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Fuel poverty is devolved. Until 2013, a single definition of fuel poverty was used across the UK: a household was defined as being fuel poor if they needed to spend more than 10% of their income to keep their home at a reasonable temperature. This definition is still used in Scotland,[1] Wales,[2] and Northern Ireland[3] but England has since adopted a different definition.

1.1   England

England has adopted the ‘Low Income High Costs’ (LIHC) definition of fuel poverty. Under this definition, a household is fuel poor if:

  • the amount they would need to spend to keep their home at “an adequate standard of warmth” is above the national median level
  • and if they spent that amount, their leftover income would be below the official poverty line.[4]

In other words, under the English definition of fuel poverty, a household is fuel-poor if their income is below the poverty line (taking into account their energy costs); and their energy costs are higher than is typical for their household type.

In both the 10% and the LIHC definitions, “an adequate standard of warmth” and a “reasonable temperature” are defined as 21⁰C in the main living area and 18⁰C in other rooms.[5]

The LIHC measure was developed by Professor Sir John Hills as part of an independent review of fuel poverty conducted for the Government. Hills published a final report in March 2012 recommending that the Government adopt the LIHC measure.[6] Following a consultation, the Government announced their intention to adopt the measure in July 2013.

The LIHC definition of fuel poverty can be used to produce two different indicators:

  • The extent of fuel poverty – the number of households meeting the LIHC definition of ‘fuel-poor’.[7]
  • The depth of fuel poverty – how badly affected each fuel-poor household is; measured by looking at the difference between fuel-poor households’ required energy costs and the median required energy costs.[8]

The new definition has been criticised by some who argue that because the indicator relies on averages, it is unlikely to show the true impact of variations in energy prices on fuel poverty.[9]

1.2   Devolved administrations

The devolved administrations’ definition of fuel poverty is as follows: a household was defined as being fuel poor if they needed to spend more than 10% of their income to keep their home at a reasonable temperature.

Extreme fuel poverty indicates that a household would have to spend more than 20% of its income to maintain a satisfactory heating regime.

Statistics on fuel poverty trends are available in the debate pack.

[1]     Scottish Government, Quality – Fuel Poverty [accessed 17 March 2017]

[2]     Welsh Government, Fuel poverty, 1 September 2016 [accessed 17 March 2017]

[3]     Department for Communities, Fuel poverty [accessed 17 March 2017]

[4]     Department for Business, Energy and Industrial Strategy (’BEIS’), Fuel poverty statistics, 19 September 2016 [accessed 17 March 2017]

[5]     DECC, Annual fuel poverty statistics report 2016, 30 June 2016, p.10

[6]     DECC/CASE (Centre for Analysis of Social Exclusion, LSE), Getting the measure of fuel poverty

[7]     DECC, Annual fuel poverty statistics report 2016, 30 June 2016, p.7

[8]     Ibid.

[9]     This point is for example made by Dr Lucie Middlemiss for the EU Fuel Poverty Network in ‘Low income high costs and the new politics of fuel poverty in England’, 26 October 2016

 


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