My Lords, the order makes provision for the introduction of a mandatory licensing condition banning the sale of alcohol below the cost of duty plus VAT.
The Policing and Crime Act 2009 amended the Licensing Act 2003 to confer a power on the Secretary of State to specify further mandatory licensing conditions relating to the sale and supply of alcohol. Sections 19A and 73B of the Licensing Act allow for such conditions where she considers it appropriate for the promotion of the licensing objectives. The order would apply to all licensed premises in England and Wales; Scotland and Northern Ireland are subject to different legislation.
The Government are committed to reducing alcohol-related harms. We have taken a decision to ban the sale of alcohol below the permitted price—that is, the cost of duty and VAT. That fulfils a commitment in the coalition agreement. It will ensure that the worst cases of cheap alcohol are banned from sale. The ban will prevent anyone from selling alcohol at heavily discounted prices. A can of average-strength lager will now cost no less than 40p, and a standard bottle of vodka no less than £8.89. The ban aims to reduce excessive alcohol consumption and its associated impact on alcohol-related crime and health harms.
It is estimated that overall alcohol consumption will fall by 10.5 million units in the first year alone, resulting in 900 fewer crimes and 100 fewer hospital admissions. After 10 years, there will be 500 fewer hospital admissions and 14 lives will be saved each year. It is vital that we reduce alcohol-related harm, which it is estimated costs society £21 billion per year, £11 billion of that being alcohol-related crime. In nearly half of all violent incidents the victim believed the perpetrator to be under the influence of alcohol. The most common type of anti-social behaviour experienced or witnessed—by one in 10 people—was drink-related. This measure will ensure that we take a step towards a much needed reduction in the £21 billion bill that this country faces as a result of alcohol.
I thank the noble Lord, Lord Goodlad—who is not in his place this evening—and the members of the Secondary Legislation Scrutiny Committee for drawing the order to the attention of the House. The committee has reviewed the order and has made some important observations about the evidence on which we rely to demonstrate the benefits that the order will bring.
I will comment on the committee’s concerns that the evidence is highly speculative. The benefits have been assessed using the University of Sheffield’s School of Health and Related Research model, which is accepted as the best available model for estimating benefits of this policy. The modelling was carried out by researchers based at the university, who are independent of government and have qualifications and significant experience in the fields of health economics, health modelling, systems modelling and decision modelling. The modelling from the University of Sheffield estimates that this policy is worth £3.6 million per year in crime reduction benefits in England alone. That figure was laid before Parliament in the impact assessment and the Explanatory Memorandum.
The health benefits have also been considered, and again, those have been laid before Parliament. The Explanatory Memorandum notes an estimated benefit to the public sector in England alone of £1.15 million per year on average over the first 10 years. The impact assessment estimates the wider health benefits to society, as well as to the public sector, to be £5.3 million per year. While the reduction in average consumption is modest, this policy will impact the most on hazardous and harmful drinkers. We know that there is a direct link between the price of alcohol and the quantity consumed by the heaviest drinkers, and that they tend to favour the cheapest alcohol. We also know that hazardous and harmful drinkers generate the biggest costs for alcohol-related harm. This policy seeks to achieve 900 fewer crimes in the first year alone. The reduction in hospital admissions will go from 100 in year 1 to 500 in year 10.
Two consultations have been held on the Licensing Act and on alcohol strategy, in 2010 and 2012-13 respectively. Following the results of the consultations, banning the sale of alcohol below the cost of duty plus VAT was considered the most pragmatic way to tackle the worst examples of cheap alcohol. I hope that the House will agree with the Government that the introduction of the ban is an appropriate use of the powers conferred on the Home Secretary by the Licensing Act 2003. Accordingly, I commend the order to the House.
Amendment to the Motion