MUP – implications of the Supreme Court decision

MUP – implications of the Supreme Court decision 

So now we finally know! The Supreme Court confirmed, in its judgement on Wednesday, the Scottish government’s legislation to introduce a minimum unit price for alcohol is lawful, and does not offend against European Union competition law. I don’t intend to look in detail at the legal arguments that underpin this decision, but rather to examine the broader question and its implications – where we go from here.

Interestingly, the Supreme Court states minimum unit pricing (MUP) has two objectives – to reduce the consumption of alcohol in a targeted way, that is, the consumption of hazardous drinkers living in poverty in deprived communities; and to reduce consumption at the level of the whole population. Except insofar as reducing consumption of any numerically significant demographic will contribute to a fall in average, per capita consumption, it is hard to see how MUP can be both a targeted measure and, at the same time, a whole population measure. 

The paternalistic nature of both MUP as a policy and the nature of the legal judgement itself, is evidenced by the fact it is explicitly stated this is a measure directed at people on low incomes notwithstanding the fact that hazardous drinking is predominantly a problem located in the moneyed, middle classes. They apparently can look after themselves, because a minimum price of 50 pence per unit isn’t going to affect the products they buy.

The underlying moral judgement is if people on low incomes who buy cheap alcohol, but don’t drink hazardously, now have to pay more, then that is an acceptable trade-off in terms of reducing the hazardous drinking of the poor. Paternalism is alive and well!

So what happens now? The Scottish government has minimum pricing legislation already in place and now needs to do two things – enact secondary legislation (a Scottish Statutory Instrument – SSI) and then amend licensing law to make it a mandatory condition on all premises licences in Scotland that alcohol may not be sold at less than the minimum price. There will presumably be a “big bang” date when this will come into effect, probably in the first quarter of 2018.

I am opposed to MUP because I think it is a bad policy, not because I think it is unlawful – but if the Supreme Court had decided it was unlawful that would have been helpful, but it didn’t, so we’re stuck with it now, at least in Scotland and soon in Wales too. In England the government, obsessed as it is with Brexit, is still taking a “wait and see if it works” approach. The Scottish legislation contains a requirement for ministers to evaluate the effect of MUP in five years’ time and it automatically lapses after six years (the “sunset clause”), unless Scottish ministers specifically order its continuation. Two points come to mind. Firstly, if the evaluation is carried out by the Sheffield Alcohol Research Group – the same people who massaged the statistics to produce the new “lower-risk” drinking guidelines – then I have no faith in this being a proper, objective evaluation. And as for the possibility that Scottish ministers would in any circumstances allow this measure to lapse, don’t hold your breath.

Some intriguing issues arise with regard to enforcing MUP. I imagine some enterprising individuals will establish cheap booze supermarkets in English border towns so a lively cross-border trade can arise. This trade will enable consumers to engage in a domestic form of “booze cruise” and it will inevitably fuel “white van man’s” supply of the illicit cheap booze market north of the border. It’s an ill wind that blows no-one any good! And think of the monumental task of enforcing minimum price legislation in every street corner convenience store in Scotland. The big supermarkets will put a system in place, but will small store owners even know how to calculate how many units of alcohol there are in a can of beer or a bottle of vodka?

I have four big fears. Firstly, MUP will spread to the rest of the UK. Secondly, now we have government price-fixers in the sector we will never get rid of them. Thirdly, MUP will become a modified form of alcohol duty escalator – there will be agitation for the minimum price to rise by inflation plus 1%. Fourthly, this will spread from the off-trade to the on-trade. Those in the Scottish Licensed Trade Association who support MUP, because they see it as harmless Tesco-bashing, will have a lot of explaining to do if local licensing authorities, freed from the constraints of competition law, start fixing a £1 per unit price for pubs and bars in their area. It is only a matter of time.

Compromise better than cliff edge in Brexit negotiations by Paul Chase

Will Brexit actually happen? New Liberal Democrat leader Sir Vince Cable doesn’t think so. Speaking on the Andrew Marr show, he said: “I’m beginning to think Brexit might not actually happen.” Tony Blair weighed in, expressing the view it would be stopped – and should be stopped. Are these opinions the wishful thinking of a bunch of “remoaners” or are they on to something?

Certainly in the cabinet there is a clear split between those around chancellor Philip Hammond who want a “soft Brexit” – putting the economy and jobs first – and those who want a “hard Brexit” and believe reducing immigration trumps all other issues. The issue of immigration control is one of huge significance for our sector because of our reliance on immigrant labour – and not just in London. Consider the following statistics:

– In the managed house sector, including pubs, bars, nightclubs and casual dining, 37% of the workforce are non-British nationals

– Across hospitality and tourism as a whole, 24% of the workforce is made up of non-British nationals, with 55% of those coming from outside the EU and where immigration controls are already in force, while 45% are from other EU countries where there are no restrictions on the right to work or live in the UK

– In London, non-British nationals make up 64% of the hospitality and tourism workforce, of which 46% come from other EU countries

I think there is a growing realisation among those who voted “leave” without knowing the destination that a hard Brexit would come at huge economic cost, and without a £350m-a-week bonus for the NHS.

What might a soft Brexit look like or might we decide, having glimpsed the destination, to stay in the EU after all? I think we will leave but it will be a gradual and nuanced affair. The talk of transitional arrangements, based on the difficulty of agreeing everything by March 2019, gives a steer regarding the direction of travel.

I suspect a transitional arrangement may look something like the “Norwegian model” – an “off-the-shelf” Brexit package based on the relationship Norway has with the EU. Its main elements are we would have tariff-free access to the single market for our goods and services but not be part of EU political institutions or subject to “ever closer union” or pressured into joining the single currency. We would not be part of the common agricultural policy or the common fisheries policy so would regain control of our territorial waters. We would still pay into the EU’s budget but probably about half the current rate. We would not be part of the Customs Union and therefore free to strike our own trade deals with the rest of the world.

What’s not to like? Crucially, the price to be paid for access to the single market would be more than just financial. We would have to abide by EU trade laws and be subject to European Court of Justice (ECJ) judgements; and we would have to agree to free movement of people – subject only to a temporary break clause in the event immigration was causing an acute social or economic problem. Being rule-takers but not rule-makers would mean we’d have no influence over how free trade within the single market might develop.

The points about the ECJ’s jurisdiction and free movement of people are the real sticking points. I suspect this will be sold to us as a transitional arrangement, with the final shape of the “leave deal” to be determined further down the line.

However, deadlines have a habit of slipping and one suspects a transitional arrangement scheduled to last two years could well be extended to three or four years, at which point the politicians would hope we’d all moved on and the transitional arrangement would quietly become permanent. This is shaping up to be that most British of arrangements – a compromise that satisfies neither side. However, it might just save our sector and others from an economic and recruitment cliff edge. Either way, I think a hard Brexit is dead unless the hardliners are bent on a strategy of keeping their hostage in Downing Street while trying to provoke a breakdown in negotiations and a walk-out of British officials from the talks. I, for one, favour a compromise rather than a cliff edge.