The profit margins for major traffickers of heroin into Britain are so high they outstrip luxury goods companies such as Louis Vuitton and Gucci, according to a study that Downing Street is refusing to publish under freedom of information legislation.
Only the first half of the strategy unit study led by the former director general of the BBC, Lord Birt, was released last Friday. The other half was withheld but has been leaked to the Guardian.
It says that the traffickers enjoy such high profits that seizure rates of 60-80% are needed to have any serious impact on the flow of drugs into Britain but nothing greater than 20% has been achieved.
The study concludes that the estimated UK annual supply of heroin and cocaine could be transported into the country in five standard-sized shipping containers but has a value which at a conservative estimate tops AUKP4bn.
The report was presented in its full form to Tony Blair in June 2003. Only 52 of its 105 pages were published on Friday night on the eve of the Live 8 concert, with a note saying the rest was being withheld under the Freedom of Information Act.
The government yesterday defended its decision not to publish the half of the report that delivers a scathing verdict on efforts to disrupt the drugs supply chain. The first 50 pages deal with drug consumption patterns and drug-related crime.
A Downing Street spokeswoman said the second half contained information supplied by law enforcement agencies dealing with security matters, it concerned the formulation of government policy and its publication would be prejudicial to the conduct of public affairs. But critics last night said much of the unpublished material was already in the public domain.
Among the data suppressed because it was supplied by an agency involved in security is a table on page 12 from the National Criminal Intelligence Service showing average street prices for various drugs. It estimates the average cost for a heavy user at UKP89 a week for cannabis and UKP525 for crack cocaine - information that is presumably at the fingertips of every hardcore drug abuser and dealer in the country.
Opposition politicians last night criticised the partial suppression of the Birt report on drugs, saying it was a stark example of the misuse of the Freedom of Information Act.
The Liberal Democrats' home affairs spokesman, Mark Oaten, called on the information commissioner to order full disclosure. "What this report shows and what the government is too paranoid to admit is that the 'war on drugs' is a disaster. We need an evidence-led debate about the way forward but if they withhold the evidence we can't have the debate."
Danny Kushlik of the Transform drugs policy foundation, which campaigns for legalisation, said the government was using the act to hide the parts of the report which demonstrated that, far from reducing production, trafficking and supply, prohibition spawned the business.
"The fact that part of the report was released late on Friday night, right before Live 8 and the G8 meeting, shows how intent the government is on 'burying bad news'. Fortunately, they won't get away with it."
The suppressed pages say that the drugs supply market into Britain is sophisticated and attempts to intervene have not resulted in sustainable disruption to the market at any level. "Government interventions against the drug business are a cost of business, rather than a substantive threat to the industry's viability," it concludes.
An economic model made for Downing Street shows that the profits per kilo for a major Afghan trafficker into Britain carry a profit margin as high as 58% - higher than Louis Vuitton's margin of 48% or Gucci's 30%.
"Because upstream UK suppliers enjoy high profits, they are more able to absorb the cost of interception. Thus up stream seizures may temporarily impact street availability but are unlikely to threaten the viability of any individual business."
Emphasising the inadequacy of seizure rates, the study says the result over the past 10 to 15 years has been that, "despite interventions at every point in the supply chain, cocaine and heroin consumption has been rising, prices falling and drugs have continued to reach users".
It concludes that even if the government succeeded in reducing the availability of drugs, that could backfire because the most ad dicted, "high harm" users might commit more crimes to fund the purchase of ever more expensive drugs.
The report says the annual cost of crimes committed by an estimated 280,000 high harm drug users to support their cocaine and heroin habits has reached UKP16bn a year - a figure which rises to UKP24bn if the costs to the nation's health and "social functioning harms" are included.
Only 20% of the 280,000 high harm drug users are receiving treatment or in prison at any one time. The report notes that those who are in treatment tend not to stay with it for long.
It says that more than 3 million people in the UK use illicit drugs every year and compares the 749 deaths annually from heroin and methadone with the 6,000 deaths from alcohol abuse and 100,000 from tobacco. It reveals that there are 674 hospital admissions on mental health grounds resulting from cannabis use, compared to 3,480 for heroin users.
The report says the drug supply business is large, highly flexible and very adaptable, and even if supply-side interventions were more effective it is not clear that the impact of the harm caused by serious drug users would be reduced.
It argues that targeting distributors and wholesalers does remove drugs before they hit the streets in small quantities but such operations are resource-intensive.
Equally, targeting street dealers helps reduce the social problems they cause but dealers are quickly replaced and only tiny quantities of drugs are removed from circulation.
The outlook for stopping drug production in developing countries is equally gloomy and embarrassing to the British government, which is leading attempts to curb heroin production in Afghanistan.
The report says a policy of compensated, forced eradication is very expensive and actually encourages further planting by farmers, while the alternative of a comprehensive set of development interventions is also expensive, takes time and might only displace cultivation to other countries.
The report was supposed to be phase one of Downing Street's reappraisal of official drugs policy.
In December 2003, phase two, titled Diagnoses and Recommendations and which also remains unpublished, was produced by Lord Birt. It ignored the reported ineffectiveness of the attempts to curb drug trafficking and recommended the compulsory treatment of arrested drug addicts. Powers to enable that are contained in the latest drugs legislation.
You may download the full report here. (PDF Format}
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