NEA Conference - 24 February 2009

Good morning ladies and gentlemen.  Firstly, I want to thank Pat Austin and her team for inviting me to make some opening remarks at the NEA Northern Ireland conference.  

The theme of this year’s conference, “Action on Fuel Poverty, Finding it – Fixing it” is most apt and also quite challenging.   As a Minister concerned about the Executive’s Fuel Poverty Strategy I fully support the approach of seeking out those people who are most affected by fuel poverty – and then actually giving them some help!  

There is a lot of good work ongoing to alleviate fuel poverty in Northern Ireland and I want to discuss some of that work this morning.  

Fuel prices in Northern Ireland are considerably higher than in other parts of the UK.  Households in Northern Ireland spend around 60% more than the UK average of their disposable income on energy.  

World market conditions have meant that oil prices have risen faster than those of other fuels.  This has had a significant impact on overall household energy bills.  Over 70% of homes in Northern Ireland are heated by oil.  

With average incomes among the lowest of UK regions, Northern Ireland also has the highest level of fuel poverty - we believe in excess of 40% of households.  

I want to talk to you briefly about 2 aspects of my approach to the alleviation of fuel poverty - the Warm Homes Scheme and the work of the Fuel Poverty Task Force.

Firstly, the Warm Homes Scheme was been extremely successful since its introduction in 2001.  

It is our primary tool in alleviating fuel poverty long term through improving the energy efficiency of private homes.  The rising cost of fuel has raised the profile and expectations of the scheme.  I am convinced that, but for our work on improving energy efficiency, the level of fuel poverty would be much higher.  

It is, of course, crucially important to ensure that available resources are targeted at those people who are most in need.  In order to maintain its effectiveness we will be introducing a number of changes to the Warm Homes Scheme.  The main changes, which have already been subject to public consultation, are:

In Northern Ireland we have a growing renewable energy industry.  I want to see this industry continue to prosper. I am keen to introduce renewable technologies to the Warm Homes Scheme, particularly in hard to treat rural homes.   I am convinced that renewable technologies such as wood pellet boilers could prove a viable alternative.

Secondly, in response to the rising cost of energy, I established a Fuel Poverty Task Force in May 2008.

I should say that I am not strictly the minister for Fuel Poverty: It is actually a shared responsibility.

I have responsibility for promoting energy efficiency in the home. DETI has responsibility for energy, energy prices and social tariffs etc. And OFMDFM has the overall remit for poverty.

It was only since no-one else was leading and the fact that I could not stand by and watch people on low fixed incomes – many already in poverty – get hit with 50-60% fuel price increases, that I decided to set up the Fuel Poverty Task Force.  

The Task Force worked over the summer produced short-term recommendations to assist those people most affected by the rise in fuel prices this year.  I would like to take this opportunity to thank all those people and organisations, including NEA, who gave their time freely to work on the Task Force.  Many of you are here today.

As many here will know I received the report of the Task Force in August and I brought a detailed set of proposals to the Executive in September.

I will not recount the details of the process of getting my Executive colleagues to a decision point on this. Let us just say that it took a little time and more than a little effort.

One of the main recommendations from the Task Force was to make a one-off payment to those people most affected by rising fuel bills.  I am pleased to say that a Household Fuel Payment of £150 will be made to 150,000 vulnerable householders in receipt of:

This represents an investment of £22.5 million and will help some of our most vulnerable households with fuel bills.

The payment may not actually reach people until April or May. I could say that people would have had their money before now if I had got my way in September – but of course I won’t say that.

The Fuel Poverty Task Force also made some other significant recommendations including that government explore the feasibility of introducing a social tariff for Northern Ireland.  I am aware that the Northern Ireland Authority for Utility Regulation has initiated some work in this area which will be subject to consultation later in the year.  

The Task Force recognised that energy prices are largely determined by world markets.  Unfortunately many households are not accessing the best available prices, particularly in terms of oil.  Some households are purchasing emergency heating drums at inflated prices on a regular basis.  I am aware of many excellent local oil stamp saving schemes across Northern Ireland which make a significant contribution to helping vulnerable customers budget for fuel.  I have commissioned the Northern Ireland Energy Agency to examine the existing schemes to identify how good practice can be shared.  

The Task Force also recommended a review of Fuel Poverty Strategy.  The ambitious target set in 2004 of eradicating fuel poverty in vulnerable homes by 2010 will not be met.  A review of the Fuel Poverty Strategy is therefore essential.  

This review will allow us to reflect on the progress which has been made since 2004.  It will also allow us to focus on what we need do to differently to cope with rising energy costs and other factors which impact on fuel poverty today.  

As you can see there is good work underway in Northern Ireland to alleviate fuel poverty.  We have been making steady progress but given rising fuel prices the impact has not been as significant as I would want it to be.  I can assure you that addressing fuel poverty will remain one of my key priorities. But we will need to stretch further in finding new and innovative ways to address fuel poverty.   Our vision for the future is still one:

And I have found the evidence presented by the University of Ulster’s Professor Christine Liddell in this area, very compelling.

Our vision must still be of a society in which people live in a warm comfortable home and need not worry about the effect of cold on their health and well-being.  

I will work with everyone who shares that goal.  

Thank you.