Chris on Sky News discussing minimum alcohol pricing

ASI fellow Christopher Snowdon argues on Sky News' Boulton & Co show that the government are wrong to introduce a minimum alcohol pricing and that this policy will not tackle problem drinking and alcohol related harm.

Chris also appeared on BBC Breakfast TV,  BBC News 24 and Channel 5 News discussing minimum alcohol pricing as well as talking on Radio Five Live, BBC Radio Wales, BBC Radio Manchester and BBC Radio Solent. Meanwhile Eamonn discussed minimum unit pricing on BBC Radio Wales, Sam appeared on BBC Radio London and Pete talked on BBC 3 Counties.

How big a problem is underemployment?

You can read the full article here. 

Summary

Dr Eamonn Butler argues on BBC News website that the government should do away with restrictions such as the minimum wage and onerous employment regulations to encourage businesses to take on full time workers. Freeing up businesses from some employment regulations will help tackle underemployment.

PM's alcohol plan is based on 'flawed assumptions'

Daily Mail: PM's alcohol plan is based on 'flawed assumptions' 

Daily Express: Crackdown on alcohol flawed

Daily Mirror: Booze plans 'don't work' features on page 2 

ConservativeHome: The science behind minimum alcohol pricing is based on suspect computer models written by Christopher Snowdon, co-author of the report. 

Spectator Coffee House: Why is government so confident that minimum alcohol pricing will work? by Chris Snowdon

BBC Radio Scotland: : Co-author of the report, John C Duffy appears on BBC Radio Scotland to discuss the flawed computer model used as a basis for Scotland's minimum alcohol pricing. You can listen to him here (from 53.54 mins in).

Off Licence News: Case against minimum unit pricing gathers steam as Cameron prepares consultation. 

The Grocer: Minimum pricing evidence base is "non-existent"

City AM: Another blow for drinkers as price floor hits

The Independent mentions our report in it's article: Cabinet split over levy on alcohol. 

Summary

Our report on minimum alcohol pricing is covered in a number of newspapers, newswebsites and broadcast outlets. 

David Cameron's ban on cheap alcohol 'may fail to curb drinking'

A ban on cheap alcohol may do nothing to cut crime or prevent health problems resulting from excessive drinking, research warns today.

David Cameron is preparing to introduce a minimum price of at least 40p per unit of alcohol and ministers are expected to launch a public consultation on the scheme within days.
However, a report published by the Adam Smith Institute found that there was no evidence that a minimum price would reduce the harm caused by high levels of drinking...

You can read the full article in the Daily Telegraph here. 

Summary

Tim Ross in The Daily Telegraph reports on the ASI's report on the Sheffield Alcohol Policy Model and minimum alcohol pricing. 

Totally pintless - Cameron booze hike 'won't curb drinking'

DAVID Cameron’s plan to push up booze prices will NOT reduce binge drinking, a report reveals today. The PM will overrule Cabinet colleagues and announce proposals for a minimum of 45p a unit.
It would cost drinkers an extra £600million a year. But free-market think tank the Adam Smith Institute said the move is based on a model containing “flawed assumptions and wild speculation”.

Read the article in full in The Sun here

Summary

The Sun covers the ASI's latest report on minimum alcohol pricing. 

Basis for government alcohol policy is bogus

26 November 2012

With a consultation on minimum alcohol pricing imminent, the Adam Smith Institute (ASI) has released a report showing that the evidence base for minimum alcohol pricing is, to all intents and purposes, non-existent.

Co-authored by John C. Duffy, a statistician with forty years experience in the field of alcohol epidemiology, the report explains that most of the estimated health outcomes, used to justify calls for a minimum alcohol pricing of 40p or 50p per unit, have come from a single, flawed computer model.

This model, the Sheffield Alcohol Policy Model, is used to predict minimum pricing’s effect on everything from NHS expenditure to unemployment, and is based on false assumptions and wild speculation, which render any predictions meaningless.

Arguments for minimum alcohol pricing based on this computer model should be ignored and the Sheffield Alcohol Policy Model should not play a role in the debate.

The model is deeply flawed for a number of reasons:

·     When calculating health outcomes, the model assumes that heavy drinkers are more likely to reduce their alcohol consumption as a result of a price rise. This contrasts with ample evidence that heavy drinkers are less price-sensitive. The majority of alcohol related harm is linked to heavy drinkers who are much less likely to be deterred by price rise than a casual consumer. By claiming that any price rise will lead to bigger drops in consumption amongst heavy drinkers, the model ignores the complex psychological and societal factors leading to alcoholism and alcohol-related violence.

·     It bases its calculations on controversial beliefs regarding the relationship between per capita consumption and rates of alcohol related harm. A low rate of per capita alcohol consumption is no guarantee of better health outcomes. There is little to be gained from making moderate drinkers reduce their consumption slightly.

·     The model provides figures without estimates of error and ignores statistical error in the alcohol-harm relationship. Patterns of consumption and harm are not the same in all countries. When Denmark reduced the tax on spirits by 45% in 2003 it did not experience any increase in alcohol consumption, and instead there was a decline in alcohol-related problems.  As alcohol has become more affordable as a result of rising incomes we have seen a decline in alcohol consumption across most of Europe and the US.  There are, of course, examples where higher prices have reduced alcohol consumption and alcohol related harm, but it is clear that price interventions are highly unpredictable and cannot be easily extrapolated from a computer model.

·     The model ignores other potential negative social outcomes of minimum pricing, such as a likely increase in the illicit alcohol trade and the greater poverty it may push many consumers into. It also ignores some of the health benefits associated with moderate drinking habits.

Alcohol-related harm may rise, fall or stay the same under a minimum-pricing regime. The evidence simply does not exist for reliable forecasts to be made about the consequences of such a far-reaching policy. The Sheffield Alcohol Policy Model is riddled with flaws and wishful thinking. It has no merit as a guide to policy and the government should not base legislation on such speculative and weak statistics.

Christopher Snowdon, co-author of the report, adds: “In the era of evidence-based policy, it seems that speculative statistics are considered superior to no statistics and a wrong answer is better than no answer. We argue that this is a mistake. The aura of scientific certainty, or even mild confidence, in computer-generated numbers based on dubious assumptions is misplaced. Minimum pricing might reduce alcohol harm, or it might increase it, or it might bring about other unexpected consequences, good or bad. An admission that the evidence base is, to all intents and purposes, non-existent is less likely to mislead decision-makers than a spurious prediction. The only certainty is that minimum pricing will transfer large sums of money from the poorest people in society to wealthy industries. This is a deeply regressive leap into the unknown and it should not be taken as a response to wafer-thin ‘evidence’.”

John C. Duffy, co-author of the report adds: “A supporter of the model might ask me ‘If you’re so smart, what’s your model – what do you predict?’ My answer is that I don’t have a model and therefore I won’t make a prediction. There is not enough information around to produce a reliable model and I won’t invent one that is engineered (by undemonstrated assumptions) to fit the prevailing facts and pretend that it is of any use for prediction. As Taleb says in The Black Swan about those who attempt to justify worthless predictions because ‘that’s their job’—get another job.”

A licence to smoke

In the debate with Simon Chapman, Chris Snowdon argues that proposals to introduce a licence shows the extreme nature of many anti-smoking lobbyists and would be a further encroachment by the nanny state.  Smokers should not have to jump through hoops and pay for a licence to do something that is within their rights. The proposal also fails to recognise that licences are not created to deter people but to ensure that people have the right technical competencies. The government should not be taking further actions to deter smoking. 

You can listen to his interview here (from 23mins 54 secs in). 

Summary

ASI fellow Chris Snowdon goes on Radio 5 Live to debate with Simon Chapman on whether governments should require smokers to purchase a licence to smoke. 

Failure to control inflation damages Britain's recovery

He writes that the Bank of England has done a poor job keeping inflation low and argues that at some point we have to take the pain. We had a huge cheap-money, public-borrowing binge and now we are trying to put off the hangover with a hair of the dog. Inflation is a killer. We need to lock it away, and fast.

You can read the full article on CityAM here. 

Summary

Dr Eamonn Butler writes in City AM on the latest inflation figures. 

Raise tax-free allowance to ensure Living Wage for all

·         The government should raise the tax-free personal allowance to the National Minimum Wage rate to achieve a ‘Living Wage’ for all workers.
·         A NMW hike would lead to more unemployment among young and unskilled workers, but a tax cut would have stimulatory effects.
·         By raising the tax-free threshold and pegging it to the Minimum Wage level, up to 1,297,000 workers would be lifted out of taxation altogether. 1

In a paper released today (Monday) at the start of Living Wage week, the Adam Smith Institute calls for an alternative reform to increase net wages of low-paid workers. It argues that although the Living Wage Foundation’s efforts to increase pay for low-paid workers by working with employers should be applauded, it should not lead to an increase in the minimum wage, which could price low skilled workers out of the employment market altogether.

The paper reviews academic studies of minimum wage increase and argues that an increase in the National Minimum Wage to reach the Living Wage level would endanger employment prospects for low skilled or young workers. The paper argues that the unemployment effects of the minimum wage, whereby the minimum wage acts as a price floor that keeps unproductive workers out of employment altogether, make a rise in the National Minimum Wage too risky to consider.

Instead, the focus should be on the net income, not gross income, of workers. The pre-tax minimum wage is actually greater than the after-tax Living Wage – in other words, the only thing holding back all NMW workers from earning a Living Wage is tax. To address this, the tax free allowance should be raised and pegged to the National Minimum Wage rate to lift the lowest paid workers in the UK out of taxation. Raising the personal allowance to £12,875 would increase the take-home pay of everybody earning under £100,000 by £575 and lift up to 1,297,000 people out of the tax system altogether.

Author of the report and Adam Smith Institute’s policy director, Sam Bowman, says: “It is a national scandal that we tax the people at the bottom of society so much that they can’t earn enough to achieve a basic standard of living. It makes no sense to say that the National Minimum Wage is the least a person should earn and also take away a large chunk of that in tax.

“A tax cut for the poor and middle in this time of low economic growth would be just what the doctor ordered. It would increase spending and repayment of private debt, and relieve some of the burden on the people who can least afford to pay. Taking the poor out of tax makes economic sense, and it is also one of the most compassionate things this government could do for people at the bottom of society.”

1. This statistic comes from data in Low Pay Commission Report 2012, p38. You can read the report here: http://www.lowpay.gov.uk/lowpay/report/pdf/8990-BIS-Low%20Pay_Tagged.pdf

· Just Rewards: Why taking the poor out of tax makes economic and moral sense is a report released by the Adam Smith Institute. You can read the full report at: http://www.adamsmith.org/sites/default/files/research/files/JustRewardsASI.pdf

How to get a proper living wage: don't tax it

Tim argues that the Milibands are ignoring the vile stupidity of taxing the poor. Instead of pushing for a Living Wage we should stop taxing low-paid workers and raise the tax-free threshold.

You can read his article in The Times here (£).

Meanwhile Sam Bowman took part in a forum debate in City AM against Boris Johnson arguing that a rise in London's Living Wage doesn't make sense. He argued that raising the minimum wage would destroy job opportunities for low skilled and young potential employees and harm the very people the policy is supposed to help.

You can read his argument here. 

Summary

ASI Senior Fellow Tim Worstall writes in The Times on the living wage and argues that instead of bullying employers, the government should let low-paid workers keep every penny they earn.