Embargoed: 00:01 Monday 4 April 2022
As the government’s £5,000 heat pump grant comes into force, the TaxPayers’ Alliance have warned that extending the boiler upgrade scheme to all 23 million homes on gas could cost £115 billion.
The government has allocated £450 million to the new boiler upgrade scheme, which will cover around 90,000 households. However there have been calls for the scheme to be extended to up to 23 million households currently using a gas boiler.
With the energy price cap rising by £693, alongside hikes in council tax, national insurance, and the income tax freeze, a heat pump could cost each household up to £18,000. The boiler upgrade scheme provides just £5,000 towards this.
The analysis also found that green taxes, including those with a partial environmental purpose, cost taxpayers £33.7 billion in 2020-21. This is set to rise to £52.6 billion in 2025-6, a 56 per cent increase.
With the tax burden at a 70 year high and the cost of living crisis hitting household budgets, the TaxPayers’ Alliance is calling on the government to come clean on the cost of green measures.
Air source heat pumps are alternatives to gas boilers and are part of HM Government’s net zero strategy. These could cost each household up to £18,000, with costs also including underfloor heating, air distribution systems or improved insulation.
- HM Government plans to provide £5,000 grants to some households from April 2022, through the three-year £450 million boiler upgrade scheme. The purpose is to subsidise homeowners to install low-carbon heating systems – such as heat pumps – by mitigating the cost of installation, bringing the cost closer to that of installing a new gas boiler.
If the grant were offered to the 23 million residential households that do not have an air source heat pump or equivalent, the cost would be £115 billion.
HM Government has announced £4 billion of new funding for decarbonising heat and buildings from 2022 to 2025. This includes the boiler upgrade scheme.
- The four taxes with explicit environmental objectives raised £2.7 billion in revenue in 2020-21. When combined with other taxes which have a partial environmental objective, the total green tax revenue came to £33.7 billion in 2020-21. This is due to rise to at least £52.6 billion in 2025-26.
John O’Connell, chief executive of the TaxPayers' Alliance, said:
"Clean energy is a laudable aim but the transition must not be done on the backs of families on the lowest incomes.
"The cost of living crisis is already being made worse by tax rises and green levies, so taxpayers cannot afford more unexpected demands on their cash.
"Before any big decisions are made, politicians must come clean on the cost of green."
TPA spokespeople are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)
Media Campaign Manager, TaxPayers' Alliance
24-hour media hotline: 07795 084 113 (no texts)
Notes to editors:
Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at www.taxpayersalliance.com.
TaxPayers' Alliance's advisory council.
The TaxPayers’ Alliance found that the green tax burden is set to increase by more than 40 per cent over Boris Johnson’s premiership.
- The TaxPayers’ Alliance have launched a green levies calculator showing the amount from energy bills that goes towards environmental and social charges.