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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The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.