Legalising cannabis could spell £1.25 billion tax benefit for UK

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Legalising cannabis could spell £1.25 billion tax benefit for UK

Legalising cannabis could spell £1.25 billion tax benefit for UKA new study has added to the long-running debate on cannabis legalisation – and proposes both legalising and then taxing the drug could reduce the Government deficit by up to £1.25 billion – without necessarily damaging public health.

The study, undertaken by the Institute for Social and Economic Research at the University of Essex, suggests the most plausible net benefit is between £100 – 415 million as well as a £0.5 – 1.25 billion reduction of the government deficit via taxation.

It states the figures determining these outcome have been moderately estimated in order to ensure a credible report.

A different way of looking

Led by Professor Stephen Pudney, the study was commissioned by the Beckley Foundation, which advocates scientifically based reforms on drug policies.

Amanda Feilding, Director of the foundation, noted “In these times of economic crisis, it is essential to examine the possibilities of more cost effective drug policy.

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Our present policies based on prohibition, have proved to be a failure at every level.”

“In a strictly regulated market, we could control the strength and purity of cannabis. We could educate, and provide treatment instead of prison. Surely, the governments of the world can do a better job of protecting the health and security of its citizens than the drug cartels” she continued.

For or against?

Those in favour of cannabis legalisation compare the drug to historically more harmful, yet legal, substances including pharmaceuticals, alcohol and tobacco.

For those who are against legalising cannabis, they cite the NHS’ repeated warnings of the health risks associated with cannabis use – including mental health problems – and the wider cartels which are formed when growing, dispatching, and selling the drug.

The paper countered this claim – starting the reverse was true and that making cannabis illegal drew users into drug-dealing, which grows the system and ultimately increases the associated economic costs to the government.

“Licensing would remove many people from illicit cannabis supply and thus reduce harm,” it states.

“We estimate modest external net benefits from reform through the avoidance of scarring effects of criminal records in the labour market of roughly the same magnitude as the external cost to society of the impact on mental health.”

Feilding explained the reasoning by stating that the drug’s illegality does not only “put one of the biggest industries in the world in the hands of criminal cartels, [it] criminalises millions of users.”

The wider picture

The study comes after a series of similar studies and, in some states, legilisation, in America.

In August a study by the New York City Comptroller’s Office – in effect the Chief Financial Officer of New York – showed that regulating cannabis sales would raise US$ 400 million a year, and save a further US$ 31 million by transferring resources from marijuana-related arrests to tuition, for example.

And now, after recently legalising the drug, it has been reported the US will not challenge the state marijuana legalisation laws in Colorado and Washington.

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