California's message - end the War on Drugs, cut the deficit

Campaigners are confident that it is now when, not if, marijuana is legalised in the US, with several states likely to vote on legalisation initiatives in 2012, and a Presidential election year that increases turn out of liberal voters likely to vote “yes” in California. Where the largest US state leads, others follow, but the ramifications would be global. Mexican and Colombian politicians have said their countries would follow suit, with a snowball effect all but inevitable.

Colombia’s President Santos has said:

"How does one explain to indigenous people that they are not to grow marijuana at the risk of being thrown into jail, but that in the richest state of the United States, they have legalized its production, sale, and consumption?"

If the architect of the War on Drugs acted in direct contravention of the UN Conventions underpinning prohibition, the unravelling of the current approach to all drugs could be rapid.

But why is legal regulation of marijuana in the California now on the cards, and are the circumstances the same in the UK?

Partly it is the bloody reality of the Drug War's failure arriving uniquely on America’s Mexican doorstep. Partly it is a generational shift as older voters are replaced by younger ones who lean towards reform - which is also happening in the UK.

But the most important trigger is probably economic. As public spending is slashed to reduce California’s budget deficit, the State Board of Equalisation estimates that legalising and taxing cannabis could raise $1.4 billion dollars, with huge additional savings in reduced enforcement costs. Others have disputed this figure on and the precise number will clearly depend on price controls tax levels and other variables. Regardless, this is an argument that is not going away soon - in the UK as much as the US.

As dust from the Comprehensive Spending Review settles, ministers claim no area of public spending will escape scrutiny. Exploring non criminal justice responses to drug users, or more ambitiously, legally regulated drug production and availability, could dramatically improve outcomes for society, make substantial cost savings, and generate tax revenues. Currently, enforcement aimed at reducing supply costs us £380 million per year, but the Home Office estimates the additional cost of ‘dealing with drug related crime’ is £1.7 billion a year, rising to over £4 billion a year, if costs across the criminal justice system (prisons etc.) are included.

Yet despite these billions, the Government’s own analysis shows we are further than ever from the promised ‘drug free world’. Drugs are cheaper than ever before, use of the most harmful is at record highs, and massive levels of drug motivated crime is fuelling a crisis in the criminal justice system - at a time when the Government plans to reduce prisoner numbers.

Despite this staggering cost ineffectiveness, drug enforcement spending remains protected from public scrutiny within a political bubble of law and order populism. This year alone, reports from the National Audit Office, The Public Accounts Committee and Home Affairs Select Committee have blasted the Home Office for having no meaningful evaluation of the impact of the money spent. In terms of major public spending initiatives, drug policy is unique in this regard. But with widespread concern about public spending cuts, the blank cheque for the drug war may soon be a thing of the past.

Crucially, it is now widely accepted that many of the costs of ‘the drug problem’ – including gang violence and acquisitive crime committed by addicts - are primarily fuelled by drug prohibition, not drug use per se. The Home Office does not dispute this, nor does the UN Office on Drugs and Crime, which has acknowledged a ‘vast criminal black market’ is one of the ‘unintended negative consequences’ of the current approach.

Yet such is the political fear of more cost-effective approaches, including Portuguese-style decriminalisation or the regulatory models for drug production and supply explored in Transform’s Blueprint for Regulation (with controls over products, vendors, outlets, access and marketing), that they have never been seriously considered. Questions about legal regulation are rebuffed with claims that the benefits would be outweighed by increased health costs from an assumed increase in use. These claims are baseless. The Home Office has never, and will not do, the cost benefit analysis needed to substantiate them. There is also no evidence that prohibition has been an effective deterrent, or reduced drug harms, or that strictly controlled legal availability would increase misuse. When challenged, successive governments have admitted all they have is a ‘belief’ the current system is effective.

Transform’s analysis, which the Government does not dispute, shows that legally regulating drug supply could save around £2 billion a year from the Home Office budget alone (primarily through a 75% drop in drug motivated crime), with much greater savings to society as a whole. On top of this is the potential to tax cannabis in particular. California’s $1.4 billion marijuana tax take would be from a population only about two thirds that of the UK, whilst in the Netherlands (one quarter of the UK population, with lower levels of use) ‘coffee shop’ tax revenue is 400 million Euros a year, which would rise by 260 million Euros if the supply of cannabis to the coffee shops were taxed as well.

The stark reality is that squandering money on the War on Drugs is not just counterproductive, it starves worthwhile projects of funds. If legally regulating drugs realised £2 billion a year in savings and taxes - which is an extremely conservative estimate - it would be equivalent to paying the salaries of 86,000 police constables, or 92,600 teachers, or 94,000 nurses. Alternatively we could refurbish around 250 schools every year and reverse the cut in Child Benefit. Or just fund proven drug treatment and education programmes properly.

Whilst this research is based on limited data, it demands that at the very least the Government formally counts the costs and benefits of the current approach, and explores alternatives. No more, in fact, than has been called for by the pre-coalition Lib Dems, and David Cameron when on the Home Affairs Select Committee.

When even the US is exploring legal regulation, what is the UK still afraid of? The Government needs to ask; is it really still worth squandering billions a year just to sound tough on drugs?