Northern Ireland Assembly
Tuesday 25 September 2001 (continued)
Mr S Wilson:
Has the Member not just made the most pertinent point in regard to the issue? If we pass to NIE the responsibility for financing the eradication of fuel poverty, we let the Executive off the hook. They would be able to wash their hands of the matter and say that the responsibility for financing rests with NIE.
Mr McClarty:
I agree with some of what Sammy Wilson said, but one cannot force a private company such as NIE to give money towards eradicating fuel poverty. The onus should be on the Executive to help eradicate fuel poverty.
I support the motion, because additional funding, if created, will augment and complement statutory funding and have a significant impact on the battle against fuel poverty. The Assembly, and the Executive in particular, have an onus to help break the cycle of fuel poverty that so many households in Northern Ireland experience. The situation will get worse unless Members act now to deliver hope to those senior citizens and families who face another winter in the war to keep warm.
Mr O'Connor:
I too support the motion. It is unacceptable that there are old people and poor people in this country sitting with their coats on during the winter because they cannot afford to light their fires. We are not living in the Dark Ages; this is the twenty-first century. The Assembly must look at how it can eradicate the problem of fuel poverty. Guidelines state that people who have to spend more than 10% of their income on necessary fuel for heating, lighting or appliances suffer from fuel poverty. That includes a lot of people in Northern Ireland, bearing in mind its high levels of unemployment.
I agree with some of what Mr Dodds said in moving the amendment. People in this country are already strapped for cash, and they are paying the highest energy prices anywhere in Europe. That is a legacy that we inherited from Mrs Thatcher, and it must be addressed.
Mr McClarty said that the Executive needed to look at this issue. I see that the Minister for Social Development is in the Chamber, and I thank him for his presence. I know that he shares Members' concerns about fuel poverty and that he has taken steps through the Domestic Energy Efficiency Scheme (DEES) to try and assist with the problem.
Unlike Scotland and Wales, Northern Ireland does not have any targets in place for reducing fuel poverty. The National Assembly for Wales is aiming to reduce fuel poverty in 15 years, and the Scottish Parliament is trying to do so within 10 years. The people of Northern Ireland need to know where they stand and what the Assembly is going to do for them.
There will always be pressures on finance, especially in the Department for Social Development. However, I urge the Minister to make the case for Executive programme funds to target this worthwhile issue. Fuel poverty affects people throughout Northern Ireland, regardless of their religion or background. The problem seems to be worse in rural areas, where higher numbers of people appear to be suffering from fuel poverty.
Rev Dr Ian Paisley:
We have heard the argument that one can tell the old-age pensioners that they will pay £5 more, but one cannot negotiate with a company that has somewhere in the region of £96 million in the kitty at the end of the year. Surely the Assembly should have the power to reason with that company and point that out to them. If they slap us in the face and say "No", then the Assembly has legislative authority to go back to them and do it.
Let nobody think that they can hide from this big issue. If a £5 energy efficiency levy is imposed on everyone, those who are just above the poverty line will have to pay it, and those below the poverty line will also have to pay it. Why put a levy on the people that need help?
Mr O'Connor:
There already is a levy. The precedent has been set; it is £2 at present. We are suggesting an increase of 6p a week, which would not buy one a slice of pan loaf.
We must consider how to deal with this matter. For every pound that is raised, approximately £10 is saved. If £2 million were raised to provide people with low- energy light bulbs, the savings to those people would be approximately £20 million. That would allow them greater flexibility to spend their money on food and on other essentials rather than being obliged to spend it on heating. People should not be forced to choose between heating and eating. An increase of 6p a week would give the most vulnerable a tenfold return as they could afford extra energy-efficient appliances, such as light bulbs.
It is only a drop in the ocean, and we are only tinkering at the edges: it must be mainstreamed. We spoke about targeting social need; who better to target than the most vulnerable? We must think of the savings to the Health Service. Mr McClarty said that there are 170,000 fuel-poor homes in Northern Ireland. How many people develop pneumonia, asthma, influenza and other stress- related illnesses because they live in cold, damp homes? Tackling fuel poverty could save the Health Service money, because fewer people would get sick.
I urge the Minister to reconsider a system that allows landlords to claim housing benefit for houses that are damp and unfit. Landlords should be obliged to repair houses before any housing benefit is paid. People can get a statutory notice from a district council served on a house that is damp or full of mould. They then approach the Department for Social Development with a begging bowl for a grant to subsidise what is in effect a business. People are entitled to a decent standard of living; no one should have to live in such conditions.
We must educate the most vulnerable in how to use their energy efficiently. Education is a great way forward. People have elaborate heating systems that they do not know how to use, so they are not getting maximum efficiency from them. Such programmes must be developed.
Yesterday Mr Empey said that he was committed to targeting social exclusion. The most vulnerable people in our society will benefit from what Mr Ford has proposed.
I accept that it is a stealth tax, but an extra 6p a week can generate benefits for some of our neediest people, and I welcome it. It does not, however, detract from the Executive's responsibility in this area.
3.45 pm
Rev Dr Ian Paisley:
Everyone in the House will agree that this is a crisis, and we must approach the problem with a crisis attitude. Mr O'Connor spoke about sixpence, but to people living in poverty sixpence is a large sum of money. This £5 is added to the rate. Everyone paying for electricity in Northern Ireland is paying more than people do anywhere else in Europe. NIE is pulling in millions, yet it tells us to place the burden on the poor consumer. I do not accept that. People who have enough money would be quite happy to give £5 a year. However, there are people who do not have enough money, and I want to have those people eliminated from paying this charge. I was told that that would be impossible. The £5 taken from those poor people will be sore on them. If it is only sixpence per week, it would be peanuts to the people who bring in a profit of £96 million.
We are getting this the wrong way round. We cannot say to NIE that we want it to pay up, but as reasonable people we can state the problem in relation to this levy. We can say to NIE that with the gains it receives from its consumers it should do the honourable thing and tell us how much of a contribution it is going to make. That is a reasonable thing to do. If NIE says that it will give nothing, we will know the nature of the brute and who it is looking after - the people who have invested in its companies in order to receive higher dividends. NIE is not looking after the consumers. It would be immoral for NIE to take that attitude, and I do not think it will do so. As I understand it from the proposer of the motion, NIE has made some contribution to this situation. Why can we not ask NIE to make a greater contribution? Why should we not aim to have fuel poverty eliminated in five years' time rather than 10 years' time? The only way we can do that is to exert pressure on the organisation that has the money. And it has that money because higher rates are being charged in Northern Ireland than anywhere else in Europe.
The Executive and Sir Reg Empey cannot escape either; they should be putting their money where their mouth is. Sir Reg Empey said that he will target the needy, but instead the poorest people have to join this scheme and pay the tariff. It is a tax, and it is not morally defensible. The people of Northern Ireland would be outraged to think that instead of our going to NIE to ask for help, others want us to jump in and impose the levy immediately. I was told that if it was not done immediately, it would not be voted through. In conscience neither my Colleagues nor I could support this motion. We are not recommending that this scheme should stop. What we are saying is: go to the people who have the money and see what they can give us. If they do not give us the money, we will have to take other steps. Members have the power to do this. I was told that we would have to legislate. What is wrong with legislation? Are we not called here to legislate? That is not a problem. It will not take a long to consult with NIE.
That can be carried out, we can look at the results, and we can then return to the outlook that NIE is prepared to make money from the people of Northern Ireland - both the poor and the rich - but that it is unprepared to help when there is a problem. I would like the problem to be solved in one year rather than in 10, however we could at least half the proposed time to five years; that would be a better proposition.
Dr O'Hagan:
Go raibh maith agat, a LeasCheann Comhairle. I support the motion. Although I agree with the spirit of the amendment and the reasoning behind it - it is clear that NIE has made massive profits from consumers in Northern Ireland - the practical outcome of the amendment will be to hinder the creation of a levy and the proper eradication of fuel poverty. For that reason only, I cannot support the amendment. However, I hope that a similar motion will be tabled in the future.
People in the Chamber will recognise that my Colleagues in the Enterprise, Trade and Investment Committee are in the middle of an inquiry into energy and, in particular, into the higher price of electricity in the North of Ireland. An issue that arises frequently is the generation contracts that were negotiated at the time of privatisation in 1992 and 1993. Those contracts are largely responsible for the high electricity prices in the North of Ireland; they are the highest in Europe. The people who benefit most from high prices are the shareholders of NIE, most of whom do not even live in the North of Ireland.
At the time of privatisation, the British Treasury received twice the price per megawatt of generation capacity from the North of Ireland as it did from Britain. The power stations were sold for £352 million. The contracts are not competitive. Companies are paid an availability payment in addition to the full cost of the fuel that they use to generate electricity. The cost of generation is 60% of the final cost of electricity. That cost is passed on to the consumers in their fuel bills.
The costs of refurbishment programmes at power stations are also often passed on to the consumers. Ballylumford was sold to British Gas and operated by its subsidiary, Premier Power Ltd, on the condition that a pipeline from Scotland to the Six Counties be created and that the station be converted to gas with EU grant aid. The Ballylumford contract has been renegotiated, but the result of that is that the customers will have to pay for the new deal until the year 2012. AES Corporation, an American multinational company, owns Kilroot and Belfast West power stations. In 2000, AES made a net income worldwide of US$658 million.
It is clear to those examining the issue and to members of the Enterprise, Trade and Investment Committee that the generation contracts will inhibit the introduction of full competition. There is a real risk that low-income consumers, who are unattractive to new companies entering the market, will be left to pay an increased share of the generation costs.
Although I support the motion, it represents only one part of the equation in tackling fuel poverty. In addition, the electricity regulator should be given full powers to regulate the generation companies, including ensuring full competition and the end of unfair contracts. Until those unfair contracts are renegotiated or done away with, we will not be able to tackle fuel poverty seriously.
However, the increased levy would be a first step and would go some way toward alleviating fuel poverty. While it proposes an increase of £5 per customer per year, which would raise a total of £3·4 million per annum, it is also expected to save customers £22·5 million per annum. That would be money well spent and would, in the long term, benefit electricity consumers.
If the motion is passed - and I sincerely hope that it will be - the system needs to operate in a fully transparent, open and accountable manner. We must ensure that every single penny of that £5 customer levy goes toward eradicating fuel poverty. Go raibh maith agat.
Ms Morrice:
I find myself falling between two stools in this debate. Standing between the DUP and the Alliance Party is not a very comfortable place to be - I am between a rock and a hard place. I have listened with a great deal of interest. I have had both the motion and the amendment in my head, and I wanted to hear the arguments on both sides and to be convinced of the right way. That is what is so valuable about debating in the Chamber. While I agree that there should be an increase in the levy, I do not agree that those in fuel poverty should have to pay an additional increase.
I was impressed by Mr Dodds's and Dr Paisley's arguments that the issue should be brought into the context of Northern Ireland. It is very difficult to ask consumers - industrial as well as private consumers - to pay more for their electricity. The rise may be only 6p per week, but that is 6p per week on top of the highest electricity prices in Europe, if not the world. It is a mountain that is perhaps too high to climb.
This must be looked at much more imaginatively. It has been argued that nobody can force Northern Ireland Electricity (NIE) to act, as it is a privatised company, but we must look at how it has been done elsewhere. I understand, although I have no details on it, that a windfall tax on privatised utilities is in operation in England. When profits rise above a fixed level - [Interruption]. You say that it is as high as £96 million. Companies are taxed on that amount, and the tax then goes into the fuel poverty programmes. That would obviously need new legislation, a stage that we have not yet reached. However, surely the Assembly could do something more imaginative to help those in fuel poverty without taxing them further.
It was said that 170,000 households were affected by fuel poverty, including pensioners and those on low incomes. Statistics have already been quoted about people who have died from the cold as a result of having to choose between heating and eating.
4.00 pm
The point was made that people who endure fuel poverty are more likely to use coal than electricity for heating. Is that not the case? They pay an increased levy on electricity bills, but the price of coal, which they use to heat their homes, stays the same.
Mr O'Connor:
Will the Member accept that there is non-manual heating, usually in either ground-floor flats or small two-bedroom bungalows in which disabled or elderly people live? That is generally Economy 7, but it is definitely not economical.
Ms Morrice:
I thank Mr O'Connor for making that point. Dr O'Hagan raised the issue of the increase. The Committee for Enterprise, Trade and Investment has listened to the regulator, Douglas McIldoon, and his call for an increase in this levy. The Committee supports that, but it has major reservations. He said, for example, that it is proposed to ring-fence the increase at 80% for the fuel poor. That is not enough. If that is to happen it must be 100%. Guarantees must be given that not only 100% goes back to the fuel poor, but that somehow every single one of those 170,000 fuel-poor households benefits. At the moment I am not certain of that guarantee.
Rev Dr Ian Paisley:
Will the Member not also keep in mind that that levy was very low when it came in, but it is now going up and up? How much will it rise? Will we have another rise next year, et cetera? It is going up rapidly. It started at £1, and now it is going up to £5.
A Member:
And £7.50 is the projected amount.
Ms Morrice:
That is a concern. It puts an added burden on the consumer. I underscore the point that 6p per week - an increase of £3 per year - may be very little for those in the House to contemplate, but if we suffered as the fuel poor suffer, especially in winter, such an added burden would possibly be too much to bear.
Mr Deputy Speaker:
Members, we have completed the first round of speakers from each political party, and because of the numbers who wish to speak I must, unfortunately, ask you to limit your speeches to five minutes.
Mr Cobain:
I am not going to get into arguments about NIE. The moral responsibility to tackle fuel poverty lies in the Chamber, not elsewhere. Everyone knows, and the points have been made, that we are dealing with the most deprived people in society. The Minister of Finance and Personnel said this morning that most of his Budgets are directed towards those who live in need. The fuel poor are such people.
Six hundred people die each year of cold-related illnesses. It is a moral responsibility for the House and the Executive to cure that problem. We may get assistance from NIE, which is fine, but the moral responsibility lies with the Assembly and with the Executive. Between £40 million and £50 million is needed to eradicate the situation. Those are capital programmes, not revenue programmes, and once spent they do not need to be spent again. That cannot be done overnight; it will take five or six years.
The Minister has introduced the domestic energy efficiency scheme, which has been very important. However, the number of people who can apply for that is limited, as he is restricted by the amount of money the Executive have given him.
If we really want to eradicate fuel poverty we need to do it through an Executive programme. There are no short cuts. NIE might get £1 million or £2 million per year. That would make some difference, but not much. If the House is really intent on removing fuel poverty, it can be achieved in the Budget. We can insist that, in the next six or seven years, the Executive programme funds provide an additional £4 million or £5 million per year for the Minister, and in five or six years from now fuel poverty will be eradicated. It is as simple as that.
Every Member has said how moved he or she is by people who endure fuel poverty before going on to appeal to a private company to eradicate it. However, responsibility does not lie with neither the private sector nor the public one. The House should decide, and make it known, that Members will no longer tolerate people having to endure fuel poverty. We should instruct the person responsible to bring forward a scheme to allow the Minister for Social Development to have the necessary money to eradicate it. It will not be eradicated next year or the year after that; it will take five or six years because of the number of people involved. That should be the end of the argument.
Mr ONeill:
I am glad that the fuel poverty issue has been brought to the House. What must strike us is that we are divided only on how to eradicate it. Members agree that something must be done. It is conceivable that had the mover of the amendment joined with the mover of the substantive motion, both subjects could have been debated simultaneously. That would have been in the best interests of all the people who we want to help.
The SDLP waxed and waned about the best approach to adopt. As our social development spokesperson said, we came down in support of the motion. That was partly because of the structure of the efficiency levy. We realised that overriding the levy as a way to raise funds to combat fuel poverty might damage the mechanism. We must be conscious of that. If we ignore or avoid that mechanism, we could damage its future use.
Ian Paisley referred to a second concern of the SDLP. He wondered why we do not ask NIE for more money. The motion asks the regulator to move on that. It is his job to approach NIE to ask for more money and for a reasonable level of power increases in people's bills. He has been doing that with some success for a while. We should encourage him.
The SDLP feels that it should support the substantive motion because it will provide us with a means to solve the fuel poverty problem. Some people said that the levy is rising - the phrase used was "going up and up". That is inaccurate; there have been only two increases. However, if the levy is increasing, it is because it needs to address the increasing problem of fuel poverty. That problem is not disappearing, so we must address it. The levy is increasing to help those people in the most need. One cannot have it both ways. People cannot be asked to contribute in order to cure the problem. The problem must be tackled, and money must be spent on it.
It is important for us to be sure that any extra funds that are raised go directly to those who need them. The SDLP is concerned about whether the real fuel poor have been identified.
Particular attention is, by necessity, paid to pensioners, who are at risk because of health problems and a lack of funds. However, why is no provision made for disabled people, who are often housebound and reliant on benefits? What about single parents, large families and, in some cases, students? A broadly-accepted definition of fuel poverty is the need to spend 10% of one's disposable income on fuel costs. Many people, however, must choose between paying for food and heat. People often choose heat. That is why there are vulnerable people who get sick, and that is the reason for the figures that we have heard today.
Those with greater heating needs - those who spend more time at home - are most at risk. Ironically, those who are claiming benefits, are disabled or are in receipt of pensions are the people who receive bigger bills. Those people have the lowest disposable incomes. That creates the fuel poverty trap, which we must address.
Mr M Robinson:
I would like to begin by saying that I welcome the fact that the widespread problem of fuel poverty is being addressed, but I have great difficulty with the charge, which will once again fall on the purse of the customer. The levy currently stands at £2 per customer, with National Energy Action (NEA) now advocating an increase of 150%, which would raise the levy to £5 per customer, in the hope that £3.4 million can be raised for energy efficiency and the eventual eradication of fuel poverty.
My difficulty stems from the fact that, once again, the extra charge will fall on the customer. Why should the customer pay for the scheme, when NIE's profits for the year 1999-2000 were £96.1 million? What is the problem with diverting £3.4 million from this profit margin to eradicate fuel poverty? Would it make a great difference to reduce the profit margin to £92.7 million from £96.1 million? It appears that the profits are bypassing the customer and being directed, once again, into the pockets of the so-called fat cats.
The main difficulty is that the market for gas and electricity in Northern Ireland is relatively small, which means that NIE does not have any direct competition. That has led to high charges. I must point out that Northern Ireland has higher levels of fuel poverty than mainland Britain. NIE continues to pass any extra costs on to the customer, which contradicts its aim to reduce fuel prices in Northern Ireland. NIE have supposedly been working hard over the past four years to reduce electricity prices in Northern Ireland, yet here we stand in 2001, debating an increase in the customer levy.
The most vulnerable in our society are the people who would be classified as the fuel poor. Those who fall into this category are lone parents, the unemployed, Housing Executive tenants, low-income families and the elderly. It is hard to believe that there are over 170,000 households that suffer from fuel poverty in Northern Ireland. That is why I feel that it is of extreme importance to be absolutely sure that the cost does not fall on every NIE customer, regardless of status. The system must not only be fair and inclusive, but must also be seen to be fair and inclusive, with the most needy as the beneficiaries. It is, therefore, important that those who would be classified as the fuel poor will incur no extra cost. Therefore, I state that I would fully support any scheme that aims to tackle fuel poverty, as long as those who are considered to be the fuel poor do not pay the highest price.
Mr McElduff:
Go raibh maith agat, a LeasCheann Comhairle. Ba mhaith liom tacaíocht a thabhairt don rún seo. I commend the motion. It prescribes a measure that can contribute to the eradication of fuel poverty. Many Members have said that fuel poverty effects approximately 170,000 households in the Six Counties. It is a particular problem in rural areas, where there are high levels of unfit housing, properties are widespread and isolated, and dwellings tend to be larger and mostly in the private- rented or owner-occupied sectors.
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I welcome the proposal to create an extra £3·6 million, and it should be created as a matter of urgency. Many Members have reminded the Executive of their responsibility - and that responsibility is additional to, not in place of, the Executive's normal responsibilities.
A partial solution has been suggested, which we should embrace. It requires political support and will. I agree that the additional revenue generated must be directed towards the fuel poor. Ultimately, it is a matter of people's health and of improving the quality of their lives - not least those who are most vulnerable, needy and disadvantaged. It is a matter of saving people from ill health, misery, cold and, in many cases, death.
I will not speak for much longer. As Mr ONeill said, the debate has been constructive. I welcome the unusual engagement of the DUP - their contribution has also been constructive.
Dr McDonnell:
I welcome the opportunity to engage in this debate on energy, as the issue has been a bee in my bonnet for some time. There is so much more to the issue, and we are dipping - in an almost one-dimensional fashion - into a massive issue for the entire community; so much so that it cuts across all Departments, although the main responsibility lies with the Department of Enterprise, Trade and Investment.
At the core of the motion are some serious facts that we often ignore. Brief mention has been made of the fact that electricity prices are much too high, and that those prices are being driven by a rip-off. As somebody once said, Dick Turpin wore a mask. The rip-off of 1992 was much more effective than anything that Dick Turpin ever did. The price of electricity in Northern Ireland was effectively doubled. Contracts were put in place that allowed the price of electricity to be doubled for 20 years so that the Chancellor of the Exchequer could double what he charged those who were buying out the generating stations. That ensured a good return for the Chancellor and solid, guaranteed profits for the power station owners and shareholders.
Ultimately, however, it sold all electricity users in Northern Ireland - from the very poor to the very wealthy - into a 20-year bondage that is extremely difficult to escape from. However, we must escape from it, and there is an onus on the Assembly, the Executive, the Departments and the Government to do everything in their power to break the cartel and free us from bondage.
Everything in relation to energy in Northern Ireland flows from those contracts. The prices of other energy sources are pulled up or down - and in this case pulled up high - by those contracts. Due to the history of the Northern Ireland Electricity Board - subsequently NIE and now Viridian - our energy market is, by and large, supply-driven, and little or no consideration is given to the consumers. By consumers, I mean everyone from the big industrial user down to the householders who cannot afford to heat their homes.
There is absolutely no motivation within that plethora of energy policy to cut energy use, to improve conservation efforts, or to develop any renewal or alternative sources. The main thrust of our energy policy is to ensure that the generators get rid of as much electricity as possible and charge as much as possible for it. NIE then comes in, distributes the electricity, and works that system. The more electricity NIE can pump through its system, the more money it gets. Therefore, there is an aversion to conservation, saving energy, and discovering alternative sources of energy.
The cost of electricity generation has fallen considerably over the past 10 years because of greater efficiencies in generation costs. However, the benefits all go towards the bottom line - the profits of the company or companies involved. I received a letter today from an industrial user who complained that the price of electricity has gone up by 31% in the past 14 months. The prices compared very unfavourably to those in England and Scotland.
Another serious consideration for me, which I do not believe has been touched on already, is that householders cannot afford to keep their homes warm, and we have every right to emphasise that fact. The big industrial users often have enough muscle and clout to ensure special deals - and I do not blame them for using that clout. As the market starts to become deregulated they will have the option to work for a cheaper price within their contracts. However, the net effect will be that the poor, the dispossessed, and those who cannot afford to heat their homes will make up for that subsidy. If the large electricity users get a price cut, the price for the small users will rise by 5% or by 10%.
Mr Deputy Speaker:
Will the Member draw his remarks to a conclusion?
Dr McDonnell:
I am sorry. I thought I had more time. There are 170,000 households that endure fuel poverty - 28% of the people. I could run through many more issues but I will leave it there. We need to take the issue seriously. We have made a start on it today.
Mr Shannon:
I support the amendment. The DUP takes the matter very seriously; that is why we proposed the amendment. Many constituents have spoken to me about the issue and they have expressed concern that the energy efficiency levy has been raised to £5. Although there may not be much difference in the opinions of people in the Chamber as regards the motion and the amendment, it really comes down to who we feel should pay for the increased levy.
The people who will suffer will be those who pay the tax increase: I call it that because many of us feel that it is a tax disguised as a levy. Senior citizens can least afford to pay it, and they have come to our advice centres to tell us that. They have stated that they are unhappy with the levy, not because it is a big charge in itself, but because, over the year, it cumulatively takes away their income. Our responsibility as elected representatives is to ensure that senior citizens and those who fall into the category of enduring fuel poverty can pay. It is unfair that they should be asked to pay that levy.
Everyone agrees that to try and eradicate fuel poverty is a worthwhile goal, and that is what we are aiming for. All of the parties are committed to it. We want to see fuel poverty being eradicated. Our amendment provides a method to try and address the levy charge. It is unfair that those who can least afford to pay the levy should shoulder a portion of costs, and that is why we have put forward the amendment. We have the highest electric charges in the UK - indeed, in Europe. To insist that the consumers, our constituents, should have to pay that levy is unfair; many would say that it is immoral.
NIE's profits are already over £90 million and rising. Do Members not agree that a portion of NIE profits could, and should, be used to reduce the energy efficiency levy? Last week, when I spoke to NIE officials about the matter, they insisted that, although their proposed increase is £5, they could not guarantee that the charge would not end up being equal to the current charge on the mainland, which is £7.50.
Is that the thin edge of the wedge? Will the increase be £7.50 next year? Where will the charges end? Should not the party that can afford to cover the increase in costs take responsibility for it? The increase, which started at £1 and could end up at £7.50, is just the latest chapter. We are all committed to the eradication of fuel poverty and to helping those who need it most.
The Housing Executive has already introduced a policy to help its tenants, and that programme is well advanced. Mr Cobain suggested that the Assembly and the Executive make a contribution. That contribution, combined with the existing levy charge and a voluntary contribution from NIE, would yield sufficient money to address the issue. It is only fair that NIE should contribute some of its large profit to eradicate fuel poverty.
NIE has received exorbitant profits, which have been paid for by the consumer, including those in the grip of fuel poverty. The levy to address fuel poverty, as proposed in the motion, will apply only to those who can least afford to pay it. The amended motion would provide a means to address the issue to everyone's satisfaction. We all feel that something must be done. Let the financial responsibility fall on the shoulders of those who can afford it. Those who can least afford to pay should not be charged. The DUP amendment would protect those who cannot afford to pay the levy. I support the amendment.
Mr M Murphy:
Go raibh maith agat, a LeasCheann Comhairle. I support the increase in the levy and the benefits that it could achieve. However, there needs to be greater transparency in the administration of the levy; we should be able to see how the proceeds from it are spent. The funds that are raised should be used to lift people out of fuel poverty rather than deliver piecemeal measures that merely reduce the problem slightly.
In tandem with the Programme for Government, our first and foremost task is to end poverty, especially fuel poverty. We must ensure that the cold, misery and ill health experienced in many households during the long, cold winter months are ended for good.
NEA is a charity that campaigns for solutions to fuel poverty, including heating and insulation problems that are suffered by people on low incomes. With the support of the Energy Saving Trust, the NEA seeks support from elected representatives to help bring about an increase in energy levels and to create more funds to tackle fuel poverty.
Over 170,000 households in Northern Ireland suffer from fuel poverty. Lower income levels, combined with a lack of access to energy efficient fuel and the high cost of energy, contribute to higher levels of fuel poverty than in Britain. Fuel poverty damages houses, causing dampness, condensation, mould growth, disrepair and unfit conditions. Fuel poverty exists in parts of Belfast, but, for the large part, rural areas experience it. It also damages health, causing asthma, heart disease, pneumonia, influenza and stress, and it leads to more than 700 deaths every year.
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Fuel-poor and energy-inefficient dwellings release harmful emissions that damage the environment. To increase the levy to £5 will provide an annual carbon saving of 81,000 tonnes and energy savings of 32 gigawatt hours, which in turn will improve the environment. I support the motion.
Mrs Courtney:
I too support the motion. Fuel poverty could be defined as the inability to afford sufficient heating for a home. The reasons for that vary, but ultimately those who cannot afford sufficient heating are not helped by information campaigns. They simply cannot afford the cost. An income-based analysis can also mislead, because people who work and with limited income may be forced to continue to pay for fuel at the expense of other necessities, such as food and clothing.
The fuel poverty trap contains those who spend more than 10% of their disposable income on fuel costs. Because domestic electricity prices offer little or no elasticity, it logically follows that the less income a person has, the more he will spend proportionally on fuel. The most recent changes, such as the abolition of standing charges, offer nothing to those who have little or no choice in their fuel consumption, while central subsidy to NIE has benefited industrial users. In addition, those social groups that are most at risk of fuel poverty are those who spend more time in the home - those with higher needs such as people with young families, pensioners and the disabled.
We also have property-based analyses, which can help to determine the causes of inefficient fuel use. There are sets of funding available for energy efficient measures, such as insulation, but that falls far short of what is really needed if we are going to approach the problem seriously.
Regional climate variations are not currently considered when fuel needs are being addressed. The seven-day rule which triggers retrospective payments to select recipients of income support is viewed by many as a deliberate attempt to reduce such payments. It is reasonable to expect that people at this stage in Northern Ireland's socio-economic development should not have to deny themselves sufficient heat. It has been stated already that there are 600 deaths a year due to hypothermia, and many people's medical problems are exacerbated by a lack of heating in their homes. It has also been said already that more than 170,000 households endure fuel poverty in Northern Ireland. Lower-income levels combined with a lack of access to energy-efficient fuels and high- energy costs contribute proportionally to higher levels of fuel poverty than in Britain.
The Northern Ireland Executive have committed themselves to the eradication of fuel poverty. This morning the Minister of Finance and Personnel said in his draft Budget statement that
"specific actions will be taken to reduce fuel poverty".
The energy efficiency levy is currently £2 per consumer. That raises £1·4 million per year. The amendment suggests that we approach NIE and ask it to make funding available. My party, in most instances, would say that that is the right way to advance. In this instance, we accept that NIE has not shown much commitment over the years. It did have an energy needs programme a few years ago, and, at that stage, it did improve energy for pig farmers, community buildings and some pensioners. That was a good first step, but it was not built on. If it had been, we would not be here considering increasing the levy from £2 to £5 per customer.
The proposed increase would raise a total of £3·6 million per year and earn £2 million each year to help with energy efficiency and fuel poverty. It is proposed to direct that increase to the fuel poor - that is 80% - to help to meet Government commitments in the Programme for Government and the UK fuel poverty strategy. Mick Murphy quoted from the NEA. The Energy Saving Trust also support the increased levy, and because of that we support it.
NEA in Northern Ireland has said that it supports the increase of the levy on the basis that it would create
"a source of significant additional funding to complement statutory funding for fuel poverty programmes. The levy can play a significant role in the eradication of fuel poverty, ensuring that the cold, misery and ill health experienced by so many vulnerable households during colder months is ended for good."
It is for such reasons that I support the motion.
Rev Dr William McCrea:
I thank Mr Ford for raising the subject in the House, and I accept his sincerity in doing so. None the less, I support the amendment, which proposes a better way forward, although I think that there is a better way forward still.
There is a fuel poverty crisis, and many people are in tremendous need, which no one denies. We must resolve the crisis urgently, which no one denies either. Moral responsibility does not lie with the ordinary consumer. Unfortunately, the change proposed in the motion would place a moral responsibility on the ordinary consumer, who already faces exorbitant electricity costs.
Some Members may not have been in the Chamber this morning when the Minister of Finance and Personnel spoke. This is the second tax increase to be discussed today. In the Minister's presentation of the draft Budget, he said that £2 million had been withdrawn from councils. To make up that £2 million, people will have to pay higher rates. That was slipped in before Members realised that it was being done.
Higher taxes have already been levied in the draft Budget. The extra money that we are discussing now is on top of the other rise that we heard about earlier, which will affect 16 of the weakest councils. Several Members sit on those councils, and they will soon get a wake-up call. It is not just a matter of a few pence a week; the tax comes on top of the other tax that has already been slipped in.
Moral responsibility does not rest with the ordinary consumer, nor is it necessarily the responsibility of NIE, although NIE is in a better position to pay and has the necessary profits to do so. Where does the responsibility lie? It lies with the Assembly, not with the others on whom we are trying to put it. We say piously that we are trying to act in everyone's best interests, but the best solution could be a tripartite one, involving customers, NIE - if it wants to prove its good faith in the matter - and the Assembly. The Assembly should put its money where its mouth is. If we achieve genuine unanimity on the matter, we can table an amendment to the draft Budget.
It will be interesting to see how sincere everyone is on this important issue. Do we impose a further tax on the ordinary consumer, many of whom are caught in the poverty trap.
There is a poverty trap. Those who are above the level of income regarded as the poverty line have to pay for everything. Those are the people who will be paying again. I suggest to the Assembly that a wake-up call is needed to the fact that we have already heard recommendations for a tax to be slipped in. Here now is a second tax. That is not the way forward. Let us have good faith from everyone. Let us have a tripartite approach, so that we can see it done in five years' time rather than in ten.
Mr Dodds:
As almost everyone has indicated, this has been a useful and constructive debate. All the contributions have dealt with the subject in a relevant way. As Dr McCrea has mentioned, we all agree on the objectives. There is no difference among us in our desire to deal with the difficult problem of fuel poverty.
The Minister for Social Development has sat through most, if not all, of the debate, and he will have taken that on board. He has programmes in place, which include a new domestic energy efficiency scheme, to try to push forward the eradication of fuel poverty in Northern Ireland. We all agree that the more money that can be put into that scheme the better.
Ms Morrice summed up the problem when she highlighted that we are asking the fuel poor to pay for the increase. Some people have talked about a figure of 6p per week. I have looked through a press release from NIE from last January on the subject of the 9% increase in electricity prices. A favourite trick, when you want to disguise the magnitude of an increase, is to bring it down to what is described as "the cost of a newspaper". NIE put the price rise for a typical customer at about 60p per week, saying that all the customer was being asked to pay was the price of a newspaper per day. However, that amounts to £182·50 a year. When you put everything together, all those pence per day add up to a substantial amount of money.
Dr McCrea has already referred to today's announcement of a 7% increase in the rates, and now we are back looking for more from Northern Ireland's consumers, householders and families. Dr Paisley mentioned that that levy has increased substantially. Only two years ago the levy stood at £1. It was then proposed in 1999 that it should rise to £1·50 and then to £2 in the 2000-01 financial year. We are now being told that it should increase this year by another 150% .
Let us get this into perspective. The levy has increased in two to three years by 500%. Where will it end? It is a handy little device to extract money to pay for things. We will deal with the issue that was rightly highlighted in the previous speech, and by Mr Cobain, about where the real responsibility lies. It is a useful device to extract money to pay for schemes that are rightly the Executive's responsibility.
We have already seen how this has been massively exploited. Nobody disagrees with the objectives to which the money is put; on this occasion it is the method by which the money is being raised, to which we object.
A point was raised about the money being spent on fuel poverty programmes. In an NIE press release dated 25 September, rushed out today, we are told that 80% of the money raised through the levy is spent on fuel poverty programmes and that the remaining 20% is spent on schemes for business and pump-priming new energy efficiency initiatives.
It may have been Ms Morrice who asked why it should not all go towards fuel poverty programmes. We now find that 20% is being spent on schemes for business.
Not all businesses are making rich pickings, but a few are making a profit. However, the Assembly is told that 20% of the money that has been raised through the energy efficiency levy is going to business schemes. That must be addressed.
4.45 pm
I am amazed at some of the contributions from Members, who claim to be of a social democratic disposition - and I do not mean the SDLP. I am talking about Members who generally take a left-of-centre or socialist viewpoint - Members who would usually be the first on their feet to decry anything that went against the socialist principles.
Members are not only concerned with the objectives of the expenditure, they are concerned about how money is raised. The energy efficiency levy is a flat-rate tax on everybody; it is not progressive taxation, it is regressive taxation. The great argument against the poll tax, for instance, was that it would bear harvest from those least able to pay it. That is what Members are being asked to approve. The energy efficiency levy applies to the richest and the poorest people in Northern Ireland. They pay the same. How can anyone who claims to have socialist or social democratic principles agree with that? How can they go into the Lobby to vote for that?