The return of the boiler tax is the last straw

Will Ed Miliband never learn? While electric heat pumps are a perfectly respectable choice for heating your home, particularly modern ‘sealed box’ new builds, or those without a gas supply, the person best placed to make that choice is you, not a Minister. The ‘Boiler Tax’ or Clean Heat Market Mechanism, attempts to force suppliers of gas boilers to sell an increasing market share of pumps until 600,000 are sold every year by 2028. The Conservatives conceived the policy, then delayed it until 2025, and now admit they should have killed it.

Miliband, an veteran interventionist and tinkerer, who often conveys a sense he would happily double energy bills, bankrupt industry, and risk blackouts rather than miss a climate target, clearly loves it. Whatever you think of Net Zero however, the policy is bad. Forcing boiler makers to make and sell heat pumps is like requiring teapot makers to launch cafetieres. It’s like chaining a carthorse to a racehorse and being puzzled why the performance of both degrades. They’re different products, made in different factories, for different markets, using different processes, with different challenges. 

Meanwhile many more people still want the boilers. They work, are quieter, smaller, and easier to hide, don’t require extensive home improvements, and even with outrageously regressive subsidies for early switchers, they’re still cheaper to fit and maintain. Dictating sales volumes, when there is weak demand, like the zero emissions vehicle mandate, means the cost of the inevitable fines are being added to boiler ticket prices, some say up to £180 per unit, hence ‘boiler tax’.

These higher prices in turn mean people delay upgrades, leaving older less efficient boilers in situ longer, using more gas, meaning higher emissions. In short, as with so many Government interventions the policy is not only expensive and damaging to industry, but actively undermines its own objective. 

The sensible policy for die-hard climate activists is to set a competitive carbon price, and let the market decide how best to decarbonise heat. No technology targets, no grandiose missions, no sweetheart meetings for cronies and donors in the Ministry, no pretence that the Government has the first clue how to plan the future. 

Miliband of course will not do this, nor will he reduce household bills by £300 a year. Instead he will likely preside over the worst energy misselling scandal since various policies encouraged homeowners to inject their walls with foam and Councils to clad tower blocks.

Many beneficiaries of the Government subsidies will have heating systems that fail, domestic producers hit by the boiler tax will move production offshore, and many British homes will remain colder and more expensive to heat than they ought. They never learn.

Andy Mayer is Chief Operating Officer and Energy Analyst at the Institute of Economic Affairs