UK to Cut Heat Pump Subsidies to Fund Defence — SkimNews
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- Miatta Fahnbulleh, the energy secretary, has been tasked with finding more than £2bn in savings from her department's budget to help fund the Defence Investment Plan agreed by the previous government.
- The Boiler Upgrade Scheme will see hundreds of millions cut from its £2.7bn budget — though the £7,500-£9,000 grants for heat pumps will not be abolished — and ministers are separately expected to approve the Jackdaw gasfield this week.
- Ed Miliband, as former energy secretary, agreed to a £2bn capital budget cut to help pay for a £15bn rise in defence spending over four years under then-PM Keir Starmer.
- John Healey, now chancellor after resigning as defence secretary in June over the size of the uplift, must find an additional £4.7bn in savings beyond what departments have already agreed.
- Octopus Energy CEO Greg Jackson warned cutting subsidies would be "brutally damaging," noting more than 500,000 customers requested heat pump quotes in the last 18 months and the industry is expanding by more than 25% a year.
- Nesta director Madeleine Gabriel called the cuts "a kick in the teeth" for tradespeople building the industry, while Treasury officials have long viewed the scheme as subsidising middle-class households — though supporters say over 40% of funds went to households earning below £52,000.
- Carbon capture and green hydrogen schemes are also being cut per Bloomberg, against a planned £21.7bn spend on CCS through 2050; energy minister Martin McCluskey told Politico the department is "having to make some difficult decisions" because of the defence plan.
Why it matters: The Boiler Upgrade Scheme has subsidised nearly 80,000 heat pump installations since 2022 and is driving an industry growing 25% a year — yet the UK still sold just a quarter of France's volume last year. Pulling hundreds of millions now risks stalling that momentum while gas bills rise again, and tradespeople, nascent manufacturers, and the government's own net-zero commitments absorb the cost.
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