Basil McCrea: Fuel, Poverty and Politics

The rising poverty rates in the Western world have been hitting the headlines. Writing for Slugger the NI21 Leader, Basil McCrea writes about what can be down about this issue

President Obama has been criticised for plans in his State Of The Union Address aimed at introducing tax benefits for childcare, college education and retirement.

His crime? The initiatives would be funded by raising funds from banks and rich families and pumping the estimated $300bn. raised into initiatives which would be popular with America’s middle classes.

The money would be raised by imposing a new levy on the US’s top financial institutions, raising the top rate of capital gains tax to 28%, and closing the loophole that lets wealthy families pass on assets without paying tax. The White House claims that the capital gains and inheritance tax changes would almost exclusively effect the wealthiest 1% of Americans and that 80% of the impact would fall on the much narrower 0.1% – those with an annual income of more than $2m.

However the proposals are unlikely to pass a Republican controlled Congress who claim such changes would slow economic growth.

The President’s plans coincide with a report from Oxfam that suggest the wealthiest 1% will soon own more than the rest of the world’s population. The report was launched ahead of the annual World Economic Forum meeting in Davos which Oxfam executive director Winnie Byanyima will co-chair who said: “Do we really want to live in a world where the one per cent own more than the rest of us combined? The scale of global inequality is quite simply staggering and despite the issues shooting up the global agenda, the gap between the richest and the rest is widening fast.

“In the past 12 months we have seen world leaders from President Obama to Christine Lagarde talk more about tackling extreme inequality but we are still waiting for many of them to walk the walk. It is time our leaders took on the powerful vested interests that stand in the way of a fairer and more prosperous world”.

“Business as usual for the elite isn’t a cost free option – failure to tackle inequality will set the fight against poverty back decades. The poor are hurt twice by rising inequality – they get a smaller share of the economic pie and because extreme inequality hurts growth, there is less pie to be shared around”.

Oxfam is calling on governments to adopt a seven point plan to tackle inequality:

• Clamp down on tax dodging by corporations and rich individuals
• Invest in universal, free public services such as health and education
• Share the tax burden fairly, shifting taxation from labour and consumption towards capital and wealth
• Introduce minimum wages and move towards a living wage for all workers
• Introduce equal pay legislation and promote economic policies to give women a fair deal
• Ensure adequate safety-nets for the poorest, including a minimum income guarantee
• Agree a global goal to tackle inequality

With regards to Northern Ireland a report by the Joseph Rowntree Foundation in March 2014 shows that after inflation, incomes for the poorest fifth fell by 16% (£39 a week lower) – compared to 5% in the rest of the UK on average – between 2006/07 and 2011/12 (the latest available data). Average households saw their incomes fall by 9% over the same period.

The Northern Ireland Fuel Poverty Coalition found that Around 300,000 households in Northern Ireland cannot afford to heat their homes.

Monday’s Budget Statement by Simon Hamilton announced that a further £28.8 million of Financial Transactions Capital has been allocated by the Executive meaning that £40.9 million in total is available for “much needed investment in infrastructure such as energy efficiency”.

The budget itself does not provide the mechanisms to explicitly tackle the myriad of poverty issues highlighted by Oxfam.

Is there an opportunity to establish a mechanism to use a proportion of the Northern Ireland Investment fund to begin to tackle Fuel Poverty – an issue that affects 42% of the population compared with only 15% in England?

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  • Ernekid

    Is NI21 still a thing?

    If NI21 is still a thing is it going to run in May for the Westminster election?
    Is Basil going to run again in Lagan Valley under a NI21 banner?

    Those are the questions I’d ask Basil. Him wittering about fuel poverty is pointless if he’s a single backbench MLA who’s managed to burn all his bridges in stormont.

  • David McCann

    Sorry can you stay on topic please, this site has rules about playing the ball, not the man

  • Ernekid

    I think it’s on topic. There hasn’t been a peep from Basil in months about the party he leads. If he wants to speak about a social issue like fuel poverty you’d think him being a political party leader would be a good vehicle to do so, to totally fail to mention what his party plans to do about fuel poverty suggests that his party is inoperable.

    It’d be odd if Mike Nesbitt for example decided to comment on a social issue and not outline where his party stands on it. Basil isn’t a only an independent MLA. He claims to be a party leader, therefor he should act like one.

    I don’t disagree with what he’s saying anyway I’d just like to know where he stands

  • David McCann

    It’s not on topic. I am normally liberal but I don’t want to come on tomorrow and read 20 comments that do not engage whatsoever with the topic at hand

  • Ernekid

    But Basil isn’t really making a point here.

    The article can be summed up as.

    Inequality and fuel poverty is a thing.

    Inequality and fuel poverty is a thing in Northern Ireland.

    Maybe we should do something about?

    It’s a bit of an empty article, beyond a vague suggestion to use the Northern Ireland investment fund to do something about it, there’s nothing concrete here.

  • kalista63

    Well, there’s the obvious issue that privatisation was a croc, especially obvious in GB.

    The issues are as basic, the need for providers to create profits for their investors and the burst lie that multiple providers creates price decreasing competition whereas they gang up and price fix.

    Last year, when Ed Milibalnd had his brainstorm of fixing prices, there was a great enthusiasm to go further, to renationalise services

  • Kevin Breslin

    I think the clue was in the word Soapbox, McCrea is on the Soapbox. The last comment perhaps spoke of opinion rather than policy. Isn’t the NIF being used to fund political speeches.

  • Kevin Breslin

    Mike Nesbitt is odd, I think he carried through with his promise to spend a night in the home of someone below the poverty line.

  • Dan

    Happily NI21 went nowhere if this bullshit from McCrea is what we’d have been subjected to.

  • chrisjones2

    Wheres the evidence of price fixing? There is none and how is that not better than a state monopoly

  • chrisjones2

    This is all descriptive with not a single new idea.

    300000 households in fuel poverty – there are only 700000 households in NI so your / their figures are total utter nonsense. Inflated twaddle to justify their existence and grants

  • New Yorker

    Basil is correct when he says “extreme inequality hurts growth” and there is economic analysis to support his statement. In the US only the most economically illiterate believe otherwise. Last night in his State of the Union address President Obama gave an overview of what needs to be done on the issue. He does not expect most measures to become law in the remainder of his presidency. He is setting the agenda for what comes after he is President. It will likely be a major issue in the 2018 elections.

    A major restructuring to address the issue in the UK would be nationwide, not just NI. Whether he knows it or not, Basil is suggesting a change in all the UK. Indeed, this is an issue in almost all modern liberal democracies.

  • cimota

    The stats speak for themselves. Between 32% (Belfast), 40% (East of the Bann) and 56% (West of the Bann) of households in Northern Ireland suffer fuel poverty. Theres even a pretty diagram.

    See here: http://cimota.com/blog/2015/01/12/snake-oil/

  • cimota

    Of course there is price fixing. OPEC actually said they were setting the price low to respond to competition from fracking and other markets (the U.S. oil fields are at their highest production rate since the 80s).

    OPEC also stated they had 8 years of reserves. Enough to starve the oil industry in the US out (and deplete their reserves) as its a lot more expensive to drill in the USA than in the OPEC countries (where they are less concerned about humans rights etc).

    Do some research for Gods sake.

  • cimota

    I didn’t see Basil post any solutions.

    “Won’t someone do something” is a common plea. But as the DUP are wilfully climate-change ignorant and SF are climate change apathetic, nothing will be done.

    Our energy insecurity could be resolved. Our fuel poverty could be resolved. But it would require putting down the flags and putting up a few turbines.

  • kalista63

    True and there’s also the ongoing saga of OfGen on gas and electric providers working together. It’s strange that Chris missed it as its a big story at the moment in GB as Dave is making much of Ed’s fixed rate would leave people paying o Dr the odds.

  • SeaanUiNeill

    Water turbines certainly, cimota, but as someone activly green in my politics who has carefully looked into solutions, I’d say that the great wind turbine swindle and “subsidy mine” has been one of the most counter-producative things for those pressing for genuine solutions to the climate change problem.

    Wind turbines are essensially a big business solution, requiring heavy subsidy. They produce eratic power output, and accordingly only work within a centralised system of power supply where steady need is met by fossil fuel systems of generation. Water and PV can both be scaled down to individual home needs, permitting real independence from the centralised system. In the case of water generation, the flow may be controlled for steady output through small dams, and it is the one option that sucessfully substitutes for current generation methods.

  • cimota

    I’m actively green in my science rather than my politics. Wind turbines work fine and nearly everywhere in NI has a surplus of wind. Water turbines only work when you’ve got water. No rivers near me.

    My vertical turbine is arriving this week. 😉

  • SeaanUiNeill

    Thanks for the reply, cimota, science eh? That’s me put firmly in my place! “Wind turbines work fine and nearly everywhere in NI has a surplus of wind.” So steady even supply guarenteed is no problem. Good. we’ve solved that one.

    We are obviously reading different evaluations from different academic papers. Me? I’ll stick to PV and a few batteries in my isolated hovel up the mountains.

  • leanbh inchinn Ceilt

    So does the European Central Bank executive board, but that just feels wrong too. 😉

  • cimota

    As I bought a house that faces East/West, my confidence in PV as a solution is less than favourable. I’m putting the damn things up myself, grid be damned.

    Without resorting to a flywheel, we do have technology that evens out the supply ; such as charge controllers.

    Shouldn’t be taking power directly from the source anyway – the challenge for micro generation is storage and energy shifting.

  • SeaanUiNeill

    I’m really beefing about the centralised system, cimota.

    I wasn’t referring to individual unit regulation and storage in the sentence, “They produce erratic power output”, I was referring to “big picture” linkage of wind farms to the grid, the “centralised system of power supply” where this irregularity needs to be intigrated with regular output demand, itself unevenly staggered across the day, but differently timed. The uneven power generation of wind needs to be supplimented to actual need by “fossil fuel systems of generation.” And sometimes it is too much for the grid and needs to be turned off, and this inactivity still needs to be paid for, by all of us. The old “millar and grain” use of wind power worked when the millar could pick his hours of work to run with the winds, the erratic nature of winds mixed with the need for electricity on demand in our society make wind power one of the less attractive options in the rael world. I note that a number of Tyrone/Fermanagh units are closing down after a few years.

    But while I’d assume that we’d disagree about detail, I think we’re probably in general agreement about the centrality of micro-generation as the only real way to go. Hey! thank goodness formodern Lithium batteries! I sincerely wish you every luck with your own micro generation, especially if wind is the only real option.

  • cimota

    Hi Seaan,

    Storage is the big question and it’s the bit that gives me the heebie jeebies as my background in biology and ICT hasn’t prepared me for dealing with batteries and electricity. And, typically, this isn’t something that we can learn at our local colleges.

    I have suggested a short class at Farset Labs that could educate more people on the uncertainty of PV and wind and how to regulate and store the energy reaped. I’d sign up for that in a second.

  • Sharpie

    Fuel Poverty is the most egregious symptom of our dysfunctional political system. The solutions exist, the people who can implement them exist, we know how much it will cost, we know where the 50% of households in fuel poverty are, we know what is effective and what isn’t. Hundreds of millions are spent on this, around £70m per year in Northern Ireland alone with little impact on the figures.

    Why?

    Stormont politics. There are five Government Departments who have a role in current Fuel Poverty initiatives – DETI for energy policy, DSD for “Fuel Poverty” and NIHE work, DARD for rural development, PHA for health measures, OFMDFM for its work on “HEAT” – the new loan system for household upgrades. Of course there are other roles for Finance and for DEL in skilling up the installers and DOE for helping Local Authorities act as the Local Area Approach champions and overseeing quality of work.

    They don’t talk together, more importantly they don’t acknowledge the scale of the issue nor have they consensus on how to approach it.

    A costed plan, signed up to by all parties, with prioritisation of the extreme fuel poor (30000 NI Households) is essential for movement to happen.

    The outstanding question – who leads? There is no champion of this issue in Government. I can only imagine that there are protestant fuel poor and catholic fuel poor and that is where the debate starts and ends.

    Basil is light in what he says but at least he has engaged with the issue. If only people knew the scale, the issues, the causes there would be uproar. Why does it not happen? Only a conspiracy theorist or an incompetence theorist could decipher the why.

  • SeaanUiNeill

    Excellent idea, cimota, while I was brought up in a family who ensured that I could turn my hand to most things, in matters such as electricity, my abilities are rudimentary and my “skills” as such as to make my hair stand on end (probably literally).

    We need access to good and up-to-date information taht would facilitate local microgeneration. The first step would be to educate as many as are interested thougherly in general theory, and those of us who are foolhardy enough, in the practicals. It would be one of the first steps that anyone in government seriously interested in sustainable rural regeneration would start with, but everyone appears to think “big infastructure” and “big contracts” to the exclusion of everthing else. I’ll watch the Farset Labs website from now on. Again, good luck!

  • chrisjones2

    Depends how you define fuel property. Any suggestion that half the Ni population is in poverty at any level is simply fabricated ….socialist fantasy stuff

  • chrisjones2

    My apologies …I misunderstood what you said and assumed you were alleging collusion in the local electricity / gas ,markets.

    OPEC is by definition a cartel so it exists to fix prices

  • chrisjones2

    By all means have a go but recognize that economically its a nonsense

  • Andrew Gallagher

    Is there any independent comparison of the TCO of micro wind power vs the equivalent in the grid? Supply regularisation is an issue in both cases but one would naively assume that it would benefit from economics of scale (it may be windy in the sperrins and not in the mournes, and vv). And unless you’re living on the top of a mountain you still reserve the ability to tap into the grid in emergencies – how many nines does micro have?

  • SeaanUiNeill

    I’ve been in few very cold houses out in the sticks, chris, have not actually found anyone frozen to death yet, but it does happen.

  • SeaanUiNeill

    Bless you chris, I suppose not everyone actually wants to be a self-sufficent, independant person, but then not all of us would have the skills to try. You’d prefer to be dependant on someone else for your power supply, ah, obviously you’ve not been living up on the Antrim Plateau over the last few winters.

  • cimota

    Econonics of scale works for fossil fuels and if we paid attention to it, no-one would be driving cars with internal combustion engines. 🙂

    It’s less about how many nines you can eke out of microgeneration but how many nines you actually need. Going independent of the grid would start of to show folk what they’re doing with their money.

  • PaulT

    Thing is, OPEC only pump the stuff, the markets decide the price. Don’t really have an issue with what OPEC is doing, as with any industry they have a right to protect their market share,

  • cimota

    When you compare the cost delta for fossil fuels versus renewables over the last forty years, economically it becomes an inevitability. Fossil fuels are getting more expensive while renewables keep getting cheaper.

    And that’s ignoring the environment argument.

  • cimota

    If there’s anyone who fancies being part of a workshop on microgeneration, let me know and I’ll find some experts.

  • cimota

    “Engaged” has to mean more than “had a rant from a podium”.

  • cimota

    Of course it depends how you define it and BY THE NATIONALLY AGREED DEFINITIONS we have a nationally embarrassing level of fuel poverty in Northern Ireland.

    The only region of Northern Ireland to improve on the fuel poverty index was Belfast. Every other part, including leafy and affluent North Down was worse off on aggregate. But yet we have no leadership of energy issues.

  • cimota

    No, Ted.

    OPEC is a cartel that decides the initial market price and then the markets get to buy and sell. The low prices we are enjoying are direct market manipulation by the Saudis. We get a drop of 10 p on the litre while they drive other oil producing competitors into insolvency.

    Saying they just pump the stuff is incorrect.

  • SeaanUiNeill

    Me for a start, let me sound out a few people.

  • cimota

    Getting off topic so will shelve this here. Drop me an email

    MattJ @ cimota dot com

  • chrisjones2

    Its embarrassing as its BOGUS. Look around you …look at the housing cars people and then do the same in Sheffield, Manchester, Lioverpool.

  • SeaanUiNeill

    Will do.

  • cimota

    True. I should ignore social science, actual research, professional statisticians, civil quislings and all of that under a Tory government that would make Thatcher blush….

    …because some randomer on Slugger says it ain’t so.

    Dead on.

  • chrisjones2

    Yes you should if its that crap…and thank you for the personal abuse.

    The NI Definition of poverty is anyone whose income is less than 60% of median income. That is relative poverty not an absolute measure of the ability to support oneself and family

    The Joseph Rowntree Foundation estimated in 2010 that around 1 person in 6 in NI was in poverty. That’s too high but way lower than the waffle you rely on

  • chrisjones2

    Great. So what do you want Government to stop doing? Fixing roads? Street lights? Cuts in Health? Policing? Paying benefits??

    Where is the money to come from?

  • chrisjones2

    Turbines? Wind power is one of the most expensive and least reliable sources.

    And where are you going to get the cash for all these turbines? And whose land will you stick them on? And who will pay? and what will you stop doing elsewhere to pay for them?

  • chrisjones2

    Good luck. You will soon learn that you wasted your money and contributed to global warming.

    Where was it manufactured?

  • chrisjones2

    I fear you may avoid fuel poverty at the cost of hypothermia

  • chrisjones2

    Economically its still nonsense.

  • cimota

    Calling you a “randomer” is hardly personal abuse.

    Now if I was to say you’re as informed and opinionated about renewables and the environment as Sammy Wilson, then you can decide for yourself whether that’s an compliment or not.

    Fuel Poverty has a definition. Absolute poverty is a definition. Do you think they’re linked? Do you think that resolving fuel poverty will go some way to resolving absolute poverty?

    you’re having a moan because the Rowntree Foundation says around 17% have absolute poverty but you balk at 32% having fuel poverty because….what….it suits your world view?

    Luckily facts are true whether or not you choose to believe them.My numbers were from NIHE. Why is that less reliable than the Rowntree Foundation?

    Because you say so?

    Right.

    Dead on.

  • Sharpie

    Chris I would not want any of these things stopped. It does not have to be either or and I’ve never heard a politician saying this, although saying this, if someone with cancer lost their job and couldn’t heat their home because it had no insulation – to me that would mark a priority over everything above!

    Luckily there is much that can be done without having to resort to drastic measures. Why not start by spending the current £70 million in a smart way.
    Why not claim down monies from EU Commission that are available for this type of investment as other EU countries are doing?
    Why not seek private partnership investments as is done for other infrastructure?
    Why not consider a business case that has already been done through UU that demonstrates that FP costs a lot of money in ill health.

    Regarding benefits – that is a good point to raise. It is one of the basic ways people here can up their income – while many like to sneer at those on benefits a lot of money (don’t know exact figures) is not drawn down each but which is allocated to Northern Ireland (Pension Credit, Child Tax Credit, Working Tax Credit etc). Income is one of the three main causes of Fuel Poverty (alongside high fuel costs and poorly insulated houses).

  • Andrew Gallagher

    Lots of nines is very important if you own a refrigerator or a home server. And internal combustion is currently favourable because a) battery capacity is still dreadful and b) transmission losses of the alternatives are still too high.

    Poor battery capacity is going to hit your home wind power plan too – you’re essentially talking about running it through a UPS, and any serious UPS installation has a diesel generator backup because you pay through the nose for battery capacity. The advantage of a grid is that you can rely upon multiple sources, failure of one of which is hopefully insufficient to take out the whole thing. (honoured more in the breach of course, particularly in NI)

    I’ve seen loads of graphs showing that onshore wind is just about the worst renewable energy source there is – the only reason it has taken off is because the barriers to investment are relatively low. Hydro is great if you ignore the damage to watercourses. Geothermal is great if you have volcanoes. Biomass is great if you don’t give a toss about the food supply. That leaves solar and offshore wind as the only reasonable alternatives, and Ireland doesn’t get much sun.

    Speaking of which, it turns out that you don’t need your solar panels to face south. West or south west facing panels are actually better for home usage because you use more electricity/hot water in the evening.

    There’s always nuclear of course…

  • cimota

    Considering a refrigerator is really only pulling power about 4 hours a day, lots of 9s isn’t actually that important. What is important is the battery storage (which has been dropping between 8% and 16% in cost over the last five years – ref Tony Seba’s book).

    While you can wax lyrical about how onshore wind isn’t great, the issue for most people is that they don’t have watercourses on their back door, nor do they own a stretch of ocean.

    I had a similar conversation with a friend and he was very down on renewables. Low on specifics but pessimistic. I’m not really interested in general pessimism. I have a use-case, I have a target, I even have a storage system in mind and , as I mentioned, my first vertical turbine arrives this month (it’s a kickstarter so it could arrive in 2036 to be honest).

    The point is not whether you think you could survive off-grid. The point is whether I could.

    Facing south makes a lot of sense as the sun is never to the North at our latitudes. The point about East/West is a bit inane because any usage will be based on power stored from the action of solar during the whole day or wind during the whole 24 hours. A surge at teatime won’t be affected at all by whether or not the sun is on the wax or wane in the sky. If you’re relying on the sunshine to get you through a problem “in media res”, then you’ve let your imagination run away with you. You’d be load balancing it anyway so not to damage your batteries.

  • chrisjones2

    What you call ‘absolute poverty’ is not absolute its relative and depends upon the definition which, as I pointed out above, is calculated to produce the result you quote. It bears no relation to reality

  • SeaanUiNeill

    Luckily, chris, you will not be paying……yet.

  • Sharpie

    The criteria for defining Fuel Poverty here are the exact same used across the UK: Basically spending 10% or more of income on energy. Even if you disagree with what is the right definition of fuel poverty, 45% of whatever it is households suffer with regards to energy compares to 15% across the water (a bit higher in Scotland and in Wales). We are more than three times as likely to be struggling to pay energy bills here as in GB.

    I’d say it is how you respond to the facts that decides if you are a socialist or not.

  • Ian James Parsley

    You are correct, Chris.

    “Fuel Poverty” is a term banded about meaninglessly and those definitions are far from “nationally agreed”. I have been in “fuel poverty” under that definition for most of this decade – and I live in a detached house in Jordanstown! “Waffle” is right.

    It’s worse than that. Some people in NI do struggle to keep warm. Banding around obviously daft figures and promoting waffle simply turn people away from the subject altogether.

    I set up the “Winter Fuel Trust” charity five years ago, asking for donations from people who receive but don’t need the Winter Fuel Allowance so that we can allocate it to those who really need it. The waffle is seriously detrimental to such efforts, as people know it’s nonsense so refuse to believe there’s any issue at all.

    I fear some people just like to rant to feel good about themselves, but when it comes to taking time to gain a comprehensive understanding of the subject to tackle the real problem…

    Under genuinely nationally agreed indicators, “relative poverty” as you note (though I would call it “income inequality”) is 21% across the UK and 19% in NI (according to last month’s ONS figures).

  • Reader

    OPEC is a broken cartel – there are a load of producers outside the cartel, or willing to break ranks, so OPEC can drop prices easily enough, but can’t force the prices up the way they did in the old days.
    I’m not sure too many consumers or greens are too worried right now, with OPEC squeezing the frackers and Scots and the tar-sands extractors, not the end users.