Sir Ed Davey argued that doubling the annual discount of £140 on electricity bills for the lowest earners and some pensioners would be an effective way of supporting people hit by the energy crisis.
Rising global gas prices resulted in nine UK energy companies going bust during September, with firms calling for the price cap – currently set at £1,277 for the average bill – to be increased significantly next April.
Speaking to the BBC Good Morning Scotland programme, Sir Ed said the UK Government had failed to prepare for the crisis, with a lack of investment to insulate homes.
He called for the £140 one-off discount to energy bills this winter to be doubled and extended to include 22,000 more pensioners across Scotland.
Asked about where the funding should come from for the scheme that would cost an estimated £37 million, Sir Ed replied: “I think it should ultimately be paid for by the taxpayer.
“At the moment, Warm Home Discount is paid for by other bill payers but I think the taxpayer needs to pay for this in the short term because we’ve got a crisis here, and people are going to have to choose between eating or heating because the heating bills are going to rocket.
“I think if the Government isn’t doing something, we will see families across Scotland, really, really struggling.
“We’ve come forward here with a practical proposal, something that builds on something that already exists … so you can do it really quickly.
“Given the Government has cut Universal Credit by £20 a week saving £6 billion pounds – I wish they hadn’t done that – but because they’ve done that, here’s something that they could do which would be a lot cheaper but would actually be really effective, given (that) heating bills are going to hit so many families.”
Challenged about his previous opposition to the energy price cap, Sir Ed said: “It is damaging competition but I think it should stay in now because we’ve got this crisis and, indeed, we need to protect people who are facing high bills now.”
He added: “The price cap isn’t really helping lots of people because people will see their bills increased to the price cap.
“Lots of people were paying for their energy bills (at) much lower amounts before this and now they’re going to have to go to the price cap and, guess what, I see that price cap increase being increased by Ofgem next year.
“So the price cap is is helpful in the short term, but it’s not dealing with the long-term problem that people across Scotland are going to be facing.”