Chancellor of the Exchequer John Healey has cut planned support for heat pumps to help plug shortfalls in the UK’s defence budget.
In his first Budget since taking up office, on 28 October, the Chancellor set out how the Department for Energy Security and Net Zero will make £2bn worth of cuts, agreed during the summer to fund the government’s Defence Investment Plan.
Funding for the Warm Homes Plan, published earlier this year, has been reduced by around £1bn, of which the biggest cut relates to the Boiler Upgrade Scheme (BUS), which provides grants of up to £9,000 for households switching from fossil fuel heating systems to heat pumps.
Spending on the BUS will be kept at its planned level of £400m this year, but future increases – which were due to nearly double the scheme’s budget to £709m by 2029/30 – will now be linked to inflation.
Healey also announced the abolition of the standing charge on gas bills, which analysts estimate will reduce the ratio between electricity and gas prices, increasing incentives for households to install heat pumps.
Charlotte Lee, chief executive of the Heat Pump Association, criticised the cut to future BUS funding.
‘Reducing planned funding for the scheme, at a time when applications are growing strongly, is incomprehensible and risks creating a hiatus in the market while the sector waits for the full implementation of the Warm Homes Plan,’ she said.
‘The government is right to protect consumers, but the £2.6bn being spent on household support this winter is a sticking plaster. For long-term resilience and lower bills, the government must prioritise implementing a new low-income support scheme as part of its devolution strategy, as soon as possible.’
