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August 2010 - Combating Fuel Poverty Must Be A Priority

One of the top priorities of the Stormont Executive must be a renewed attack on fuel poverty, alleviating its severity and extent. New figures on fuel poverty in Northern Ireland are expected to reveal a significant increase in fuel poverty, despite the best efforts of government to eliminate it through the Warm Homes Scheme. A combination of factors have conspired to keep pushing up the basic price of fuels such as oil and natural gas, to exceptional levels in the international markets. That means that the local price of oil and natural gas is pushed higher and higher, making the cost of domestic fuel in the North of Ireland one of the highest in Europe.

Unfortunately we have no direct control over prices, particularly international prices. Nor have we much control over incomes. Our low income base is one factor in the greater extent of our fuel poverty in comparison to other parts of Europe. Much of our pay levels are determined in Britain and elsewhere. In addition, we are a low wage economy and given the recession and impending public service cuts pay levels could remain static, or even in fact decline. If that happens, fuel poverty could increase as ordinary workers will not have the ability to pay higher fuel bills.

This being the case, the only real tool we have is our ability to make our homes more energy efficient, thereby optimising the use of whatever fuel we use in our homes. Certainly we have made significant progress since 2001 when the Warm Homes Scheme was first introduced, but we still have further to travel.

We have significant work to do as 44% of those in private rented homes are in fuel poverty. Even 41% of Housing Executive homes are in fuel poverty. In the owner occupier sector 33% of homes are in fuel poverty. Any new strategy must aim at making all our current homes energy efficient. And all new homes should, as a matter of course, be constructed as energy efficient homes. If homes in more severe climates, such as Norway or Sweden, are almost totally energy efficient, why can’t we in a much more temperate climate increase our levels of energy efficiency? Surely this is not an overly ambitious target?

Another major factor is the type of fuel that we use to heat our homes, particularly in urban areas. Over 70% of our homes use oil for heating. In England and the South, 90% of homes are heated by natural gas. Natural gas is much more efficient as a fuel, is marginally cheaper than oil, and is more environmentally friendly. Annual fuel bills here are much higher than in England or Scotland. The average home here spends £1200 per annum, whereas the average home in Britain spends about £850.

In the medium term natural gas is our best option, given that the price of oil will continue to be extremely volatile into the foreseeable future and subject to all sorts of international factors, that will inevitably push the price up further. It is therefore time for government, in any new fuel poverty strategy, to move away from our current dependence on oil. This could be done by encouraging the gas companies to link up more individual homes throughout the North, instead of just commercial premises, big businesses, or large housing developments. Generous and widely available grants and soft loans, with low levels of interest and extended repayment periods, could be introduced to encourage domestic consumer conversion from oil and other fuels to natural gas.

Commendably the new Social Development Minister, Alex Attwood, has said that the alleviation of fuel poverty is one of his key priorities as a Minister. Let’s hope the Executive will back him in making the alleviation of fuel poverty a collective aim for this Administration and end misery that too many of our citizens suffer throughout the year, but every winter in particular. Given the stubborn nature of this frustrating problem, there are good reasons to review our current strategy that will build on past good practice and introduce innovative policy measures that can make a radical difference.

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