Does minimum pricing work?

The PM will indicate support for the measure to reduce problem drinking. But does it make sense?

Anyone who's ever come home from a night out with an empty wallet will groan at the thought, but David Cameron is to indicate support for putting a minimum price on alcohol today. During a visit to a hospital in the north-east, he will say that excess consumption of alcohol is costing the NHS £2.7bn a year. This comes ahead of a government strategy on alcohol, due to be published soon after nearly a year of consultation with health professionals and the drinks industry.

If minimum prices are endorsed, it will mark a change in the government's policy. Cameron is instinctively opposed to further regulation, while the public health minister, Ann Milton, has queried whether it would be legal under European free trade legislation. Scotland, which has gone furthest on prices, is still testing the legality.

Of course, minimum prices will have the greatest impact on supermarkets and shops, where discount selling is more common than in pubs or bars. But is it an effective way to reduce dangerous drinking and alcohol-related problems?

Minimum prices would have most effect on the cheapest, strongest end of the spectrum, substantially upping the price of budget ciders (like the notorious, discontinued White Lightning). Some of these could more than double in price. For this reason, it has gained the support of a wide range of health campaigners: upping the prices of these drinks could target the most problematic drinkers.

Over at the BBC, Branwen Jeffreys explains some of the evidence cited by those in favour of the move:

Those who support a minimum price say there is strong evidence internationally that price is linked to consumption, and higher consumption is linked to higher harm. They point to Finland where in 2004 a dramatic cut in prices via taxes led within a year to an increase of 9% in consumption, according to official figures.

Most alcohol in Finland is sold through tightly controlled government-run shops. By 2005 alcohol-related problems were the most common cause of death among Finns of working age.

A 2008 model by the University of Sheffield suggested that a high enough minimum price could significantly reduce the impact and cost of alcohol to society. It found that problem drinkers seek out the cheapest ways to get drunk as they tend to be either young or those who drink a lot, and therefore would change their behaviour in response to price increases more than moderate drinkers would. (It has been strongly challenged by the drinks industry).

While the international examples may be compelling, it is worth pointing out that minimum prices have not yet been introduced in a country with a history of few limitations on the sale of alcohol. States in Canada which have used minimum pricing have a history of prohibition, and the Nordic countries have a tradition of selling alcohol through government-owned shops. That's why the example of Scotland will be watched closely.

On the other hand, some question the efficacy of minimum pricing on economic grounds. Tim Harford points out that it would up the profit margins of supermarkets -- and that in fact, if they decided a minimum price amongst themselves (rather than having one imposed by the government), they would be in breach of competition laws. He recommends increasing taxation further instead, as this would ensure that prices rise in proportion and would put the extra revenue in the hands of government rather than supermarkets. Rather paradoxically, minimum prices could make cheap alcohol a very lucrative product for supermarkets (because of the mark up).

Although the long-term benefits to society are difficult to prove conclusively, most people would agree that less cheap alcohol would have a positive effect. The evidence that alcohol consumption goes down when prices goes up is fairly strong. The best economic method of doing this remains to be seen.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

Rex Features
Show Hide image

Keir Starmer: “I don’t think anybody should underestimate the risks of getting Brexit wrong”

The former director of public prosecutions is now heading up Labour’s response to Brexit. But can he succeed in holding the Tories’ feet to the fire?

Early in his new role as shadow Brexit secretary, Keir Starmer was accused of being a “second-rate lawyer”. The gibe, in a Commons debate, came from none other than Iain Duncan Smith. Starmer was director of public prosecutions for five years and later stood for parliament in 2015. No novice, then. Within a few days, Duncan Smith stood again in the House, this time to offer his apologies.

A fortnight later, I met Starmer at his quiet office in Westminster. He was sitting at a table piled with papers, in an office that, a discreet family photo aside, was unadorned. He had just got back from a whirlwind trip to Brussels, with many more such visits planned in the weeks ahead.

Starmer returned to the shadow cabinet after Jeremy Corbyn’s second leadership election victory last month. “The series of agreements we will have to reach in the next few years is probably the most important and complex we’ve had to reach since the Second World War,” he told me.

Starmer, who is 54, took his time entering politics. Born in 1962, he grew up in a Labour-supporting household in Surrey – his father was a toolmaker and his mother a nurse – and was named after Keir Hardie. After studying law at Leeds University, he practised as a human rights barrister and became a QC in 2002. In 2008, after varied legal work that included defending environmental campaigners in the McLibel case, he became the head of the Crown Prosecution Service for England and Wales as well as director of public prosecutions, positions he held until 2013.

When in 2015 Starmer ran for a seat in parliament to represent Holborn and St Pancras in London, it was assumed he would soon be putting his expertise to use in government. Instead, after Labour’s election defeat under Ed Miliband, he served as one of Corbyn’s junior shadow ministers, but resigned after the EU referendum in June.

Now, he is back on the opposition front bench and his forensic scrutiny of government policy is already unsettling the Conservatives. Philippe Sands, the law professor who worked with him on Croatia’s genocide lawsuit against Serbia, says he couldn’t think of anyone better to take on the Brexiteers in parliament. “It’s apparent that the government is rather scared of him,” Sands said. This is because Starmer is much more capable of teasing out the legal consequences of Brexit than the average Brexit-supporting Tory MP. Sands added: “It would be fun to watch if the stakes weren’t so very high.”

Starmer is a serious man and refused to be drawn on the character of his opponents. Instead, speaking slowly, as if weighing every word, he spelled out to me the damage they could cause. “The worst scenario is the government being unable to reach any meaningful agreement with the EU and [the UK] crashing out in March 2019 on no terms, with no transitional arrangement.” The result could be an economic downturn and job losses: “I don’t think anybody should underestimate the risks of getting this wrong.”

If Starmer seems pessimistic, it is because he believes time is short and progress has been slow. Since the referendum, disgruntled MPs have focused their attention on the final Brexit settlement. Yet if, as he argues, the starting position for our negotiations with the EU is wrong, the damage will have been done. MPs faced with a bad deal must either approve it or “risk the UK exiting the EU without a deal at all”.

It is this conviction that is driving his frantic schedule now. Starmer’s first month in the job is packed with meetings - with the representatives of the devolved nations, business leaders and his European counterparts.

He has also become a familiar face at the dispatch box. Having secured a commitment from David Davis, the minister for Brexit, that there will be transparent debate – “the words matter” – he is now demanding that plans to be published in January 2017 at the earliest, and that MPs will have a vote at this stage.

In his eyes, it will be hard for the Prime Minister, Theresa May, to resist, because devolved parliaments and the European parliament will almost certainly be having a say: “The idea there will be a vote in the devolved administrations but not in Westminster only needs to be stated to see it’s unacceptable.”

In Europe, Starmer said, the view is already that Britain is heading for the cliff edge. It was May’s pledge, that after Brexit the UK would not “return to the jurisdiction of the European Court of Justice”, which raised alarm. And among voters, there is “increasing anxiety” about the direction in which the UK is moving, he said. Even Tory voters are writing to him.

In the Labour Party, which is putting itself back together again after the summer’s failed coup, immigration remains the most vexed issue. Starmer told me that Labour had “earned a reputation for not listening” on the issue. Speaking on The Andrew Marr Show shortly after becoming shadow Brexit secretary, he said immigration was too high and ought to be reduced. But later that same day, Diane Abbott, a shadow cabinet colleague, contradicted him, publicly criticising immigration targets.

Starmer believes there is a bigger picture to consider when it comes to Britain’s Brexit negotiations. Take national security, where he warns that there are “significant risks” if communications break down between the UK and the EU. “Part of the negotiations must be ensuring we have the same level of co-operation on criminal justice, counterterrorism, data-sharing,” he said.

Crucially, in a Labour Party where many experienced politicians are backbench dissenters, he wants to reach out to MPs outside the shadow cabinet. “We have to work as Team Labour,” he stressed.

It’s a convincing rallying cry. But for some MPs, he represents more than that: a lone moderate in what can be seen as a far-left leadership cabal. Does he have any ambitions to lead Labour? “Having had two leadership elections in the space of 12 months, the last thing we need at the moment is discussion of the leadership of the Labour Party.” He has agreed to serve in the shadow cabinet, and is determined to stay there.

Starmer has found his purpose in opposition. “If we think things aren’t going right, we’ve got to call it out early and loudly. The worst situation is that we arrive at March 2019 with the wrong outcome. By then, it will be too late.”

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

This article first appeared in the 27 October 2016 issue of the New Statesman, American Rage