Pubdate: Tue, 13 Oct 2015
Source: Independent  (UK)
Copyright: 2015 Independent Newspapers (UK) Ltd.
Author: Nigel Morris


Legalising cannabis would raise taxes worth hundreds of millions of
pounds and produce large savings for the criminal justice system, a
private analysis for the Treasury has concluded.

It judged that regulating cannabis, which was used by more than two
million people in the UK last year, could generate "notable tax
revenue" and "lead to overall savings to public services".

The Treasury study, seen by The Independent, was commissioned by the
former Deputy Prime Minister Nick Clegg ahead of the general election
to help formulate Liberal Democrat drugs policy if the party remained
in office.

Following David Cameron's general election victory, the Government has
set its face against reform of Britain's 40-year-old drugs laws and
rebuffed calls for a new approach to cannabis use.

But his officials' research underlined the appeal to the Treasury and
the courts and prisons system of following the lead of several
countries and US states and legalising and regulating the drug.

Norman Lamb, the Lib Dem health spokesman, said the study - believed
to the first carried out by the government - added to growing evidence
pointing to the need for a new approach to cannabis.

He said: "This is an important contribution to the wider debate on
drugs reform and shows the UK could make savings in public spending
and generate notable tax revenues from a regulated cannabis market,
probably in the hundreds of millions of pounds, some of which could be
spent on better education around the dangers of drugs use.

"There are successful cannabis markets emerging in different parts of
the world and we should look to learn from these experiences. The
burden is now with supporters of the status quo to explain why
prohibition should continue in the face of the emerging evidence."

The research drew heavily on a study by the Institute for Social and
Economic Research (ISER) at the University of Essex, which calculated
an annual windfall of between ?500m and ?800m to the Treasury if
cannabis was treated in the same way as tobacco.

George Osborne's department agreed that regulating and taxing cannabis
had the potential to "generate notable tax revenue, although we expect
it to generate less than the c ?0.5-0.8bn pa ISER assumes".

It worked on the basis that the highly potent forms of cannabis, such
as skunk, would remain illegal and under-18s would be barred from
buying the drug as they are with cigarettes.

The Treasury said the rate of duty would depend on how much money the
government wanted to collect and the extent to which it wanted to
drive down use. VAT would also be levied on cannabis if it was legalised.

It pointed to research concluding that legalisation could have a small
impact on the NHS costs. The research speculated on a range of
outcomes between a saving for the health service of ?16m and a cost of

However, any extra spending is likely to be outweighed by annual
savings of between ?55m and ?147m to the criminal justice system, the
Treasury said. If people were no longer charge for possession of
cannabis, there would savings of ?18m to the police, ?24m to the
courts, ?9m in community sentences, ?3m to the probation service and
?2m to prisons.

It also suggested that the cost of dealing with more serious drugs
offences would drop as users switched to the legal market.

The Treasury cited research concluding that cannabis use is not
closely linked to adult productivity, although it pointed to academic
studies pointing to long-term adverse effects for consumption of the
drug among under-16s. It said there was a "high level of uncertainty"
around that point, but it believed that the impact of negative impact
of legalisation on economic productivity "would most likely be towards
the lower end of the 0-?3bn range".

In a Commons debate on cannabis legislation, the former Conservative 
Cabinet minister Peter Lilley said cannabis should be legalised and made 
available for medicinal use, telling MPs: "Even Queen Victoria allegedly 
used cannabis to relieve menstrual pain and if it's a Victorian value 
then surely it can be made more widely available."

He said: "Prohibition of cannabis drives soft drug users into the arms
of hard drug pushers. Only by providing some legal outlets for
cannabis can we break the contact between cannabis users and those
pushing cocaine, crack and heroin."
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