Ross Clark

When is the government going to stop pretending that chopping down trees in North American forests and shipping them across the Atlantic to burn them in UK power stations is a zero-carbon form of energy? The environmental-friendliness of Drax power station in North Yorkshire has been called into question yet again this week after BBC Panaroma investigation reported that some of the woodchips being burned there have allegedly been sourced from established ‘old growth’ forests in Canada rather than recent plantations. Drax has not commented on those specific allegations, but the investigation has thrown the issue back into the spotlight.

Time was when a chancellor had to resign for leaking the Budget – Hugh Dalton famously lost his job after telling a reporter a few details of what he was about to deliver. Dalton assumed it was past the newspaper’s deadline, but he was wrong. Nowadays, it seems to have become customary for chancellors to leak beforehand, just leaving a ‘rabbit in the hat’ for the day itself. Therefore, we should take seriously reports in the Times this morning that Jeremy Hunt has abandoned plans to cut income tax, inheritance tax or stamp duty next week and instead intends to limit himself to a further one pence reduction in National Insurance Contributions (NICs). A tax on vaping liquids also seems to be on the cards.

Here’s a good wheeze: prod every last inch of your own country, open the taps and become the world’s largest producer of fossil fuels. Then, when other countries start to try to develop their own resources, tell them they mustn’t, for the good of the planet. In other words, make them all dependent on you. That is pretty well what John Kerry, the outgoing US special envoy on climate change, suggested on the BBC's Today programme this morning.  The US is shamelessly using climate change to promote its own industries 'We do need gas to keep our economies moving but we don’t need to open a whole raft of new exploration,' he said, adding that US president Joe Biden had made a ‘courageous step’ not to approve a recent gas project.

It is of course good news that the Ofgem price cap for a dual fuel household bill will fall from £1,928 to £1,690 from April (that is the bill paid by the average householder). It means that there should be strong downwards pressure on inflation (the Consumer Prices Index) in April. Barring a jolt in inflation in other goods and services or an acceleration in earnings it ought to mean the Bank of England finally has the courage to cut its base rate, probably in May. None of that, though, should distract from the fact that energy prices in Britain remain far too high. For one thing, the huge fall in wholesale gas prices since their peak of 634 pence per therm in August 2022 has not yet been fully passed on. The wholesale gas price today is 55.

We’re not cutting interest rates because we think the recession may already be over and we’re not even sure we are in recession anyway. That was the gist of Governor of the Bank of England’s evidence to the House of Commons Treasury Select Committee this morning. Bailey fell back on the traditional excuse of CEOs who get it wrong and send their businesses into a downwards spiral: the weather Andrew Bailey reminded the committee of what happened ten years ago when Britain seemed to be on the verge of a triple dip recession. In the end, revisions of the GDP figures revealed that we had never even entered a double dip, yet a triple one. There are signs of economic recovery, added Bailey. Services inflation and wage rises are still too strong. Real incomes rose by 1.

Maybe the Office for National Statistics should stop seasonally adjusting its data. That is the lesson from today’s retail sales figures, which show a strong rebound in sales volumes of 3.4 per cent in January. All areas of spending were up except clothing, which was down by 1.4 per cent. The overall figures might sound promising, but all they really do is to cancel out December’s fall of 3.3 per cent. Look at the figures for the past three months and sales are pretty flat, falling by 0.2 per cent in that time. The high street is in a stupor, just like the economy as a whole. Why did retail appear to fall into a deep hole in December? The answer lies in the seasonal adjustment.

It wasn’t so long ago that Orsted was being held up as an example of how oil and gas companies should handle the transition to clean energy. In 2009 the then-DONG (Danish Oil and Natural Gas) announced that it was going to turn around it business so that instead of earning 85 per cent of its money from oil and gas it was going to earn 85 per cent of it from renewables. It was an early mover in offshore wind – and, at least for some years, shareholders were richly rewarded. The share price marched upwards from around £19 in 2014 to a peak at £100 in early 2021. Increasing your money fivefold and saving the planet at the same time – you can hardly argue with that. The economics of building wind farms has changed Except that the bubble in renewables didn’t last.

Who cares about economic forecasts, which have proven to be about as useful as sticking a pin in a chart, blindfolded? But given their prominence when they foresee the UK economy performing less well than the EU, it provides a little balance to note when it is the other way around. A little over a year ago the OECD, like the IMF, was pessimistic about the UK economy, predicting that it would shrink by 0.4 per cent in 2023, and just about creep back into growth in 2024. ‘UK faces worst downturn of any advanced economy, OECD says’ was how the BBC reported it. The only bright spot was that, unlike the IMF, the OECD thought that Britain wouldn’t do quite as badly as Russia. And now?