The battle to tackle drug addiction is not lost

The debate about legalisation is a distraction.

It is impossible not to be moved by the plight of communities in Mexico and other drug-producing countries across the world. Crime and violence related to the supply of drugs are without a doubt causing extreme grief to citizens and governments. But reaching to decriminalise or legalise those drugs in the hope that it will overcome those communities’ deep-rooted problems offers them a false prospectus, and overlooks the nuanced picture of drug use and addiction which in this country at least, is in decline.

For many producer nations, drugs are one of a number of complex factors contributing to adverse conditions within their countries.  Legalisation would compound the devastating effects of drug use and the drugs trade, as former UN head of drugs and crime Antonio Maria Costa argues, especially if the structural issues that leave those states without the resources to tackle the causes and consequences of their drug problem are not addressed.

The legal framework in this country does not prevent those with drug problems from being treated humanely and effectively. Drug treatment is freely and quickly available via the NHS in England, and offers users the prospect of stability and recovery from the chaotic lives inherent in addiction. Over the last six years, 340,000 mainly heroin users have got help for their addiction, of whom around one third successfully completed their treatment, which compares favourably to the international evidence of recovery. Addicts are treated as patients in the health service, and if there are other crimes to account for, addiction treatment is offered for offenders in the community and in prison in line with NHS standards.

Drug use in this country is falling, particularly amongst young people. Heroin, crack and cannabis are being used by fewer people, and whilst there are more young people taking so-called legal highs and novel drugs, their numbers are nowhere near the levels we faced when setting up the nation’s treatment response primarily for heroin addicts more than a decade ago. At the same time, more people are recovering from drug addiction in England. There is no cause for complacency, in fact we are accelerating efforts to orientate drug treatment towards recovery, but it is worth pointing out that the trends on use, addiction and recovery are heading in the right direction.

Domestically and globally, the public discourse about drugs tends to exaggerate the power of the drug, and minimises the impact of social and economic circumstances. Compared to the 2.8million who use illegal drugs there are around 300,000 heroin or crack users in England, over half of whom are in treatment each year. Probably another 30,000 or so are in treatment for dependency on other drugs e.g. powder cocaine, cannabis and ecstasy. Those who become addicted tend to be seen by the media as the victims of hedonism, the random by-product of widespread recreational drug use. A steady trickle of millionaires’ children and celebrities fuel this myth, playing to the anxieties of middle class readers about their own children. Too often, those in the public eye think they understand drug addiction because of personal or family experiences which bear little relation to the multiple disadvantages experienced by most addicts.

In reality drug addiction is targeted. The 300,000 heroin and crack addicts are not a random sub set of England’s regular drug users. If they were, they would be as likely to live in Surrey as Salford, to have been to Westminster School as Wandsworth Prison, and their childhood would have been as likely to have been overseen by a live-in nanny as much as by Newham Borough Council.

Addiction, unlike use, is concentrated in our poorest communities, and within those communities it is the individuals with the least capital who are the most vulnerable to succumb and least able to extricate themselves. Compared to the rest of the population, heroin and crack addicts are male, working class, offenders, products of the care system, with poor educational records, little or no experience of employment, and a history of mental illness. Increasingly they are also in their forties with declining physical health. They will tend to struggle more than most to make sound personal decisions, which contributes to their other problems.

The reputation of heroin is such that few people will even try it. Of those who become addicted, the majority will recognise where they may be heading and stop. Amongst them will be people who are intelligent, resourceful and ambitious who will realise they are in “in over their heads”, pull themselves up sharp, and sort themselves out. Others will not necessarily have the innate resources to do this but will have family and friends to support them to achieve the same outcome. Key to this success will be the existence of an alternative life with the reality or realistic prospect of a job, a secure home, a stake in society and supportive relationships. The access to social, personal and economic capital not only enables individuals to overcome their immediate addiction, but to avoid relapse.

The government’s 2010 drug strategy recognises that treating addicts in isolation from efforts to address their employment, their housing status and the myriad other problems they face is unlikely to lead to long term recovery. According addiction primacy as a cause of poverty, criminality, worklessness, and child neglect denies the fact that it is as much a consequence of individual family and community breakdown as its genesis. Drug addiction exacerbates problems, and unless it is addressed will inhibit or even prevent progress in other aspects of people’s lives, but addressing it in isolation is not a silver bullet.

Drugs are not the unique barrier to normal social functioning for most addicted people. Drugs are not the unique barrier to a better, fairer and safer world in drug producing countries. The debate about legalisation is a distraction from facing and comprehensively addressing the social and economic factors that underpin drug use, addiction and the drugs trade.

Paul Hayes is the Chief Executive of the National Treatment Agency for Substance Misuse (NTA)

Opium poppy buds in an Afghan field. Photograph: Getty Images

Paul Hayes is the Chief Executive of the National Treatment Agency for Substance Misuse (NTA)

Ralph Orlowski / Getty
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Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

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