Economy

The fallout from Chris Huhne’s sudden review of the government’s system of subsidies for small-scale renewable energy gathers momentum. Solar firms, who built business cases on the system of subsidies, are threatening judicial review over the Energy Secretary’s change of direction. So why did the government raise concerns about the policy? Apparently, because it has been too successful. The scheme encourages householders, communities and businesses to cover their roofs in solar panels and erect wind turbines by offering them a generous subsidy for the electricity they produce. It was introduced by the Labour government with three aims: to cut carbon emissions; to help reduce the costs of the technologies; and

As an economist working in politics, I’m sometimes shocked at some of the arguments about the economy. But today’s statement on welfare reform is economically shocking.   Miliband argues that you can’t reform welfare until there are more jobs. Set aside the fact that this is another area where Miliband’s argument is Lord make me virtuous, but only tomorrow. Team Brown delayed welfare reform for over a decade under Labour, and their position today is to call for yet more delay.   Let’s look at the economics.   First, Miliband falls for the classic lump of Labour fallacy. It’s as if he thinks there are a set number of jobs

It was the snow wot done it. The new unemployment figures have been published and the headline figures are that unemployment increased by 44,000 to 2.49 million between December 2010 and January 2011; the claimant count also went up by 2,400 to reach 1.46 million. It’s disappointing news, especially as figures from Germany are markedly different. Miliband may exploit the news at PMQs. But there are reasons to be positive. The government’s mouthpiece on these issues, Chris Grayling, who is less attack dog more beast of burden these days, argued that Q4’s negative growth figures will have had some effect on employment (and it’s likely to continue to do so

Now that today’s inflation figures are up, to a predictable and predicted 4.0 percent on CPI and 5.2 percent on RPI, we can expect the usual response. Nothing from the government (even though the declining standard of living will eclipse cuts as the no.1 problem of 2011); plenty of shocked news stories; and, then, the round of commentators saying that Mervyn King should “hold his nerve,” and not increase the absurdly low base rates of 0.5 percent. Inflation is temporary, he says, and should be okay again this time next year (that’s what he said about the start of 2011). The Spectator does not have much company in finding fault

The government’s plans for state forestry are so weak and feeble that it is hard to understand why there is so much fuss about them. Maybe people do not realise that three-quarters of the English woodland that they love so much is already privately owned. And those private owners face strict standards on public access and recreation, environmental quality, and conservation. So why is there so much fuss about selling the rest? People forget that broadleaf woodlands comprise just 8 percent of the Forestry Commission’s estate. The other 92 percent is farmland and conifer plantations, and it is hard to get worked up about who owns either of those. But