Time for another Boiler Scrappage Scheme?
Published:  23 April, 2012

No, no, no, said Chris Huhne, Energy Secretary, before his big exit from government. But, as Brett Amphlett, policy manager of the Builders’ Merchants Federation reports, another scheme could give the industry a timely boost.

One of the last letters Chris Huhne MP signed before leaving the Coalition Government was to the Builders’ Merchants’ Federation about merchants’ calls for another Boiler Scrappage Scheme.

The former Energy Secretary was replying to a letter from the BMF on the second anniversary of the original scheme that was introduced by the Labour administration on 5 January 2010.

The BMF was one of the trade voices representing plumbing, heating and hot water businesses that joined the Department of Energy & Climate Change and Energy Saving Trust staff to devise the original scheme.

The BMF wrote to DECC to ask Mr Huhne and his Lib Dem colleague, Danny Alexander MP, Chief Secretary to the Treasury to re-introduce a further scheme during 2012.

Mr Huhne told the BMF that in the current economic circumstances, ministers had to ensure the best use of public money by better targeting their resources. Any capital grant scheme – such as the Boiler Scrappage Scheme – had very limited resources and could only remain open while funding was available.

Mr Huhne added that support for boiler replacement is still available for those people in fuel poverty.

In its letter, the BMF acknowledged that Exchequer funds were scarce – and Mr Huhne’s government’s much-trumpeted flagship policy, the Green Deal, was on the horizon.

But, as output and employment prospects falter, the BMF urged the Energy Secretary to reinvigorate the market prior to the Green Deal by reintroducing another end-of-life scheme for old, inefficient boilers. For a relatively small amount of funding, ministers could incentivise voters to have a new boiler fitted.

Earlier this month, official figures released by DECC showed that greenhouse gas emissions went up 15% during 2010 due to the exceptionally cold weather at the beginning and end of that year.

Rather than suffer the cold, voters endured rising energy bills to heat their home and keep warm. This was the single reason behind the first rise in the UK’s carbon footprint since 2003.

With the news that the Treasury and HMRC wrote off nearly £11bn in unpaid taxes in year 2009-2010, another Boiler Scrappage Scheme, costing a comparatively small £50m looks like a justifiable use of taxpayers’ money.

As one of those who helped DECC to work out the arrangements and to decide on the eligibility and practicalities, the BMF can testify that its simplicity was the prime reason for its success. It is a tried-and-tested way to improve the energy performance of homes – and one that the public responded to.

The letter to Chris Huhne was another step in the campaign BMF staff have steadily been pursuing since the original Boiler Scrappage Scheme ended.

Merchants who attended the BMF Members’ Day in September 2011 raised the matter – most notably in the round tables with senior civil servant, David Purdy, the head of insulation and delivery at DECC.

Mr Purdy was asked directly about getting another scheme going, but told merchants “no”. Whitehall did not think it offered value-for-money.

A high percentage of claimants used vouchers to go towards a new boiler they were going to have replaced anyway, he said.

Other occasions during 2011 when the BMF pushed for another scheme included:

January 2012:

  • In its written response to the Green Deal consultation, the BMF argued that the Government should instigate another scheme to help achieve its Affordable Warmth Target. The BMF said heating controls and thermostatic valves should be included, as about 70% of English homes do not have a full set of heating controls.

September 2011:

  • Labour leader Ed Miliband MP found time to talk to BMF between engagements. Recalling the success of his scheme, Mr Miliband recognised the need for another and told the BMF to keep his Shadow Ministers up-to-date with developments.

January to June 2011:

  • When lobbying Parliament during the Energy Bill, BMF staff briefed Tory, Lib Dem, Labour, SNP and Green Party MPs more than once – verbally or in writing. The BMF was the only trade association to attend every day that Parliament debated the Green Deal and new ECO. No other industry voice from construction or home improvement was present. The issue was raised when BMF staff took MPs to merchants in their constituency. For example:
  1. Ridgeons in Norfolk hosted Tory MP George Freeman and Lib Dem MP Simon Wright.
  2. JT Dove in Tyne & Wear was visited by Labour MPs Ian Lavery and Dave Anderson.
  3. Palladium in Devon welcomed Tory MP Dr Sarah Wollaston.
  4. Buildbase in Wiltshire hosted Lib Dem MP Duncan Hames.
  5. Labour MP Dawn Primarolo visited Kellaway in Bristol.

The Boiler Scrappage Scheme was designed at Christmas 2009 and went live on 5 January 2010. Householders applied to receive a £400 voucher towards the cost of a modern, energy-efficient model.

Energy suppliers and others matched the Government promotion by offering a further £400. People who shopped around could obtain £800 that amounted to a saving of a third of the overall cost.

Vouchers were valid for 12 weeks for residents to have the work completed before claiming the £400.
Those that lapsed before being redeemed were not re-issued or honoured. The Energy Saving Trust administered the Scheme. All 125 000 vouchers were claimed by 26 March 2010.

At its height, EST said the scheme create huge daily demand from the public seeking advice through its
website and helplines. The £50m allocated helped to replace 118 618 boilers, resulting in:

  • £34m of savings on energy bills annually.
  • £60m in additional VAT receipts to HM Treasury.
  • A carbon saving equivalent to every car in the UK being left idle for four days.
  • Sixty-one per cent of participants saying that they would not have replaced a boiler if it had not been for the scheme.
  • Seventy-seven per cent of those who claimed a voucher also fitting an additional energy-efficiency measure.
  • Fifty-one per cent of all boilers replaced being more than 25 years old – ie far worse than a G-rated boiler.
  • Ninety-two per cent of installation businesses benefitting in all parts of the UK.

This article first appeared in the February 2012 edition of Builders' Merchants News.

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