I met two Chinese business leaders last week – both running companies which lead the way in batteries and other in clean energy technology.

Their products are genuinely amazing. I decided to learn more after I’d spoken to the head of energy of a huge international pension fund. “I’ve spent the last two years essentially doing a PhD in battery chemistry, to work out which companies we should invest in” he told me. “And I’ve concluded that we won’t invest in anyone. China’s already won the battery race”.

I love Britain. I love Europe. But hearing this made me realise that Chinese advantage in the field of electrification wasn’t because of state subsidies and cheap labour. It was because the Chinese government had created the right policies to build an industry. 

In 2010, they introduced grants to enable citizens to buy an electric car with a very hefty discount, and implemented other measures, such as building out-of-home charging to enable the easy adoption of EVs. The result? China now has a world-leading EV industry and a supply chain – such as batteries – to match.

We should be grateful. One impact is that oil and gas analysts have been surprised that the Hormuz crisis has not led to even higher oil prices. They’re bad, but not in the realms of the shocks of the 70s. And perhaps the biggest factor is that Chinese demand for oil has dropped dramatically – in part due to its rapid electrification of transport.

For the first time, the world has an alternative to fossil fuels which is economically attractive and meets the needs of consumers and industry.

In the case of cars, it took about a decade of consistent policy. Of course, the Chinese example stands out – but in Norway almost all new cars are electric. Denmark’s going that way, and so are countries as diverse as Laos, Nepal and Ethiopia. Electrification is not about whether a country is rich or poor. It’s simply a better solution.

Just like EVs, smartphones were a niche product for well-off people when the iPhone launched – but within half a decade it paved the way for cheap communications and universal internet access nearly everywhere in the world.

And so it is with the electrification of heat. Early adopters are driving down the costs for others. Heat pumps are going from expensive items for those renovating posh homes to increasingly accessible heating solutions for all. The path is as inevitable as smartphones and EVs.

And, it is the only viable way for us in the UK to reduce our dependence on gas for heating our homes. This is obviously important for the climate – but it’s crucial for national security too. It is the power that malevolent leaders like Putin have over our energy costs which gives them such leverage over us.

The UK’s main programme – the Boiler Upgrade Scheme – is remarkably similar to the stimulus which drove China’s EV industry. Grants to consumers allow early adopters to drive the industry, growing it from niche into an ever more mainstream product. With the scheme helping householders buy heat pumps, companies large and small have had the confidence to train thousands of plumbers and electricians to install heat pumps.

Moreover, companies have invested in R&D and manufacturing. Octopus, for example, built a large research facility in Slough – employing engineers and physicists to create ever more efficient heat pump technologies – and we opened a large factory in Northern Ireland to design and make heat pumps. It currently employs 100 people and is set to grow as the industry scales.

As with Chinese EVs, stimulating the industry is enabling policymakers to identify what else needs fixing, such as planning permission, and is giving confidence that heat pumps can lower bills and improve conditions for residents in social housing as well as private. You may hear from detractors that heat pumps need huge insulation overhauls for homes or can’t heat them as warmly, but the government scheme has improved the technology so much that that’s like judging an electric car based on a milk float. A modern heat pump can heat to the same temperature as a gas boiler – but uses less than a quarter of the energy.

The number of heat pumps installed in homes is growing – from 200,000 before the government scheme to over 600,000 now. The data we get live from every heat pump we’ve built shows heating bills are 20 to 40 per cent lower than with a gas boiler. And unlike a gas boiler, you can power it yourself – adding solar panels and a battery has eliminated energy bills altogether for thousands of homes.

Just as with EVs, heat pumps aren’t just a replacement for their fossil-fuel predecessors. They can do so much more. With climate change, the need for cooling is growing. Not just for vulnerable people, but for anyone who has to concentrate at work or school after nights of no sleep.

Yet, there are reports that the Government may slash the funding for the Boiler Upgrade Scheme. This would be short-sighted industrial vandalism. Worse, the suggestion is that heat pump support could be cut to fund defence. Yet, it’s our dependence on gas – and the economic havoc it’s wrought – that has left us vulnerable. The Treasury spent £40bn subsidising energy bills in the last crisis. Our flagship heat pump programme costs just 1 per cent of that.

In the Budget this week I hope the Government sticks to the course, backs UK-manufacturing and continues to create this vital new industry. It’ll be good for the economy, good for energy bills, good for the climate – and bad for Putin, Iran and everyone else who uses our dependence on gas against us.