The Society of St. Vincent de Paul, SVP, welcomes the opportunity to present to the joint committee on the issue of energy poverty. As the largest charity of social concern in Ireland, working to address energy poverty is a core aspect of our work, the solutions to which are closely related to tackling climate change. Our work across communities demonstrates that energy poverty remains a major issue for a large number of households. According to a survey of income and living conditions in 2017, almost 400,000 people went without heating owing to cost. Last year SVP spent more than €4 million in helping people with fuel and utility bills. Approximately 70% of this expenditure was on solid fuel and oil.
The combination of increased energy prices, poor quality housing and the persistence of low income impacts significantly on the households SVP assists. Low income households in rural areas, those living in social housing or the private rental sector and one-parent families are particularly exposed to the risk of energy poverty. We are concerned about the impact of carbon tax increases on these households.
As outlined by Dr. Lynch, ESRI research has shown that an increase in the carbon tax, as it is currently designed, would hit low income households harder. Unless there is greater investment in income supports, public transport and energy efficiency schemes, low income households will have to absorb these costs and will be unable to afford to switch to climate friendly alternatives. Energy poverty will increase as a result.
I wish to provide our perspective on how the schemes available to those experiencing energy poverty are working. We are concerned that energy unaffordability persists, in spite of the availability of energy income supports and without accounting for increases in carbon taxes. At current levels, the fuel allowance is insufficient to meet the cost of energy for people on low incomes. An additional week of fuel allowance payments was introduced in budget 2019, bringing the payment to €630 for the winter months. However, in terms of purchasing parity, it is €200 less than the rate in 2010 as a result of cuts to fuel allowance and subsequent energy price increases. Furthermore, fuel allowance is a highly means-tested payment. If carbon taxes are increased and a decision is made to offset them through this scheme, many people experiencing energy poverty will not be compensated.
We note that recent ESRI research suggests recycling revenues via maximum social welfare rates and tax credits for those experiencing working poverty as the most administratively straightforward and equitable option. However, increases in maximum social welfare rates must not be at the expense of broader policy goals of reducing poverty and improving income adequacy for low income households.
On energy efficiency schemes, SVP is supportive of the warmer home scheme which is available to social welfare recipients who own their own home. The scheme may be a good option for older homeowners, but it is more likely that low income households with children live in social housing or the private rental sector. SVP is concerned that the enhancement of grants without examining eligibility criteria or measures to support take-up across tenure type would not not be an effective mechanism for protecting households from increases in carbon tax.
On transport, a lack of an integrated public transport system in rural areas has a significant impact on low income households’ ability to afford a minimum essential standard of living. The development of the rural transport scheme is welcome but sustained and increased investment is required.
Overall, it is clear that current schemes for addressing energy poverty are limited and that a large proportion of the population continues to experience energy poverty, which is why Ireland needs an ambitious target to eliminate energy poverty by 2030. SVP would support the establishment of a just transition fund in meeting this goal.
This would ensure coherence across goal 1 relating - no poverty - and goal 13 - climate action - of the sustainable development goals. If Ireland is to be successful in addressing climate change and energy poverty, the Government needs to see both issues as both sides of the same coin and, critically, of equal importance. Without addressing energy poverty, it will not be possible to meet our climate obligations as energy-poor households will be unable to change their behaviour in response to measures such as increasing carbon tax. This will lead to longer-term social, health and environmental costs in the future.
Our budget 2020 submission proposals, which are included in appendix 1, include a range of measures that can help address energy poverty. They include the provision of community energy advisers, increased investment in the retrofitting of social housing, measures to support the introduction of minimum efficiency standards in the private rented sector and investment in rural transport. If energy poverty was eliminated, it would not only improve the living standards of low-income households, it would also upgrade the energy efficiency and quality of our housing stock, reduce health-related costs and, more important, help meet our climate change obligations.