Fuel Poverty set to rise rapidly - Turn2us

A new independent review confirms that fuel poverty is a serious national problems, affecting people who have low incomes and energy costs that are above typical levels. Figures are set to rise rapidly over the next few years.

Produced by John Hills, Professor of Social Policy at the London School of Economics, who was appointed fuel poverty tsar by the Government last year, the review looked at:

• The definition and measures of fuel poverty
• Fuel poverty targets
• The effectiveness of policies that aim to address the problem.

Measuring fuel poverty

The review suggests that the way fuel poverty is currently measured, based on whether a household would need to spend more than 10% of its income on energy, is flawed. It gives a misleading impression of trends, excluding some affected by the problem at some times and including people with high incomes at others. 

It proposes a new way of measuring the problem, focused both on the number of people affected and the severity of the problem they face. Using this measure, it finds that:

• Nearly 8 million people in England, within 2.7 million households, both had low incomes and faced high energy costs in 2009 (the most recent year with available data). These households faced costs to keep warm that added up to
  £1.1 billion more than middle or higher income people with typical costs. 
• This “fuel poverty gap” – already three-quarters higher than in 2003 – will rise by a further half, to £1.7 billion by 2016.
  This means fuel poor households will face costs nearly £600 a year higher on average than better-off households with typical costs.

Effects and interventions

The report argues that:

• Fuel poverty exacerbates other hardship faced by those on low incomes, has serious health effects (including contributing to extra deaths every winter) and acts as a block to efforts to cut carbon emissions.
• Interventions targeted on the main issues of fuel poverty – especially those that improve the energy efficiency of homes lived in by people with low incomes – can make a substantial difference. However, the impact of those planned to be in place by 2016 will only reduce the problem by a tenth.

Professor Hills's comment

Professor Hills said: "There is no doubt that fuel poverty is a serious national problem – increasing hardship, contributing to winter deaths and other health problems, and blocking policies to combat climate change.  But the official measure has fed complacency at times and gloom about the impact of policies at others.

"When one focuses on the core of the problem in the way I propose, the outlook is profoundly disappointing, with the scale of the problem heading to be nearly three times higher in 2016 – the date legislation set for its elimination – than in
2003.

"But this daunting problem is one with solutions.  Our analysis shows that improving the housing of those at risk is the most cost-effective way of tackling the problem, cutting energy waste, with large long-term benefits to society as a
whole. We need a renewed and ambitious strategy to do this."

Find out more about Professor Hills's report (link opens in a new window)

Read our Fuel Poverty information sheet (link opens in a new window)

Sources: Professor Hills's press release (link opens in a new window PDF file size 133kb) and Guardian news article (link opens in a new window)