Sort off, I do not know how it is over the North sea, but here in the Netherlands a similar plan has a 'few' hickups.
- First of all, the price of a unit and its installation can be staggering, as it needs a complete overhaul of the existing system, and before that the house needs complete new isolation all over including all windows. That can run into the 30.000 euro region, even in a partly isolated house.
- Second, there are no great mountains of supplies for this, so you can want it, but if it is rolled out, there will be a need to start mass manufacturing on your own soil --- Not a great pain, its jobs i tell you --- But that takes time, a lot even.
- Third, and this hurts a lot, there are not enough people with the skills to do this on the market, and not to be very rude about it, but Brexit has driven away a whole lot of people with these kind of skills away from the UK. Over here the demand for workers in this branch, solar cells and house isolation vastly outreaches the amount of people having the skills and the knowledge to work in it.

Also the pile-up in the sues canal has shown that we do NOT want to be dependent on China for all our stuff (including this) as they are just as much a rogue state as Russia is. Choices Choices..

Here in the UK a heat pump installation averages about £10,000 I think. This does assume a good level of insulation already. The government is offering a limited number of £5,000 grants from April, replacing a previous £7,000 scheme. I am aiming to get a heat pump but no idea of there will be any subsidies left by the time I'm ready.

Government failure to consistently fund subsidies in this way has led to much uncertainty (companies are reluctant to commit because they don't know if the market will collapse in a year or two) and seriously hindered the growth of the industry/skills. As with all things, Brexit has made this worse.

Completely insulating a house is about 20.000 as new HR++ glass is (even if the existing window frames take it)a large part of that sum, but standard CV heating plates do not work with a heat pump, neither does high temperature floor heating systems (and replacing THAT is a half house renovation) isolating roof & floor is not a huge cost factor, depending on what is possible, but do all houses even have cavity walls in the UK? I guess after a certain building year they would but beautiful old cottages and such, nope, that makes isolating the walls a nightmare.
It sounds like a plan, but it is more like a paper tiger I think.

Cavity walls have been the norm for maybe around 100 years here. Insulating the cavity has been done on a reasonable proportion (over the last couple of decades or so, there have been various subsidies for that, and for loft insulation). Most houses have double glazing, although mostly not high-performance glass that's become available more recently. Some older buildings are just not viable for heat pumps as they can never be insulated well enough for it to work. For houses that aren't up to modern insulation standards but could easily be, that's the other half of the solution to the problem as there are some easy (and relatively cheap) measures which get big savings on a lot of homes. Say a couple of hundred pounds for some deep (300mm) loft insulation, and a few hundred for cavity wall insulation.

Retro-fitting larger radiators needed by lower-temperature heat pump systems is a good chunk of the £10k. Underfloor heating doesn't seem to be especially common; that's much better for heat pump systems but as you say, fitting that is a major undertaking in an existing house (it's a no-brainer for new builds, but it will be a couple more years before that's compulsory here).

It (floor heating) is now for quite a while here the standard, as it frees wallspace and floorspace for other stuff, and face it those radiotors are not a thing of beauty ;-)