Expand the Warm Homes Plan: note

Central fiscal result

+£3.0bn - Net fiscal impact in 2028-29

Low case: +£1.5bn. High case: +£6.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Models expand the warm homes plan by 2028-29.
• Baseline is current policy or published departmental plans.
• Central case uses published party or official anchors where available.
• Wider manifesto interactions are excluded unless stated.

Affected population

• Affected units are people, firms, households or providers depending on policy.
• Direct exposure follows the manifesto or government target group.
• Indirect exposure includes suppliers, workers, consumers and taxpayers.
• Weakest counts are widened in the low and high cases.

Gross impact

• Published anchor or scenario central is +£3.0bn in 2028-29.
• Gross costs or receipts are adjusted for behaviour and delivery risk.
• Tax, benefit or procurement offsets are separated in the fiscal build-up.
• The range is deliberately wider where implementation detail is thin.

Fiscal build-up, central case

• Gross programme or delivery cost: +£3.4bn
• Tax and receipt offsets: -£0.2bn
• Administration and evaluation: +£0.1bn
• Behavioural and pass-through effects: -£0.3bn

Central net impact: +£3.0bn in 2028-29.

Behaviour and pass-through

• Low case assumes stronger delivery or receipts than central.
• Central case applies moderate behavioural leakage and pass-through.
• High case allows weaker delivery, larger take-up or higher costs.
• Output effects follow incidence, capacity and investment channels.
• Distributional gains do not automatically imply GDP gains.

Phasing

• 2026-27: +£0.3bn. Phased implementation and take-up.
• 2027-28: +£1.7bn. Phased implementation and take-up.
• 2028-29: +£3.0bn. Phased implementation and take-up.
• 2029-30: +£3.0bn. Phased implementation and take-up.

Main source groups

• Andersson, "Carbon Taxes and CO2 Emissions" (American Economic Journal: Economic Policy, 2019): Sweden’s carbon tax reduced emissions while maintaining economic growth, but institutional context mattered; supports carbon-pricing benefits with design caveats.
• HM Treasury, "Budget 2025" (2025): Budget 2025 sets out implemented welfare, energy, motoring and tax-threshold measures; used for current government delivery policies.
• Metcalf and Stock, "The Macroeconomic Impact of Europe’s Carbon Taxes" (NBER, 2020): European carbon taxes show limited adverse macro effects in studied cases, partly depending on recycling; relevant to output and inflation risk.
• Department for Energy Security and Net Zero, "Warm Homes Plan" (2026): The plan allocates public funding for insulation, low-carbon heating and fuel-poverty support; defines target households and cost channel.
• Labour Party, "Change: Labour Party Manifesto 2024" (2024): The manifesto sets the policy pledge, funding claim or target being modelled; used as the policy definition and manifesto baseline.