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Government urged to use Octopus cash to reinstate Winter Fuel Allowance

Government urged to use Octopus cash to reinstate Winter Fuel Allowance
Emma Lunn
Written By:
Posted:
24/10/2024
Updated:
24/10/2024

Octopus Energy has repaid the state support it received when it rescued rival Bulb, sparking a £1.5bn profit for taxpayers.

According to Sky News, Octopus Energy will confirm today that it has paid more than £3bn to the Government.

The money includes more than £40m, which has accrued under a profit-share agreement struck between the energy giant and Government ministers two years ago.

Bulb collapsed in 2021 and its customers were in limbo for a year before Octopus took over the failed supplier’s customer base, receiving state support for the deal. The move made Octopus Energy the second-biggest UK energy supplier behind British Gas.

Industry sources said today’s announcement would mean that Octopus Energy had repaid the entirety of the state support it received as part of the deal.

The repayment of the cash amounts to an unexpected £1.5bn profit for taxpayers. Sky News claimed that one industry insider said that although the Government had spent more than £1.6bn on dealing with the Bulb crisis, the fall in wholesale energy prices had generated a “fortuitous windfall for the public purse” owing to a hedging arrangement that had been established at the time of the transaction.

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The Liberal Democrats are urging the Government to use the windfall to stop the Winter Fuel Payment cuts. Ministers announced in July that the £200 annual payment, previously handed out to anyone over the state pension age, will now be means-tested.

The party calculated that the cost of reinstating the Winter Fuel Payments for this year would be £1.4bn.

Daisy Cooper MP, treasury spokesperson for the Liberal Democrats, said: “This Government must use this windfall well by reinstating the Winter Fuel Payments for this year, giving itself the time to come forward with a better solution for next year.

“These crushing cuts have left millions of the most vulnerable pensioners with the terrifying prospect of choosing between heating and eating this winter.

“The Chancellor now has the opportunity to think again and stop these hammer blow cuts from impacting some of the most vulnerable in our society. Rachel Reeves must take it.”