Martyn Bridges, Director of External Affairs at Worcester Bosch, examines an early change Andy Burnham has brought in. And has hopes for how our new Energy Secretary can make a difference to our industry:
We’ve had seven prime ministers in the past ten years, and it’s always interesting to see what each does when they start the job.
One of our new PM’s first actions was to remove the 5% VAT rate from domestic electricity bills across the country, starting 1st of October. And while this is only likely to save people about £45 a year, to coin a phrase, ‘every little helps’.
This change is guaranteed for six months or so. And while it’s welcome, our industry is crying out for much longer-term policy commitments on energy. Making electricity price-comparable with gas, for one, which would make the proposition of heat pumps even more appealing to end-consumers.
On becoming PM, Mr Burnham also set about the time-honoured tradition of arranging his Cabinet. Most relevant for our industry was the appointment of Miatta Fahnbulleh as Secretary of State for Energy Security and Net Zero (DESNZ), replacing Ed Miliband.
Our industry already has a pleasant history with Miatta Fahnbulleh. She was Parliamentary Under-Secretary of State at DESNZ under Ed Miliband up until about a year ago, when she changed jobs. But in that short time she proved both open and interested in our industry and listened to our points of agreement (and disagreement) with DESNZ policy.
But the hot question is, is her appointment a case of us having a genuinely new boss, or a reincarnation of the old one?
Challenging perceptions on net zero
Well, our new Energy Minister has now done a round or two of TV and radio interviews. In them she’s already challenged perceptions by publicly rejecting that Net Zero green levies are causing domestic bills to rise. Unusual (especially for a minister), as much of the funding that DESNZ receives to cover heat pump grants and installations is a direct result of these levies.
At the same time, Ms Fahnbulleh reaffirmed the government’s intention to block any new oil and gas drilling licence applications. No change there then. And while policies like this may seem far from the day-to-day issues for installers, the trickle-down consequences of big policy decisions like this will and do affect our industry.
It’s early days for our new Energy Minister. It would be unfair to make judgements before her feet are even fully under her desk. But one thing I (and others in our industry) would like her to now give serious consideration to is the Clean Heat Market Mechanism. It’s simply not viable that the target for heat pump installations rises each year, but government policy and funding to achieve this have stalled.
What’s more, this is at a time when we’ve recently seen the first six months’ results of heat pump sales. These revealed that retrofitted heat pump installation numbers have effectively flatlined. Much of this may be due to electricity prices, but some of it is down to the cancellation of the ECO scheme, which was funding at least a thousand installations a month. So, unfortunately, that’s gone, and the so-called replacement for it within the Warm Homes Scheme has yet to be revealed.
Government funds for heat pumps and installation quotas need to be tightly connected, with any changes in government funding tied to changes to the target quotas the government is setting for boiler manufacturers. At a stroke, our new Energy Secretary would show her understanding of critical issues for our industry and herself as a force bent on supporting both fairness and Net Zero within our industry.
Image credit: Miatta Fahnbulleh ©House of Commons/Roger Harris
