Sam Jenkins' presentation on DECC's fuel poverty policy for the international workshop "Energy-related economic stress at the interface between transport poverty, fuel poverty and residential location", held at the University of Leeds, 20th – 21st May 2015.

1. Government action on Fuel
Poverty in England
Sam Jenkins | Fuel Poverty Programme | DECC | 21/05/2015

2. Outline
2
Defining fuel poverty in England
Statutory Fuel Poverty Target – Government’s objective
Current policy landscape – action to tackle the problem
Government action on fuel poverty in England

3. 2000 – 2013: the ’10%’ definition
3
The original definition
A household is defined as being in fuel
poverty where it needs to spend more
than 10 per cent of its income on
energy in order to maintain an
adequate heating regime + meet other
basic domestic energy requirements.
What Government was trying to achieve
Government had a statutory obligation to
eradicate fuel poverty in England as far
as reasonably practicable by 2016.
Government action on fuel poverty in England

4. The Hills Review – 2011/12
4
• Is fuel poverty a distinct problem?
• Yes
• Is the current 10 per cent definition
accurately capturing that problem?
• No
• If not, how should the problem be
defined?
Low income households facing high
energy costs
Yes
No
Low income, high costs definition
Government action on fuel poverty in England

5. 5
Fuel poverty as distinct from income poverty
Professor Hills’s three perspectives on why fuel poverty matters
Government action on fuel poverty in England

6. Low Income, High Costs Definition
6
Warm Homes and Energy Conservation Act 2000
Low Income, High Costs Definition:
• Low income household (below the
poverty line)…
• …that needs to spend more than
typical households to keep warm
and meet other basic energy needs
s/he
Government action on fuel poverty in England

7. High Costs
2013 to present: LIHC definition
7
Professor Hills recommended
adopting the Low Income High
Costs (LIHC) approach. Where a
household is fuel poor where:
- It has an after housing costs
income below the poverty line
(after adjusting for energy costs)
- It faces above average
(modelled) energy costs
The LIHC approach provides twin
indicators that show the extent and
depth of fuel poverty.
Income
Low High
Low Income
Energy
Costs
Low
High
Fuel Poor =
Low income
and High CostsFP Gap
£1,200
£2,500
FP Gap = £1,300
Government action on fuel poverty in England
2.3m fuel poor households
Aggregate FP gap = £1bn

8. 8
.
Band G Band F Band E Band D Band C
Band E by 2020
Band D by 2025
Band C by 2030
The 2030 target is in law. Interim
milestones for 2020 and 2025 are
set out in the fuel poverty strategy.
Government action on fuel poverty in England
New Statutory Fuel Poverty Target
As many fuel poor home as is reasonably practicable
to…

9. 9 Government action on fuel poverty in England
Tackling the drivers of fuel povertyIncreasingIncomes
Policies aimed at increasing incomes
• Winter Fuel Payments: £100 - £300
cash payment to pensioners each
winter
• Cold Weather Payments: £25 cash
payment during local cold spells
Reducingenergy
costs
Policies aimed at reducing energy costs
• Energy Company Obligation: Delivery
insulation and efficient heating to 260,000
low income households per year
• Warm Home Discount: £140 bill discounts
to 2 million low income homes per year

10. 10
The statutory target focuses future effort on
energy efficiency
2020 Interim
Milestone
- Band E
2025 Interim
Milestone
- Band D
Government action on fuel poverty in England

11. 11
Thank you
samuel.jenkins@decc.gsi.gov.uk

12. 12
Summarystatistics forfuelpoverty inEngland
Government action on fuel poverty in England