DECC announced today that it is amending its definition of 'fuel poverty' from one (unsatisfactory) measure to another (unsatisfactory) measure.
The existing definition is one of a household that would need to spend more than 10% of its income "on energy costs in order to meet a prescribed standard of warmth and other energy needs", or elsewhere in DECC's literature "on fuel to maintain an adequate level of warmth". Among its many faults is that it takes no account whatever of the amount households actually expend on heating their home.
The new definition is the Low Income, High Cost (LIHC) indicator recommended in John Hills's Review. Under this measure a 'low income' is an income below the so-called 'poverty line' (60% of equivalised median household income) less 'required fuel costs'. 'High cost' is where the required fuel costs are above the median average. Among the disputable components are the use of a measure of inequality to define a low income, and the continued use of 'modelled' fuel bills.
The DECC documents setting out the new definition, 'Fuel Poverty: a framework for future action' can be downloaded here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211180/FuelPovFramework.pdf
The supporting analytical annex is available here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211137/fuel_poverty_strategic_framework_analytical_annex.pdf
Paul Ashton
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