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DECC sets new fuel poverty definition

By Katie Anderson on July 11, 2013

A new definition of fuel poverty has been set by the Department of Energy and Climate Change (DECC) according to a recent press release. It now means a household will be classed as fuel poor if, after setting energy costs aside, their annual income is below 60% of the median and their energy costs are higher in comparison to average energy bills. 

Up until now fuel poverty was attributed to any household who spent 10% of their annual income on their energy bills. However the definition has been updated after an independent review and consultation argued that it misrepresented fuel poverty, leading to many households being categorised as fuel poor incorrectly. The new definition will also take into account the fuel poverty gap. This is basically how much extra over what they have already spent that the average fuel poor household would need to spend on heating their home to a comfortable and healthy level.

Taking into account the updated definition amendments will be made to the Energy Bill with new fuel poverty targets. According to DECC’s press release amendments “will focus on ensuring that fuel poor households attain a certain standard of energy efficiency in their home by defining an average or a minimum standard for energy efficiency for fuel poor households.”

Commenting on the changes Secretary of State for Energy and Climate Change Edward Davey said he was “determined to tackle the scourge of fuel poverty and help hard-pressed consumers across the country.” Davey added that in the past addressing a growing problem like fuel poverty has in fact been hindered and made worse because of its very definition, leaving those people who need help the most suffering.

Davey added: “The new definition, together with the amendment that we are making to the Energy Bill, will ensure a focus on the households that are at the heart of the fuel poverty problem. That’s those with both low incomes and high energy costs.”

The Government has established a new strategic framework identifying how the new definition can be embraced so that resources are targeted in the most effective way possible going forward.

Although recently published Government figures have revealed a slight drop in the number of fuel poor homes, the problem is a persistant one.

Despite a slight drop in the Department of Energy and Climate Change’s annual fuel poverty figures – in 2011 4.5 million households in the UK were struggling to pay their energy bills, down from 4.75 million in 2010 – the Government has introduced energy efficiency grants and schemes like the Energy Company Obligation and the Green Deal to help householders by offering a range of energy efficiency measures which are designed to improve their cold, damp and unhealthy homes, making them far more efficient to heat which in turn will lead to lower energy bills.

With a new definition comes a new approach to fuel poverty. But with the number of fuel poor households still unacceptably high is it going to make enough of a difference?