Heat Pump Grants to Be Cut to Help Fund Defence Spending
Hundreds of millions of pounds are expected to come off the boiler upgrade scheme, which offers grants of up to £9,000 from a £2.7bn budget, as the energy secretary Miatta Fahnbulleh looks for more than £2bn towards the defence investment plan. The scheme is not being abolished. The department says the savings are “a small part” of its overall budget.
This rests on unnamed sources rather than an announcement, so it is a plan reported rather than a decision confirmed. The lineage is instructive. A £2bn capital cut was agreed under the previous prime minister to help fund a £15bn four-year rise in defence spending — the same rise John Healey resigned as defence secretary in June for calling too small. He must now find a further £4.7bn of savings as chancellor, which is the arithmetic behind the institute’s £35bn warning elsewhere in this briefing. The Treasury has long regarded heat pump grants as a middle-class subsidy. Those who build the things disagree about the timing rather than the principle. Octopus Energy’s chief executive Greg Jackson says heat pumps “can now cost the same to install as a gas boiler after the grant” and that more than 500,000 people have asked his company for a quote in eighteen months: “Cutting the engine now would be brutally damaging.” Madeleine Gabriel of Nesta notes bills are rising because of gas prices, so “cutting funding for heat pumps makes no sense”. Approval for the Jackdaw gasfield is expected this week.