Boiler firms axe price increase after Energy Secretary pressure

Adjusting the setting on a home boiler
Adjusting the setting on a home boiler - Brian A Jackson/iStockphoto

Homeowners will no longer pay up to £120 in extra charges for their boiler after manufacturers reversed their decision to raise prices in anticipation of paying millions of pounds in new penalties.

Boiler makers had expected to pay fines under planned sale quotas for heat pumps, which were dubbed a “boiler tax”, and raised prices in anticipation of those costs.

Ministers shelved plans for the so-called boiler tax, under which firms would have been fined £3,000 every time they failed to fulfil a heat pump installation beyond a certain quota, until after the election following a backlash from Conservative MPs.

Firms will no longer pass any extra cost to consumers now that Claire Coutinho, the Energy Secretary, has confirmed the plans would be pushed back by a year until April 2025 and applied pressure on the companies to scrap the extra charges.

Worcester Bosch had previously announced the price of new gas boilers would increase by £120, while Vaillant was to increase its prices by £95.

Baxi, one of Britain’s biggest boiler makers, will remove its £120 surcharge “as soon as possible” and return cash it had already collected, while other manufacturers are also set to follow suit.

It is understood boiler makers are set to reimburse their customers, while the Competition and Markets Authority (CMA) confirmed it would consider a request from the energy department to review the home heating appliance market.

Claire Coutinho, Secretary of State for Energy Security and Net Zero
Claire Coutinho, Secretary of State for Energy Security and Net Zero - Geoff Pugh for the Telegraph

Insisting the public must not be “needlessly hit in the pocket in the name of net zero”, Ms Coutinho said: “Unjustified price rises by some manufacturers for gas boilers were punishing ordinary people.

“Four big boiler companies dominate 90 per cent of the market and it was clear to me their sudden, sharp price rises were a concern. That is why I have called on the market watchdog to review the industry.

“I welcome the confirmation that it will consider this request, to ensure prices stay down and competition up. And I’m pleased to see manufacturers axing the extra costs they had put on boilers. We now must move to low-carbon heating, but not by burdening people with high costs.”

Ms Coutinho added that to achieve net zero, businesses must “bring the nation along with us, not force them to join a journey at their expense”.

The intervention by Ms Coutinho came as the CMA wrote to her confirming it would weigh up a review of the appliance market in the second half of this year.

Sarah Cardell, its chief executive, said: “The CMA’s work to date, especially over the last two years, evidences our commitment to taking action to contain cost of living pressures and to help accelerate the UK’s transition to a net zero economy.

“With this in mind, we will review your request carefully and consider potential work in this area alongside potential work in other priority markets for potential initiation during the second half of the year.”