‘Absurd Soviet-style’ heat pump policy threatens UK jobs

Following the announcement of a new heat pump production quota by Energy Secretary Grant Shapps, the energy industry has expressed outrage at the ‘out of touch’ system. 

According to proposals, 4% of all British heating manufacturers’ gas boiler sales should come from heat pumps. Every individual boiler made that exceeds this limit would in turn be liable to a £5,000 fine, with a maximum liability set at £340m. 

Based on current demand, if implemented this approach would lead to the industry being forced to recoup significant losses, with a high likelihood this would be done by increasing prices to the customer. At a time when many are already struggling with energy bills and schemes designed to facilitate more households to upgrade their heating systems are failing due to low uptake, many believe the idea would prove counterproductive. 

‘Punishing manufacturers for selling the boilers that consumers want to buy is simply irrational, and by doing so, manufacturers may be left with no choice but to raise prices. If the public truly want to buy heat pumps, our members will sell them – that’s the basic law of demand and supply. Instead, this absurd, Soviet-style production quota will force our members to import heat pumps into the UK, to avoid a fine and that’s at the expense of a British-built boiler,’ said Mike Foster, CEO of trade body Energy and Utilities Alliance (EUA), who believes this would lead to job losses. 

“The Whitehall obsession with this market mechanism reaffirms our view. They are simply out of touch with the public, they do not understand even basic economics and frankly, they don’t care about the jobs of British workers,’ he continued. ‘We have suggested a way forward on this and the UK’s Hydrogen Champion recommended the same way forward. The largest British boiler manufacturers have written to Grant Shapps asking to meet him to highlight their concerns but also offer up a solution. They are yet to hear back.’

Image: EUA