Arthur Morgan (Louth, Sinn Fein)

I thank the Labour Party for sharing time and for giving me the opportunity to address this important and tragic issue which, like most public representatives, I see first-hand among my most vulnerable constituents on almost a weekly basis at this time of year.

It is apparent that low and average income households use a greater proportion of their income on daily necessities such as food, heating, housing and transport. The poor spend on average twice as much on fuel as a proportion of their income and inflation hits these households hardest. Fuel poverty is the inability to afford adequate warmth in a home or the inability to achieve adequate warmth because of energy inefficiency in a home. It is exacerbated by poor energy efficiency in housing stock, poor insulation and inefficient heating systems. Many of the fuel problems faced by pensioners and lower income families could have been avoided if the Government had decided long ago to build social housing that was energy efficient instead of allowing developers to cut cheap corners. We are paying for this now.

In the 12 months leading to May 2008, liquid fuels such as domestic heating oil rose in price by 47%. Oil is the most common type of fuel used by older people and, while its price has fluctuated in recent times, very few of the decreases have been passed on to customers, or were passed on slowly, whereas fuel providers are always quick off the mark to pass on increases. Bord Gáis has applied to the Commission for Energy Regulation for a 17% to 19% price rise from October and the ESB is also believed to be seeking a double digit increase.

Groups such as Age Action and other organisations working with older people are concerned that thousands of older people will suffer unnecessarily this winter because they will be unable to afford to heat their homes properly. The cost of all types of fuels has surpassed the means-tested fuel allowance which the poorest receive. Considering the inflated cost of living in this State, many older people, social welfare recipients and people on low incomes could face this winter with a choice of either food or fuel.

All of this we know. It makes this motion timely and I commend Fine Gael for bringing it forward. However, we are debating this against a surreal background. On Monday, the Taoiseach told the public he would not increase taxes to cope with the soaring budget deficit. I might add that the decision yesterday to underwrite the banks for such a large amount will have come as a shock to the most vulnerable people in society who are being told there is no money to help them. None of us should kid ourselves about the Government's intention to deal with fuel poverty. If it had wanted to do so, it could have dealt with it and sorted out the problem when the Exchequer was in surplus.

Despite prices rising at a soaring rate, no significant increases in the means-tested fuel allowance were made over the past two years. Budget 2007 gave pensioners an extra €4 per week, bringing the fuel allowance to €18 per week for the 29-week period of the payment. Budget 2008 left the fuel allowance unchanged but extended the payment period by one week, which equates to a 60 cent increase per week for the 30-week period of the payment. The fuel allowance currently covers just 42% of the cost of fuel for pensioners during the 30-week period it is paid. Over 52 weeks, it covers just 24% of a pensioner's fuel bill. Those budgetary adjustments were made before the Government blew the State coffers.

When the Government made the minor increases in fuel allowances, it did so knowing that Irish winter mortality was among the highest in Europe. The majority of winter deaths are among older people and due to cardiovascular and respiratory-related illnesses. While there is a need for a national fuel poverty strategy to provide medium and longer-term solutions to these problems, there is an immediate need for urgent action before this winter. Those who work with people suffering from fuel poverty would have welcomed the announcement of an early budget in October because they have long pointed out that by the time the December budget kicks in, more people suffer unnecessarily dire winter conditions. However, against the current climate of spending cuts speculation, they are probably dreading what they will hear in the budget in two weeks' time. We all remember the savage 16 cuts.

Knowing this, it is with hope but not much expectation that I set out Sinn Féin's proposals for what must be considered an absolute priority in this budget. The Government may think it is a priority to give their developer friends a leg-up in budget 2009 — there is speculation they may do so — but it is wrong. Not letting people freeze to death should be the priority for public policy in any economic circumstance.

Bearing this in mind, Sinn Féin wishes to see an increase in the fuel allowance. We want the value of the gas discount in the household benefit package to reflect the rise in the price of gas. The extra VAT generated by rising fuel prices must be ring-fenced to fund the increases in fuel allowance. We also suggest, as advocated by a number of groups dealing with the vulnerable, that the option of receiving fuel allowance in two lump sums in October and January is made available.

Following this winter, the Government must develop a national strategy to address fuel poverty. Wider issues such as the position of the Commission for Energy Regulation must be examined. The ability of those on low incomes to adequately heat homes is affected by CER's decision to sanction increases in electricity and gas prices. This independent body responsible for the liberalisation of Ireland's energy sector has an objective to bring competitors into the electricity market. Over the years we have seen the commission push up ESB prices to entice others into the market to compete with the ESB. Prices were pushed up, we were told, to bring in competition, which was supposedly to bring prices down again. However, the increases announced by the ESB hit those on low incomes hardest. The increases demonstrate that the regulator is not upholding its duty to take into account the needs of rural customers, the disadvantaged and the elderly. The role of the regulator must be reviewed to ensure that serving the common good, not the agenda of liberalisation, underpins its work.

My party is also proposing a new scheme based on the residential renewable energy grants introduced in budget 2006 specifically for low income households. Under the scheme proposed by Sinn Féin, anyone assessed as being entitled to the fuel allowance and having an entitlement under the free energy scheme would be entitled to a grant to cover the full cost of installation of sustainable heating alternatives, with the scheme to be open to both local authority tenants and homeowners who are entitled to fuel allowance. The introduction of this scheme will have the added benefit of further boosting the renewable energy industry while contributing to the State's drive to reduce CO2 emissions. We also support an extension of the warmer homes scheme.

All of these proposals can contribute in some way to eradicating fuel poverty. It is my hope the Government takes this issue seriously and uses budget 2009 to make a significant start in this regard.

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