Coalition accused of redefining fuel poverty to cut numbers

The planned change to the definition in the Energy Bill would cut the number of households classed as fuel poor from 3.2 million to 2.4 million.

By George Eaton

The coalition is seeking to demonstrate its commitment to helping “hardworking people with energy bills” (as ever, one wonders, what about less hardworking people?) by formally announcing its planned changes to green levies. It promises that the average customer will save £12 through the transfer of the Warm Homes Discount into general taxation (Labour’s response is that the government is giving with one hand and taking with another), £30-£35 through a reduction in the cost of the Energy Company Obligation and £5 through savings to network costs, meaning an overall reduction of around £50. Labour has responded by noting that, with the average energy bill up £120, prices will still be around £70 higher than last year. Unless George Osborne has something extra up his sleeve for Thursday’s Autumn Statement, the Tories are likely to find it harder than they hope to neutralise Miliband’s price freeze.

The government’s cost-of-living drive has also been undermined by the claim that it is seeking to reduce the number of households classed as fuel poor by changing the official definition. A report from the cross-party Commons environmental audit committee notes that the Energy Bill includes a clause redefining fuel poverty from any household that needs to spend more than 10% of its income “to maintain an adequate level of warmth” to any household that has “above average” fuel costs that leave them with “a residual income below the official poverty line”. The effect of this change would be to reduce the number of households classed as fuel poor from 3.2 million to 2.4 million, or from 15% to 11%. This is because the new definition excludes any household that spends less than average on energy to keep warm (as many poorer families do).

Labour MP Joan Walley, who chairs the commitee, said: “The government is shifting the goalposts on fuel poverty so that official statistics record far fewer households as fuel-poor.

“The changes to the fuel poverty definition and target, in part being made through amendments to the Energy Bill, should be stopped unless the government is prepared to make a public commitment to end fuel poverty altogether.”

A spokesman for the Department of Energy and Climate Change has responded by insisting that “the changes to the fuel poverty definition helps to get a better understanding of the causes and depth of fuel poverty, and to target policies more effectively”. Energy minister Michael Fallon has previously told parliament: “The new definition allows us to understand much better what the actual depth of fuel poverty is in a particular household rather than simply the extent of it”.

But whether or not the change is well-intentioned, the perception that the coalition (which has become renowned for its abuse of statistics) is attempting to disguise the true number in fuel poverty is not one it should welcome.