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Coffee House

Why is the government so confident minimum alcohol pricing will work?

26 November 2012

10:38 AM

26 November 2012

10:38 AM

Given the decidedly mixed record of minimum alcohol pricing around the world, why is the government so sure it will work in Britain? The figures it quotes are certainly striking: a 50p unit price will reduce annual alcohol-related mortality by 900, 3,393, “more than 1,000” or “nearly 10,000” a year in England alone. But how solid are they? The Adam Smith Institute did some digging, and found that all of these predictions can be traced back to a computer model designed by a team at Sheffield University. The model has numerous flaws, many of a technical nature, and like all models it is only as good as the data and assumptions that are pumped into it. These assumptions range from the questionable to the demonstrably false.

One of the questionable assumptions is that reducing the affordability of alcohol will inevitably reduce its consumption and related harm. Sometimes it does, of course, and yet alcohol consumption has fallen in most of Europe and the USA (though not the UK) in recent decades despite rising incomes making alcohol relatively more affordable. Even in the UK, the moral panic about booze being sold at ‘pocket money prices’ has coincided with a sharp and sustained decline in alcohol consumption since 2004. Amongst the demonstrably false is the assumption that heavy drinkers and alcoholics are more likely to reduce their consumption when prices rise. This is at odds with the evidence and with basic common sense.

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The Sheffield computer model is riddled with optimistic assertions and wild speculation of this kind, all of which happen to paint a rosy picture of England under a minimum pricing regime. Some might argue that a degree of speculation is inevitable when predicting the consequences of an untried policy – although my co-author, the statistician John C.Duffy, believed that if your job is to make ‘worthless predictions’, you should find alternative employment.

The funny thing is that we already know what would happen to alcohol-related mortality if the Sheffield model’s assumptions are correct. All of its projections are based on a 50p minimum price reducing per capita alcohol consumption by 6.7 percent from the 2006 level. But we know exactly what would happen if alcohol consumption fell by just under 7 per cent from the 2006 level because we have lived through it. Indeed, the decline in per capita consumption since that year has been closer to what the Sheffield model predicts would happen under a 70p per unit regime (ie. a 17 per cent decline). According to the model, the kind of reduction in alcohol consumption that Britain has already experienced should have reduced the number of alcohol-related deaths by 1,273 (28 per cent) in the first year, rising every year until 7,263 deaths (62 per cent) are prevented each year by 2015. None of this has happened. We are in the unusual position of being able to empirically disprove a prediction about a policy which has not yet been introduced.

Chris Snowdon is a fellow at the Adam Smith Institute and author of a number of books including ‘The Spirit Level Delusion’, ‘Velvet Glove, Iron Fist’ and ‘The Art of Suppression: Pleasure, Panic and Prohibition since 1800’.

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