and its citizens are currently attempting to come to terms with the first recession that has visited us in a quarter of a century. For the next four years, the Minister, Deputy Brian Lenihan, will borrow €10 billion just to keep the country afloat. The Taoiseach, Deputy Cowen, will have doubled the national debt by the end of his term.
The seriousness of these difficulties in the financial area should inform everything that is done and said in Dáil Éireann in the coming months. In the coming political cycle we must redouble our efforts to ensure public money is not wasted and that we use the national resources available to us efficiently and sensibly. It is from that perspective that I contribute to this discussion this evening.
We cannot do this in isolation. There must be an interdepartmental and cross-Cabinet effort in respect of fuel poverty. This year, the Department of the Environment, Heritage and Local Government stipulated that 500 families in Inishowen, County Donegal will not be allowed to harvest turf from the 3,000 acres of bogland where they and their ancestors have harvested turf for centuries. Officials from the Department travelled to Donegal recently and, without consulting with any of those 500 families, designated 3,000 acres of bogland in Magheradrumman, Donegal as a special area of conservation.
Fine Gael is proposing to develop a strategy to tackle the looming crisis that has left hundreds of thousands of families in the grip of fuel poverty. The Department of the Environment, Heritage and Local Government, by ordering the termination of traditional fuel harvesting at Magheradrumman, has contributed to that looming crisis and will put people in the grip of fuel poverty next year.
The Irish special area of conservation is a product of the 1997 Wildlife Act and the 2000 Wildlife (Amendment) Act, which were brought before this House on foot of the European Union habitats directive of 1992. Those Acts are based on a flawed Irish interpretation of the EU habitats directive. In 1997 and again in 2000, the relevant Ministers assigned areas as SACs on exclusively scientific grounds. That exclusively scientific foundation is deeply flawed. The EU habitats directive declares that its central aim is to promote the maintenance of biodiversity, taking account of social, economic, cultural and regional requirements. It commits itself to a general objective of sustainable development and acknowledges that to this end, the maintenance of such biodiversity may, in certain cases, require the maintenance or encouragement of human activities. The 1997 regulations and the Wildlife (Amendment) Act 2000 do not take account of economic, social, regional or cultural requirements. I am examining this issue from such perspectives this evening in the context of the looming fuel poverty crisis. The designation of the area of County Donegal I mentioned as a special area of conservation is an aberration. It is based on an unsound interpretation of the EU’s habitats directive.
The members of the Cabinet, as a team, are considering various strategies, policy proposals and new interventions as part of their search for answers. It is a great team for talking jargon. When they refer to best practice, they speak about what is happening in places like Finland and Canada. The solution I am offering would be of great assistance to the Ministers for Social and Family Affairs and Communications, Energy and Natural Resources. With their colleague, the Minister for the Environment, Heritage and Local Government, Deputy Gormley, they should examine what is going on. People are being prevented from cutting turf which would help them to meet their fuel needs at a low cost and, as the habitats directive makes clear, on sound sustainable grounds. I have outlined a solution. It is important that we do not forget what is happening on the ground. We know what happened over recent days, when the so-called experts, the so-called gurus and the so-called intelligentsia in the financial sector were shown to have made mistakes. There are far too many God-damn experts in this country telling people how they should live their lives. We know how to live our lives. I have suggested a solution to this problem. It worked hundreds of years ago and there is no reason it cannot continue to work into the future.
Deputy Michael D’Arcy: This Private Members’ motion is rather timely as we face into the winter. When one sticks one’s head outside the window, one can see why fuel poverty levels are increasing. I wish to focus on two issues, the first of which is the price of fuel.
Over the summer, my attention was drawn to the difference between the speed at which the price of fuel is increased when the price of crude oil increases on the world markets and the length of time it takes reductions in the price of crude oil to be passed on to consumers. I do not blame those who work at the forecourts, those who drive lorries or those who deliver home heating oil, but the four or five companies that supply such people. When I raised this matter at a meeting of the Joint Committee on Communications, Energy and Natural Resources, all my colleagues on that committee agreed to invite representatives of the companies in question to address the committee. I do not think the House will be surprised to learn that the companies have been unhelpful. I am being polite when I use the word “unhelpful”. I could use some other words to describe them.
If we are to ensure that a cartel is not in operation, we need to get the companies to explain the pricing regime that is in place. We need to ascertain whether the companies are operating at a margin that is not the maximum they can get. Those are two very different things in business. Far too often, companies and organisations operate on the basis of getting what they can from consumers and there is no oversight system to prevent them from doing so. People often suggest that this House and its committees are irrelevant. I intend to use the committee system to pursue this matter. I thank my colleagues on the committee, some of whom are in the Chamber this evening, for their support in this instance. We will not accept any refusal on the part of the companies in question to come to the committee to explain how their pricing systems operate and how their business is conducted. I hope we will achieve a positive result for consumers. It seems that while fuel prices can be increased overnight, it can take a week for price decreases to be implemented. Consumers potentially have to endure five or six days in which prices remain high even though reductions should have been passed on to them.
I am also concerned about social welfare payments, particularly the fuel allowance payment. The payment is too high in the summer and too low in the winter. The Department has not agreed to permit its customers to carry amounts over from the summer to the winter if they wish to do so. At this time of high prices, a tankful of oil can cost up to €800. Prices fluctuate by up to €20 all the time. It is important to provide for flexibility within the scheme so that people who do not use all their entitlements during the summer can carry them on to the following winter. I do not think that is an outrageous proposition. I am trying to help those who need the fuel allowance scheme most, rather than calling for a carte blanche to be applied to the operation of the scheme. As other Deputies have said, the elderly need this allowance because they are most susceptible to the effects of the cold. We should offer them the option I have mentioned. If the Minister is to do anything on foot of this debate, he should change this aspect of the scheme. It is within his power to do so.
Deputy Michael Ring: In recent times, the average two-monthly domestic ESB bill has increased by between €30 and €50. The annual cost of electricity used to be approximately €870 per household, on average, but it has now increased to €1,000. People on low incomes are not able to cope. I will concentrate on three aspects of this issue this evening.
I agree with my colleagues who spoke about turf. When I hear members of the Green Party talking about carbon tax and other environmental strategies, I worry about the poor, the weak and the sick, who will have to pay more as a result of such initiatives. The big guys will be able to write their additional costs off against tax, but poor people will have to meet such costs from their social welfare incomes and their pensions. I do not envisage that there will be a major increase in the pension this year. Ireland does not enjoy much sunshine or very good weather over the course of the 52 weeks of the year. I do not think we have had three consecutive fine days this year. People on the fuel allowance scheme believe the allowance should be paid all year round, rather than merely from October to April. All elderly people want is to be safe and warm in their homes. They worry that they may die in their homes from the cold because they do not have enough fuel to stay warm. They must be protected.
I would like to speak about the regulator and the Minister. The Minister washed his hands of the ESB and the energy sector when he handed responsibility for it to the regulator. I sent a scathing letter to the regulator a few weeks ago. He awarded major increases to the ESB last year. Three months later, the ESB announced that it did not want the increases. It had been given too much. The poor people still had to pay the ESB, however. They were topping it up.  I accept that oil and diesel were quite expensive on the world market earlier this year. The people of rip-off Ireland were ripped off yet again when the price of fuel increased. Home heating oil prices in Ireland are the highest in Europe. Why should oil be any dearer in Ireland than in any other part of Europe? The rip-off merchants of this country are making it dearer. The banks ripped off the people. They got so greedy that they brought down the economy.
I wish to return to the price of fuel. The minute the price of oil and diesel increased, the regulator could not wait to sanction an increase on the part of the ESB and whoever else wanted one. He could not run fast enough to do so. He provided for a massive increase of 19% or 20%. He said he would re-examine the matter at a later stage. When the price of oil and diesel decreased, the regulator failed to say to the ESB that the price of electricity needed to be cut because fuel prices had gone down. He did not do that. The old, sick, weak and poor of this country should be protected.
I will comment on the role of the local authorities in this regard. The health boards used to run the disabled person’s grant scheme, under which roofs and other parts of houses could be improved. The scheme helped people to retain some heat in their homes. Responsibility for such matters has now been passed to the local authorities, which is fine. There is no point in doing that, however, without also giving the local authorities the money to help people. Thousands of applications were made in my county. The county council has all the reports ready and is ready to grant-aid the money but the problem is that it does not have any money. There is no point giving schemes to the local authorities when they do not have resources or money.
The budget will be presented in two weeks. I hope the weak, sick and elderly are looked after, particularly with regard to fuel. I know it is not a good time and that we have a shortage of money. However, this is when we should look after the weak and vulnerable in society. I want to send a message to the Minister for Social and Family Affairs. She had better ensure the fuel allowance is increased. It has not been increased for many years. One would not even buy a bottle of gas for what one receives, not to mention coal because one would not even get half a bag of coal for it. It is time a significant increase was made.
To the Green Party I state that the people of this country are beginning to realise it is wonderful to have green policies. However, who will pay for them? It will be the weak, the old and those on low incomes because big businesses will be able to write it off and pass it on to those who cannot afford it. To the Minister, the Government and the Green Party, I state their policies are great but who will pay for them? The people cannot afford to pay any more. They have enough of it.
Deputy Seymour Crawford: It is not easy to follow that. I welcome the opportunity to speak on this issue. There is no doubt that death can occur through fuel poverty. Ireland has among the highest energy prices in the EU added to by the recent price increase of 17.5% in electricity and a 20% rise in gas prices as recently as September of this year. This is creating serious energy poverty for at least 227,000 households in Ireland today. The frightening situation is that the Commission for Energy Regulation is actively considering further electricity and gas increases from January 2009 and the price of home heating oil has risen dramatically in recent years.
It is clear that in recent years, Ireland has suffered more severely from higher energy costs than our colleagues in other European countries. Only last year, I highlighted the fact that one company based in my constituency of Cavan-Monaghan was paying twice as much for its electricity as it was for a similar plant in France and had an almost similar situation at its other plant in Holland. This means that our Government should be making every effort to develop a joint energy market with the UK and integration with France and mainland Europe.
It is vital for our elderly and disabled who need so much heat and power that we minimise the cost factor at a time when it is more difficult to increase supports because of our financial difficulties. Another aspect I must touch on is that our county councils and HSE authorities no longer have funds to help people reconstruct and improve their houses to make them more acceptable for our elderly and disabled, particularly from a heat conservation point of view. People have been told they will receive a grant and to borrow the money from their credit unions as it will be paid next year.
Over the years, great work was carried out under the auspices of the health boards to ensure that essential repairs were carried out for the elderly and the disabled. In my constituency, an independent company was established which carried out such work at nominal costs to the elderly and disabled and at very good value to the State. Funding was withdrawn from this scheme last year and in principle the scheme was transferred to the local authorities. However, as has been stated, in reality no funds were made available. Under this scheme double glazed windows and roof repairs, including insulation, were carried out allowing many people to remain in their homes for a much longer period. I believe the winding up of this scheme will have serious implications for the future and will lead to much more pressure on the social housing sector within the council.
The Government can no longer advise that an essential repair scheme or a disabled grant is available when it has totally failed to fund county councils and other authorities to support the work. It would surely be cheaper for the Government to provide proper funding to insulate and improve houses rather than giving tax breaks to private builders to build nursing homes and fund the people through subvention to stay in them.
One other issue I must highlight tonight is the failure of the Government to realistically increase the living alone allowance over the years when money was plentiful as the amount of €7.70 is an absolute joke for some individuals, especially in rural Ireland where a person living alone must pay the same amount to heat a home as was paid to heat the same home for the entire family. The person must keep and maintain a car, if they are still able to drive, so as to avoid isolation.
If two people are living in that household their pension would be approximately €450 but if there is only one person the pension is only €225 plus €7.70 for fuel allowance. The person in those circumstances must live with less heat and possibly less food, particularly if the person is to retain his or her car and therefore retain some independence? I appreciate that in difficult times money is scarce and hard decisions have to be taken but I contend that the living alone allowance must be increased if people are to continue to live in their own private homes and not in long-term institutions.
I congratulate Deputies Simon Coveney and Olwyn Enright who have spelled out clearly how structures can be put in place and changed and funds obtained from unearned windfall profits. Fine Gael believes that the poor, the needy and those needing heat should be looked after, even in difficult times, and they should be a priority.
Deputy Dan Neville: I welcome this opportunity to contribute to the debate. “Fuel poverty” is the new buzzword. People do not have enough money to heat their homes to keep them in reasonable comfort and protect their health. More than half a million houses experience some type of fuel poverty, with 62,000 experiencing persistent fuel poverty. It is an extensive issue in need of Government attention.
Fuel poverty affects those who are most vulnerable, those who have less goods and who are on lower incomes. It also affects people in certain houses with inefficient energy conditions.  Elderly people in particular rely on expensive heating appliances or expensive fuels. Two issues are raised, namely, income and fuel efficiency. The Government should examine schemes to assist with energy efficiency, which is the key to improving the position. Those on low incomes and who experience fuel poverty do not have the means to do so themselves.
Certain groups are in greater need of warmth than the average person, such as those in ill health, those with disabilities, the elderly and those caring at home. The unemployed also spend longer in the house and do not have the same level of activity as others. The effects of fuel poverty range from uncomfortable living conditions to negative impacts such as poor physical or mental health, increased debt and a decline in the physical state of the home. These people cannot maintain their homes which deteriorate over a number of years.
In 2005, 6% of the population went without heating due to a lack of money. This also contributes to our winter mortality rates and poor physical health. Others have raised this issue in respect of the special housing aid for the elderly scheme. Limerick County Council’s finances just covered applications to the end of last year, so no new grants have been available this year for people who wished to improve their houses. It is hard for people to understand that these schemes are in operation but are not being funded. What is the point in operating them without funding? I hope that special attention will be paid to this issue in the forthcoming budget.
Ireland has the second highest excess winter death rate in Europe. There is a strong correlation between fuel poverty and mortality rates. More than 2,000 deaths occur here each winter. Across Europe, Ireland’s high incidence of fuel poverty stands out among lone parents, the employed and others in rented accommodation. In addition, the poor spend eight times more of their income on fuel than those in higher income brackets.
Deputy James Bannon: On behalf of those throughout the country who have no voice, low incomes, big overheads and are facing a bleak winter, I am glad of the opportunity to speak on this motion, which highlights the Government’s shameful disregard for those experiencing energy poverty. I thank my colleagues, Deputies Coveney and Enright, for tabling this motion, which has far-reaching implications both for energy and social welfare issues. Government cutbacks, soaring prices, capped incomes and rapidly rising live register figures mean that our most vulnerable citizens, particularly the elderly, will not have the money for both food and heating this winter.
The Society of St. Vincent de Paul has seen a rise of almost 40% in calls for help to its Dublin offices alone, primarily concerning increased energy, fuel and food costs. This is indicative of the Government’s mismanagement and neglect. Winter mortality in Ireland is high compared to other EU countries. According to a UCD study covering the years 1988 to 1997, Portugal suffers from the highest rates of excess winter mortality at 28%, followed jointly by Spain and Ireland at 21%. The link between environmental temperatures and thermal inefficiency indicates that housing standards in southern and western Europe play a strong part in such mortality rates.
It is incumbent on the Government to develop a national strategy to address energy poverty. This matter cannot be put on the long finger by the Government; it must be tackled urgently by providing a cohesive plan, incorporating pricing and income supports, and having a detailed timeframe for delivery.
We are in a crisis situation with 227,000 households experiencing varying levels of energy poverty — a shocking figure by any standards — and electricity prices increasing by 134% from 2000 to 2008. In addition, the recent 20% rise in gas prices is to be followed by another increase in January. When we use the term “poverty” we are making an evaluation; it means not just that people are in a certain situation, but that something ought to be done about it. The Government must do something about this. This is the Government that coasted through the boom years on the crest of a wave, but the wave failed to impact on those who were living and continue to live on or below the poverty line.
Instead of using the wealth of the Celtic tiger years to address such situations, the Government squandered it. The reality for many people this winter will entail rising fuel prices and the unenviable choice between heating and food. Let there be no misunderstanding — it will be a winter of discontent with the Government coming under increasing attack.
This national crisis combined with the international situation demands the immediate establishment of a national strategy to address energy poverty. Under such a strategy, joint energy markets with the UK and mainland Europe could be combined with legislation to permit the Commission for Energy Regulation to set a maximum price as opposed to a set price.
In a report published yesterday, the Environmental Protection Agency again warned that Ireland is facing a major challenge in meeting EU targets on reducing greenhouse gas emissions. The Government must utilise the positive impact that increased energy preservation would have in helping to reverse this trend. However, the possibility of carbon taxes being introduced by the Government would see low-income households being proportionally the most penalised as they tend to be forced to use the most carbon intensive fuels and inefficient heating systems.
Under current Government policy, consumers stand to assist electricity generators, primarily the ESB, to make unearned gains of up to €1.6 billion under the current phase of the carbon allowance credit plan. Fine Gael has exposed this unacceptable situation and is proposing that the Government recoups this windfall, using it to alleviate fuel poverty. The forthcoming budget must be used positively by the Government to assist the socially disadvantaged, including those in energy poverty. The budget should not be used, as many believe it will, as proof that the Government is using the economic downturn as an excuse to cut back on the social equality agenda.
Minister of State at the Department of Communications, Energy and Natural Resources (Deputy Seán Power): I commend the amendment to the motion, but thank the Fine Gael Party for giving us the opportunity to discuss energy poverty. It is somewhat ironic that the debate over the previous 24 hours has referred to billions of euro, whereas we are now discussing energy poverty where a few extra euro can make the difference between people just surviving or living with some comfort. Previous speakers have shared with us their experiences of some of the difficulties concerning constituents and people’s fears for the winter ahead.
The cost of energy has attracted much attention in recent times. While many headlines have been given over to business — and there is no denying that energy costs constitute a major competitiveness issue — the cost of energy to households is equally important. It is correct that the Government should give its attention to that matter also. I grew up in a rural part of County Kildare where there was a great tradition of cutting turf so that by the end of the summer householders would have a shed full of turf for the winter ahead. The introduction of special areas of conservation, however, means that for many households around the country that provision is no longer possible. Fuel is a big problem for many homes and, unfortunately, poorer people must spend a greater percentage of their income on it than others who are better off. In many cases, such people are living in homes that are not energy efficient, but small changes could improve the temperature of their dwellings.
Deputy Seán Power: I will outline the position as I see it. I am never one to be blinkered, no matter what side of the fence I am on. I have also been on the Opposition benches. I know that whatever any Government can do in this area, one will never be satisfied as there will always be difficult cases. In fairness to the Government, we have focused in recent budgets on older people. Much more needs to be done and we have depended to a large degree on agencies like the Society of St. Vincent de Paul, which has played an important role in identifying people at risk and assisting them.
My ministerial colleagues, Deputies Ryan and Hanafin, have outlined the measures they have taken and outlined their intention for the future. A number of the policies we have implemented have had a very positive effect. The warmer homes scheme is a key mechanism through which low income households, such as those in receipt of the fuel allowance and disability benefit, can benefit from the provision of attic insulation, draught proofing, lagging jackets, energy efficient lighting, cavity wall insulation and energy advice at little or no cost to eligible households. These measures can significantly reduce the amount of energy required to heat and light the home.
Major improvements in energy efficiency throughout the economy are essential for controlling and reducing energy costs in the short to medium term, a fact that has been recognised by the European Commission and the G8 leaders. The Minister, Deputy Ryan, explained how we are focusing on a number of key areas to mitigate the impact of the increasing cost of energy, including increasing the energy efficiency of residential and commercial buildings, especially for those on low incomes. We have also concentrated on improving people’s understanding of their energy usage patterns, and we have begun a roll out of smart metering. Deputy Calleary stated he would like to see it done a little quicker. However, it will have a positive impact and will succeed in changing consumer behaviour, which will result in a major saving. The evidence is there and people can see that with small changes, they can save a considerable amount of money over a year. That is a scheme we look forward to rolling out.
Deputy Ryan also referred to our dependence on fossil fuels and to augmenting the level of renewables in our fuel mix. We have not concentrated on our dependency on oil and the need for people to change. The Government has a big role to play in that, but we all have a role to play as individuals and we can make a difference. The national energy efficiency action plan will act as an important mechanism through which we can manage the process of achieving our energy efficiency target for 2020. Fundamental to achieving this target is our ability to create the appropriate structures that effectively underpin the identified measures and that facilitate the introduction of new measures that will contribute to our national energy savings.
Ensuring consumers have the appropriate information to make the right energy usage decisions is an important element in helping to reduce energy demand. The Power of One national energy efficiency awareness campaign has been successful in making consumers and businesses understand the value of energy and how they can take simple actions that can result in big savings. There are a number of television programmes that have been very helpful in contributing to the education of people in energy efficiency. The smart meters are of great importance and the roll out of a national smart meters trial will help make people aware of how much energy they are using and help them to reduce costs. A number of speakers have mentioned it this evening. It is a wonderful idea and the change in behaviour will have significant benefits.
While energy efficiency is very important, it is only part of the answer to make energy more affordable for low income households. The Minister for Social and Family Affairs stated that the main role of the social welfare system is to provide income support and that since December 2001, social welfare payments have increased by between 71% and 88%, whereas energy prices have increased by 74% and inflation by 28% over the same period. In successive budgets, we have targeted older people and we gave a commitment on targets for old age pensions in the programme for Government. This occurred when times were good, but it was the right thing to do and I am proud that we did it. In addition to the primary payments, there is a number of social welfare schemes to assist with heating costs, specifically the national fuel allowance scheme, the special heating needs supplement and the household benefits package. These arrangements have been considerably improved in recent years.
The Commissioner for Energy Regulation normally announces one annual increase for electricity and gas prices. In the past, the commissioner has amended the increase and has allowed for price reductions when fuel prices have gone down. Unfortunately, fuel prices have almost doubled, leading to consequential increases in electricity and gas tariffs. In order to cushion consumers from the worst impact of unprecedented volatility in international fuel prices, the commissioner has announced a two-phased approach, with the first increase taking effect in the summer, and the second increase taking effect next January. There is no point in blaming the commissioner for this. It is like blaming the weatherman for poor weather. The commissioner has a job to do and there was a method to what he did by having two increases. I thank Members for their contributions.
Deputy Terence Flanagan: I thank my colleagues, Deputies Simon Coveney and Olwyn Enright, for bringing forward this motion. The Fine Gael motion reflects a true and accurate picture of Irish people having to live with fuel poverty and what the Government can do to improve things for them. The definition of fuel poverty, according to the Institute of Public Health in Ireland, is households that spend more than 10% of their income on fuel to heat their homes. Fuel poverty occurs when people live in damp, cold and badly insulated houses. People in vulnerable groups such as the elderly, the disabled, the unemployed and those on low incomes suffer the most from this problem.
The extent of fuel poverty in Ireland is extremely worrying. It is reported that 17% of Irish families are suffering from fuel poverty, or 227,000 households, according to Sustainable Energy Ireland. This is a real issue that needs to be tackled by the Government. A total of 2,800 people died from fuel poverty last year, which is an absolute disgrace. This figure is only going to increase as we face more harsh winters. The Government needs to put its money where its mouth is and insulate people’s homes. In 2006 alone, the Society of St. Vincent de Paul spent approximately €3 million assisting householders in Ireland suffering from fuel poverty. There has been a huge increase in callers to the society in wake of the recent fuel price increases, and this trend will continue unless the Government introduces measures to tackle the problem.
Our country has one of the highest energy prices in the EU. This small, open economy is becoming very uncompetitive and we are losing small businesses. Our potential to attract more business will diminish if we do not tackle the issue. The price of fuel is ridiculous, as we all know from visiting the petrol pumps or from obtaining home heating oil. The recent 17% and 20% increases in electricity and gas have been ridiculously high. They are completely out of line with inflation. There may be more bad news for householders if prices are due to increase in January 2009. The Minister needs to say “No” to that increase and only allow increases that people can afford to pay.
People depending on social welfare payments are struggling to cope with their fuel costs. Their fuel allowance is a miserable €18 a week, which is a joke and a disgrace. The Government needs to take this issue seriously in the budget on 14 October and increase this fuel allowance in line with the price of gas and electricity.
The Minister needs to set aside money to ensure that energy-efficiency improvements are made to all old homes and social housing homes and that more money is set aside for the greener homes and the warmer homes schemes.
The national strategy on fuel poverty needs to be put in place. If the Government is serious in this regard it needs to deal with the Commission for Energy Regulation and have Oireachtas committee hearings where both sides could discuss the increases. The Government should recoup the full unearned windfall profits of €1.6 billion from energy generators and not simply accept the €300 million being offered by the ESB. This money needs to be ring-fenced to help improve people’s homes. We want to see actions taken in the budget.
Deputy Andrew Doyle: I congratulate Deputies Coveney and Enright on bringing forward this motion on energy poverty and for calling on the Government to develop and publish a national strategy to address energy poverty with a specific focus on conservation, pricing and income support and with a targeted approach and a timeframe for delivery. The Fine Gael motion also calls for a consideration of initiatives around energy security, energy policies and for the Government to deal with the immediate problem. We are often told we are robbing Peter to pay Paul. The ESB receives a windfall tax. Approximately 450,000 households are experiencing some level of fuel and energy deprivation. There is a simple and direct way to deal with the immediate and long-term problem but the Government amendment to the motion proposes to deal with the long-term problem and as a consequence, with fuel poverty for the people who are poor. This is a joke. The Government amendment refers to housing adaptation grants and the warmer homes schemes.
Wicklow County Council needed to ask for approval for an overdraft facility to fund the disabled person’s grants and housing adaptation grants schemes to which it was committed in the hope it would receive an allocation for 2009. The 2009 scheme will be virtually nil because the money has already been allocated to the 2008 commitments. The housing adaptation grants could achieve something but they are being shelved.
I was told last Thursday that the foreshore licensing Bill would come before the House in 2009. This Bill needs to come before the House in early 2009 so that responsibility can transfer from the Department of Agriculture, Fisheries and Food to the Department of the Environment, Heritage and Local Government. The delay seems to be with the division of responsibilities between the Departments. Even with these laudable and admirable proposals for energy security and renewable energy from the Government, it is alleged that €16 billion worth of renewable energy projects are held up in the bottleneck because they cannot access the grid, or so we were informed at another meeting here a couple of weeks ago. These proposals are great on paper but there is no specific plan. The transfer of ESB’s assets to EirGrid is in the pipeline; everything is in the pipeline.
Today is 1 October and there is no point in talking about this next April because it will be too late. Statistics speak for themselves. The accident and emergency departments will be overloaded with people. Food and fuel are both dearer this year. It makes sense from a cost-effective point of view to put money into keeping people warm so that they are not turning up at accident and emergency departments.
Deputy Simon Coveney: I thank my colleagues on all sides of the House for their contributions to this debate. I sometimes wonder whether Private Members’ motions have any effect on Government policy and earning some dividend or change for people outside this House. If ever there was a motion that I hope will have some impact on the Government’s attitude towards an issue, this is such an issue. Every Member of the House will agree that one issue raised by all constituents is the cost of electricity and the increasing cost of simply living in Ireland.
I want to offer some suggestions to the Ministers who are present — I am glad to see there are some present for the conclusion of this debate. I do not simply wish to give out about Government performance.
Actions can be taken by means of legislation and regulation to improve the energy market in Ireland and reduce energy prices. I ask the Minister to consider legislating to allow the regulator to set a maximum price for energy rather than setting a set price, as is the case each year. The ESB could then be permitted to generate power at below the price ceiling if this is possible. It could benefit from increased market share as a result of more competitive pricing. I can understand why there has been a set price for the past ten years because we have been trying to introduce competition into the market and attract new entrants. Such new entrants could not survive under normal competitive conditions whereby the ESB would simply offer to generate at a lower price. However, the situation has changed in that regard.
I would encourage the Government to fast-forward the transfer of ESB assets in the electricity grid to EirGrid, in an effort to send a strong signal to the marketplace that we support competition and a fair market place for all generators.
We should reform the public consultation process around the decision-making when the regulator decides to increase prices or, if ever, to reduce prices. It is hugely stacked in favour of generators or the ESB who makes their case. In the United States or Canada the practice is to have a forum of discussion that includes organisations such as the Combat Poverty Agency and others who understand the worries and concerns of consumers and households. The regulator has a legal responsibility to protect consumers as well as offering fair prices to generators.
The Minister needs to look at the regulatory regime for gas pricing as at some stage in the future gas will be coming ashore from the Corrib field. Under the existing regulatory structure for gas, this will result in increased gas prices in Ireland because we will be importing a much lower volume of gas which will therefore be more expensive and the price of gas to consumers will be increased.
We have missed the boat this year with regard to the famous windfall profits being made by energy generators. The ESB has made what I would describe as a generous donation in a rebate of €300 million. We must be honest with people. Every household is already paying a carbon tax of 10% on top of their energy bills. That money must be taken back, put into a ring-fenced energy fund and spent responsibly looking after poor people and low-income households who need support from the Government.
There are some issues regarding smart metering but I will raise them separately with the Minister. In terms of energy rating, I welcome the substantial work being done on housing insulation. However, I encourage the Minister for the Environment, Heritage and Local Government to examine energy rating issues regarding windows, through which large amounts of heat and energy are lost. Our rating system for windows is not satisfactory and we should examine the UK’s system which is a far more exact measurement of the overall window structure rather than just the glass pane.
The Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, has described fuel poverty as the most crucial social issue facing society, an issue of a crisis of affordability for homes across the country. Those are strong words from a senior Minister. Yet all this motion seeks in terms of a commitment — everything else relates to suggestions — is that the Government would introduce a comprehensive policy which puts fuel poverty at its heart rather than a description of other energy policies, as heard this evening, regarding conservation, climate change, greenhouse gas emissions, etc., where benefits for families struggling with energy costs are just a by-product of such policies. That is not good enough for an issue as important this one.
We want a specific, targeted policy with a set timeframe and budget, financed by windfall energy taxes. Even the Commission for Energy Regulation at yesterday’s meeting of the Joint Committee on Communication, Energy and Natural Resources called for a carbon tax on energy generators. The commissioner acknowledged it is ridiculous that 50% of energy produced in Ireland is coming from private energy generators who get windfall profits on the back of consumers and households struggling to meet their payments. That is not just.
|Ahern, Dermot.||Ahern, Michael.|
|Ahern, Noel.||Andrews, Barry.|
|Andrews, Chris.||Ardagh, Seán.|
|Aylward, Bobby.||Behan, Joe.|
|Brady, Áine.||Brady, Cyprian.|
|Brady, Johnny.||Browne, John.|
|Byrne, Thomas.||Calleary, Dara.|
|Carey, Pat.||Collins, Niall.|
|Conlon, Margaret.||Connick, Seán.|
|Coughlan, Mary.||Cregan, John.|
|Cullen, Martin.||Curran, John.|
|Dempsey, Noel.||Devins, Jimmy.|
|Dooley, Timmy.||Finneran, Michael.|
|Fitzpatrick, Michael.||Fleming, Seán.|
|Flynn, Beverley.||Gallagher, Pat The Cope.|
|Gogarty, Paul.||Gormley, John.|
|Grealish, Noel.||Hanafin, Mary.|
|Harney, Mary.||Haughey, Seán.|
|Healy-Rae, Jackie.||Hoctor, Máire.|
|Kenneally, Brendan.||Kennedy, Michael.|
|Kirk, Seamus.||Kitt, Michael P.|
|Kitt, Tom.||Lenihan, Brian.|
|Lenihan, Conor.||Lowry, Michael.|
|McEllistrim, Thomas.||McGrath, Finian.|
|McGrath, Mattie.||McGrath, Michael.|
|McGuinness, John.||Mansergh, Martin.|
|Moloney, John.||Moynihan, Michael.|
|Mulcahy, Michael.||Nolan, M. J.|
|Ó Cuív, Éamon.||Ó Fearghaíl, Seán.|
|O’Brien, Darragh.||O’Connor, Charlie.|
|O’Dea, Willie.||O’Flynn, Noel.|
|O’Keeffe, Batt.||O’Keeffe, Edward.|
|O’Rourke, Mary.||O’Sullivan, Christy.|
|Power, Seán.||Roche, Dick.|
|Ryan, Eamon.||Sargent, Trevor.|
|Scanlon, Eamon.||Smith, Brendan.|
|Treacy, Noel.||White, Mary Alexandra.|
|Allen, Bernard.||Bannon, James.|
|Breen, Pat.||Broughan, Thomas P.|
|Bruton, Richard.||Burke, Ulick.|
|Burton, Joan.||Byrne, Catherine.|
|Connaughton, Paul.||Coonan, Noel J.|
|Costello, Joe.||Coveney, Simon.|
|Crawford, Seymour.||Creed, Michael.|
|Creighton, Lucinda.||D’Arcy, Michael.|
|Deasy, John.||Deenihan, Jimmy.|
|Doyle, Andrew.||Durkan, Bernard J.|
|English, Damien.||Enright, Olwyn.|
|Feighan, Frank.||Ferris, Martin.|
|Flanagan, Charles.||Flanagan, Terence.|
|Gilmore, Eamon.||Hayes, Brian.|
|Hayes, Tom.||Higgins, Michael D.|
|Howlin, Brendan.||Kehoe, Paul.|
|Kenny, Enda.||Lynch, Ciarán.|
|McCormack, Pádraic.||McEntee, Shane.|
|McGinley, Dinny.||McHugh, Joe.|
|McManus, Liz.||Mitchell, Olivia.|
|Morgan, Arthur.||Naughten, Denis.|
|Neville, Dan.||Noonan, Michael.|
|Ó Caoláin, Caoimhghín.||Ó Snodaigh, Aengus.|
|O’Donnell, Kieran.||O’Dowd, Fergus.|
|O’Keeffe, Jim.||O’Mahony, John.|
|O’Shea, Brian.||O’Sullivan, Jan.|
|Penrose, Willie.||Perry, John.|
|Rabbitte, Pat.||Reilly, James.|
|Ring, Michael.||Shatter, Alan.|
|Sheahan, Tom.||Sheehan, P. J.|
|Sherlock, Seán.||Shortall, Róisín.|
|Stanton, David.||Stagg, Emmet.|
|Timmins, Billy.||Tuffy, Joanna.|
|Upton, Mary.||Varadkar, Leo.|
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