Heat pumps may never be cheaper than gas boilers, Ed Miliband has said.
The Energy Secretary made the comments as Labour snuck a boiler tax through Parliament with minimal scrutiny on Wednesday, despite warnings the move will push up prices.
Under the scheme, which will come into force in April, boiler manufacturers will be fined if they fail to sell enough heat pumps, which companies have warned will force them to increase the price of installing a new gas boiler by as much as £120.
When asked to confirm whether the Government would abandon the proposed 2035 ban on new gas boilers at a parliamentary committee, he said: “We can say to people you need to get a heat pump, not a gas boiler, potentially, at some point in the future.
“But I’m very wary of saying we’re going to stop people having gas boilers at a point when we can’t guarantee heat pumps are going to be cheaper for people.
“We must proceed in a way that we can say to people they will be better off in the transition.
“I do not want to be in a position where we say to people ‘you must go down this road’ and then people say – rightly – ‘you have made me worse off’.”
Heat pumps currently cost around £10,000 if bought without any Government subsidy, compared to around £3,000 for a gas boiler.
The relatively high price of electricity also means they are often more expensive to run than a gas boiler, despite being more efficient.
Ministers tabled the powers to enact the boiler tax as a statutory instrument, a type of legislation that can be passed with minimal scrutiny.
The measure was brought to a delegated committee in a side room of Parliament on Monday night, where there was little debate and no vote.
Labour MPs were only forced to vote for the policy at all after Tories in the chamber shouted out their opposition on Tuesday, triggering a ballot.
The boiler tax, officially known as the clean heat market mechanism, was first proposed in 2021 by the Conservatives whilst they were in power.
Under the scheme, boiler manufacturers will be required to set annual targets for heat pump sales and will face a fine for unsold units if they fall short of that number.
Andrew Bowie, the shadow energy minister, said it was “inevitable” that the cost of paying the penalties would be passed on to customers.
He said: “Far from having consumers in the mind’s eye, this is a Government that has already shown flagrant disregard for consumers.
“Now they are asking us to support the Secretary of State for Energy, who clearly has no interest in the cost of living in this country, to have unfettered power to interfere in the price of people’s boilers.
“The British people will once again be forced to pick up the bill for this Government’s ideological approach to net zero.”
He said that Mr Miliband was likely to impose heavy fines because of his “obsession with going further and faster than any other country”.
Mr Bowie added that it was “simply not sustainable to impose ever larger taxes to force consumers to switch to technologies if they do not want to do so”.
When the boiler tax was first put forward by the Tories, the proposed fine was £5,000 for every missed heat pump sale.
Manufacturers would have had to ensure that heat pumps constituted at least 4 per cent of their sales in 2024-25, rising to 6 per cent in 2025-26.
Claire Coutinho, the former energy secretary, reduced the planned fine to £3,000 and delayed the scheme by a year following a backlash.
Her allies have said she was considering ditching the policy entirely had the Tories won the election because of the cost it may impose on consumers.
Mr Miliband has revived the scheme, setting manufacturers the same 6 per cent sales target for 2025-26.
He has slashed the fines for the first year to just £500 per missed unit, but there are no guarantees they will not be increased again in future.
Miatta Fahnbulleh MP, an energy minister, said that these electric heat pumps would help end Britain’s reliance on costly gas imports.
She said the Government was “confident” that enough heat pumps would be sold this year so that no manufacturers will have to pay any penalties.
“Making the transition to cleaner, cheaper heating is one of the most important challenges we face as a country,” she told MPs.
“We are absolutely determined to do it in a way that is ambitious, that is achievable, but critically that is absolutely affordable for consumers.
“Every household deserves the security of a home that they can afford to heat and heat pumps we believe have a key role to play in this.”
