Fuel poverty is a serious and complicated issue, which energy suppliers are helping to tackle in a number of ways. For the obligation starting in April 2017, up to 2022, £640m will be spent annually on energy efficiency measures, and a large part of this money will be made available to fuel poor customers, to help them reduce their bills, heat their homes and keep warm.
What is fuel poverty?
In June 2013, the Department for Energy and Climate Change (DECC)* published 'A framework for future action’ which set out the Government’s intention to adopt a new definition of fuel poverty for England.
This new definition states that a household is said to be in fuel poverty if:
- They have required fuel costs that are above average (the national median level), and
- Were they to spend that amount they would be left with a residual income below the official poverty line.
This also uses a fuel poverty gap - i.e. the difference between a household’s 'modelled' (average) bill and what their bill would need to be for them to no longer be fuel poor.
In England, the adeguate standard of warmth is defined as 21°C in the living room and 18°C in other occupied rooms.
Since 2001, the Government has had a legal duty to set out policies that will, as far as possible, cut out fuel poverty. A variety of schemes and measures have been introduced, but the number of households assessed to be in fuel poverty has not fallen in line with the targets.
*DECC is closed. Energy issues are covered by a new department called Business, Energy and Industrial Strategy (BEIS).
Tackling fuel poverty
Whilst tackling fuel poverty is a legal obligation of Government, energy suppliers recognise their responsibilities, especially the elderly, and those on key benefits.
With this in mind, suppliers have worked closely with social services, citizens’ advice bureaux and charitable groups, such as Age UK and Macmillan, to consider the best way to help vulnerable customers. Thousands of energy customers have been taken out of fuel poverty through the efforts of energy suppliers working with social welfare organisations.
Challenges when dealing with fuel poverty
If fuel poverty is to be eased, hard choices need to be made and difficult problems solved. For example:
- Fuel poverty should be addressed at its root causes through greater societal action on energy efficiency and poverty reduction. Financial assistance clearly helps but it is not an adequate solution.
Energy UK believes that the fairest way of addressing fuel poverty, is through energy efficiency measures paid for from the tax and benefits system.
Energy UK is committed to working with Government to address these challenges, including the key question of how to identify the fuel poor.