Cannabis legalisation worth millions - government report

Legalising cannabis could generate hundreds of millions of pounds a year in tax and cut costs for the police and prisons, a government study has found.

The internal Treasury report, obtained by BBC Newsnight, said regulating the market would "generate notable tax revenue" and "lead to overall savings to the criminal justice system".

MPs debated the issue on Monday, after a petition calling for legalisation drew more than 220,000 signatures.

Ministers do not plan to alter the law.

The Home Office said it had "no plans" to change the law on cannabis, which is currently classified as a Class B illegal drug, adding that cannabis use was falling gradually.

'216 tonnes'

The Treasury study was undertaken earlier this year at the behest of the Liberal Democrats when they were in coalition, but was not published.

Civil servants were asked to consider the "potential fiscal impacts of introducing a regulated cannabis market in the UK".

The study notes that 2.2 million people aged 16 to 59 are thought to have used cannabis last year - smoking a total of 216 tonnes.

Government analysts reviewed the work of the Institute for Social and Economic Research, which has estimated that licensing cannabis could help reduce the UK budget deficit by up to £1.25bn a year - from taxes raised and cost reductions.

The Treasury report argues that sum is probably an over-estimate.

But it agrees that regulating cannabis would raise significant amounts in tax, as well as saving the state up to £200m in court and police costs a year.

'Ludicrous criminalisation'

Liberal Democrat health spokesman Norman Lamb said his party wanted to consider regulating and taxing cannabis, pointing to the example of changes in some US states.

He said: "The whole debate has shifted dramatically now... as we see state after state starting this debate, with many states in the US deciding to establish legalised regulated markets.

"And of course the basic principle it seems to me is, do you put a potentially dangerous product into the hands of criminals who have no interest in your welfare at all or do you seek to regulate it?

"And I think in terms of public health protection of individuals and avoiding the ludicrous criminalisation of so many young people, a legalised regulated market makes a lot of sense."

But the Home Office said in a statement: "The government has no plans to legalise or decriminalise cannabis.

"There is clear scientific and medical evidence that cannabis is a harmful drug which can damage people's mental and physical health, and harms individuals and communities."