If ministers want to curb violent crime in our cities, they should liberalise our failing drug laws

Ah, Camberwell. Image: Getty.

On Sunday, home secretary Amber Rudd argued that the “biggest driver” of rising violent crime was the illegal drugs market. The growth of so-called county lines gangs, often recruiting young children to transport drugs around the country, is fuelling our £5.3bn black market in cannabis, cocaine, ecstasy, and more.

The violence of crimes from drug gangs is spreading outwards from our cities, with an estimated 4,000 teenagers in London alone caught up in smuggling operations. Between 2014-15 and 2016-17, the share of homicides where either victim or suspect was a drug user or dealer increased from 50 per cent to 57 per cent. Competition among drug dealers has reached such a high level that some are offering loyalty cards for repeat customers.

But as politicians across the ideological spectrum discuss Band-Aid measures like tougher restrictions on buying acid and banning home deliveries of knives, the elephant in the room is our failed policy of drug prohibition.

In its recently-released Serious Violence Strategy, the Home Office inadvertently diagnoses many problems of prohibition. It correctly highlights that “grievances in illicit drug markets cannot be settled through legal channels, so participants may settle them violently. This can lead to escalation as dealers seek to portray themselves as excessively violent.”

But this is entirely avoidable: the Home Office goes on to say that “violence can be used as a way of maintaining and increasing profits within drugs markets”. In other words, the escalation happens because drugs are illegal and unregulated.

Gangs are sophisticated businesses, with strong incentives to keep their clients involved and those in their control under their thumb. Gangs in our largest cities run weapons and trafficking operations across the country. They use income from the drugs trade to finance their lifestyles, and the need to protect this feeds the firearms they trade – as seen in Liverpool where the Anfield gang jailed last year were found to be running the country’s second largest combined gun, drug and people trafficking operation with activity in rural Cheshire, Lancashire and even down to the South Coast.


The violence these gangs create is entirely the result of forcing such markets underground. Legal, regulated alcohol companies solve their disputes through competition in the marketplace, and the courts if necessary. Illegal, unregulated drug gangs often solve their disputes by the less formal methods of murdering and robbing each other.

And when police bust one gang, the resulting power vacuum can lead to heightened violence as those remaining vie for dominance. Economic evidence suggests that the introduction of medical marijuana laws (MMLs) in the USA led to a decrease in violent crime in states that border Mexico, and more wide-reaching liberalisation will have even greater effects.

But it’s not just turf wars between rival gangs that disappear under legalisation. Problem drug users are free to seek treatment without fear of arrest; campaigners are currently calling for drug consumption rooms in London, Glasgow, and elsewhere.

They are also less likely to fund their habit through theft. Washington State’s decision to legalise cannabis in November 2012 caused a reduction in thefts of between 13 per cent and 22 per cent.

Property crime is likely to plummet if other drugs were legalised and regulated according to relative harm levels: official figures show that nearly half of shoplifting, thefts, robberies and burglaries are committed by regular heroin and crack cocaine users.

Recreational users are also less likely to face violent crime. You don’t tend to get robbed at knifepoint purchasing alcohol in an off-licence, but buying cannabis in a dark alley is a different matter. Parents would no longer have to worry about the possibility that their teenage children are getting into cars with complete strangers in order to buy drugs, and any dealers who survive their market being swept away from them would face a police force with far greater resources to put them behind bars.
Last week, David Lammy MP told BBC Radio 4's Today programme that, “The police and our country has lost control of [the] drugs market.” He’s right – but more prohibition and more police on the beat won’t solve the problem of rising violent crime. The definition of insanity is continually doing the same thing and expecting different results.

But we needn’t. The state is imposing the spillover cost of violence onto estates in our cities and onto the young people caught up in gang warfare. It has the ability to take this power away from gangs and become a world leader in harm reduction. The only way to gain control of the drugs market is to make it legal and regulated.

Daniel Pryor is head of programmes at the Adam Smith Institute.

 
 
 
 

“Stop worrying about hairdressers”: The UK government has misdiagnosed its productivity problem

We’re going as fast as we can, here. Image: Getty.

Gonna level with you here, I have mixed feelings about this one. On the one hand, I’m a huge fan of schadenfreude, so learning that it the government has messed up in a previously unsuspected way gives me this sort of warm glow inside. On the other hand, the way it’s been screwing up is probably making the country poorer, and exacerbating the north south divide. So, mixed reviews really.

Here’s the story. This week the Centre for Cities (CfC) published a major report on Britain’s productivity problem. For the last 200 years, ever since the industrial revolution, this country has got steadily richer. Since the financial crash, though, that seems to have stopped.

The standard narrative on this has it that the problem lies in the ‘long tail’ of unproductive businesses – that is, those that produce less value per hour. Get those guys humming, the thinking goes, and the productivity problem is sorted.

But the CfC’s new report says that this is exactly wrong. The wrong tail: Why Britain’s ‘long tail’ is not the cause of its productivity problems (excellent pun, there) delves into the data on productivity in different types of businesses and different cities, to demonstrate two big points.

The first is that the long tail is the wrong place to look for productivity gains. Many low productivity businesses are low productivity for a reason:

The ability of manufacturing to automate certain processes, or the development of ever more sophisticated computer software in information and communications have greatly increased the output that a worker produces in these industries. But while a fitness instructor may use a smartphone today in place of a ghetto blaster in 1990, he or she can still only instruct one class at a time. And a waiter or waitress can only serve so many tables. Of course, improvements such as the introduction of handheld electronic devices allow orders to be sent to the kitchen more efficiently, will bring benefits, but this improvements won’t radically increase the output of the waiter.

I’d add to that: there is only so fast that people want to eat. There’s a physical limit on the number of diners any restaurant can actually feed.

At any rate, the result of this is that it’s stupid to expect local service businesses to make step changes in productivity. If we actually want to improve productivity we should focus on those which are exporting services to a bigger market.  There are fewer of these, but the potential gains are much bigger. Here’s a chart:

The y-axis reflects number of businesses at different productivities, shown on the x-axis. So bigger numbers on the left are bad; bigger numbers on the right are good. 

The question of which exporting businesses are struggling to expand productivity is what leads to the report’s second insight:

Specifically it is the underperformance of exporting businesses in cities outside of the Greater South East that causes not only divergences across the country in wages and standards of living, but also hampers national productivity. These cities in particular should be of greatest concern to policy makers attempting to improve UK productivity overall.

In other words, it turned out, again, to the north-south divide that did it. I’m shocked. Are you shocked? This is my shocked face.

The best way to demonstrate this shocking insight is with some more graphs. This first one shows the distribution of productivity in local services business in four different types of place: cities in the south east (GSE) in light green, cities in the rest of the country (RoGB) in dark green, non-urban areas in the south east in purple, non-urban areas everywhere else in turquoise.

The four lines are fairly consistent. The light green, representing south eastern cities has a lower peak on the left, meaning slightly fewer low productivity businesses, but is slightly higher on the right, meaning slightly more high productivity businesses. In other words, local services businesses in the south eastern cities are more productive than those elsewhere – but the gap is pretty narrow. 

Now check out the same graph for exporting businesses:

The differences are much more pronounced. Areas outside those south eastern cities have many more lower productivity businesses (the peaks on the left) and significantly fewer high productivity ones (the lower numbers on the right).

In fact, outside the south east, cities are actually less productive than non-urban areas. This is really not what you’d expect to see, and no a good sign for the health of the economy:

The report also uses a few specific examples to illustrate this point. Compare Reading, one of Britain’s richest medium sized cities, with Hull, one of its poorest:

Or, looking to bigger cities, here’s Bristol and Sheffield:

In both cases, the poorer northern cities are clearly lacking in high-value exporting businesses. This is a problem because these don’t just provide well-paying jobs now: they’re also the ones that have the potential to make productivity gains that can lead to even better jobs. The report concludes:

This is a major cause for concern for the national economy – the underperformance of these cities goes a long way to explain both why the rest of Britain lags behind the Greater South East and why it performs poorly on a

European level. To illustrate the impact, if all cities were as productive as those in the Greater South East, the British economy would be 15 per cent more productive and £225bn larger. This is equivalent to Britain being home to four extra city economies the size of Birmingham.

In other words, the lesson here is: stop worrying about the productivity of hairdressers. Start worrying about the productivity of Hull.


You can read the Centre for Cities’ full report here.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites

Want more of this stuff? Follow CityMetric on Twitter or Facebook