Taxpayers on hook for another £500m for Bulb Energy bailout

The taxpayer bailed out the banks when they were out of control – and now energy companies that are going to the wall. Both gambled because they were allowed to and both lost their shirts when the markets went against them. Last year 28 energy suppliers went to the wall. Another 4 went in the last quarter of the previous year – and another one at the beginning of this year. The last 15 months has seen nearly 70 per cent of all energy suppliers go bust since the energy markets were deregulated.

The government bailout, or more accurately, the taxpayer is on the hook of failed British energy supplier Bulb, which will cost taxpayers an additional £500 million over two years, taking the total support required to £2.2bn, according to the independent fiscal watchdog

The Office for Budget Responsibility said in documents published alongside Rishi Sunak’s Spring Statement that the bailout would cost £1.2bn in 2021-22 and a further £1bn in 2022-23

This additional sum was to “cover the company’s operating losses”. Bulb, Britain’s seventh biggest energy supplier with some 1.6mn customers, was rescued under a process known as “special administration” in November after it admitted it could no longer withstand sharp swings in wholesale energy prices.

At that time, when the taxpayer stepped in, the government said it would put up £1.7bn in taxpayer money to support the failed group until it could be sold.

Administrators are said to have spent £800mn to keep the company afloat, a £200mn increase on their last estimate only a week ago. The price of supporting Bulb is in addition to an estimated £2.4bn cost to consumers of rescuing customers of all the other collapsed energy suppliers.

 

 

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