The idea that a household is in fuel poverty if it needs to spend more than 10% of its income to keep adequately warm – the traditional definition of fuel poverty – is flawed. The 10% just happened to be twice the average household spending in the 1990s. Calculating a number based on this definition is a statistical exercise: it is not based on actual household experience. Consequently it has been difficult to accurately target programmes to assist the fuel poor, and these programmes have had to rely on imperfect proxy benefits designed for other purposes.
That is the rationale behind John Hills’ quest in his magisterial review of fuel poverty for a new definition. He proposes instead to bring together data which matches low incomes with high energy costs, and supplement that with a new indicator measuring the ‘fuel poverty gap’ – the spending required by households with high costs compared to the median household. The first gives a picture of fuel poverty: the second shows the extent, the depth, of that fuel poverty.
The net result reduces the numbers in fuel poverty but by only a little, and the average depth of fuel poverty in 2009 stood at £414 per household. Together, as Hills also comments, these paint a picture of a very serious problem, and it is still growing. Analysing the impact of policies which will be in place through to 2016, there will be between 2.6 and 3 million households in fuel poverty (affecting over 8m individuals), and the fuel poverty gap will be £600.
Will the new measure help to target fuel poverty programmes better? It is possible to identify low income households, but adding high costs will inevitably mean using proxies, such as having oil or solid fuel heating, having solid walls, living in a rural area off the gas grid, or in a pre-1945 house. But Hills has given us a better picture of what sort of household to look for in what kind of property.
There is little comfort for the Government from all this impressive analysis. Fuel poverty remains a big and growing problem, affecting health, poverty, communities and climate change. There has to be a more robust policy response than the weird comment from DECC that Hills is ‘showing the positive impact of current Government policies are having on tackling fuel poverty’. They are having the kind of impact a fire extinguisher has on a forest fire.
Age UK is campaigning to reduce the number of excess winter deaths. Find out more about our Spread the Warmth campaign.