The market mechanism is a planned scheme which will penalise British boiler manufacturers if they do not sell heat pumps, even though the Government’s own climate change advisers acknowledge this will increase heating bills by an average of 10%.
Commenting on the market mechanism plans, CEO of the Energy and Utilities Alliance, Mike Foster, said: “I can’t recall a more ridiculous policy than the so-called market mechanism. We have always said this smacks of Soviet-style planning, with bureaucrats telling industry what they must sell, regardless of what the consumer might want or can afford, and with huge financial penalties facing British businesses if they disobey Whitehall. But now it is even worse.
“It seems British gas boiler manufacturers will be heavily penalised if they sell a boiler rather than a heat pump, even though a boiler offers lower heating bills. So in the middle of a cost of living crisis, successful and innovative British businesses are being forced to put consumers’ bills up by around £100 a year and literally fined if they don’t. You couldn’t make it up.
“The Minister is not living in the real world. Energy bills are hurting consumers. People are forced to choose between eating and heating. They are rationing their own energy use. And along comes Lord Callanan fining British business if they help keep heating bills down. How is this consistent with the Prime Minister’s pledge to help ease the cost of living crisis?
“The policy is due to take effect in 2024. It will apply a penalty, a figure of £5,000 a time is mentioned, to sales of British-built boilers in favour of imported heat pumps; penalising businesses if they try and keep bills down, knowing consumers will be worse off with a heat pump and now it is time to stop this madcap plan.
“The UK heating industry has submitted alternative options to the Government and now they must decide whose side they are on, the consumer and British manufacturers or the energy suppliers and foreign importers.”