An On the wire story
The government is preparing to pare back support for heat pump installations as it looks for savings to help meet a rising defence bill, according to reporting in The Guardian and Politico.
The move would mark a further retreat from a flagship part of Labour’s Warm Homes Plan, which Ed Miliband launched only nine months ago as part of a broader push to accelerate the switch away from gas boilers. The Department for Energy Security and Net Zero has been asked to find more than £2 billion in savings, and ministers are now said to be weighing whether a large slice of that should come from the Boiler Upgrade Scheme.
The scheme currently offers grants worth up to £7,500, and in practice has been one of the main state incentives for households considering a switch to low-carbon heating. The Guardian reported that the package, which has a budget of £2.7 billion, could be reduced rather than abolished outright, while other reports suggested the cut may run to hundreds of millions of pounds.
Treasury officials are said to have long regarded the subsidy as relatively generous and skewed towards better-off households, though supporters argue it remains vital to building demand in a sector that is still in its infancy.
The pressure on Miliband’s department reflects a wider scramble across Whitehall to fund higher military spending. During the summer, No. 10 and the Treasury were locked in negotiations with the Ministry of Defence over how to plug a gap said to be as large as £28 billion in the defence investment plan, the long-delayed equipment programme.
In the end, the government committed an additional £15 billion, but left £4.7 billion to be found later. John Healey, who has since moved to the Treasury, is now expected to confront that funding problem in his first Budget as Chancellor on 28 October.
For the heat pump industry, the timing is awkward. Critics of the proposed reduction have warned that trimming support now could slow a market that is only just starting to scale, while data from the Microgeneration Certification Scheme suggest that a typical installation can still cost around £13,600 without the grant.
Russell Dean, residential heating expert at Mitsubishi Electric said: ‘Slashing the Boiler Upgrade Scheme would be a serious mistake. Households need help to move away from gas. Cutting that support would make cleaner heating far less affordable for many families and undermine the government’s commitment to tackling the climate crisis.’
‘Cutting support now would be a false economy, sacrificing progress on affordable heating just as the market is starting to gain momentum.’
Analysts and campaigners have also linked the debate to growing unease inside Labour about the political costs of Net Zero measures, particularly as households continue to feel the pressure of higher energy bills. Miatta Fahnbulleh, who has taken over responsibility for the energy brief, has already signalled that some of the government’s more ambitious environmental commitments may need revisiting.
References
Main reference [1]
• This On the wire article was created using Noahwire AI and reviewed by CIBSE Journal’s editorial team
