Fuel Poverty (Hansard, 24 July 2000)

§ Mr. Meacher

The information is as follows.

1. The Inter-Ministerial Group on Fuel Poverty, chaired jointly by my right hon. Friend the Minister for Energy and Competitiveness in Europe and my noble Friend the Parliamentary Under-Secretary of State for the Environment, Transport and the Regions, has reviewed the commonly applied definition of fuel poverty, namely a household that needs to spend more than 10 per cent. of income to achieve a satisfactory heating regime. The Group has taken account of responses to last year's consultation on the new Home Energy Efficiency Scheme (HEES), which sought comments on the definition, and in particular: whether the use of fuel for non-heating purposes should be included in assessing the amount of fuel needed to achieve a satisfactory heating regime;and whether the calculation of household income should exclude any element of housing costs such as rent or mortgage payments.

Some 60 per cent. of the 252 respondents commented on one or both of the questions.

2. The Group has concluded as a consequence that the 10 per cent. threshold is appropriate for defining fuel poverty. On non-heating fuel, the Group noted that 54 per cent. of respondents to the new HEES consultation had commented that all fuel costs should be taken into account; 6 per cent. had other suggestions; and the other 40 per cent. did not comment. The Group believes that the definition should be based on all fuel use.

3. As regards the treatment of housing costs, the Group noted that 34 per cent. of respondents suggested that they should not be excluded from the calculation of household income; 20 per cent. that some allowance should be made; 6 per cent. offered other suggestions; and 40 per cent. did not comment. The Government's Poverty Strategy has shown income data both with no allowance for housing costs, and excluding costs met by Housing Benefit or Income Support for Mortgage Interest (ISMI). The Group has taken account of responses to the consultation exercise and the difficulty of producing definitive figures, and has concluded that the draft Fuel Poverty Strategy which will be issued in the autumn will focus mainly on the first basis, but will identify the number of fuel poor on both bases. But the Government will consult further and will invite comments on this, when they publish their draft Strategy.

4. Some commentators have argued that all mortgage, rent and other housing costs should be excluded in calculating household income. On this basis, however, more than one in three households in England would have been classed as fuel poor in 1996, based on the English House Condition Survey. Although fuel poverty is unacceptably widespread, this definition would include many households who would not be regarded—or regard themselves—as being in material fuel poverty.