800,000 people ‘lifted’ out of fuel poverty – by redefining it

David Cameron ‘putting interest of energy firms above ordinary people’

Ed Balls, left, and Chancellor George Osborne, right, share a lighter moment on ‘The Andrew Marr Show’. Warning Mr Osborne not to boast about the recovery, Mr Balls said he would run a budget surplus in the next parliament if Labour wins the election (Getty)

The Government is attempting to manipulate official figures to bring down fuel poverty, it is claimed today.

A clause in the Energy Bill will change the definition of the key poverty indicator, reducing the number of English households counted as “fuel-poor” from 3.2 million to 2.4 million overnight.

The new definition, which could come into force before Christmas, will instantly reduce the percentage of fuel-poor households in England by nearly a third, from 15 per cent to 11 per cent, according to calculations by MPs on the cross-party Environmental Audit Committee (EAC).

“The Government is shifting the goalposts on fuel poverty so that official statistics record far fewer households as fuel-poor,” said the committee’s chair, Joan Walley MP. “The changes to the fuel-poverty definition and target should be stopped unless the Government is prepared to make a public commitment to end fuel poverty altogether.”

Currently, fuel poverty refers to those households that need to spend more than 10 per cent of their income on fuel “to maintain an adequate level of warmth”. But under the new definition, contained in the Government’s forthcoming Energy Bill, which could be passed by the end of the year, it will apply only to households which need to spend more than average on fuel to keep warm and who would be left with “a residual income below the official poverty line” if they did.

According to Simon Fiander, who helped to draft the EAC report published today, the new definition will dramatically reduce the number of people in fuel poverty because it excludes anybody who needs to spend less than average on energy to keep warm – as many poorer households do because they are often smaller.

The Government has characterised the definition change as an attempt to “improve the energy efficiency of the homes of the fuel-poor”. The Energy minister, Michael Fallon, told Parliament in October that the new measure had the advantage of not just addressing the proportion of income needed for energy bills, but also the level of households’ wealth or poverty.

“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,” he said.

But last night the suggested change met with anger, coming as it does against a backdrop of inflation-busting hikes in gas and electricity bills and ahead of an expected watering-down of measures to subsidise insulation for poor households in George Osborne’s Autumn Statement on Thursday.

Official figures released last week show more than 31,000 people died needlessly during last winter’s freezing weather, of whom about 10,000 deaths are estimated to have been the result of cold homes.

Mr Osborne is set to announce that people buying houses will be offered £1,000 to spend on energy efficiency, while all householders will get £50 off their fuel taxes under a deal on green levies struck by the Coalition.

The bill reduction will come in part by stretching out the Energy Companies Obligation scheme, which provides free insulation to low-income households, over four years rather than two.

Jonathan Reynolds, Labour’s shadow Energy and Climate Change minister, said: “The idea that the answer to rip-off energy bills is to help fewer people make their homes better insulated just shows how David Cameron puts the interests of energy companies before ordinary people.”

Ms Walley, the Labour MP for Stoke-on-Trent North, added: “In the longer term, green levies could actually keep bills down if they drive energy-efficiency improvements that cut the cost of heating our homes. Insulating homes and supporting green technologies is vital to help the fuel-poor and cut the emissions causing climate change.”

The EAC report also criticised the Government’s decision to weaken its legislative commitment to fuel poverty. This means it will no longer require the elimination of fuel poverty by 2016, but instead ask for it to be addressed by a date to be set later.

A spokesman for the Department of Energy and Climate Change said: “The Government is tackling fuel poverty through schemes like the Warm Home Discount, which will help two million households this year, including more than one million low-income pensioners who will receive £135 off their bill.”

Fuel poverty: disputed meaning

* Under the current definition of fuel poverty, a household is “fuel poor” if it needs to spend more than 10 per cent of income to maintain 21C for the main living area and 18C for other rooms.

* The Government wants to change the definition so households will only be fuel poor if they have “required fuel costs that are above average and were they to spend that amount they would be left with a residual income below the official poverty line”.

* According to an MPs’ committee, the new definition will move more 800,000 households out of fuel poverty, as many poor households are smaller than average and cost less than average to heat. This means that even if heating costs a significant part of their income, a household still won’t technically be “fuel poor” because the amount it needs to spend to keep warm is still below average.