Minimum pricing: the key questions

Some aspects of the debate are more settled than others.

Minimum pricing for alcohol is back in the news today, as ministers are expected to announce that the price per unit will be 45p.

Since the new information is rather technical (importantly, the average price-per-unit in a recent IFS study was 44.8p, so this price will have a material effect), what we're actually getting is less a discussion of whether 45p is too high, too low or just right, and more rehashing of old arguments. So here they are again.

Minimum pricing lowers alcohol consumption

The Lancet concludes:

Natural experiments in Europe consequent to economic treaties have shown that as alcohol taxes and prices were lowered, so sales, alcohol consumption, and alcohol-related harm have usually increased.

Samira Shackle wrote in February that:

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's hardly surprising. All that is being concluded is that, on a societal basis, alcohol sales obey the laws of supply and demand (as an aside, it's fascinating that those normally most wedded to this rule of thumb are quickest to argue with it in this situation).

There is some countervailing evidence. An IEA paper suggests that there is no cross-national correlation between affordability of alcohol and total consumption:

Chart

Nonetheless, the balance of evidence is strongly on the side of minimum pricing having some effect on consumption.

Minimum pricing hits some types of problem drinkers harder than others

Alcoholics – people with a pathological addiction to alcohol – are unlikely to reduce their consumption that much in the face of minimum pricing. It is nearly the definition of addiction that you prioritise feeding that addiction, and that is no different with alcoholism. Minimum pricing hurts alcoholics with basically no upside (although for a few it may be the final straw to seek help).

The policy is instead aimed at a different sort of problem drinkers: binge drinkers, who suffer their own health problems but are thought to be far more price-sensitive.

In this aspect it can be seen as a trade-off: hurting alcoholics to help binge drinkers.

Minimum pricing hits the poor hardest

George Eaton writes:

As a recent ONS study noted, 'people in poorer households spend a greater proportion of their disposable income on alcohol duty than higher wage earners.'

Additionally, price-based controls always hit the poor hardest by their very nature. That doesn't necessarily mean they're aimed at the poor, just that the mechanism by which they work has less effect on people with enough disposable income not to care (cf. fuel duty, carbon taxes, prescription charges and passport fees).

Minimum pricing is a boon for supermarkets

Matt Cavanagh writes:

Last year’s IFS study [pdf] estimated that, assuming ‘no behavioural response from consumers and no wider price effects’, the 45p MUP proposed by the SNP in 2010, if introduced across the UK, ‘would transfer £1.4 billion from alcohol consumers to producers and retailers’.

This transfer is largely unavoidable if the major benefit of minimum pricing – the fact that it prevents retailers absorbing the cost – is to be maintained. As I wrote in March:

In order to prevent this increase being absorbed by supermarkets as a loss-leader (even with duty at the much lower current rates, it is possible to buy some drinks which are sold for less than the combined duty and VAT charged on them), this would have to be combined with legislation preventing shops from selling for less than the duty charged on the drink.

Enacting this plan would indeed result in a sharp rise in alcohol prices, with most or all of the increase going to the treasury rather than the supermarkets or drinks companies. But the increase would come from all drinks, rather than just the cheaper ones that the proposed minimum price is targeting.

It might be illegal under EU law

The European Union is quite prescriptive about how sin taxes work. The European Commission has warned that Scotland's implementation "causes problems with the compatibility with the EU Treaty", and previous attempts have been shot down by the courts. Not that that's not a reason not to try.

Of course, none of these questions address what is really the heart of the matter: how far does the government's right or responsibility to alter people's behaviour to protect them extend? That's a valid debate to have; but it is a separate one from whether minimum pricing would work at achieving its stated goals. To that, the answer is a cautious yes, but it remains worth noting that its goals are reducible to "stopping poorer binge drinkers from drinking so much". That may still be a valid aim, but its a weaker one that many defenders have made it out to be.

Booze. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Why isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.