UK households who have a boiler being handed £180 each after Labour u-turn

The so-called "boiler tax" has been cut by the new Labour Party government as part of reforms to the the Clean Heat Market Mechanism (CHMM). Ed Miliband is set to slash the boiler tax by four fifths over fears his net zero plans will drive up prices and spark a backlash from voters.

The Energy Secretary is expected to drastically scale back the fines that manufacturers will face if they fail to sell enough heat pumps. It comes after boilermakers warned they would have to put up the price of their products by at least £120 to cover the cost of the penalties.

Under the previous Government's plans, boiler manufacturers would have been required to match or swap four per cent of their boiler sales with heat pumps starting from April. This scheme aimed to phase out gas boilers from homes, with a target of installing 600,000 environmentally-friendly heat pumps annually by 2028.

READ MORE UK set for new snow bomb which will 'explode' this weekend with 9 inches dumped

Manufacturers who failed to meet these targets faced substantial penalties of £3,000 for every installation they fell short of. One insider said officials at his net zero department had become increasingly concerned about the negative headlines the policy was generating.

“They’re absolutely beside themselves at it being called a boiler tax,” the source said. “They’re keen to keep the cost off the consumer for net zero.” Manufacturers have warned it is already too ambitious and that they are struggling to sell enough heat pumps to a sceptical public.

Fewer than 37,000 certified heat pump installations were recorded in 2023, which is significantly short of the 90,000 needed to achieve the 6 per cent target. A spokesman for the Department for Energy Security and Net Zero said: “The energy shocks of recent years have shown the urgent need to upgrade British homes.

“Our Warm Homes Plan will make them cheaper and cleaner to run, rolling out upgrades from new insulation to solar and heat pumps. We will respond to the consultation on the postponement of the Clean Heat Market Mechanism to April 2025 in due course.”