Doing A Level maths isn't necessary to do A Level Economics, but for the vast majority of Economics courses at good universities, A Level maths, rather than A Level economics is the requirement. In the academic school where I work, with over 40 students doing A Level Economics, only 1 is not doing A Level maths too.
A Level maths is a facilitating subject for many degrees, whilst Economics is a highly regarded subject bit not a facilitator or necessary subject at A Level for any degree.
Unless someone knows for certain that they won't want to continue Economics at uni, studying it without Maths these days, really is something which limits options.
Regarding your son being told he can't do maths - well, perhaps his school is one which places a lot of value on the teacher judgement as well as the GCSE grade - lots of GRammars and Independents do this. They might say an A student isn't suitable for A Level maths because the maths teachers know he was a lazy pain in the backside for several years. They might know that he was never A material and the a* was a total fluke and he really will struggle at A Level. They might be a school which never throws students out, but is only willing to offer certain subjects - and those who are lower performers generally in the schools view or who have been deemed not acceptable by other departments are channellers into new subjects not studied at GCSE where the Deprtment isn't able to reject people becaue they haven't taught them already. Who knows....we don't know your son, but he might be being offered Economics instead for any of these reasons or different ones entirely. I would say though, if he has been lazy and hasn't worked hard and is still of this mind set, Economics will be very hard for him to do well in.....as will all subjects in honesty. As an essay subject and one based on current affairs much of the time, to do well you need to keep abreast of what is going on and to engage in lots of developed essay writing. Most of the marks will come from pretty lengthy, evaluative essays and lots of reading will be needed.
I would go back to the school and discuss this issue of Economics without Maths. It might be that due to his results or the schools judgement of his ability or behaviour, he has very limited choices and Economics is option still but only without maths. Fine, as long as goes into it well aware that the opportunity to continue Economics at a top uni is extremely limited.
Regardless, he needs to be aware that these limits to his range of choices are partly the result of his poor attitude to work lower down the school - he needs to see that already there are very tangible consequences of this for him, and that if he continues like this, there will be more consequences.
Of course, many places would snap him up for Maths with an A*. I guess as a parent, you know really if the school is being accurate in their judgement if his ability and behaviour, or it is over harsh and you should push hard for him to do maths or go elsewhere to study it.
Best of luck in finding an appropriate A level course of study,