Towards a fuel poverty strategy

Ann Stewart Gill of the General Consumer Council for Northern Ireland outlines the Council’s arguments for a positive strategy to tackle fuel poverty.

Fuel poverty is defined as ‘a situation in which a household  would have to spend more than 10 per cent of its income on fuel to maintain an acceptable temperature throughout the home’. In practice, for many it is about living a life of misery in a freezing cold house.

In October 2003 the Department for Social Development launched its consultation paper, Towards a fuel poverty strategy for Northern Ireland. This document presents the most up to date picture of fuel poverty in Northern Ireland as one in three, or 203,000 households, meeting the UK definition. This is clear evidence of the problems that exist and the urgency by which solutions need to be found.

What causes fuel poverty?

Fuel poverty is caused by a combination of low household income, high fuel costs and poor household energy efficiency.
It can have serious implications for the health and well being of vulnerable groups such as the elderly, children and people living with disabilities or chronic illness. Some of the effects include poor mental health, respiratory disease, heart disease and premature mortality. Asthma can become more common in children and the symptoms of rheumatism and arthritis are worsened for older people.

With a cool, wet climate and mild summers, the likelihood of households in Northern Ireland spending more than ten per cent of their annual income on fuel is increased by the need for year round heating.

The General Consumer Council for Northern Ireland was one of the 44 organisations which responded to the Department’s consultation document. The Council looked at a number of key issues which affect fuel poverty, some of which are very specific to Northern Ireland. This response builds on the Council’s previous work on fuel poverty including our 2001 publication Frozen Out.

Energy policy

Many known factors, such as wholesale gas and oil prices and the long term generation contracts, determine Northern Ireland energy costs. There are also a number of other measures which could add to the already high fuel prices such as the liberalisation of the Northern Ireland energy market, the potential introduction of Renewable Output Certificates and the very real introduction of the European Emissions Trading Scheme. These policies will significantly influence the Northern Ireland energy market especially in relation to fuel prices and may have serious implications for vulnerable groups and those already in fuel poverty.

It is important that fuel prices are transparent. Energy suppliers must be able to justify existing costs and any future tariff increases. Payment options which offer cheaper ways of paying for fuel is one way to minimise costs. Direct Debit and Pay As You Go methods offer the greatest reductions, however, these options are only successful if companies get the bills right. It is also important that bills are clear, accurate and easily understood to allow consumers to budget their fuel consumption correctly.

A fuel poverty strategy must highlight the importance of a consumer’s right of access to a choice of fuels. Natural gas is the most efficient fuel but is currently unavailable to two thirds of households in Northern Ireland. Fortunately, this is changing with the development of the North West and South / North pipelines by Bord Gais Eireann (BGE) providing the opportunity to widen domestic distribution. It is essential that the planning of these distribution networks ensures that as many households as possible fall within the catchment area and that the network is not solely designed around industry and high user needs.

Energy efficiency

Research has found that 80,000 households (approximately 39 per cent) are described as living in fuel poverty because of poor energy efficiency. Energy efficiency initiatives can bring many benefits and savings to communities. The difficulty is getting people to change their habits and attitudes. It is important that the energy efficiency message is powerful, yet simple and strategically targeted at key groups. Appropriate advice and support on energy efficiency must also be available.

Household income

Income is a more difficult area to contend with in the fight against fuel poverty. Incomes in Northern Ireland are lower than in the rest of the UK and the cost of living in relation to fuel is high. Northern Ireland households spend on average 25 per cent more on fuel, light and power than the rest of the UK.

It is important that action is taken to balance the effects of high fuel prices and low incomes by providing greater financial support for vulnerable groups and helping households reduce their fuel costs through energy efficiency.

Existing schemes such as Warm Homes, winter fuel payments and cold weather payments have made a difference, but not everyone who could benefit from such financial assistance is eligible to receive it.

Achieving the target

The Department for Social Dev-elopment for Northern Ireland has set itself the target of eradicating fuel poverty in Northern Ireland by 2016. This is an ambitious but not necessarily unrealistic goal.

Good examples already exist of community initiatives in Northern Ireland which have led to the total eradication of fuel poverty in targeted areas. These projects focus on raising household income through benefit maximisation and household energy efficiency measures. Additional benefits of fuel poverty schemes can be improved quality of life, raised community interaction and awareness as well as the numerous health and social benefits of living in a warm home. It is therefore vital that the lessons learned from these success stories are translated to other cold spot locations in Northern Ireland.

Involvement and commitment at all levels is key to the success of a fuel poverty strategy for Northern Ireland. A fully integrated approach is necessary to ensure commitment of effort, time and resources across departments with the necessary skills and experience to tackle the specific causes of fuel poverty. However, it is vital that the targets are driven at a high level by an inter-departmental body or ministerial task force.

Fuel poverty is a serious problem in Northern Ireland which cannot be ignored. The high number of responses to the Department’s consultation is a positive sign that fuel poverty is taken seriously and that the necessary support to make the strategy work is out there.