What the Autumn Budget must deliver for Midlands homeowners
A Coventry and Rugby-based heating company is urging the Chancellor to prioritise affordable home heating in the Autumn Statement, warning that current green policies risk pricing out working families while the cost of living crisis continues to squeeze household budgets.
Custom Heat, which serves homes across Warwickshire and the West Midlands, is calling on Rachel Reeves to use next week’s Budget to reform heat pump subsidies, extend VAT relief to heating upgrades, and provide long term policy certainty for homeowners.
Lincoln Smith, Managing Director of Custom Heat, which has been operating since the 1980s, said: “As a heating firm working with families across the Midlands, we see at first hand the impossible choices people face between staying warm and paying their bills. This Budget is an opportunity for the Chancellor to show that going green does not have to mean going broke.”
Custom Heat has welcomed reports that the government is considering scrapping the 5 per cent VAT on household gas and electricity bills, which could save families up to £200 a year. However, Mr Smith argues that the measure should be expanded to include all heating efficiency upgrades.
“Scrapping VAT on energy bills is welcome, but it is only a sticking plaster. Heat pumps currently benefit from 0 per cent VAT, but that expires in March 2027 and reverts to 5 per cent. The Chancellor needs to make that zero rate permanent and extend it to insulation and efficient boilers too. That is where families make lasting savings,” he said.
The company has also raised concerns about reported plans to restrict the existing £7,500 Boiler Upgrade Scheme grant to only lower income households.
“We fully support helping those on low incomes to access heat pumps, but creating a cliff edge where middle income families get nothing risks leaving millions locked into expensive and inefficient heating for years to come,” Mr Smith said.
Custom Heat is proposing a tiered subsidy system, for example £7,500 for low earners, with reduced support of between £3,000 and £5,000 for middle income households who still cannot afford the typical upfront cost of more than £10,000 for a heat pump installation.
“Our customers constantly ask us whether they should wait for a better grant. We need the government to provide certainty, not constant speculation about what might change next year,” Mr Smith added. “Businesses and homeowners need long term, confirmed policy, not year to year changes.”
Custom Heat is also calling on the Chancellor to make the 0 per cent VAT on heat pumps permanent and extend zero rated VAT to all heating efficiency upgrades, introduce tiered heat pump subsidies that support both low and middle income earners, commit to long term stable policy, and streamline grant applications so that support reaches people faster.
“This Budget is a crucial moment,” Mr Smith added. “The Chancellor has an opportunity to show that going green can be part of the solution rather than another financial burden.”
The Autumn Budget will be delivered by Chancellor Rachel Reeves on Tuesday, November 26.
