The Cut: Will the Budget bring down bills?

• 20mn households are set to get £100 to help with bills this winter
• The Warm Homes Loan Scheme will offer thousands for the installation of clean tech
• However, VAT is making a comeback and will be slapped on solar and heat pumps

There’s only one place to start this week, and that’s the Budget. What was in the Budget for billpayers?

That depends who you speak to. On the surface, it sounds like good. Chancellor John Healey’s first big announcement on Wednesday was to cut standing charges on gas. That should see about 60% of households in the UK paying less to heat their homes.

The truth is it won’t help everyone because even though standing charges are being removed, the costs of maintaining the grid will be pushed onto the kWh rate. That means heavy gas users, such as big families or people who live in large houses, will end up paying more.

There was also the news that up to 20mn of us will get £100 to help with paying the bills this winter. The House Energy Payment will be paid to anyone in England who is in council tax bands A-D. The payments will be made in January 2027. If you live in Scotland, Wales, or Northern Ireland, you will still get some support, but it will be up to the devolved government to pay it.

There was also an announcement on debt relief for vulnerable households, particularly those who have built up debt from the Ukraine war energy crisis from 2022.

The government said it would try to “tackle the root causes of energy debt and take practical steps to prevent debt building up again”.

All of these are positive moves and should make a real difference to households. However, there were a lot of things missing.

What should John Healey have announced in the Budget?

To really help households and billpayers, John Healey should have promised more funds to help households install heat pumps. The Boiler Upgrade Scheme was not cut, as had been threatened earlier in the month, but spending was frozen at current levels.

According to the Heat Pump Association, this means households will lose a combined £792mn in planned support for heat pump installation.

But the really bad news is that VAT is making a comeback and will be set at 5% on all heat pumps, solar panels, and solar storage systems from 1st April 2027. Inevitably, this will make the cost of solar panels and heat pumps increase at a time when households need more support to get away from gas.

The industry is understandably furious about this. The Heat Pump Association’s chief executive Charlotte Lee said the Budget “represents yet another injection of uncertainty into the deployment of heat pumps” and described the VAT hike as “reckless”.

“Reducing planned funding for the Boiler Upgrade Scheme, at a time when applications are growing strongly is incomprehensible and risks creating a hiatus in the market whilst the sector waits for the full implementation of the Warm Homes Plan,” Lee said.

“The dual blow of tax rises on heat pumps and programme cuts risks fuelling yet another boom and bust cycle, threatening the existing supply chain and future investment in the UK.”

There might still be changes between now and 1st April and we’ll continue to cover the clean tech sector for billpayers.

Written By

Maximilian Schwerdtfeger Deputy editor

Max joined The Eco Experts as content manager in February 2024 and became deputy editor in 2025. He has written about sustainability issues across numerous industries, including maritime, supply chain, finance, mining, and retail. He has also written extensively for consumer titles like City AM, The Morning Star, and The Daily Express.

He has represented The Eco Experts on national television several times, including the BBC’s Sunday Morning Live and ITV Tonight .

In 2020, he covered in detail the International Maritime Organisation’s (IMO) legislation on sulphur emissions and its effects on the global container shipping market as online editor of Port Technology International.

He also explored the initiatives major container ports and terminals have launched in order to ship vital goods across the world without polluting the environment.

Since then, he has reported heavily on the impact made by environmental, social, and governance (ESG) practices on the supply chain of minerals, with a particular focus on rare earth mining in Africa.

As part of this, in 2022 Max visited mines and ports in Angola to hone in on the challenges being faced by one of the world’s biggest producers of rare earth minerals.

His most recent sustainability-related work came much closer to home, as he investigated the eco-challenges faced by independent retailers in the UK, specifically looking at how they can cut emissions and continue to thrive.

Max lives in South London and is an avid reader of books on modern history. He has also recently learned to play the game Mahjong and takes every opportunity to do so. He is also yet to find a sport he doesn’t enjoy watching.

More about