Jason McCartney is MP for Colne Valley
After a summer of speculation, and with COP26 just days away, the government yesterday published its new Heat and Buildings Strategy.
The strategy couldn’t have arrived at a better moment, given the ongoing public debate over how to protect households and businesses in the future from the high gas prices which the world is once again experiencing.
But there was an active discussion over the future of home heat – one of the trickiest sectors of the economy to decarbonise – even before wholesale prices were sent rocketing by a perfect storm in the international gas market.
Some voiced fears over gas boilers being ripped out prematurely by the Government, or of people being forced to cough up for home upgrades they can’t afford.
With the publication of this strategy, however, those fears have been put to bed. The overall objective has been clarified: cut bills, fuel poverty and carbon by levelling up UK heat.
The strategy will unlock a mountain of pent-up private investment into small firms across the UK, including in constituencies like mine in Colne Valley.
The Government’s own analysis found that the economic benefit from increased domestic heat pump manufacturing could be upwards of £5.5 billion by 2035. A sustained drive to boost energy efficiency can slash bills by £7.5 billion per year to 2030, while supporting 190,000 jobs across a range of trades.
The new 2035 phase-out date for the sale of new gas boilers, the twin policy of the 2030 phase-out date for new petrol and diesel cars, sends a signal to the market to innovate and invest in clean alternatives. We’ll no doubt see similar success to that we’re already seeing in the automotive and power sectors.
Those companies which get on board with the programme the fastest will thrive, while consumers will safely wait for their existing gas boiler to naturally conk out as the low-carbon heat market scales up over the next 14 years. By the time most households are ready to upgrade to a heat pump, costs will have plummeted.
Nobody is denying this is a big change, which is why the power of the market must be brought to bear. The Government’s heat pump grants, worth up to £5,000, will support those who need help to switch, an important step which has been welcomed by MPs following backbench campaigning.
Heat pumps are up to four times more efficient than gas boilers. They will provide cheap heat for homes and, importantly, reduce the UK’s heavy reliance upon gas, which is the reason for the rise in energy prices.
The Government has also committed to moving environmental and social levies from electricity bills to gas. This change won’t be noticed by those on duel fuel bills, but will make a world of difference to those who only use electricity, including those in new homes in particular.
At the moment, 23 per cent of an electricity bill funds legacy renewable energy projects and fuel poverty schemes, while only two per cent of a gas bill is affected. Addressing this imbalance will have the double benefit of promoting the switch to heat pumps, thereby scaling up the market even faster, and of incentivising the use of lower-carbon electricity over higher-carbon gas
But we must remember that heat pumps work best in energy efficient homes. Here lies another opportunity for everyone to cut their bills and carbon through insulating their homes and reducing the energy required to run our homes in the first place.
Most importantly, however, it would cut fuel poverty. Perversely, it’s often the poorest who pay the most for their energy. Instead of dealing with the symptom of leaky homes by helping people pay their energy bills, we can use that money to tackle the root cause, by helping them insulate their homes and wiping out the need for winter fuel payments in the long run.
This would also help us avoid pressures placed on the NHS caused by fuel poverty (saving between £1.4 and £2 billion annually) and potentially 10,000 excess winter deaths every year.
We all want to play our part in cutting emissions and handing on a healthy planet to our children and grandchildren. We can’t do that without moving away from gas boilers to heat our homes. This strategy doesn’t just pave the way for reaching net zero, it’s a plan for raising the standard of living across the country through warmer homes and new well-paying jobs.