Subsidise the price of labour, not the price of energy

Simpson, David (1982) Subsidise the price of labour, not the price of energy. Quarterly Economic Commentary, 7 (4). pp. 36-37. ISSN 0306-7866

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Amongst the items which featured in this year's Budget, announced on 9 March, was a so-called "Industrial Energy Package". This contained proposals for paying subsidies to "larger industrial users" of gas and electricity. Together with similar measures announced in last year's Budget, these arrangements will benefit the firms concerned, (whose identify remains undisclosed) to the extent of £250 million. It is difficult to think of any justification for the payment of these subsidies and this brief economic perspective attempts to question the merits of such a subsidy.