The Age of Unreason

“Government Must Act Now to Save Our Children” read a recent headline in the Times. The reference was, of course, to the demand that government introduce a sugar tax of between 10 and 20 per cent on fizzy drinks. I’ve written about this issue before, but it does seem to me that it now has all the hallmarks of a classic moral panic. It’s almost as if health campaigners have given up on minimum pricing for alcohol, and this is the next ‘big thing’ for them to obsess over. But actually it’s just top of a very long list of things that they think need taxing or banning – and the list gets longer and more absurd by the day.

It’s not that taxing sugary drinks wouldn’t reduce consumption, it would. Use taxation to raise the price of anything and consumption of it will fall, more or less, depending on the price-elasticity-of demand for the product concerned. The point is that the effect will be utterly trivial in terms of its impact on obesity. There are many, many products that contain added sugar, and a recent article in the Sunday Telegraph looks at how many ready meals sold in our major supermarkets contain much more added sugar than fizzy drinks. Should we tax or regulate to reduce sugar in them all? Health campaigners would say yes – the taxation and mass reformulation of products is exactly what they support; it’s all part of their mad plan for world domination – otherwise known as regulating capitalism out of existence!

The impression given by health activists, and much of the media, that sugar consumption is out of control is simply wrong. Reports from DEFRA and from the National Diet and Nutrition Survey show that sugar consumption is lower than it was 40 years ago; but when a moral panic sets in it’s a case of “never let the facts get in the way of a good story”.

Before we ask government to intervene in free markets we should first of all establish whether there has been a market failure that justifies such intervention. One of the most intriguing statistics I’ve read on the subject of sugar and non-alcoholic drinks came from JD Wetherspoon’s Tim Martin. Writing in Propel he disclosed that in the previous week ‘Spoons had sold 580,000 Pepsi products on draught and that 197,000 of them were Diet Pepsi and therefore sugar-free. That’s just over a third. In addition, Martin wrote, ‘Spoons sold a million cups of tea and coffee that were served without sugar. So when we talk about all non-alcoholic drinks and not just fizzy drinks, it is clear that customers were already, overwhelmingly, choosing the sugar-free options. This may not be a scientific survey, but it’s a highly indicative snapshot of the choices people are now making, so where’s the evidence of market failure? And what a brilliant baseline of free choice on which a successful public education campaign could build.

But back to alcohol. According to the press, Public Health England has said there is no safe level of alcohol consumption in terms of the risk of developing Alzheimer’s disease. Now, whilst there is a specific form of dementia called Wernicke-Korsakov syndrome that arises when you pickle your brain in copious quantities of alcohol over a prolonged period of time, the evidence for a causal link between low and moderate alcohol consumption and Alzheimer’s is very weak indeed. But Public Health England say just because there is no evidence that alcohol is implicated doesn’t mean it isn’t; so, apply the precautionary principle and say until there is evidence that it is safe let’s assume it is unsafe and advise abstinence.  What reason! What impeccable logic!

All of these public health campaigns are really predicated on a fear of death. But according to Professor Westendorp – a leading expert in human ageing and longevity – life expectancy is going up in the West faster than we can adjust to it. Every week we get an extra weekend of life-expectancy; every day we gain six hours: “The first person to live to 135 has already been born” he states (The Times, October 22^nd 2015). Dementia, the bogeyman of the present, is also in significant decline according to Professor Westendorp. A large-scale population study in the UK reported a 30 per cent drop in the risk of getting dementia over the past 20 years. And heart disease and strokes are also on the decline. In the first half of the 20^th century, half of the population died of cardiovascular disease; that has now dropped to a third and heart disease continues to fall.

The doom-mongers of the public health racket never give up though. As reported by Chris Snowdon on his blog site Velvet Glove, Iron Fist, a recent report by Dr. Neal Barnard, president of the Physicians Committee for Responsible Medicine is concerned about the health aspects of cheese. There is a reason why pizza is such a successful food product. It contains an addictive substance.  Dr. Barnard believes cheese to be as addictive as morphine because it contains “casein-derived, morphine-like compounds” which become super-concentrated during the cheese-making process.  And so cheese might as well be called “dairy crack” he declares.

And, hot off the press, a World Health Organisation report has just been published that classifies processed meat as carcinogenic – alongside arsenic and asbestos. Less than one sausage a day increases your risk of developing cancer by almost a fifth.

I am utterly speechless!

Paul Chase

SAFE LEVELS OF ALCOHOL CONSUMPTION

It has been reported in the press recently that the Department of Health is considering revising down the ‘lower-risk’ or ‘sensible drinking’ guidelines, on the basis of new evidence linking even very low levels of alcohol consumption to an increase in the risk of developing cancers – particularly breast cancer. The logic of the healthist argument is that there is no level of regular alcohol consumption, no matter how low, that doesn’t raise the epidemiological risk factor for a variety of cancers, and therefore there is no ‘safe level’ of alcohol consumption. It follows from this that the ‘lower-risk’ drinking guidelines should be reduced, as they have been recently in Canada and Australia. I believe that there is actually good evidence, from a health point of view, that we could safely raise the lower-risk guidelines. That’s right – raise them!

Let’s take a step back: firstly, if the overarching purpose of lower-risk drinking guidelines is to reduce levels of drinking and thereby levels of premature death by reducing the risks of developing fatal diseases, then surely what we should look at is the relationship between various levels of alcohol consumption and the risk of premature death from all causes, not just premature death from one cause – cancers. Here’s where we uncover some inconvenient truths for the health lobby. Research has established that people who drink moderate amounts of alcohol on a regular basis are less likely to die prematurely than people who never drink. And to be more specific, they are less likely to die prematurely from cancers or heart disease.

In the graph below we see the risk of all-cause mortality for ‘never drinkers’ represented by the horizontal straight line. If we look at the J-curves for men and women, represented by the solid black line and dotted black line respectively, we can see that risk of premature death from all causes declines at very low levels of consumption (less than one standard drink a day) and then starts to rise. But it only exceeds the risk for people who never drink when it exceeds four standard drinks a day for men and approximately 3 standard drinks a day for women. An American ‘standard drink’ equates to 1.7 units of alcohol.

The current UK lower-risk guidelines were plucked out of the air; they are not based on science. But we can now define a rational basis upon which to calculate such guidelines. It’s about relative risk: if people who drink moderate amounts of alcohol regularly have a lower level of all-cause mortality as compared with those who never drink, then the question we need to ask, when framing the lower-risk drinking guidelines, is: how many units of alcohol consumed per day would raise the risk of premature death from all causes above the risk level of those who never drink?

We do have an answer to this – represented in the J-curve graph. Research in the United States has shown that for men, two to four ‘standard drinks’ per day, and for women, one to three standard drinks per day, keeps the risk factor of premature death from all causes below that of ‘never drinkers’. In the United States a ‘standard drink’ is the equivalent of 12 fluid ounces of beer with an ABV of 5%. This translates into 1.7 British units of alcohol. So, two to four standard drinks a day represents between 3.4 and 6.8 units of alcohol consumption for men, and one to three standard drinks gives us a range of 1.7 to 5.1 units a day of alcohol consumption for women. The current UK guidelines are 3 to 4 units a day for men, and 2 to 3 units a day for women – hence my suggestion that the current guidelines err on the side of caution and could safely be raised.

But there is another question we need to ask about what the healthists have to say concerning safe levels and risk factors. If we are going to define alcohol as ‘unsafe’ because at any level of consumption it raises the risk of developing cancers, then what happens if we apply that principle to other drink and food products?

Let’s take tap water as an example. In the UK we put chlorine in our public water supply. Chlorine is a disinfectant that kills micro-organisms and thereby renders water safe to drink. The chlorination of public water supplies represented a massive step forward in public health and virtually eliminated cholera, typhoid and other water-borne diseases in advanced countries. But we know from research done in the 1970s and the 1990s that chlorine, when added to water, forms Trihalomethanes (THMs), one of which is chloroform. THMs increase the production of free radicals in the body and are highly carcinogenic (cancer causing). Specifically, they raise the risk factor for bladder, colon and breast cancers. THMs may also have an effect on pregnancy and the level of miscarriages and on the development of allergic reactions to certain foods.

There are numerous studies that establish this link between chlorinated water consumption and cancer. Here is just one example: a study published in the Journal of the National Cancer Institute in the United States found that “long term drinking of chlorinated water appears to increase a person’s risk of developing bladder cancer by as much as 80 percent.” I’m not trying to start a health scare here folks, because the absolute risk of developing bladder cancer is very low, so an 80 percent increase in a very low risk is still a very low risk. I’m merely pointing out that basing public health policy on epidemiological risk factors alone, does not provide the basis for evidence-based policy-making. Used selectively, as in the example of alcohol consumption and cancer risk factors, it is merely scaremongering and doesn’t deserve to be taken seriously. Department of Health, please take note.

But if we apply the principle that any elevation of cancer or other health risk factors renders food (as opposed to alcoholic drinks) unsafe, then we get to an even more untenable position. Consumption of red meat; of meat products such as bacon, sausages and burgers; consumption of convenience foods for microwave cooking, such as spag bol, because they contain added sugar and salt, and for the same reason consumption of fizzy drinks – all these foods raise disease risk factors. So what we are left with is fruit and veg – and nothing to drink! The healthist utopia is the creation of a teetotal, vegetarian society. And this is where you can begin to see that ‘public health’ as a movement is not about public health, but about state regulation of lifestyle. It is an ideology that seeks to use epidemiological research to pressure government to regulate the food and drinks’ industries in order to enforce mass product reformulation.

There are of course genuine concerns about the health effects of heavy alcohol consumption and about excessive consumption of foods rich in sugar, salt and saturated fats. But as long as we have free information and there is no market failure in terms of the provision of affordable healthy alternatives, there is no justification for government stepping in with large-scale regulation.

Paul Chase

FAT LIES AND SUGAR RUSHES

Musician Frank Zappa once said: “Some scientists claim that hydrogen, because it is so plentiful, is the basic building block of the universe. I dispute that. I say there is more stupidity than hydrogen, and that is the basic building block of the universe.” Which neatly brings me to Jamie Oliver. 

Oliver has decided to become an anti-sugar evangelist, and in his recent Channel 4 programme ‘Sugar Rush’ he described sugar as “evil”. His response is to put a 10p ‘sugar tax’ on fizzy drinks sold in his restaurants which will go to his campaigning fighting-fund. And there are reports that Leon and Abokado are about to follow his lead. Social psychologists refer to this kind of behaviour as “virtue signalling” which is a gratuitous example of just such stupidity.

And then there are the double standards involved. Oliver tells us that we shouldn’t consume more than seven teaspoons-full of sugar a day. So, how does he justify the nine and a half teaspoons of it in his Eton Mess; or the seven teaspoons of it in his baked cranberry cheesecake; or the four teaspoons of it in his chocolate ice cream; or the two table spoons full of it in his bread? I could go on, but what is apparent is that saying “my added sugar is OK, but I’m not sure about yours” is just stupid. Sugar is simply a basic ingredient added to many foods to give taste and texture, and if we are to characterise that as evil then Fanny Craddock and Mrs Beeton will be turning in their graves!

The truth is that the campaigns against sugar, fat and alcohol all stem from the same ideology: ‘healthism’. Health campaigners believe that capitalism is wicked; that that the next big step forward in public health is to get the government to prescribe a national diet, and to nudge people into making the ‘right choices’ with sin taxes, bans and the mass reformulation of products. But the facts are not on their side. 

According to the British Heart Foundation (2012: 107): “Overall intake of calories, fat and saturated fat has decreased since the 1970s. This trend is accompanied by a decrease in sugar and salt intake, and an increase in fibre and fruit and vegetable intake.”

Surveys carried out by the Department for Environment, Food and Rural Affairs (DEFRA) since 1974 have also validated the fact that calorie consumption, fats, and carbohydrates, including sugars, have all declined since 1974. And that includes consumption in the home and out of home consumption too (The Big Fat Lie, IEA publication by Chris Snowdon). This research also indicates that per capita consumption of sugar, salt, fat, and calories has been falling in Britain for decades. Per capita sugar consumption has fallen by 16% since 1992 and calorie consumption by 21% since 1974. At the same time the average body weight of English adults has increased by two kilograms. This apparent paradox can only be explained by reference to the decline in physical exercise – at home, in schools and in the workplace.

But these inconvenient facts don’t suit health campaigners. They know there’s not much you can do about long-term changes to the nature of work or the decline in school sport, so they need to construct a narrative whereby Big Food seeks to addict us all to sugar and salt in order to flog their stuff. This is similar to the narrative about the addictive nature of alcohol and the slippery slope. This notion, that the docile masses need protection for the machinations of food and drink producers, who are depicted as little better than drug dealers, is what underpins the assertions of swivel-eyed fanatics like Graham MacGregor, chair of Action on Sugar; Mike Raynor, a member of it, and Tam Fry head of the National Obesity Forum – all of whom appeared in Oliver’s programme Sugar Rush.

So, how dangerous are sugary drinks and sugar in any event? According to the government’s Scientific Advisory Committee on Nutrition (SACN) there is an association, based on “moderate evidence” between excessive consumption of sugary drinks and type 2 diabetes, but no evidence between sugar as such and type 2 diabetes; no association between sugar and blood insulin; and no association between sugary drinks and childhood obesity. The demand of anti-sugar campaigners to reduce sugar consumption from 10% of our dietary energy to 5% represents a reduction in calorie intake of just 100 calories a day. That’s going to cure the ‘obesity epidemic’? Really?   

Jamie Oliver chooses to ignore the mainstream science and instead to give the oxygen of publicity to fanatical anti-sugar campaigners to whom he is just a useful idiot.

In the upcoming final series of Downton Abbey there’s a scene where the Dowager Countess, played by the wonderful Maggie Smith, asks her moral-crusading friend Mrs Hughes the following question: “Tell me, doesn’t it ever get cold on the moral high ground?” For Jamie Oliver the moral high ground is shifting beneath his feet because he’s just not bright enough to do some basic research. It should send a shiver down his spine.

MINIMUM UNIT PRICING- THE RESULTS!

Like an interminable series of the X Factor the issue of minimum unit pricing (MUP) has dragged on and on. And I’m getting bored now!

Yesterday saw the publication of the opinion of the Advocate General of the European Court of Justice (ECJ) on the legality of MUP under EU law. This was billed as a definitive opinion on whether MUP could lawfully proceed or not. And it didn’t quite live up to the pre-publication hype. It was a wordy, 41 page judgment written in deep legal-speak and it took me quite some time to understand whether it was saying “yes MUP is legal” or “oh no, it’s not!” 

On reflection I think it is pretty clear that the Advocate General was not a fan of Nicola Sturgeon’s pet project and that his opinion struck a potentially fatal blow to the whole ill-conceived measure. Amongst other things he found that fixing a minimum price for a unit of alcohol could only be justified if the Scottish Government could prove that alternative means of curbing excessive consumption, such as increasing taxation, would not deliver the same, or substantially the same benefits – but without restricting trade and the free movement of goods. He concluded it was “difficult to justify” minimum pricing as it appeared “less consistent and effective” than increasing taxes and “may even be perceived as being discriminatory.” Ouch! Take that! 

But let’s take a step back and consider the legal issues: one of the fundamental principles of the EU is free movement of goods. Anything that impedes that is likely to be ruled unlawful. So, put yourself in the position of a Spanish wine maker. Your operation is efficient and your costs are low. You pass this onto the consumer and your wine is inexpensive to buy so you can sell lots of it. Up pops the Scottish Government and imposes a minimum unit price that makes your wine more expensive. The outcome is that you can no longer reap the competitive advantage that arises out of your efficiency, so your volumes will fall. Both sides in this case agreed that this amounted to a “quantitative restriction” – an impediment to free movement of goods – and therefore, on the face of it, illegal.

Ah, but there’s a get-out clause that says such restrictions may be lawful if they are necessary to protect public health. However, any such measure would have to pass the “proportionality test”. This means that the measure (MUP) must not be disproportionate to the desired goal (improving public health), and if there is an alternative measure that would protect public health and not impede or restrict the free movement of goods then you must choose that instead. And it was this point that greatly exercised the Advocate General when he pointed out that the Scottish Government had provided no evidence to show that taxation wasn’t at least as effective, if not more so, as a means of reducing excessive alcohol consumption.

Now the issue of “proportionality” did not fall from the sky; the Scottish Government wasn’t ambushed by this proposition. Both sides knew this would be the crux of the matter. So when Nicola Sturgeon commented yesterday that “the policy (MUP) can be implemented if it is shown to be the most effective public health measure available”; and that “it will be for the domestic courts to take the final decision” she sounds like a drowning person clinging to a life ring with a puncture in it, who nevertheless maintains “I’m still optimistic!” 

Firstly, it was always going to be up to the domestic court and its judges to decide – but with the ruling of the ECJ ringing in their ears. Secondly, it’s not just about establishing that MUP is the most effective measure, it’s about explaining to the court’s satisfaction why you didn’t choose a measure that could achieve substantially the same objective, but without discriminating against efficient producers with low costs and low prices. The Scottish Government had ample notice that this would be the crucial test, but failed to provide any evidence with regard to why they were insisting that only MUP could achieve their objectives.

I think that one of the things the Advocate General picked up on is that the Scottish Government was confused about what the objectives of MUP actually are. Is it intended to deter heavy drinkers and reduce their consumption? Well, many heavy drinkers are quire well-heeled so it is unlikely that you could successfully argue that price rises would deter them. Was it to reduce alcohol consumption across the whole population? Well, clearly alcohol duty is a much better mechanism for doing that, and in any event why should ordinary, moderate drinkers be penalised in this way? Or could it just be that they want to reduce the alcohol consumption of poor people with a regressive sin tax?

I think the Advocate General’s opinion blows MUP out of the water. Get over it Nicola, and move on.

ANOTHER DAY, ANOTHER BANDWAGON

I’ve generally tried to stay out of the tobacco debate, largely because I’m not a smoker and don’t feel strongly about smoking as such. But the ban on smoking in enclosed public spaces has already impacted on pubs and has been one of the factors that have contributed to pubs closing. The smoking ban has now been extended from enclosed public spaces to banning smoking in enclosed private spaces – cars, when children are present. My belief is that the longer-term goal of ‘public health’ is to ban smoking in the home when children are present, stopping-off along the way to test the water and condition public opinion to extending smoking bans more widely.

It seems another stopping-off point is smoking bans in open public spaces – and this is already proposed for beaches in Brighton and for city squares in Bristol. This is the kind of petty-Gauleiter activity you get when ‘public health’ is given to rinky-dink local government to play with. The latest public health sock puppet to jump on this particular bandwagon is the Royal Society for Public Health (RSPH). They are calling for the smoking ban to be extended to beer gardens, al fresco eating areas of restaurants, parks and outside school gates. RSPH go on to say smoking should be seen as “abnormal” and people needing a “fix of nicotine” should use e-cigarettes. 

According to the BBC, Shirley Cramer, RSPH’s chief executive, said: “Children are hugely receptive to the behaviour of the adults around them. The sight therefore of individuals smoking at prominent locations risks teaching them that smoking is a normal and safe habit.

“We believe that banning smoking in these locations via an exclusion zone could further de-normalise smoking, ensuring that it is seen as an abnormal activity and potentially, prevent children and young people from beginning in the future.”

The end-game here is to ban smoking at home – what could be a more prominent place in which to influence children than the home? But with 22% of men and 19% of women smoking regularly it is not for government to decide what is or is not “normal”, and then to threaten people with fines or imprisonment if they depart from the norm by breaking a legally enforceable ban – particularly one introduced at the insistence of a bunch of obsessive cranks who seek to write moral prescriptions for everyone else. There is no longer any pretence that such banning measures are there to protect non-smokers from second-hand smoke - that was always just an excuse. The goal is “de-normalisation” as a kind of cultural form of prohibition.

Now where have I heard all this before? Well, think of the health lobby’s proposals on banning alcohol advertising. This is part of their strategy for de-normalising the drinking of beverage alcohol. Where smoking policy goes, alcohol policy is sure to follow. Smokers have been driven outside the pub, now they are being told that if they need a “nicotine fix” it must be from an e-cigarette. I’m beginning to think of smokers as a persecuted minority! But this measure can only discourage smokers from going to pubs.

Palcohol?

One of the techniques that healthists use to de-normalise alcohol is to take the drinking of it completely out of its social and cultural context and say it is “just another drug”. In the United States we have seen the development of a powdered form of alcohol – a product called “Palcohol”. The US Alcohol and Tobacco Tax and Trade Bureau have approved this product, which, when mixed with 6 fluid ounces of water produces the same alcohol content as a standard mixed drink. The powders come in various flavours – vodka, rum and powderita – a margarita version. 

I cannot imagine a worse development for our sector, or one that is more calculated to facilitate the portrayal of alcohol as just another drug. If you thought that healthists had a field day with “alcopops” wait until powdered alcohol hits the shops. Once we separate ethyl alcohol from beverage alcohol – from the tradition of craft and flavour, and the use of natural ingredients – then those of us who defend the drinking of beverage alcohol as a lawful and socially acceptable activity are placed in an untenable position. 

Actually, when I said I can’t imagine a worse development for our sector than powdered alcohol - I take that back! We have also seen the development of alcohol vaping – inhale it as a vapour and it goes straight from the lungs to the brain and people get very drunk, very quickly. Currently the Home Office is consulting on whether powdered alcohol at least should be brought under the licensing regime. This type of product is already available online. I find myself in the slightly uncomfortable position of favouring a ban. Oh dear!

THE NANNY STATE NEVER SLEEPS

What divides ‘public health’ from those of us who would rather like to make our own lifestyle choices is essentially the question of what it is we want to maximise. Do we want to maximise ‘longevity’ or ‘utility’? It seems to be the unquestioned assumption of ‘healthists’ (those for whom the ‘health of the nation’ has become an ideological obsession) that longevity – length of life – is the main thing we have to consider; that all our lifestyle choices should be based on maximising the length of time we spend knocking about the planet. This explains why we have an endless stream of research papers that seek to uncover our epidemiological risk factor of premature mortality from a variety of illnesses linked to lifestyle. 

A visit to the GP involves feeding all your numbers – blood pressure, cholesterol ratio, height, weight and even your postcode into a computerised, mathematical model that calculates what is termed your ‘QRisk Factor’ – your risk of heart attack or stroke in the next 20 years. You can Google a QRisk factor calculator and play around with this model if you know your ‘numbers’. I did so and discovered that my risk of heart attack or stroke was only marginally reduced even if I significantly reduced my blood pressure or my ‘bad cholesterol’. But when I altered my age from 66 years to 35, but made no other alteration to my numbers, then my risk of getting a heart attack or stroke in the next 20 years reduced dramatically – from 19.4% to 1%. In a man of my age managing epidemiological risk factors seems like an exercise in trying to hold back the tide. And we all know what happened to King Canute!

Of course, if you combine a reduction in both blood pressure and bad cholesterol then that does deliver a significant reduction in your risk of premature mortality, which is why the mission of many GPs is to get anyone over 40 medicated with drugs that reduce both these measures. And they’d also like you to stop drinking and smoking and to eat a nationally approved diet. But there is no obvious reason why longevity should be the ultimate goal of public health. What most people seek to do is maximise utility. This means they seek to live their lives in a way that maximises enjoyment, pleasure and sensory experience so as to enhance sociability and enable them to, er… enjoy life!

Longevity and utility are not mutually exclusive alternatives; this is not a zero-sum game in which you have to choose. This is about balance. Drinking yourself to death is not my idea of maximising utility, nor is chain smoking. But to live a life of abstemious self-denial elevates longevity to the status of a life principle that trumps everything else – and probably ensures that when you die, it will be of boredom. I think it is up to each individual to decide where to establish this balance, but epidemiology has been elevated almost to the status of a new religion; it is puritanism dressed in a white coat.

We are bombarded with healthist scare stories that capitalise on our fear of death, and which seek to persuade us to surrender our freedom and our right to make our own moral choices to a new priesthood: the ayatollahs of public health.

But every so often something happens that warms the cockles of my libertarian heart. One of the unintended and positive consequences of the squeeze on public spending is that cash-strapped local councils can’t waste money funding sock-puppet fake charities that peddle the healthist ideological agenda. And so it is that DrinkWise Northwest has had its state funding withdrawn. Most of their money came from local authorities, not public donations, and they used this money to campaign and lobby for changes to government policy on alcohol. This was a classic case of using public funds to campaign against public policy. Their website was full of imprecations to ‘join the movement’, ‘act now’ or ‘write to your MP’. They campaigned, anonymously at first, via an arms-length website, for alcohol advertising bans and minimum unit pricing. In relation to minimum pricing they made the ludicrous claim that it would reduce the price of some drinks. 

Their campaigning falls foul of a Department for Communities and Local Government ‘anti-sock puppet clause’ that reads as follows:

“The following costs are not eligible expenditure: payments that support activity intended to influence or attempt to influence Parliament, government or political parties, or attempting to influence the awarding or renewal of contracts and grants, or attempting to influence legislative or regulatory action.” 

DrinkWise North West has a counterpart called Balance North East and I can only hope they will suffer a similar fate along with Alcohol Concern, which is another fake charity which, when it isn’t pickpocketing the taxpayer, gets money from the pharmaceutical industry for endorsing products used to treat ‘mild alcoholism’.

The nanny state never sleeps, but we may be able to starve it to death.

POLITICAL CROSS-DRESSING

There’s no limit to the opportunism of politicians, and the extent to which George Osborne stole Labour’s clothes with the announcement of a new National Living Wage (NLW) is a case in point. To understand what is going on here we need to separate the economic arguments for government wage-fixing and tax credits for those in work, from the social justice arguments. In a free market economy the interplay between demand and supply should determine the price of all ‘factors of production’, including wages for labour. Government should only intervene to correct a ‘market failure’. The two most obvious forms of market failure arise from monopoly and monopsony power.

A ‘monopsony’ arises when employers dominate the labour market, sort of an employer equivalent of a monopoly. The economic argument is that a ‘monopsonist’ is able to hold wages below the market equilibrium, just like a monopolist would force prices above the market equilibrium.  Thus labour is being exploited by the market power of an employer, or small group of employers. This ‘market failure’ justifies government intervention that puts a floor under wages. 

But the idea that the UK’s national minimum wage (NMW) was introduced to combat employer buying power that was artificially holding down the level of wages for unskilled labour is ridiculous. The NMW was introduced in April 1999 and it raised the wages of workers who were largely unskilled or semi-skilled across a whole range of occupations, but it covered only 3% of the workforce. The justification for it was never an economic one, but a moral, social justice one. Put simply, the Labour Government believed it was just wrong for people to be paid below a given, hourly rate. So the NMW was introduced in the name of social justice, not to correct a market failure of the type defined above.

So, when in addition to the NMW Gordon Brown introduced Working Tax Credits in April 2003, he didn’t do so to subsidise ‘low-pay employers’ who otherwise would suffer a labour shortage, but to subsidise low-pay employees in order to correct a failure of government policy, namely, the way in which the benefits system was distorting the labour market and creating a ‘why work’ culture. If the gap between receiving benefits for doing nothing, and what a worker on minimum wage would receive net of tax was too small, then workers in this position realised they were really working for the difference and it wasn’t worth it to them. Working tax credits were introduced to widen that gap – solve a government policy failure, not a market failure.

So, now the newly elected Tory Chancellor comes along and says that he too wants to make work pay, and that a new, compulsory national living wage is the way forward. Again, there is no economic justification for this; it is a social policy/social justice objective. That’s fine, but it isn’t immediately apparent to me why the burden for realising that social policy objective should fall disproportionately on employers - who aren’t paying below the market equilibrium for labour and don’t operate as a monopsony. 

And it’s not just where these policies start that’s important, but where they end up. I support the general thrust of policy towards reducing dependence on benefits, reducing the cost of them and thereby enabling tax cuts that benefit workers on low pay, but when the NLW is fully implemented in 2020 at approximately £9.35 an hour, then 20% of all employees in the UK will have their wages determined by a government quango, the Low Pay Commission. So, a social policy that aimed to protect a small group of low paid workers, just 3% of the workforce will, just over two decades later, have morphed into a policy that fixes the wages of 20% of the workforce. This same mission creep can be seen in the rising cost of working tax allowances: a cost of £1.1 billion in 2003; rising to £30 billion by 2014 precisely because working tax credits were linked to the minimum wage which over its lifetime has exceeded both price and wage inflation. The consequence has been to create a ratchet-effect that has seen the cost of tax credits sky-rocket.

Currently the hospitality sector accounts for 26% of all minimum wage jobs, so the effect of creating a much higher rate of pay for those over 25 who will be subject to the new, compulsory living wage, is going to have a big impact on the sector, particularly on rented pubs where the net margins are small. 

Personally, I would have preferred deeper spending cuts to fund bigger reductions in taxes. And a more radical reform of the tax system to harmonise income tax and national insurance. Also, raising the level at which employees start to pay NI towards the level of the income tax personal allowance would do more to help those on low pay than a compulsory NLW that will throw between 60,000 and 120,000 people out of work. We should bear in mind that an increase from £6.50 per hour to £9.35 per hour is a 43.8% rise over four years at a time when retail price inflation is virtually non-existent. This is preposterous. Budgets are high political drama, but they also have a habit of unravelling. If this particular measure doesn’t unravel then our sector will pay a very high price for the Chancellor’s political cross-dressing moment.