Why is the United Kingdom fuel poor?

Tackling fuel poverty and decarbonising heating are two of the biggest challenges before the UK economy. Using Structural Equation Modelling (SEM) this research evaluates the main causes of fuel poverty within the UK, drawing parameters from various definitions and it assesses the immediate impacts of fuel poverty. A series of fuel poverty determinants have been drawn from the literature to develop a SEM model, using fuel poverty as a latent construct. Fuel Poverty has then been divided further into three latent factors, Household, Macroeconomic factors and Renewable energy. A time series data of 13 years (2010–2022) has been collated from a variety of published databases to arrive at the most significant indicators of the latent constructs. The paper also evaluates if the decarbonisation target can be achieved along with reducing the fuel poverty by including the indicators of renewable energy. A robust interrogation has been done of the most recent policy measures and its relevance based on the results obtained by the longitudinal data analysis. The research presents strong evidence that there has been limited investments in housing efficiency and green energy projects, there is an immediate need to control inflation and household incomes. Additionally, policies related to the dependence on oil and gas as primary energy source, winter fuel payments and gas and electricity disconnections need attention. • A wholistic analysis of the causes and consequences of fuel poverty in the UK covering several parameters to help the UK Government in making more informed policy decisions. • Though efficient housing stock is essential to combat fuel poverty, not much has been done in this area because of which there has been no variability of data in past 13 years. • Investing in renewable energy would reduce the dependence on energy imports but the investments have been minimal, and the data has remained constant for several years, leading to no significant results. • Overall macroeconomic development especially controlling inflation is essential to address the challenges associated with fuel poverty. • The incidence of electricity and gas disconnections because of fuel poverty is high. The government policies therefore need to work on controlling the disconnections.