14 Jenkins Fuel poverty policy
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The document outlines the definition and government action on fuel poverty in England, focusing on households that spend over 10% of their income on energy. It discusses the adoption of the low income high costs (LIHC) definition to better identify fuel poverty, emphasizing income and energy costs. Additionally, it details various policies aimed at increasing incomes and reducing energy costs to meet statutory targets set for 2020 and 2025.
14 Jenkins Fuel poverty policy
- 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
- 12. 12 Summarystatistics forfuelpoverty inEngland Government action on fuel poverty in England