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.

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Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle