Ministers plan to cut heat pump subsidies for defence spending

Summarised from 2 outlets · Updated 12 Oct, 22:57 · Archive

The government is planning to slash subsidies for heat pumps to help fund defence investment.

Energy secretary Miatta Fahnbulleh has been tasked with finding more than £2bn in savings from her energy budget to help fund a Defence Investment Plan. The plan was drawn up by the previous government but funding was left significantly short. Ministers are now pressing departments across government to find savings to help fill the gap.

A portion of those savings is expected to come from cutting the boiler upgrade scheme in England and Wales, which provides grants of up to £9,000 to help households install electric heat pumps instead of gas boilers. The scheme has a budget of £2.7bn. According to The Guardian's sources, hundreds of millions of pounds would be cut from the programme, though it would not be abolished entirely. Treasury officials have long viewed it as a subsidy used mainly by middle-class households.

The scheme has helped tens of thousands of households switch to cleaner heating. Greg Jackson, chief executive of Octopus Energy, said the scheme is 'doing exactly what it was meant to do'. Critics warn that cutting funding would damage the emerging British heat pump industry and undermine the government's climate commitments. The Daily Mail reports that road projects and school refurbishments could also face delays or cancellations to help fill the defence funding gap.

How it is being reported

• Heat pump subsidies are to be slashed to help fill a black hole in the defence budgetEnergy secretary Miatta Fahnbulleh has been told to find £2 billion in savings ahead of this month's Budget to help fund the Defence Investment Plan.Daily Mail · 12 Oct, 22:36
• Ministers preparing to slash heat pump subsidies to fund defence spendingExclusive: Some of £2bn savings needed from energy budget expected to come from boiler upgrade scheme, sources say Ministers are preparing to slash the amount of money available to subsidise heat pumps as they look for ways to fund higher defence spending, sources have told the Guardian. Miatta Fahnbulleh, the energy secretary, has been tasked with finding more than £2bn in savings from her budget to help pay for defence investment under a plan drawn up by the previous government. Continue reading...The Guardian · 12 Oct, 06:00

In this story: Miatta Fahnbulleh · Greg Jackson · Octopus Energy · Nesta

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