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”.
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