Ed Davey calls for halt to energy price cap increase to avoid ‘catastrophe’

theguardian.com:

Liz Truss or Rishi Sunak should cancel the £1,400 energy price cap increase in October in a new “energy furlough scheme” and government should absorb the £36bn cost of the hike, the leader of the Liberal Democrats has said.

Ed Davey said neither candidate appeared to have any policies that grasped the magnitude of what could happen this autumn. “We are facing a catastrophe this winter, a drop in living standards unlike anything we have seen in my lifetime,” he said.

Truss has previously said she would not give people “handouts” in the autumn despite the rises, though she has promised measures including cancelling the national insurance rise and cancelling green levies on energy bills.

The stance has alarmed a number of Conservative MPs, and new polling for the Lib Dems found that almost half of voters said they planned to spend less on food this winter because of inflation and energy prices. That figure does not significantly drop for Conservative voters: 41% said they would spend less on food.

Davey said his proposed intervention was costly and radical but was the only measure that would save many families from dire poverty this winter. A quarter of those polled said they would not put their heating on this winter.

Davey, a former energy secretary, said it would cost £36bn over a year and that there should be a new, broader windfall tax imposed on oil and gas companies’ profits, with fewer exemptions. He said he hoped it could bring in as much as £20bn.

He said the government could also find money from additional VAT revenues from higher than expected inflation.

“It would mean a huge sigh of relief across the country,” Davey said. “We’ve looked at everything we possibly can and the only thing that cuts it is saying: this rise