My Lords, I am grateful to the Minister for his explanation, and for his comments on the report of the Secondary Legislation
Scrutiny Committee. I beg to move my Motion of Regret, which reads as an amendment to the Motion moved by the noble Lord.
I seek clarity from the Minister on the evidence he has produced and the information presented to your Lordships’ House in the Explanatory Memorandum and in the impact assessment. It seems to be a regular theme when looking at Home Office legislation—I feel that I come back to these three points again and again—that we need to probe further to understand: the evidence base for the measures brought before us; how those measures will work in practice and the impact they will have. That is, whether the measure can achieve the objective the Government state and any unintended consequences, such as whether groups or individuals other than those whom the policy targets are affected and whether that is reasonable. I have tabled this amendment to the Motion today because of the lack of clarity on these points in the order before us.
Most noble Lords would agree that alcohol can be both a pleasure and a pain. The vast majority of those who enjoy a beer or a glass of wine—or something stronger—do so responsibly, without causing any significant harm to themselves or others, and do not cause any disruption or drain on public services. However, we are also aware of those who, because of the amount of alcohol they consume, cause significant harm to themselves, and harm and disruption to others. That can be a considerable drain on public services, to the detriment of others. The challenge is to effect such change that will impact on the behaviour of those who have and cause significant problems, without unfairly impacting on responsible drinkers. The question for your Lordships’ House is whether the order before us today achieves those objectives.
I found the Secondary Legislation Scrutiny Committee’s 32nd report, and the 35th report with the publication of the correspondence from the Minister, Norman Baker, very helpful, and I was glad that the noble Lord referred to them briefly in this comments. The committee has proved—I have tried to follow this in reading the papers myself—the discrepancies and the contradictory information supplied by the Government in evidence for the policy. I am particularly grateful to the committee for its scrutiny, and I always find its reports particularly helpful and invaluable to your Lordships’ House.
After the committee’s initial scrutiny, the Government withdrew their original Explanatory Memorandum that claimed that the benefit to the public sector was £17 million a year from this policy and replaced it with the significantly more modest claim of less than £1 million —and I have to say that the evidence base for that £1 million remains a bit woolly. The 35th report published correspondence with the Minister, Norman Baker, with the initial questions and concerns of the committee. Having read the order, the Explanatory Memorandum, the impact assessment and the committee’s reports, I had anticipated a fuller response from Norman Baker. I share the concerns that the committee expressed in its 35th report, when it said:
“We found the letter to be no more convincing on the merits of this policy than the Explanatory Memorandum. The House may wish to press the Minister to explain the policy of the instrument more clearly in debate”.
That is the challenge for the Minister this evening: to explain that and to assist your Lordships’ House in understanding the rationale and impact of this, as well as bringing clarity to the evidence on the impact.
I am going to refer to parts of the Explanatory Memorandum and impact assessment as I make my comments. Page 2 of the impact assessment provides the Government’s assessment of the economic benefits of this policy. It identifies a best-estimate annual cost of £5.3 million and £9.5 million of benefits, giving a net annual benefit of £4.2 million. I am still a little puzzled by the figures. If the Minister has the impact assessment in front of him, he will see that the calculations of the costs in the figures include only two of the four costs listed; it does not include the cost to retailers. It says:
“There will be transition costs as retailers familiarise themselves with the policy … This is estimated to be a one-off total cost of £4.1m”.
Neither does it include,
“transition costs to the licensing authorities to familiarise themselves with the policy and inform alcohol retailers, estimated at £0.2m”.
Those costs do not seem to be included in the £5.3 million that the Government give as their best estimate of annual costs. But those are costs that the Government say will arise.
When we look to non-monetised costs and benefits, we see that there is more certainty around the costs than there is around the benefits, where it says:
“There may be a benefit to business if consumers”,
do such and such, such as “switch their expenditure”. So there is much more clarity about the costs than there is about the benefit, with the costs being referred to as “will” and the benefits as “may”.
Paragraph 10 of the Explanatory Memorandum is completely different, because the cost to business there is identified at around £0.4 million a year, with an estimated one-off cost as well. But it talks also about the impact on the public sector, saying:
“There is an estimated cost of £5.3 million per annum, plus £0.2 million implementation costs. There is an estimated benefit in reduction of healthcare costs of £1.15 million per annum. The benefit to society, for example to victims, the police and the criminal justice system through a reduction in alcohol related crime is estimated as £3.6m per annum”.
There is a net annual cost of £0.5 million—so that is different. But I do not where the evidence is for the impact that is outlined in the impact assessment. The evidence base would be crucial on this, and if the Minister could enlighten us on the evidence base for those figures and why they are different in the impact assessment from the ones in the Explanatory Memorandum, I would find that helpful.
I have quoted from Norman Baker’s explanation in the committee’s 35th report. He explains the modelling used and offers,
“reassurance that work is in hand to improve the quality of checking Home Office Statutory Instruments and supporting documents”.
I still do not understand the reasons for the differences, but maybe I am missing something that is very obvious to others—I just do not know what it is, and other noble Lords may also find a lack of clarity there. If the
Minister can give an explanation on points that I have raised regarding costs and benefits, that would be very helpful.
The second point is on the impact of the policy. What difference would this policy make? The rationale for the policy is outlined on page 7 of the impact assessment, which cites the NHS costs of £3.5 billion, alcohol-related crime at £11 billion and lost productivity due to alcohol at around £7.3 billion a year. That is £21.8 billion annually. It would be helpful to have the evidence base for that, because, again, those are significant costs. If they are likely to be reduced significantly, we would like to know the evidence base for that.
Page 3 of the impact assessment identifies the policies that were considered by the Government before bringing this policy forward. Originally, there was the minimum unit price, which qualifies what they used to call competition. The Home Secretary said previously:
“We will ... introduce a minimum unit price for alcohol”.—[Official Report, Commons, 23/3/12; col. 1071.]
There were no ifs, buts or maybes—she said, “We will introduce this”. The consultation document on the alcohol strategy stated:
“In the Strategy, the Government committed to introducing a minimum unit price. However, in other areas, this consultation seeks views on the introduction of policies”.
That seems to me very clear. The Government had intended, and were clear about that intention, to introduce minimum alcohol pricing, to the extent that they were consulting on other matters in the strategy and not that one. But tucked away on the impact assessment to the order, on page 3 we learn:
“The Government has decided that the introduction of minimum unit pricing (MUP) will remain a policy under consideration but will not be taken forward at the present time”.
That is not quite the same fanfare as when it was announced that it would be brought in. So that was rejected.
The other policy rejected was the ban on multi-buy offers, such as “buy two, get one free” in supermarkets. I am not clear how that works in conjunction with this order. Presumably, although multi-buys are not being offered, they would have to be sold in line with the formula in this order at a permitted price. I would like an explanation on how that works. I go to Marks & Spencer and buy my husband six bottles of Sussex Golden Ale for the price of five—that is a multi-buy. He is not going to get drunk on those; he is not a big drinker. He might have a couple of bottles of beer at the weekend, of an evening. But presumably that affects the price for those seeking to purchase such items on a budget. Although the Government do not seek to do anything around multi-buy offers, the permitted price would have an impact on such offers.
What about those pubs or restaurants that offer in many areas fish and chips and a pint for £4.99 or £5.99? Will that fall foul of this order, if somebody decides that the beer rather than the chips has been discounted on price? How would that be assessed? I would like to know the detail of how that will work, because we are told that this policy is the alternative to banning multi-buys and minimum unit pricing. What difference is it going to make?
The Minister quoted from the University of Sheffield School of Health and Related Research, which produced the data for the Government on the impact of the policy and the different income groups. There is recognition that those with an addiction are not likely to be affected by pricing; the greatest impact appears to be on those hazardous and harmful drinkers on lower incomes, as those on higher incomes could just spend less for the same effect.
Page 13 of the impact assessment explains further that there will be no change in expenditure for the higher-income moderate drinkers but there will be an increase for hazardous drinkers of 30 pence a year. It says that,
“whereas low-income harmful drinkers are expected to increase their expenditure by £1.40 per year, higher-income harmful drinkers are expected to decrease their expenditure by £0.10 per year”.
Is that really going to make any difference? The Minister gave some sort of figures on the differences that this policy is going to make, but I have not seen the evidence behind the information that he has given.
The response to the committee from the Home Office when it asked about the impact on crime—and the Minister gave significant figures on this—was:
“The reduction in crime costs was estimated by predicting how crime will change in response to changes in alcohol consumption. These estimates do not predict how the level of crime will respond to any changes in disposable income resulting from the ban on below cost sales. However, the prediction is that, on average, alcohol spending among low income groups will increase by 0.03%, equivalent to a £0.15 increase in annual spending. It is not likely that this would lead to any considerable increase in crime”.
We need more information about a significant impact in this regard. If we want to reduce harm, including harm from crime caused by drinking, will this pricing policy do it? How much less would someone drink as a result of this policy?
The Secondary Legislation Scrutiny Committee’s report states that the Sheffield model—the ScHARR model—
“assumes that on average each person will reduce their alcohol intake by 0.04%. The Committee asked what that meant in practical terms. The Home Office responded: ‘The reduction in consumption equates to an average three units per year per person that is equivalent to a large (250ml) glass of 12% ABV wine’”,
or two regular glasses, if, like me, you do not like the large glasses that some pubs use. Given that such minimal outcomes are listed in the report, the impact assessment and the Explanatory Memorandum, one has to question whether the measure will make the significant difference that the noble Lord claims that it will. It seems to me that there is not much evidence for that.
The impact assessment says that minimum unit pricing is still under consideration, but I understand that it may be affected by the Scottish legal challenge. Is this genuinely still under consultation—I think that the committee made a similar point in that regard—or is that just a phrase now being used as a graceful way of ditching the policy when it is difficult to say what the real position is, given the comments made by the Home Secretary and the Prime Minister?
These are worthy objectives. None of us wants to see harm caused to individuals or society through alcohol. I emphasise that most drinkers drink responsibly
and drink gives them pleasure rather than causes them pain. The Government need to bring forward evidence to support their policy on these issues. I hope that the noble Lord will address these issues; otherwise, it seems to me that considerable effort and money have been expended to bring forward legislation that appears to have such a small effect.
Alcohol abuse is a serious issue and we all want to see policies brought forward to address it. However, I worry that the Government do not have a grip on this issue. We have had the hokey-cokey over the minimum unit pricing and the late night levy, which was supposed to bring in £16 million a year in the first year and £17 million in subsequent years. I think that that figure is now about £520,000. Not a single early morning restriction order has been put in place. The Police Reform and Social Responsibility Act included powers for the Home Secretary to introduce full cost recovery for alcohol licences. The Government say that they will implement those powers but have not done so although the Act dates from 2011. We now have the Government’s sobriety scheme to help those with alcohol problems. The pilots were launched in April 2012 and lasted for six months. I have no information on them but I understand that six people have benefited from the scheme.
If we are going to tackle this issue, we have to do so seriously and seek to have a joined-up approach on the different issues that can make an impact. However, I am not clear that the measure before us today will have any impact. If it will have an impact, where is the evidence base for that?