Rishi Sunak and the coming Tory battle over climate change

The Chancellor, Rishi Sunak, isn’t normally given to waffle, which makes his maiden appearance on GB News all the more remarkable. Asked by Andrew Neil who – government or homeowner – would have to pay the estimated £10,000 per household cost of replacing domestic gas boilers with heat pumps to help reach the target of net zero emissions by 2050 Sunak replied: 

‘So when you say the alternative is the household or the government, the government’s money is the people’s money. And that’s my point when I say ultimately we all pay. The government does have any separate money of its own’

As a general point of political philosophy, it was a fair enough statement. But it is one which might better be applied by a Chancellor who was proposing to cut public spending – not one who is proposing to hit homeowners with huge costs over the next decade. 

The move to decarbonise homes is going to be the next great battlefield over climate change – and has the potential to become even bloodier than that over electric cars. The typical car lasts around ten to 12 years. To improve the energy efficiency of the nation’s automobile stock can, as a result, be achieved relatively easily over a decade or so – by setting regulations for new models. No-one has to be asked to convert their existing diesel car to run on batteries instead.

Homes, by contrast, can last hundreds of years. There are around 28 million homes in Britain and we are currently building around 300,000 of them a year. Thus at the current rate of building it would take around 93 years to replace all homes – and that assumes we don’t need any extra homes. The government cannot, in other words, expect to reach a 2050 net zero target by setting zero carbon targets just for new homes – it has to find a way of retrofitting old homes. This is where it becomes extremely difficult – and expensive.

Andrew Neil was right to identify the cost of replacing a gas boiler with an electric heat pump at around £10,000. But that is not where the costs will end. Heat pumps operate at lower water temperatures than do gas-fired central heating systems. To get one to heat a house it has to have high insulation standards – difficult to achieve, for example, in the eight million British homes which have solid walls. To fit solid wall insulation will add another £10,000 to £15,000 to the bill.

These are not merely huge costs; they will fall disproportionately on relatively low-income homeowners in the centres of industrial towns in the Midlands and North, where there are huge numbers of solid-walled 19^th century and early 20^th century homes. If the government really does press ahead with its plan to replace gas boilers, and does not instigate a system of grants, voters in former ‘Red Wall’ will face the kind of bills which have been hitting flat-owners caught up in the cladding scandal.

In his interview, Sunak mentioned grants – yet failed to mention that he abolished the Green Homes Grant in April, after it had reached only ten per cent of the planned 600,000 homes. 

Who pays for decarbonising homes? That is a question which ministers are not going to be able to waffle their way through for much longer.