The ‘monstrous’ cost of bailing out stricken energy supplier Bulb has sparked calls for a fresh inquiry into the scandal amid a mounting backlash against ministers.
The company was effectively nationalised last November as soaring gas and electricity prices left it unable to afford to buy the energy it owed its 1.6m customers.
Figures buried in documents published alongside this week’s Autumn Statement showed the cost of the bailout has spiralled to £6.5billion – three times higher than an earlier estimate of £2.2billion.
![In the spotlight: Bulb founders Amit Gudka and Hayden Wood](https://i.dailymail.co.uk/1s/2022/11/18/20/64705381-11445143-image-m-76_1668804367679.jpg)
In the spotlight: Bulb founders Amit Gudka and Hayden Wood
The bill – worth £230 per household and the biggest government bailout since the rescues of Royal Bank of Scotland and HBOS during the financial crisis – will be picked up by taxpayers.
That will pile more pain on those already struggling with rising living costs and higher taxes.
Campaigners and MPs said last night that the scandal posed questions over how the industry is regulated and why the cost of the bailout has risen so high. The ballooning bill also thrusts Bulb founders Hayden Wood and Amit Gudka back into the spotlight. The duo founded Bulb in 2014 and pocketed £4m each in a fundraising in 2018.
Wood was criticised earlier this year after it emerged that he was still being paid £250,000 a year even after its collapse and rescue by the Government.
As MPs called for an inquiry into the debacle, Gillian Cooper, head of energy policy at Citizens Advice, said: ‘The staggering cost of the Bulb Energy failure is deeply worrying given the huge cost of living pressures people are facing. We need urgent confirmation that this won’t add to customers’ already sky-high bills.
‘From the start there hasn’t been enough transparency about the costs involved and how they’ll be paid for. Urgent lessons must be learnt to make sure taxpayers never again pick up an eye-watering tab because of a breakdown in the energy market.’
John O’Connell, chief executive of the TaxPayers’ Alliance, said: ‘Taxpayers will be appalled at this monstrous bill, especially at a time when budgets are stretched. A protracted intervention process has seen costs soar, which should give politicians pause for thought before pushing for bailouts.
‘Ministers must ensure that taxpayers’ money is never put on the line in this way this way again.’
A string of energy firms have collapsed in recent years with customers at 28 other suppliers transferred to rivals. But Bulb’s customer base was deemed too big and it has been in ‘special administration’ since its bailout before being sold to Octopus Energy last month for an undisclosed sum.
Labour MP Dame Angela Eagle, who is a member of the Commons Treasury committee, said the cost of the scandal should trigger an inquiry.
‘It should not be being kept secret,’ she said. ‘Six billion quid is a lot of money.
‘During the period there has been enormous volatility in energy prices and there has been the cost of continuing to service those customers.
‘It might be that is the explanation. But whatever the explanation is, we should have it.’
The business committee has already probed the costs around Bulb, which collapsed late last year. It is now awaiting confirmation from Whitehall as to how it is being paid for.
Labour MP Darren Jones, chairman of the committee, said: ‘We have long been concerned about the cost of the Bulb administration, not least given ministers’ decision to prevent the administrators from hedging against future energy price rises.
‘This whole saga – triggered by a seismic failure of effective regulation – is now the most expensive market failure since the banking crisis of 2008.
‘Once again, it looks like bill payers are picking up the tab whilst many of those who created the problem walk off Scot free.’