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If Labour Really Wanted to Ensure People Can Afford to Heat Their Homes it Would Ramp Up the Gas

by Ben Pile
22 November 2024 9:00 AM

According to the Minister for Energy Consumers Miatta Fahnbulleh, “All families deserve the security of a home they can afford to heat.” This statement was included in an update to the Government’s extremely long-winded update to its Warm Homes Plan policy, published on Thursday. The policy is not unexpected, and promises to “help people find ways to save money on energy bills and deliver warmer, cleaner to heat homes [sic]”, adding that “up to 300,000 homes [are] to benefit from upgrades next year”. But there is a problem with Fahnbulleh’s formulation. If the Government is so concerned to give people what they “deserve”, why is it taking so much away from them?

The alleged benefits of this policy are pretty weak beer. For example, the Boiler Upgrade Scheme, the Government claims, will “support more households switch [sic] to a heat pump”. Great. But what are the benefits? Well, according to the same press release, families can save “around £100 a year compared to a gas boiler by using a smart tariff effectively”. For this, the Government will stump up a £7,500 heat pump grant – money taken from other taxpayers – leaving the homeowner with the remaining roughly equal sum. And in case that is not clear, a £100 saving per year on even just a £7,500 outlay is an extremely poor return on investment, even were the other part of the cost actually free magic money. It would take 75 years to ‘pay for itself’, assuming 0% interest, by which time it would have had to be replaced several times. It would never pay for itself at any interest rate above 1.3%.


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Tags: Boiler taxConservative PartyEnergy BillsEnergy crisisEnergy PricesGas BoilersLabourNet Zero

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