Department of Energy & Climate Change

Fuel Poverty is Redefined by DECC (Department of Energy and Climate Change)

July 16, 2013 | Fuel Poverty

Amendments to the Energy Bill currently going through parliament will remove the need for the government to end fuel poverty by 2016 and, following a review of fuel poverty by John Hills at the London School of Economics, the definition of fuel poverty has also been changed.  Previously, a household was considered to be in fuel poverty if they spent more than 10% of their income on fuel however, the new definition from DECC states that household in fuel poverty is one where:

“The total income is below the poverty line (taking into account energy costs)and energy costs are higher than typical.”

In some ways this does make more sense as the previous definition did mean large wealthy households that were spending a lot to heat their homes (including their swimming pool!) could be classed as suffering from fuel poverty. However, it is believed that redefining fuel poverty immediately removes 1 million families from the official number of fuel poor, so it could be seen by some as a move by government to massage the figures.  James Granger from Fuel Poverty Action said that the new definition and subsequent reduction in fuel poor households will “only escalate the cold homes crisis”.

The new focus by the government as set out in the Energy Bill will be on improving energy efficiency in poor households through a variety of measures including an extension to the Warm Home Discount scheme and more emphasis being placed on the energy companies with schemes such as the Energy Company Obligation.  Both schemes target poorer households and eligibility is based on age and/or income and can help with bills or providing funds to replace out of date and less efficient heating systems or insulation.

Whilst improving energy efficiency is always a good thing, governments have no control over the price of fuel and whilst urban domestic customers of the utility companies can switch suppliers, there are fewer options for those in rural areas. Age UK estimated in Jan 2013 that 1.5m older people living in rural areas were struggling to heat their homes because of the cost of heating oil. If prices continue to escalate, energy efficiency on its own will probably not overcome these rises.

It is probably fair to say that however fuel poverty is defined, there needs to be a mixed approach to this issue that tackles not only fuel efficiency but also renewable fuels, unemployment and poverty in general as well as raising awareness amongst households about how they can shop around for their fuel cost, whether they use gas, electricity or heating oil to heat their homes. There are still a large number of households that it is believed have never switched suppliers.

At BoilerJuice we provide heating oil customers with the facility to find the cheapest heating oil quote from our participating heating oil suppliers in their area thus ensuring they don’t pay over the odds for heating oil. We offer advice on how to help customers get the cheapest price for heating oil and we also supply a range of heating oil additives for boilers and Agas to help improve the overall efficiency of these appliances which can ultimately cut fuel bills.

 

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