Monday 12 October 2026
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UK set to cut heat pump subsidies to fund defence spending

Ministers plan to cut hundreds of millions from the Boiler Upgrade Scheme as energy department budgets are redirected

By LineZotpaper
Published
Read Time2 min
The UK government is preparing to cut hundreds of millions of pounds from its flagship heat pump subsidy scheme for England and Wales, taking aim at the Boiler Upgrade Scheme to help fund higher defence spending. Energy Secretary Miatta Fahnbulleh has been tasked with finding more than £2bn in savings from her department's budget.

The Boiler Upgrade Scheme provides grants of up to £9,000 to help households switch from gas boilers to electric heat pumps. The programme, budgeted at £2.7bn, will not be abolished entirely but is expected to lose a significant portion of its funding.

Treasury officials have long viewed the scheme as a subsidy that primarily benefits middle-class households. Critics argue the move will damage the early-stage British heat pump industry and undermine the government's climate commitments.

Madeleine Gabriel, a director at the charity Nesta, said: 'Bills 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.' She described the decision as 'a kick in the teeth for the businesses and tradespeople who've put in time and money to build the industry.'

Greg Jackson, the chief executive of Octopus Energy, also criticised the planned cuts. The move comes as ministers are also expected to give the go-ahead for the Jackdaw gasfield as soon as this week.

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Analysis

Why This Matters

  • The cut could stall progress on decarbonising home heating, a major source of UK emissions.
  • Higher upfront costs for heat pumps may lock households into more expensive gas heating for longer.
  • The decision signals a government shift away from supporting green industries towards prioritising short-term defence spending.

Background

The Boiler Upgrade Scheme was the UK's primary financial incentive for households to switch from gas boilers to electric heat pumps. Under pressure to fund increased defence commitments, the government asked departments to find savings. Energy Secretary Miatta Fahnbulleh was tasked with identifying more than £2bn in cuts from her budget.

Key Perspectives

Government and Treasury: View the subsidy as a middle-class benefit that is an appropriate target for savings in a strained fiscal environment, prioritising defence spending. Climate Campaigners and Charities: Argue the cut is strategically backwards, deepening reliance on volatile gas prices and undermining the UK's net-zero obligations. Heat Pump Industry: Businesses and tradespeople who invested in the industry based on the scheme are facing an uncertain future, with the potential for job losses and reduced investment.

What to Watch

  • The exact amount of the cut when formally announced.
  • Whether the Jackdaw gasfield approval proceeds as expected.
  • Industry reaction and any moves by the devolved administrations to maintain their own schemes.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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