The Society of Saint Vincent de Paul, Solid Fuel Trade Group and Age Action are today issuing an urgent appeal to the government not to introduce a new carbon tax while fuel poor groups remain unprotected from this new measure.
We believe that a new tax, at this time on home heating fuel would cause disproportionate and increased hardship on groups such as the poor and elderly in society. We want to state clearly that we are not opposed to the Carbon Tax in principle. However we believe that applying this tax, without proper safeguards for poor and vulnerable people, would only aggravate levels of fuel poverty in Ireland.
Today many people simply cannot find the money to pay a gas bill or pay upwards of €800 to buy a tank of heating oil. For these people solid fuel is the fuel of last resort. It is the only affordable and available means of heating their homes. Extending Carbon Tax to solid fuel would undoubtedly cause excessive hardship, and mean that the most vulnerable groups could not heat their homes.
John Mark McCafferty of The Society of Saint Vincent de Paul said today “We are not opposed to a carbon tax as such but we are opposed to the way it has been levied. Low income groups were supposed to be protected from the additional tax but they weren’t. Fuel poor households have already been left exposed. Any attempt to increase or extend the existing levies will only push more people into fuel poverty unless some protective measures are taken for those groups”.
Eamon Timmins of Age Action warned that the proposed tax came in addition to rising gas, oil and home heating oil prices, the promise of increased VAT in the Budget and a reduction since September of up 25% in the free gas/electricity units which older people receive.
“We already know that more than 1,200 older people die each winter from cold-related illnesses,” Mr Timmins said. “Heat is important for everyone, but it is even more important for older people. Nobody should be left having to choose between food and fuel, and yet that is the stark choice which some older people will face this winter because of rising prices and declining assistance.”
Age Action is particularly concerned about older people living alone, in poorly insulated homes and those on low incomes. One-in-five older people who struggle to heat their homes to a safe level also have a disability or illness which restricts their mobility. “The Government has a responsibility to protect these vulnerable people,” Mr Timmins said.
Michael Leahy SFTG “Our members are seeing signs of increased desperation around the country. People have already fallen back on solid fuel as the only affordable means of heating their homes. If the government put a tax on the fuel supplied by law-abiding suppliers, it can only mean ordinary people will have no option but to buy un-taxed, illegal supplies”.
There is increasing evidence that Home Heating is now an optional extra for many families not an essential. Homeowners are already reduced to rationing heat. In practical terms this means that the decision to light a fire or turn on central heating is dependent on a households cash flow not the prevailing weather conditions.
It is fair to say that every person has been hit by the high price of fuel in two harsh winters. The price rises combined with falling incomes now makes fuel prices a pressing consumer issue that affects wide swathes of society- beyond the poor and elderly who are severely impacted. Today for many working and middle class families the ability to pay utility bills has come into question. Figures from various utility companies show that fuel arrears figures have soared with +250,000 persons approximately 6 months behind in Gas or Electricity payments.
Solid Fuel is exempt from Carbon Tax. The extension of the current Carbon levies to include a Home Heating Tax would see an increase in price of 12.5% for a bale of peat briquettes and an increase of 13.9% per tonne of premium domestic coal (Source: Commission on Taxation Report). It is clear to us that these significant hikes in domestic heating expenses would exacerbate the already serious issue of fuel poverty.
Due to rising incidences of oil theft and the inability of homeowners to spend €800 on filling an oil tank, for many families, solid fuel is now the fuel of last resort. In fact there is strong anecdotal evidence of empty tank homes now using coal and peat, purchased in small amounts, to heat their homes. This situation is further exacerbated in rural areas where solid fuel is the only available source of home heating.
As a society we are clearly very concerned with the question of fuel poverty when within a European context we already have an undeniably high rate of fuel poverty in Ireland. In fact, the island of Ireland has among the highest levels of excess winter mortality in Europe, with an estimated 2,800 excess deaths on the island over the winter months (Source: IPH, 2008). There are clear and strong links between low income, unemployment and fuel poverty, with single-person households and households headed by lone parents and pensioners at particular risk. Older people are more likely to experience fuel poverty due to lower standards of housing coupled with lower incomes, so population ageing must be taken into account within a strategic approach to fuel poverty.
Increases in fuel prices may frustrate efforts to tackle fuel poverty on the island by driving already-poor households deeper into debt and plunging ‘new’ households into fuel poverty – this is particularly relevant during a period of economic crisis in Ireland, when more and more people are facing uncertain futures with no job or financial security. A recent CSO report highlighted the fact that 14% of those in local authority housing will be unable to afford to heat their homes this winter, leading to an even greater level of fuel poverty in Ireland (Source: Central Statistics Office).
We have serious concerns about the impact a Home Heating Tax would have on fuel poverty. For example, rural-based consumers in the Republic do not enjoy access to the gas network and many would find it prohibitively expensive to install an Oil or Bottled Gas heating system in their homes. Solid fuel is the prime heating fuel for the elderly and the less well off in society. It can be purchased by the bag or by the bale, without requiring a major financial outlay. A further tax, on this segment of the community, can only increase the likelihood of more deaths due to hypothermia this coming winter.
It is evident that the proposed Home Heating Tax will impact more severely on the poor, the elderly and those living in rural areas. Many of these social groups are already marginalised; a Home Heating Tax would simply serve to further isolate an already vulnerable section of society, with limited benefits to the exchequer.
It is our belief that increasing thermal efficiency in Ireland is more essential to tackling both fuel poverty and climate change than a direct Home Heating Tax on residential solid fuels.
Poorer people spend a far greater proportion of their disposable income on energy than those who are better off. In 2004/2005 the poorest sections of society spent an average of 13% of their disposable income on energy, while the highest earners spent 1.7%.
A family of four, dependent on solid fuels for heating in 2009 would see an increase of €30.68 on its monthly fuel bill, if the proposed Carbon Tax is introduced. This would be an increase of 15.8*% and an unsustainable increase for many already experiencing fuel poverty.
*including VAT on excise duty element only
FUEL PRICE FACTS
These are the increases in domestic fuel prices November 2010- November 2011 (Source SEAI).
Natural Gas up 12-20%
Gas Oil up 21%
Bulk Propane up 16%
Kerosene up 28%*
Coal down 3%
Briquettes up 1%
• As the SEAI changed their sampling method for Kerosene in this period. This figure is drawn from various industry sources nationally.