After cash for ash, Stormont could be stumbling into ‘drinks for cash’, warns Dublin economist

Sean Barrett, a Dublin academic and former Irish senator, said that he was raising concerns about the issue because the recent programme for government of the new Irish government involves a commitment to encourage Stormont to implement minimum pricing so that it can be done on an all-island basis.

Stormont has for years been examining whether to introduce minimum pricing for each unit of alcohol, something aimed at addressing the sale of exceptionally strong and cheap alcohol in supermarkets and the societal damage caused by problem drinking.

Dublin’s desire is for the policy in the north to mirror that of the south in order to avoid a situation whereby someone could drive across the border to stock up on cheaper booze.

However, while Dr Barrett said that he accepted the intent of the policy, he said that the way in which it was framed would involve “a massive income transfer to the alcohol sector”.

Writing in The Irish Independent, Dr Barrett quoted figures from the Oireachtas Library and Research Service from 2015 which said that legislation in the south - which was passed but has never been implemented because Northern Ireland has not followed suit – would increase the income of alcohol retailers by €78.3m a year.

He said it was a “fatal flaw” that legislators had allowed those who manufacture and sell alcohol to keep all the extra money which customers will be forced to pay under the government-mandated minimum prices.

He said there was “an obvious contradiction in attempting to reduce the consumption of a commodity by increasing the incomes of its producers” and that if carbon tax revenues were delivered to the fossil fuel industries or tobacco tax revenues went to cigarette companies there would be outrage.

Dr Barrett said that if Nothern Ireland was to adopt the Republic’s policy that would involve a further 1.9million people or 39%, meaning a proportionate increase in the revenues to alcohol retailers, bringing their gains from the policy to €109m a year”.

Speaking to the News Letter, Dr Barrett likened the issue to cash for ash. He said: “Both come from bungled well-meaning policies. Cash for ash was Northern Ireland’s contribution to saving the planet.

“Cash for drinks is a misguided bungled attempt to make the Irish, both brands, more sober but mysteriously makes the alcohol trade very much richer.”

Scotland implemented minimum alcohol pricing two years ago and Wales did so six months ago.

Stormont Health Minister Robin Swann announced six weeks ago that he was committed to a full public consultation on the issue, saying: “The impact of alcohol misuse is being felt by too many families and communities across Northern Ireland on a daily basis. We need to consider fully every option available to us to reduce this blight on our society.”

When asked about Dr Barrett’s comments, Stormont’s Department of Health said that it would not be holding a public consultation on the issue until next year.

It added: “There is no pre-determined outcome for this public consultation, which will examine a range of possible options in respect of alcohol pricing. However, it should be noted that issues in relation to VAT and alcohol excise duty are not devolved to Northern Ireland at this time, and is a matter for the UK Government at Westminster.”

Alternative ‘never examined’

An alternative to the current minimum pricing proposals would be to implement both a minimum price per unit of alcohol and increase duty on alcohol, ensuring that the extra money goes to the public purse.

Former Health Minister Jim Wells, an enthusiastic proponent of minimum pricing, said that he did not believe that in his time officials had examined that possibility.

Mr Wells said that the issue had been presented to him as a binary choice.

He said there was also a fear that if duty was increased on alcohol then supermarkets could still sell cheap booze by making it a loss-leader to get people into their shops.

However, he accepted that if both minimum pricing and increased duty were involved that would not be possible.

A second problem for some people in Stormont is that if duty was increased there would be no direct benefit to the Stormont budget unless it could negotiated a special arrangement with the Treasury. Duty is set by Westminster, meaning that any additional income would go the Treasury.

____

____

A message from the Editor:

Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.

With the coronavirus lockdown having a major impact on many of our advertisers - and consequently the revenue we receive - we are more reliant than ever on you taking out a digital subscription.

Subscribe to newsletter.co.uk and enjoy unlimited access to the best Northern Ireland and UK news and information online and on our app. With a digital subscription, you can read more than 5 articles, see fewer ads, enjoy faster load times, and get access to exclusive newsletters and content. Visit https://www.newsletter.co.uk/subscriptions now to sign up.

Our journalism costs money and we rely on advertising, print and digital revenues to help to support them. By supporting us, we are able to support you in providing trusted, fact-checked content for this website.

Alistair Bushe