Fuel Poverty Strategy

Ed Davey Excerpts

Tuesday 3rd March 2015 Written Statements

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

Today I will be publishing the fuel poverty strategy for England as required under the Warm Homes and Energy Conservation Act 2000 following extensive consultation held from July to October 2014¹.

This new fuel poverty strategy, the first in nearly 14 years, aims to set a durable framework for future fuel poverty policies with an ambitious new legal target, accompanying milestones and a strong accountability system.

Tackling fuel poverty has been a major priority during this Government. While the numbers of fuel poor households rose rapidly from 2004 to 2010, they are now falling. In terms of energy efficiency, we have delivered over 1.8 million heating and energy efficiency measures in low income areas and households. In terms of incomes, we have permanently increased cold weather payments and continued support worth around £2 billion per year through winter fuel payments. And in terms of energy prices, we have ensured a downward pressure through retail market and tariff reforms.

The new fuel poverty strategy builds on this success.

The independent review of fuel poverty conducted by Professor Sir John Hills of the London School of Economics, held in 2011-12, demonstrated that the traditional way of measuring fuel poverty had been flawed. It underestimated the scale of the problem when energy prices were low and overestimated the scale of the problem when energy prices were high. The Hills review recommended a new approach—the low income high costs approach. That has been adopted and helps to ensure we prioritise people living in the deepest fuel poverty, above all by making their homes warmer through energy efficiency investments.

Over 320,000 fuel poor households in England live in properties rated below band an “E” level EPC rating needing to spend on average £1,000 a year more on energy to heat their home compared to a typical home. Through the Energy Act 2013, we established a new duty to adopt a fuel poverty target. The new fuel poverty target for England sets an ambition that as many fuel poor homes as reasonably practicable achieve a band C energy efficiency standard by 2030 and became law in December 2014².

Today’s strategy is our road map for meeting that target. It confirms the following interim objectives in the new fuel poverty strategy:

as many fuel poor homes in England as is reasonably practicable to band E by 2020;

as many fuel poor homes in England as is reasonably practicable to band D by 2025.

The new fuel poverty strategy sets out a number of recent and new initiatives that are being taken forward. With almost a fifth of our housing stock in the private rented sector, and a third of the fuel poor living in rental accommodation, a new minimum energy efficiency standard for the private rented sector is in the process of being introduced. DECC are partnering with the NHS to focus on the links between health and fuel poverty. A major focus is on fuel poverty in non-gas homes, with new data, new working groups and our new central heating fund. DECC is also looking at data sources to better identify of people in fuel poverty and new types of housing that appear to be badly affected such as park homes.

Today is an important milestone. With this new strategy now in place, DECC will continue to work with partners in central and local government, industry and the third sector to maintain a sustainable path towards cutting the cost of keeping warm for fuel poor homes.

I will today lay before Parliament and place a copy of the strategy in the Library of both Houses. It is also available online at: https://www.gov.uk/government/publications/cutting-the-cost-of-keeping-warm

^1. We published a consultation at: https://www.gov.uk/government/consultations/cutting-the-cost-of-keeping-warm-a-new-fuel-poverty-strategy-for-england. We also held a number of consultation events alongside our regular engagement and partnership activity.

^2. See http://www.legislation.gov.uk/uksi/2014/3220/made. Note there is also a specific methodology—the fuel poverty energy efficiency rating (FPEER) methodology—for measuring energy efficiency in relation the target. See https://www.gov.uk/government/publications/fuel-poverty-england-regulations-2014-and-methodology

[HCWS327]