Thoughts on politics and life from a liberal perspective

Saturday 31 December 2011

In which I disagree with Ewan Hoyle on alcohol pricing

My friend Ewan Hoyle has posted a piece on Lib Dem Voice arguing that Cameron's minimum alcohol pricing idea could be the government's first evidence based drugs policy.

His basic thesis is summed up in the final part:

Once we demonstrate that the harms caused by legal drugs can be effectively diminished through evidence-based policy, we can then take the fight to the criminals and terrorists of Big Illegal Drugs. It is a fact the government urgently needs to confront that we can only ever win the “War on Drugs” if they are legal. Only then can the policies of government have a significant moderating impact upon the market.

Ewan has done fantastic work within and without the party pushing the case for liberalisation of our drugs laws in his role as head of LDDPR but in this case I am afraid I disagree with him.

I should first point out that his argument is the best stab I have seen at defending Cameron's idea and a good attempt to look at the potential positive side. Unfortunately from my point of view it overlooks too many of the negatives and there are too many hopeful assumptions about what may need to happen to underpin the policy.

Numerous commenters below his piece have taken issue with his approach, although to be fair there are some supporters too. The objections range from it being an "illiberal" policy (Mill is even rolled out to back this up at one point of course!) through to it not being likely to work and that the evidence is not there.

Whether something is "illiberal" or not is always the source of much contention in any debate like this and there often seem to be nuanced arguments on both sides so I will leave that to one side for now. However I want to briefly tackle whether the policy is likely to increase or decrease harm. In order to do that I am going to reference what us drug policy reform campaigners love to do, the period of prohibition in the USA during the 1920s.

One of the strongest arguments in my view for legalising drugs is that when alcohol was banned we saw a massive increase in crime and harms associated with alcohol consumption. The inherent harms that alcohol consumption can lead to were hugely exacerbated by its very illegality. It encouraged people to distill their own spirits or buy them on the black market or at "speakeasys". The illegal liquor was often of variable and unpredictable strength and sometimes mixed with all sorts of other substances to increase the effect more cheaply. Many people died or suffered horrendous effects such as blindness during this period as a direct result of the legal change. Indeed within a few short years the Americans reversed the policy, so disastrous had it been.

Now I understand that Ewan is not advocating banning alcohol but instead imposing a minimum price. But given that as he rightly points out alcohol can be available for as cheaply as 12p per unit, moving to a situation where the cheapest alcohol is instead quadruple that price or higher is very likely (I would argue inevitably) going to lead to a large increase in the amount of home-made and illegally manufactured spirits. And I would be very surprised if in turn this did not lead to wider harm with the sort of effects that were seen during prohibition in the USA.

Whenever I have been arguing about drug legalisation with someone and they try to argue that there would still be an illegal market in drugs even if they were legalised (look at cigarettes and booze they say) I always respond that the illegal tobacco and alcohol markets are very small in comparison to the legal variants. And I am right about that, the evidence backs me to the hilt. I then counter by suggesting that were drugs legalised we would need to make sure that the scope for a remaining illegal market was vastly reduced by ensuring we made the illegal variants highly unattractive through  ensuring taxation was set at the right level.

So if we erode that argument by increasing the size of the illegal alcohol market then we could end up doing the exact opposite of what Ewan intends by giving succour to those who argue substantial illegal markets would remain so "what's the point".

In my view alcohol pricing should remain roughly where it is now. I do not see the case for a big increase being made convincingly enough without account being taken of the potentially major downsides.

However where I do very strongly agree with Ewan is where he calls for "effective investment in outreach and treatment services" in order that for vulnerable people such as impoverished alcoholics "life doesn’t suddenly become an intolerable struggle.". There is no reason why we can't have a big push for investment in that area.

We don't need a minimum price for alcohol in order for that to happen though. It should be happening anyway.


Simon Cooke said...

Not sure how true it is now that the illegal market in tobacco is small - about a fifth of tobacco consumption is now "non UK duty paid" - some legal but an increasing amount smuggled (ergo illegal).

As importantly the smoking ban has led to tobacco being consumed in private unlicensed locations - what have been called "smoky-drinky" places.

This doesn't change your argument - indeed it suggests that fiscal strategies only take us so far before substitution or illegal production undermine their effect. Smoking has, I think, already passed this point - some evidence suggests that tobacco consumption has stopped its decline and may indeed be rising again (this is definitely the case with Ireland)'

Ewan Hoyle said...

It's an important argument to have and like so much of this debate it is actually very hard to predict what level of smuggling or illegal manufacture will occur under minimum pricing.

It will increase of course, but will it increase enormously? We can't really say.

One factor that will be important is that £10 worth of vodka takes up far more room than £10 worth of cigarettes or of any of the illegal drugs. So any operation would need very large premises and transport for a much smaller return. The margin of price increase of spirits is also much smaller than for white ciders, which are considerably bulkier still.

The home-brew operations will again I suspect need quite large operations for the production of anything approaching a vodka bottle a day. So much so as to probably not be worth the bother.

If you prove correct and illegal activity does create more harm or costs than are prevented than I will happily suggest the policy is reversed. I simply think it likely that your worst fears will not be borne out.

Thanks for your respectful contribution to the debate though. Much of the discourse on Lib Dem Voice is far less polite.

Oranjepan said...

I'd say London of the 1740s is a better example for comparison that Chicago of the 1920s (or, for that matter, Miami of the 1980s).

Partly because certain demographic (waves of ethnic immigration) and sociological factors (undeveloped civic institutions) combined to foster stronger gang mentality, while culture-specific factors such as the US constitutional right to bear arms gave rise to higher levels of violence.

So rather than use the various depictions of Scarface to influence you, perhaps Hogarth's Beer Street and Gin Lane would be more valid.

More specifically the Gin Act provides an evidentiary model for dealing with the situation, by highlighting how taxation was ineffective at changing behaviour, where clamping down on unscrupulous retailers was highly effective.

Stronger enforcement is better than more control: licensing is better than legislation.

Over on LDV I suggested the changing role of retailers should be considered. Supermarket chains have entered the convenience store sector and chain pubs now dominate town centres, and this has driven a concentration of power over alcohol production and distribution which takes on the characteristics of a virtual monopoly.

The excessive power of these corporations enables them to dictate to or otherwise outmanoeuver local councils during applications and hearings, meanwhile building incentives for selling high-volumes at low-prices - quantity instead of quality.

In presenting Millian arguments over harm, this then requires us to better understand the moral values behind economic calculations.