Legalisation of drugs could save UK £14bn, says study

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• Duncan Campbell
• The Guardian, Tuesday 7 April 2009
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The regulated legalisation of drugs would have major benefits for taxpayers, victims of crime, local communities and the criminal justice system, according to the first comprehensive comparison between the cost-effectiveness of legalisation and prohibition. The authors of the report, which is due to be published today, suggest that a legalised, regulated market could save the country around £14bn.

For many years the government has been under pressure to conduct an objective cost-benefit analysis of the current drugs policy, but has failed to do so despite calls from MPs. Now the drugs reform charity, Transform, has commissioned its own report, examining all aspects of prohibition from the costs of policing and investigating drugs users and dealers to processing them through the courts and their eventual incarceration.

As well as such savings is the likely taxation revenue in a regulated market. However, there are also the potential costs of increased drug treatment, education and public information campaigns about the risks and dangers of drugs, similar to those for tobacco and alcohol, and the costs of running a regulated system.

The report looked at four potential scenarios, ranging from no increase in drugs use to a 100% rise as they become more readily available.

"The conclusion is that regulating the drugs market is a dramatically more cost-effective policy than prohibition and that moving from prohibition to regulated drugs markets in England and Wales would provide a net saving to taxpayers, victims of crime, communities, the criminal justice system and drug users of somewhere within the range of, for the four scenarios, £13.9bn, £10.8bn, £7.7bn, £4.6bn."

Titled a Comparison of the Cost-effectiveness of the Prohibition and Regulation of Drugs, the report uses government figures on the costs of crime to assess the potential benefits and disadvantages of change. The document, co-written by Steve Rolles, head of research at Transform, uses home office and No 10 strategy unit reports to form its conclusions.

It finds: "The government specifically claims the benefits of any move away from prohibition towards legal regulation would be outweighed by the costs. No such cost-benefit analysis, or even a proper impact assessment of existing enforcement policy and legislation has ever been carried out here or anywhere else in the world."

Taxing drugs would also provide big revenue gains, says the survey. An Independent Drug Monitoring Unit estimate, quoted in the report, suggests up to £1.3bn could be generated by a £1 per gram tax on cannabis resin and £2 per gram on skunk.

The report follows calls for legalisation or a full debate on reform. Last month, the Economist concluded: "Prohibition has failed; legalisation is the least bad solution."