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Topic Title: DECC announces redefinition of Fuel Poverty
Topic Summary: Following an independent review and a consultation a new definition of fuel poverty has been set out
Created On: 10 July 2013 11:44 AM
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 10 July 2013 11:51 AM
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jarathoon

Posts: 1041
Joined: 05 September 2004

The old definition of a 'fuel poor household' was one that as a household would need to spend 10% of their income on energy a year.

Clearly this was a poor definition.

It is always possible for expenditure profiles to evolve in time and for people to spend shifting proportions of their income on food, rent, energy etc. If rents do not increase or decline then this gives people more scope to spend a higher proportion of their income on energy in future, with minimal net change in overall expenditure.

The definition doesn't eliminate households that are being profligate or wasteful in their energy usage. For example most households could make themselves fuel poor in the UK by operating a heated outdoor swimming pool in mid-winter.

DECC say

"The decision to adopt a new definition follows positive responses to a consultation launched in September last year and an independent review of the current definition by Professor John Hills of the London School of Economics (LSE), published in March 2012. The current definition of a 'fuel poor household' is that a household would need to spend 10% of their income on energy a year."

https://www.gov.uk/government/news/davey-determined-to-tackle-scourge-of-fuel-poverty

DECC's new definition of a fuel poor household is:

"A household will be defined as 'fuel poor' if its:
.Total income is below the poverty line (taking into account energy costs); and
.Energy costs are higher than typical."


Now if a person came to me with a definition like that I would instantly know they were:
A) a semi-illiterate that gave up on the study of Clear and Articulate English and Maths at the age 5
B) a humanities graduate from Oxbridge, intellectualised into not realising they have now been trained to write nonsense.
C) an economics professor at the LSE.

The term "average" always has to be further clarified. The statistically meaningful terms are the mean, mode or median. "typical" is a new statistical term originating either from the London School of Economics or DECC apparently.

I am tempted to shout 'This definition of fuel poverty is nonsense and this is "typical" of DECC', to show how the word "typical" can be used in an intellectually superior pejorative sense.

This work should have been integrated properly into the much more intellectually considered work of the Department of Work and Pensions

See for example
https://www.gov.uk/government/publications/households-below-average-income-hbai-199495-to-201112

The government uses Households below average income (HBAI) as a measure of poverty. However this is a container term for various definitions of that may be termed the "poverty line" both relative and absolute. Energy usage may be analysed in terms of essential usage for maintenance of health and well being in a sort of absolute sense. The Department of Work and Pensions favours relative measures which would include energy for television and radio entertainment. However DECC's definition does not explore this distinction.

I personally think we should calculate the "poverty line" both before or after housing costs, and before and after energy costs as well, in ways which are consistent and meaningful across all government departments.

The difficulties of making definitions in this area is shown by the Definition of "Average Income" (if each department of government makes up their own definitions this beomes a mess)

"In the HBAI statistics the average income is defined as the median equivalised net household income,
where the median income divides the population of individuals, when ranked by income, into two equal sized
groups. Equivalisation is a process that makes adjustments to incomes, so that the standard of living of
households with different compositions can be compared."

https://www.gov.uk/government/publications/changes-to-
the-households-below-average-income-hbai-statistics-201112-statistical-note

James Arathoon


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James Arathoon
 10 July 2013 01:09 PM
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ectophile

Posts: 546
Joined: 17 September 2001

It strikes me that there's a more fundamental problem with the definition.

If your income is so low that you can't even afford to spend the "typical" amount on energy, then you can't be fuel poor.

But without a proper definition of "typical", the whole thing is pretty well meaningless.

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S P Barker BSc PhD MIET
 10 July 2013 01:44 PM
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jarathoon

Posts: 1041
Joined: 05 September 2004

Originally posted by: ectophile

It strikes me that there's a more fundamental problem with the definition.



If your income is so low that you can't even afford to spend the "typical" amount on energy, then you can't be fuel poor.



But without a proper definition of "typical", the whole thing is pretty well meaningless.


Yes I completely agree. Spending more than "typical" on energy bills will be very hard for the poorest.

Besides not having a proper definition in the above sense, the word "typical" is also referentially vague.

It could be mean "typical of the fuel poor" in which case it is a recursive definition or it could mean "typical" of the population as a whole, in which case it is useless as a definition.

If the meaning is "typical" of the population in a particular locality, then it would be possible that the highest energy users in a ghetto, might just qualify as fuel poor, by choosing to heat their house instead of eat or pay the rent.





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James Arathoon
 18 July 2013 12:25 AM
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jarathoon

Posts: 1041
Joined: 05 September 2004

Email I received from Fuel Poverty Statistics at DECC, with an explanation of why the word "typical" is used. I think I have a basic question. What is the purpose of poverty statistics now? Is there a underlying Florence Nightingale style moral imperative, giving purpose to statistical analysis anymore?

https://en.wikipedia.org/wiki/Florence_Nightingale
see section on "Statistics and sanitary reform"

For example, does this analysis help in giving clarity of purpose to engineers, inventors and other interdisciplinary thinkers, to help them with designing and building new material things and new economic and social orders that help make the world a better place?

Make your own mind up. I sort of think there is something wrong with the reply I got, but am not in a position yet to fully articulate it clearly and succinctly and in a way that I am completely happy with.


-

"Thanks for your email, and for your comments on the new definition of fuel poverty. We're always interested to hear feedback on how the new definition is perceived, and are sorry to hear that you find the way in which the presentation of the definition is unclear.

The way in which the definition is presented in the Government response to the consultation on fuel poverty, is a balancing act. Our aim is to ensure that the measure is presented in a short and simple way to allow non-technical users to understand it, whilst also being clear to more technical users. As a result, the headline description of the measure uses the word typical, whilst the further detail in the documents discusses the fact that this in fact means that the median energy costs of all households are used for the energy cost threshold. As you'll no doubt appreciate, the median is not a term that all users would understand, and so we have to consider this when presenting the definition.

The fuel poverty annual statistic report gives a thorough over view of how the definition is constructed. This publication can be found here:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/199833/Fuel_Poverty_Report_2013_FINALv2.pdf

Briefly, under the Low Income High Cost indicator a household is considered to be fuel poor if:
- They have required fuel costs that are above average (the national median level)
- Were they to spend that amount they would be left with a residual income below the official poverty line.
The chart shows the four quadrants of the measure. Those defined as fuel poor are in the bottom left quadrant. This quadrant includes some households who might not usually be considered to be poor under standard poverty definitions, but are pushed into fuel poverty by their very high energy requirements (giving the slope to the income threshold). The indicator also includes a measure of the depth of fuel poverty , this is measured as the difference between a households required fuel costs and what these costs would need to be for them not to be in fuel poverty.

Chart 1.1: Fuel Poverty under the Low Income High Costs (LIHC) measure"

[This is a simple four quadrant chart from page 9 of the "Annual Report on Fuel Poverty Statistics 2013"
Low Income-Low Energy High Income-Low Energy
Low Income-High Energy High Income-High energy]

"As a more technical user of the data, I would also strongly encourage you to look at the technical annex. Annex C talks through, in detail, how the definition of fuel poverty used in the Hills Review classes whether a household has a low income and high costs or not. Similar levels of detail were also published in the final report of the Hills Review. So whilst the brief description of the measure used in the executive summary of these publications does not go into this kind of detail, further details are readily available for those who are interested.

As you'll see from this further detail, the use of an income threshold that is also used by DWP means that the measurement of fuel poverty should now be more closely aligned with the way in which DWP measure income poverty. Nevertheless, whilst there are undoubtedly overlaps between the two, it is important to remember that the review also concluded that fuel poverty is a distinct issue, and should be considered separately.

I hope this addresses some of your concerns."


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James Arathoon
 18 July 2013 01:02 AM
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jarathoon

Posts: 1041
Joined: 05 September 2004

GCSE Bitesize Maths from the BBC

http://www.bbc.co.uk/schools/g...dianmode_video1.shtml

AQA GCSE Mathematics Specification

http://www.aqa.org.uk/subjects...gcse/mathematics-4360

Should government create new terminology that is meaningless to everyone without further clarification and justify this because some "non-technical users" may find it hard to understand well defined terms which do indeed have a universally accepted mathematical meaning and one which is taught to virtually everyone at GCSE maths level?



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James Arathoon
 18 July 2013 04:18 PM
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Ipayyoursalary

Posts: 265
Joined: 21 November 2009

DECC's new definition of a fuel poor household is:

"A household will be defined as 'fuel poor' if its:
.Total income is below the poverty line (taking into account energy costs); and
.Energy costs are higher than typical."


Surely the 'AND' is a bigger issue than the meaningless 'typical'.

As someone who designs digital logic for a living I can confirm the AND requirement will completely mask out the 'poverty line' part.

Ie. If someone in abject poverty is claimed to be paying 'typical' energy bills, then they will not appear in the statistics.

And in case you hadn't worked it out yet, this entire redefinition exercise is intended to prevent critics of energy policy using the 'fuel poverty argument' against hugely expensive renewable energy scams so beloved by those that control the IET.
 18 July 2013 06:56 PM
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jarathoon

Posts: 1041
Joined: 05 September 2004

Ipayyoursalary,

Yes the effect of the AND was implied in our siscussion above, but you raise the issue in a clearer way

The AND effectively means that you cannot be defined as fuel poor, if you spend less on energy than the median amount (i.e. by putting 22 odd million houshold's energy bills in a line and choosing the middle one).

Now the less wealthy generally have smaller houses than the richer and house size (internal air volume, area of external facing walls, ceilings and floors ) will be a significant factor in determining houshold expenditure on energy, especially heating.

From reading the document "English Housing Survey: Housing stock report 2008"

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/6703/1750754.pdf

I think the household with the median energy bill will either live in a larger end terrace or semi-detached house.

So unless the heating costs across the uk housing stock are normalised (or equivalised somehow), it will be unlikely that someone living in a smaller terrace house or flat can ever be defined as fuel poor, unless they are grossly wasteful in their energy use, by for example keeping all their windows wide open in mid-winter.

I don't think reading Annex C of the Fuel Poverty Report helps to address my or your concerns in this regard.

James Arathoon



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James Arathoon
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