Big boiler manufacturers cannot guarantee ‘boiler tax’ refund for ‘ripped off’ customers
Three of the “big four” boiler manufacturers for the UK cannot guarantee customers will be refunded the so-called “boiler tax” that companies added to new boilers earlier this year.
In January boiler-makers hiked costs by up to an extra £120 per boiler to cover anticipated penalties for a green scheme – which has now been delayed.
Ministers had told them to ensure 4% of their sales were heat pumps rather than gas boilers, or they would face a £3,000 fine per missed installation.
As heat pumps run on electricity rather than gas, the move was designed to boost energy security, and lower air pollution and greenhouse gas emissions.
The energy security secretary Claire Coutinho accused the manufacturers of “price gouging”, and told LBC heat pump sales were already so high that they anticipated few penalties.
Boiler makers said the unachievable targets would create multi-million-pound penalties they could not afford, so upped the price of gas boilers to cover the anticipated charges.
But in March, the government delayed the heat pump target – also known as the clean heat market mechanism (CHMM) and dubbed the “boiler tax” – to April 2025, following resistance from the boiler industry.
Three of the “big four” boiler manufacturers, Bosch, Vaillant and BAXI, this week told Sky News they were refunding the “boiler tax” cash to the distributors and retailers to whom they had sold boilers.
But they said it was those companies’ responsibility to return the money to households, because manufacturers tend not to have a direct relationship with consumers themselves.
No one from Ideal Heating was available to comment or confirm its plans.
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Are heat pumps worth it?
‘Out of pocket’ households
It comes as energy thinktank ECIU estimates the four firms together would have collected £40m via the so-called boiler tax, based on the average amount levied and an average number of boilers sold per month in the UK.
Jess Ralston, ECIU’s head of energy, said: “The manufacturers introduced the boiler tax, not the retailers, so it feels like they are passing the blame to a middle party.
“They had been suggesting the fines should be removed, so they must have thought it was a possibility they’d have to refund the boiler tax – it doesn’t seem they put in place any mechanisms for that eventuality, leaving someone else on the hook.”
Gillian Cooper, director of energy at Citizens Advice, said: “Now that boiler retailers have rightly been promised refunds, it’s essential they pass those refunds on to consumers.
“Anyone who purchased a boiler between 1 January and the end of March this year may have been forced to pay more than they should have, leaving them out of pocket.
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“Not only have people been ripped off, but the government’s decision to delay the Clean Heat Market Mechanism in response to manufacturers’ pressure will leave consumers exposed to volatile gas prices for longer.”
After the government confirmed the CHMM delay, retailer Wolseley, which sells boilers made by Vaillant, confirmed it was taking responsibility for issuing refunds on boiler sales.
Clean home heating company Warmur urged boiler manufacturers to “proactively contact customers they know to have had a boiler fitted since 1st January and help them arrange a refund”.
What did boiler manufacturers say?
BAXI said its consumers will receive a refund because it is returning “any funds already collected to our merchant distributors, who then supply products to a 35,000-strong installer community, who then sell onto consumers”.
“We are part way through completing that process, although we stopped adding the surcharge from Monday 18 March.
“In the small number of cases where we sell direct to consumers through warranty relationships, we will be refunding the surcharge to them directly.”
A Vaillant spokesperson said: “Vaillant has communicated with its direct merchant customers that the boiler levy has been removed as of the 19th March 2024 and all levies charged since 1st January 2024 will be refunded in full.”
“Vaillant can only ensure our direct customers are refunded, and it is not visible to us to what extent installers and merchants have passed the levy on.”
A Bosch spokesperson said: “We have refunded in full to our merchant customers 100% of the levy charged on boilers we sold to them in the period 1 January 2024 – 15 March 2024.
They added: “Our trading relationship is with the merchant and we have returned the levy to them. We do not sell boilers to end consumers.”
London City Airport will on Thursday name its first permanent female chief executive as it targets approval of an expansion plan that would create nearly 1,500 jobs.
Sky News understands that the Docklands airport has told staff that Alison FitzGerald, who has been co-CEO since January alongside finance chief Wilma Allan, has landed the role.
A woman wearing a face mask walks by London City Airport, which suspended its operations during the pandemic
She replaces Robert Sinclair, who left in January after six years to become boss of the High Speed 1 rail link.
The airport is owned by a consortium of Canadian pension funds and Kuwait’s sovereign wealth fund, which have backed a plan to increase its annual passenger traffic from about 6.5m to 9m.
It is appealing against Newham Council’s rejection of a planning application that would see it extend operating hours at the site, which is popular with City commuters.
The airport’s proposals include no increase in the annual number of flights and, in what it claims is a first for a UK airport, a commitment that only cleaner, quieter, new generation aircraft will be allowed to fly in any extended periods.
The runway at London City Airport
The appeal is being reviewed by the Independent Planning Inspector.
Its change of leadership makes London City the second of the capital’s airports to name a new CEO in quick succession, following the arrival at Heathrow of Thomas Woldbye last year.
“London City delivers one of the best passenger experiences in the UK and I’m committed to building on this success even further,” Ms FitzGerald said.
Representatives of Thames Water’s multinational syndicate of shareholders are poised to quit as directors of its corporate entities after refusing to inject the billions of pounds of funding required to bail it out.
Sky News has learnt that a number of board members at companies connected to Kemble Water Finance, Thames’s parent, are expected to resign in the coming days.
City sources described the move as “the logical next step” after the owners of Britain’s biggest water utility said they would not commit more than £3bn to help upgrade its ageing infrastructure and shore up its debt-laden balance sheet.
A default on part of Thames Water‘s holding company debts last month has raised the prospect that the company is heading towards special administration, a form of insolvency that would effectively leave the government liable for managing a utility firm which serves nearly a quarter of Britain’s population.
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Thames Water under threat
Thames Water is owned by a group of sovereign wealth funds and pension funds from countries including Abu Dhabi, Australia, Britain, Canada and China.
A number of the investors are represented on boards which sit at various points in the group’s labyrinthine capital structure.
It was unclear on Wednesday whether Michael McNicholas, a representative of the giant Canadian pension fund Omers and who sits on the board of Thames Water Utilities Limited, was among those in the process of stepping down.
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Along with the rest of the privately owned water industry, Thames Water faces a crucial moment next month when Ofwat, the industry regulator, publishes its draft determination on companies’ five-year business plans.
The draft rulings will be subject to negotiation before final versions are published in December.
Thames Water and a spokesman for Kemble declined to comment.
Business
Royal Mail ‘minded’ to accept £3.5bn takeover proposal by Czech billionaire Daniel Kretinsky
The owner of Royal Mail has said it is “minded” to accept a revised takeover bid by Czech billionaire Daniel Kretinsky.
The latest offer from Mr Kretinsky’s investment firm EP Group values the Royal Mail parent company International Distribution Services (IDS) at £3.5bn.
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Mr Kretinsky’s firm already owns most of IDS as a 27.6% shareholder but wishes to buy the remaining shares.
An earlier offer of £3.20 a share had been rejected last month for being too low.
But now he has offered to pay £3.60 for each share. The day before the original offer was made a share in IDS cost £2.14.
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An extra shareholder pay out of 8 pence a share has been offered by EP Group, if the deal closes, as has a 2 pence per share payment to every stakeholder, expected to be paid in September.
It would bring the total value of an IDS share to 73% more than it cost before the prospect of a buyout was raised.
‘Good value’
“Having considered the proposal, the board has indicated to EP Group that it would be minded to recommend an offer to IDS shareholders”, the IDS board said.
The price is “fair” and reflects the value of current growth plans, the IDS chairman said.
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Royal Mail could be allowed to deliver letters just three days per week, under a series of options outlined by the industry regulator.
Consideration was given by the board to the national significance of Royal Mail as the operator of the postal network.
“The board is particularly mindful of Royal Mail’s unique heritage and responsibilities as the designated universal service provider in the United Kingdom and a key part of national infrastructure”, it said.
In assessing the proposal, the board has also been very mindful of the impact on Royal Mail and GLS and their respective stakeholders and employees, as well as broader public interest factors”.
EP Group has until 29 May to advance or withdraw its takeover bid.
Who is Daniel Kretinsky?
There has already been scrutiny of Mr Kretinsky’s part ownership in the postal company but a government national security concerns review into his investment led to no intervention.
He also owns parts of West Ham Football Club and Sainsbury’s.
EP Group, which he controls, has financial interests in energy, logistics, and food retail.
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