Minimum alcohol pricing fails the coalition's "cost of living test"

Policy irony of the day: the Tories reject minimum alcohol pricing because it "hits the poorest hardest".

The most notable thing about the government's apparent U-turn on minimum alcohol pricing is the basis on which the policy has been rejected. Theresa May, Michael Gove and Andrew Lansley have led a cabinet revolt against the proposal on the grounds that it would hit the poorest hardest and punish responsible drinkers as well as irresponsible ones. 

On a point of fact, they are correct. Minimum pricing would have a disproportionate effect on the poorest since they spend a greater proportion of their disposable income on alcohol. An IFS report found that a price of 45p per unit (the level proposed by ministers) would cost the poorest households 2 per cent of their total food budget, compared to 1.3 per cent for the richest. Lansley, a long-standing opponent of minimum pricing, told the Spectator last year: "it's regressive, so there are perfectly normal families who just don't happen to have much money who like to buy cheap beer or cheap wine. Should they be prevented? No, I don't think so". 

The policy, it appears, has failed the coalition's new "cost of living test". After the great pasty tax revolt, ministers are wary of anything that increases the price of people's pleasures, particularly at a time when the government is about to hand 8,000 millionaires an average tax cut of £107,500 by scrapping the 50p rate. 

But if the new measure of a proposal is to be whether it hits the poorest hardest (as Lansley's stance suggests) it's worth noting how many of the government's existing policies fail this test. The decision to raise VAT, for instance, a regressive tax that takes no account of income, inevitably had a disproportionate effect on low earners. A study published in 2011 by the Office for National Statistics showed that the poorest fifth spend nearly 10 per cent of their disposable income in VAT compared with 5 per cent for the richest households.

Alongside this, the government has capped benefit increases at 1 per cent (a policy that will force even more to choose between heating and eating), reduced the fund for council tax benefit by 10 per cent (a measure that will force thousands to pay the tax for the first time) and elected to charge social housing tenants for their "spare" rooms (the notorious "bedroom tax"), all at the same as cutting income tax for the highest earners. Confronted by a government that has so often chosen to hit the poor, while sparing the rich, it's hard to take their new emphasis on the "cost of living" entirely seriously. 

A 'Cheap Booze' sign displayed outside a Hoxton off licence on November 28, 2012 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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A global marketplace: the internet represents exporting’s biggest opportunity

The advent of the internet age has made the whole world a single marketplace. Selling goods online through digital means offers British businesses huge opportunities for international growth. The UK was one of the earliest adopters of online retail platforms, and UK online sales revenues are growing at around 20 per cent each year, not just driving wider economic growth, but promoting the British brand to an enthusiastic audience.

Global e-commerce turnover grew at a similar rate in 2014-15 to over $2.2trln. The Asia-Pacific region, for example, is embracing e-marketplaces with 28 per cent growth in 2015 to over $1trln of sales. This demonstrates the massive opportunities for UK exporters to sell their goods more easily to the world’s largest consumer markets. My department, the Department for International Trade, is committed to being a leader in promoting these opportunities. We are supporting UK businesses in identifying these markets, and are providing access to services and support to exploit this dramatic growth in digital commerce.

With the UK leading innovation, it is one of the responsibilities of government to demonstrate just what can be done. My department is investing more in digital services to reach and support many more businesses, and last November we launched our new digital trade hub: www.great.gov.uk. Working with partners such as Lloyds Banking Group, the new site will make it easier for UK businesses to access overseas business opportunities and to take those first steps to exporting.

The ‘Selling Online Overseas Tool’ within the hub was launched in collaboration with 37 e-marketplaces including Amazon and Rakuten, who collectively represent over 2bn online consumers across the globe. The first government service of its kind, the tool allows UK exporters to apply to some of the world’s leading overseas e-marketplaces in order to sell their products to customers they otherwise would not have reached. Companies can also access thousands of pounds’ worth of discounts, including waived commission and special marketing packages, created exclusively for Department for International Trade clients and the e-exporting programme team plans to deliver additional online promotions with some of the world’s leading e-marketplaces across priority markets.

We are also working with over 50 private sector partners to promote our Exporting is GREAT campaign, and to support the development and launch of our digital trade platform. The government’s Exporting is GREAT campaign is targeting potential partners across the world as our export trade hub launches in key international markets to open direct export opportunities for UK businesses. Overseas buyers will now be able to access our new ‘Find a Supplier’ service on the website which will match them with exporters across the UK who have created profiles and will be able to meet their needs.

With Lloyds in particular we are pleased that our partnership last year helped over 6,000 UK businesses to start trading overseas, and are proud of our association with the International Trade Portal. Digital marketplaces have revolutionised retail in the UK, and are now connecting consumers across the world. UK businesses need to seize this opportunity to offer their products to potentially billions of buyers and we, along with partners like Lloyds, will do all we can to help them do just that.

Taken from the New Statesman roundtable supplement Going Digital, Going Global: How digital skills can help any business trade internationally

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