What’s the Real Cost of Booze?

A reader asks if I might write something about the “ridiculous assertion that alcohol abuse costs every Scot £900 a year”. Happy to do so!

We all know that if a tobacco company sponsors research no-one in the press will ever call any report produced by that research “independent”. Everybody knows that it’s only government-commissioned research that counts as “independent”.

And lo, today’s example of this is a report (original PDF linked to here) , paid for by the Scottish government, from “independent experts” at York University claiming that the social and financial costs of booze amount to £900 a year for every Scottish man, woman and child in the country. I don’t mean to impute the independence of the number-crunchers in York too much, but this is exactly the outcome a government determined to press on with controversial plans to increase the price of drink might want to see.

Coincidentally, the minority SNP ministry in Edinburgh wants to make drink more expensive.

According to the report the total cost of drink to boozed-up Scotland is somewhere between £2.4bn and £4.6bn each year. The rather large amount of money between these two estimates is itself a warning that this report must be almost useless.

Indeed, fairness demands that one recognise that the reports’ authors concede that it’s largely based on guess-work:

It is important to recognise the levels of uncertainty around many of the generated costs and the fact that this has led to values that should only be considered as indicative.

Needless to say that hasn’t stopped either the press from reporting its contents as gospel truth* or politicians from claiming that it proves something must be done. According to the Health Minister, Nicola Sturgeon:

“The time for stalling is over and the need for action is clear.This report, which takes a more comprehensive view than any previous study, indicates that the total cost of alcohol misuse to Scotland’s economy and society is even worse than we thought.”

A more “comprehensive view than any previous study”? Indeed so. We are victims of Government-Sponsored Study Inflation. In 2001 a study for the Scottish Executive argued that drink cost the country about £1bn a year; in 2004 another report estimated the cost at £1.1bn before, in 2007, yet another claimed that hangovers and bar-room brawls and liver disease and all the rest of it cost £2.25bn. Chicken-feed in comparison to this year’s numbers. So here too we can suppose that you can do the sums any way you please and that, consequently, it probably helps to decide what you want the result to be before you begin the whole sorry process.

So even though the report admits that:

Intangible costs (e.g. those caused by pain, suffering and loss) are often omitted from such studies due to problems with their quantitative measurement.

£1.3bn is attributed to “intangible social costs associated with life years lost”. This is more than the £1bn costs attributed to the NHS and crime combined. (I’m using the middle-of-the-pack guesstimates furnished by the authors themselves here).

That’s not all! Other estimates seem equally dubious. How about this?

In other words, we haven’t a clue. Undeterred by this potentially grievous setback, our plucky number-crunchers continue:

Given these difficulties, some caution should be taken in interpreting the estimates in relation to alcohol services.  However, every effort has been taken to ensure that the derivation of the estimates is transparent and that ranges are presented where there is uncertainty. 

Alas, there is uncertainty everywhere! So much uncertainty in fact that the whole sorry enterprise might properly be considered entirely useless. Indeed, there are moments when the authors essentially admit this. Take, for instance, their notion that the 1,611 premature deaths caused by a fondness for the juice represent 26.035 “potential years of working life lost”. This has a “cost” of £313m. Yet:

The calculations are based on the assumption that those who died prematurely due to alcohol misuse shared the same characteristics as the population as a whole, which is a potential limitation.

One has to applaud this admission of this “potential limitation“. Alas, the authors make no attempt to quantify the health savings these premature deaths might cause, nor the impact on by-their-own-admission unproductive workers being replaced in the labour market by non-sozzled, useful workers…

Similarly, the entire premise of the £1.3bn attributable to “intangible social costs associated with life years lost” is only slightly undermined by the reports’ willingness to admit that its numbers are, well, less robust than a tin of Tartan Special:

The annual values assigned to the activities that would have been undertaken prior to retirement age by those dying prematurely who were not participating in the workforce are arbitrary (but are related to minimum levels of pay that have been foregone by not working).  The annual value assigned to the activities that would have been undertaken between retirement age and life expectancy by everyone dying prematurely are also arbitrary.

[…]It should be stressed that the generated costs are estimates which are often based on assumptions rather than documented statistics.  Where possible, assumptions have been based on published evidence, however, in other instances pragmatic assumptions have had to be employed.

Look, no-one denies that there are social and economic costs that are booze-exacerbated. But this exhausting, tendentious report is so stuffed with made-up numbers that it loses whatever non-propaganda imact it was ever supposed to have. And by trying to make an economic case for temperance it must ignore all the good done by the good stuff.

For instance, the hundreds of millions of pounds it says are lost through “pain” and “grief” is nowhere balanced by the equally arbitrary figures once could concoct for all the (life-long!) joy and contentment alcohol brings. To say nothing of its positive impact on the birth-rate. (Happy, boozy pregnancies almost certainly outnumber booze-related premature deaths. This must be worth billions in the pro-drink column. These are the workers of the future!) Factor in the social cohesion – to use a favourite piece of government-speak – provided by public houses and the happiness-inducing impact of a dram at home and it seems to me that the ruinous impact of drink has, unsurprisingly, been vastly over-stated.

And that’s before you even begin to factor in more quantifiable benefits. According to the government’s own figures the whisky industry alone is responsible for more than £3bn of exports a year (roughly 15% of all Scottish exports) and employs more than 40,000 people. Or, to put it another way, 2% of the workforce. This, obviously, doesn’t include pubs and off-licences and all their suppliers. Nor does it include the taxes these employees pay or the VAT or corporation taxes paid by these businesses. Nor does it include the revenue from booze taxes which last year amounted to £8.6bn of which a reasonable Scottish estimate might be at least £850m.

As Jim Mather, the enterprise Minister, said in 2008:

“The alcohol industry is a prime example of where Scotland has a comparative advantage…It’s clear…that the alcohol industry is already embedded with the aims, ambitions and values of Scotland’s people and can work ever more closely with Government to increase sustainable economic growth.”

Emphasis added of course. No, whatever way you slice the numbers and even if you bring your own made-up numbers to the party it’s pretty damn obvious that, in strictly economic terms at least, alcohol is a massive net contributor to the Scottish economy (and I guess, to the UK one too) not a drain on it. Make a case against drink if you must but at least have the decency to do so on the basis of real harm not trumped up and bogus numbers that are used as just another excuse for meddling in people’s lives and making everything that little bit more miserable.

The point of all this is not so much that this particular report is bogus but that so many government-sponsored lifestyle-related reports are likely to be similarly flawed. Yet these are the bricks with which our legislators make their bills. A sensible public would be sensibly sceptical about all this and demand better.

*Though fairness demands that one acknowledge that Gordon Brewer and Newsnicht Scotland did well and actually pointed out the heroic, more-than-your-recommended-weekly-limit, quantities of assumption contained in the report.