Economics & Social Policy Blogs

The UK government and intervention

The UK government and intervention

Should a government provide subsides and intervene in the economy? This is an area of focus and some controversy following the recent decision to provide a government subsidy to Nissan and intervention to aid the steel sector.

One could be forgiven for thinking that the biggest criticism of such government intervention was from those arguing to reduce the size of the state. Government spending is, after all, at high levels, and the tax take, in relation to the size of the economy, at an all-time high. In fact, the biggest criticisms appeared to be from those wishing we were still in the EU, or so it seemed. Notwithstanding that, what is the issue?

How to turn renters into homeowners

How to turn renters into homeowners

“My Government will help more people to own their own home whilst enhancing the rights of those who rent.”

These words, from Her Majesty, during the Queen’s Speech, reflect an important focus for the Government. It was only last autumn that the Prime Minister outlined his intention to help Generation Rent become Generation Buy.

In the wake of the Queen’s Speech it seemed appropriate to return to some of the issues raised in a paper I produced for Policy Exchange on housing earlier this year.

Where next for Industrial Strategy?

Where next for Industrial Strategy?

“A pudding without a theme” was how Kwasi Kwarteng, Business Secretary, speaking in the House of Commons this week, described Theresa May’s 2017 industrial strategy. He had been asked by Greg Clark, who was in charge of what Mrs May had renamed the Department for Business, Energy and Industrial Strategy (BEIS), why the government had scrapped the strategy. Mr Kwarteng went on to say that the economy was in a very different state from what it had been in 2017, and that the government had “morphed” the old strategy into the new “plan for growth”.

Negative interest rates offer only a sugar high. They won’t revive monetary policy

Negative interest rates offer only a sugar high. They won’t revive monetary policy

Both Wall Street and the City of London are speculating whether the next innovation in monetary policy will be the use of negative interest rates as a deliberate tool. The new Governor of the Bank of England, Andrew Bailey, has changed the Bank’s position from that of the previous Governor, Mark Carney, who made clear that negative interest rates were not a proposition he was seriously considering. The central bank’s Chief Economist, Andrew Haldane, and one member of the Monetary Policy Committee (MPC), Silvana Tenreyro, have canvassed the idea.

Time to rethink macroeconomic policy

Time to rethink macroeconomic policy

A new Chancellor of the Exchequer and a new Governor of the Bank of England offer the opportunity of taking a fresh look at not just monetary policy, but macro-economic policy as a whole and the role of fiscal policy within it. A decade after the Great Recession, there are profound questions that policy makers should be exploring.

20 years of the euro

20 years of the euro

Twenty years after the creation of the euro, a powerful cocktail of forces have made the southern economies of Europe permanently uncompetitive compared to the northern economies and the wider international economy. Yet the currency may limp on for years yet

The ‘end of austerity’ and what should come next

The ‘end of austerity’ and what should come next

Policy Exchange’s Warwick Lightfoot – a former Special Adviser to three Chancellors – says the Prime Minister’s announcement that ‘austerity’ is ending is good politics. But increased public spending doesn’t always mean better public sector productivity, he warns.

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