In March 2011, my predecessor commissioned Professor John Hills of the London School of Economics, to undertake a review of the fuel poverty definition and target. As part of this review, he was asked to consider fuel poverty from first principles, including possible formulations for a future definition and forms of target, and the cost effectiveness of different interventions. The aim of commissioning such a review was to consider how we could focus our limited resources in the best and fairest possible way.
Professor Hills published an interim report in October 2011. He argued that fuel poverty was a serious problem, distinct from income poverty. He suggested it was an issue of concern from the perspective of poverty, health and well-being and cutting carbon. He also argued that the Warm Homes and Energy Conservation Act 2000 was correct to describe fuel poverty as a problem affecting people on low incomes who cannot keep warm at reasonable cost. He explained that the current definition of fuel poverty—which calculates the ratio of required fuel expenditure to income—was flawed and did not support effective policy-making and delivery. He proposed a new measurement approach separating the extent of the issue (the number of people affected) from its depth (how badly affected people are).
Professor Hills held a short consultation on the interim report, which showed that a large proportion of stakeholders shared his analysis. The results of the consultation have informed the final report from Professor Hills which is being published at 12.00 today on his website1. We will deposit hard copies of the report in the Libraries of of Houses.
The aim of Professor Hills’ final report, which I have seen, is to provide evidence to increase understanding of the underlying problem of fuel poverty, including who the fuel poor are and how best to help them. The report explains how the impact of Government policies can be assessed against the new measurement approach. It also provides projections of fuel poverty to 2016. Taken together, these show that Government policies are having a positive impact by reducing both the extent and depth of fuel poverty.
I am grateful for the work that Professor Hills and his team have conducted which offers an unparalleled insight into this serious issue. The evidence is overwhelming that improving the way we measure fuel poverty is integral to delivering the right policy outcomes. Without the right measure it will not be possible to focus available resources in the most effective way, proving that measurement matters and is far from a distraction away from action on the ground.
It is important that this opportunity to improve the framework for tackling fuel poverty is seized. Today, I therefore commit myself and the Government to the adoption of a revised approach to measuring fuel poverty by the end of the year. In preparation for this I will be working closely with my colleagues across Government. I am also very keen to hear the views of stakeholders on the final judgment that Professor John Hills has reached. I will therefore publish in the summer a consultation on the new approach I propose to take.