Gas boiler tax cut ‘will bring down prices’

MANUFACTURERS could drop a controversial levy on new gas boilers if the Government scraps heat pump sales targets, industry figures claim.

In December several manufacturers announced price increases of up to £120 on gas boilers to offset fines imposed by the Government for failing to meet heat pump sales targets.

Worcester Bosch raised the price of boilers by £120, saying it had “no option” as the UK market “does not have the scale” to meet government targets. Baxi also raised prices by £120, while Vaillant increased its prices by £95. But Claire Coutinho, the Energy Secretary, is reportedly weighing up scrapping the targets altogether, according to The Times.

Mike Foster, of the Energy Utilities Alliance trade body, said manufacturers would likely lower their prices if the targets were scrapped.

This year the Government’s Clean Heat Market Mechanism came into effect. The scheme aims to incentivise manufacturers to sell more heat pumps by requiring that at least one heat pump must be sold for every 24 gas boilers. For each heat pump a manufacturer fails to sell under that target, it will be fined £3,000.

Manufacturers claimed the targets were too ambitious. But Fiona Waters, of charity coalition Warm This Winter, accused manufacturers of trying to “undermine the heat pump rollout” by raising prices.

And Gillian Cooper, director of energy at Citizens Advice, said: “Rewarding this behaviour will only hurt consumers, who will be left exposed to volatile gas prices for longer.

“The Government must not water down the scheme simply because of these opportunistic price hikes.”

She said: “This Government needs to stop caving into the narrow demands of this industry and get on with the job of phasing out gas – and gas boilers – as many other countries are successfully doing.”