Mike Foster, CEO of Energy and Utilities Alliance, gives his view on plans to “force” UK boiler manufacturers to make heat pumps:
Hidden in the detail of the recently published Heat and Buildings Strategy, officials at the Department of Business, Energy and Industrial Strategy (BEIS) are plotting to force British heating appliance manufacturers to make heat pumps, regardless of whether the public wants to buy them or not.
Under what is known as the “market mechanism” current boiler manufacturers will be told by Whitehall officials how many heat pumps they need to make or risk being heavily fined if they don’t obey the instruction.
Similar policies adopted by the EU in the past led to excess supply over demand and the obscene creation of wine lakes and butter mountains.
This is the most un-Conservative industrial policy I have ever seen. To force successful British businesses to make what Whitehall officials want, rather than what consumers want, is an extraordinary degree of state-meddling.
If consumers want heat pumps, then these manufacturing businesses will make and sell them. But to be fined for not selling something the public currently don’t want is bizarre, more so when Cabinet Ministers accept that heat pumps aren’t yet ready for the mass market. It is almost as if Whitehall officials are deliberately trying to embarrass the Prime Minister by using the tactics he has previously derided the EU for using.
But the most disturbing aspect of this policy is the sheer lack of understanding of how markets work. If the Government want heat pumps installed, it needs to make them more attractive to consumers. According to the PM, they cost ‘ten grand a pop,’ well beyond the reach of most. People can’t afford them. Without consumer demand, businesses won’t supply products for fear of creating a mountain of unsold heat pumps filling warehouses across the land, all because Whitehall thinks it knows best.
For more information, visit, https://eua.org.uk/