The scheme has helped tens of thousands of households install an electric heat pump in place of an old gas boiler, but Treasury officials have long considered it a subsidy used mainly by middle-class households.<\/p>\n
Ministers are expected to give the go-ahead to the Jackdaw gasfield as soon as this week. Photograph: Murdo MacLeod\/The Guardian<\/p>\n
Critics say cutting the scheme would damage the nascent British heat pump industry<\/a> and further undermine the government\u2019s commitment to tackling the climate crisis. Ministers are also expected to give the go-ahead for the Jackdaw gasfield as soon as this week.<\/p>\n Madeleine Gabriel, a director at the charity Nesta, said: \u201cBills are soaring again because of high gas prices. Our reliance on gas is the reason we are in an energy crisis, so cutting funding for heat pumps makes no sense.<\/p>\n \u201cIt\u2019s a kick in the teeth for the businesses and tradespeople who\u2019ve put in time and money to build the industry.\u201d<\/p>\n Installers carrying a heat pump into a residential property for installation in Farnham, Surrey. Photograph: Justin Tallis\/AFP\/Getty Images<\/p>\n Greg Jackson, the chief executive of Octopus Energy<\/a>, said: \u201cThe boiler upgrade scheme is doing exactly what it was meant to do. It\u2019s kicking off an industry to drive down the costs of heat pumps \u2013 they can now cost the same to install as a gas boiler after the grant.\u201d<\/p>\n He added: \u201cJust as EVs are becoming the new normal, heat pumps are too. In the last 18 months, more than 500,000 have asked us for a quote.<\/p>\n \u201cThe market is taking off. Cutting the engine now would be brutally damaging. Heat pumps<\/a> are undoubtedly our energy future \u2013 slashing the cost of living and insulating us against fossil fuel costs and global dictators.\u201d<\/p>\n Miatta Fahnbulleh, the energy secretary, has to find \u00a32bn of savings from her department\u2019s budget. Photograph: Temilade Adelaja\/Reuters<\/p>\n A spokesperson for the Department for Energy Security and Net Zero said: \u201cSavings for the defence investment plan (Dip) are a small part of [the department\u2019s] overall budget, which saw a significant uplift at spending review.<\/p>\n \u201cWe will set out how we will fund essential investment in our national security this autumn.\u201d<\/p>\n The overall cuts were agreed to by the former energy secretary, Ed Miliband, as the then prime minister, Keir Starmer, looked for ways to fund a \u00a315bn rise in defence spending over four years. Miliband agreed that the energy department would cut its capital budget by \u00a32bn to help pay for the Dip.<\/p>\n skip past newsletter promotion<\/a>Free newsletter |Every day<\/p>\n Sign up to Headlines UK<\/p>\n Get the day\u2019s headlines and highlights emailed direct to you every morning<\/p>\n after newsletter promotion<\/p>\n Energy officials say the cuts pale in comparison with the overall growth in the energy department\u2019s capital budget, which is one of the fastest growing in Whitehall.<\/p>\n The chancellor, John Healey, resigned as defence secretary in June under Starmer, arguing that the defence uplift was not enough. He now has to find an additional \u00a34.7bn in savings over a four-year period beyond what departments have already agreed.<\/p>\n Bloomberg reported this month<\/a> that as part of the cuts to the energy department, ministers were planning to reduce spending on carbon capture and storage (CCS) and green hydrogen schemes.<\/p>\n The overall cuts were agreed to by the former energy secretary, Ed Miliband, as the then prime minister Keir Starmer looked for ways to fund a \u00a315bn rise in defence spending over four years. Photograph: Toby Melville\/PA<\/p>\n The government had been planning to spend \u00a321.7bn on CCS from now until 2050 as ministers look to make the UK a leader in the still-developing technology.<\/p>\n CCS supporters say it is the best way to cut carbon emissions while still protecting Britain\u2019s North Sea oil industry.<\/p>\n But its critics say the technology is being promoted by fossil fuel companies<\/a> who are not being honest about how much it will end up costing the country.<\/p>\n Asked recently about the future of the CCS programme, Martin McCluskey, an energy minister, said: \u201cI\u2019m not betraying any confidences when I say that we are having to make some difficult decisions because of what happened as a result of the defence investment plan.\u201d<\/p>\n The Guardian has learned that heat pump subsidies are one of the other significant schemes due to be raided to fund the increase in defence spending.<\/p>\n The scheme, which offers \u00a37,500 as a basic grant towards an electric heat pump, has subsidised nearly 80,000<\/a> heat pumps since it began in 2022. Some properties that are off the grid can claim as much as \u00a39,000 to upgrade.<\/p>\n However, given those subsidies cover only just over half the cost of the median heat pump, much of that money has gone to better-off households.<\/p>\n The scheme\u2019s supporters say that more than 40% of the money has gone to households with an annual income of below \u00a352,000<\/a>.<\/p>\n But more important, they add, is the fact the subsidies have helped to build a fast-growing domestic heat pump industry, which is expanding by more than 25% a year.<\/p>\n Other countries have a far more developed industry. France<\/a> sold four times the number of heat pumps the UK did<\/a> last year.<\/p>\n However, the technology also has vocal critics. Dale Vince, the energy entrepreneur and Labour donor, wrote recently<\/a>: \u201cCleaner heat does not yet mean cheaper heat.<\/p>\n \u201cElectrifying heat without fixing electricity pricing risks shifting higher costs on to households rather than delivering savings.\u201d<\/p>\n Get in touch<\/p>\n Contact Guardian Politics about this story<\/p>\n The best public interest journalism relies on first-hand accounts from people in the know. If you have something to share on this subject you can contact the Guardian’s UK Politics team confidentially using the following methods:<\/p>\n Secure Messaging in the Guardian app<\/p>\n The Guardian app has a tool to send tips about stories. Messages are end to end encrypted and concealed within the routine activity that every Guardian mobile app performs. This prevents an observer from knowing that you are communicating with us at all, let alone what is being said.<\/p>\n If you don’t already have the Guardian app, download it (iOS<\/a>\/Android<\/a>) and go to the menu. Scroll down and click on Secure Messaging. When asked who you wish to contact please select the Politics (UK) team.<\/p>\n Email<\/p>\n For encrypted email correspondence you can create a free Proton Mail account and email us at guardian.politics.desk@protonmail.com.<\/p>\n SecureDropIf you can safely use the tor network without being observed or monitored you can send messages and documents to the Guardian via our SecureDrop platform.<\/a><\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/10\/1791797896_731_500.jpg\")
<\/p>\n