BRITAIN'S UKP5.9BN A YEAR DRUG HABIT

Government Policy Failing to Stop Use As Prices Fall

EU Survey Finds Seizures Not Preventing Boom

The UK has 327,466 hardcore "problem drug users" who are regularly
using either heroin, crack or cocaine, research revealed yesterday.
The figure is far higher than a previous estimate of 270,000.

Britons are also spending a total of UKP5.9bn a year on illegal
drugs, about two-fifths of the amount spent on alcohol and a third of
the size of the legal tobacco market, according to Home Office estimates.

The figures are a sign that the government's policy of concentrating
on reducing the harm caused by the most serious drug abusers has yet
to make headway.

This evidence that the drugs problem in Britain is deepening comes as
the European Drugs Agency published research showing that the street
price of illicit drugs fell by up to 50% across Europe, including in
Britain, and most drugs are now probably cheaper than ever before.

"There are signs in some countries that ecstasy and cocaine are
cheaper today than in the late 1980s and early 1990s," says the
annual report from the European monitoring centre on drugs and drug addiction.

The finding, coupled with renewed evidence that Britain remains near
the top of the European table for both cocaine and cannabis abuse,
suggests that despite record seizures the "war on drugs" is having
little effect in curbing their supply.

According to the European monitoring centre, cocaine use in Britain
doubled between 1998 and 2001 and it is now the second most popular
drug. But its use has stabilised with the latest published 2003-4
figures showing that 6.5% of all adults admitted they had used
cocaine in the previous 12 months. Of the 29 countries surveyed
across Europe only Spain comes close in levels of cocaine use, but
unpublished data is expected to show that the problem is escalating
in Italy and France.

Spending by Britons on cocaine has now risen to nearly UKP1bn a year
with cocaine prices averaging UKP64 a gram in 2004. In some parts of
the country dealers have adopted "loss leader" tactics, selling
cocaine for UKP28 to UKP44 a gram initially - half of what it was a decade ago.

The European study shows that efforts in the Netherlands and northern
Spain to curb cocaine imports from South America have paid off, with
record amounts seized. But the traffickers have responded by opening
up new routes.

More optimistically, the EU drugs agency said yesterday it was
interested in the development of a "cocaine vaccine" by a British
pharmaceutical company, Xenova, which could neutralise the cocaine
high by preventing it reaching the brain. TA-CD is undergoing a
second phase of clinical trials and could be available within three
years. The initial tests showed it could enable a group of cocaine
addicts to remain drug free for three months with no untoward side effects.

Cannabis culture also remains strong in Britain, with the latest
official figures showing that 29% of all adults said they had tried
some in the last year. Cannabis use is only higher in Denmark.

Home Office estimates showed that Britons spend more than UKP1bn a
year on cannabis, with 412 tonnes a year consumed at an average of UKP4 a gram.

The European study says there are now worrying signs that people in
their 30s and 40s in Britain are continuing to use cannabis and that
it is no longer something most people try only when they are young.

Carel Edwards, the EU commission's senior official on drugs policy,
said in Brussels that the findings showed that "after 50 years of a
moral, international crusade to reduce the drugs problem the results
are not exactly brilliant ... whatever we are seizing is not hitting
the market".

The EU drug agency said its first ever analysis of street drug prices
based on data from 29 European countries - the 25 EU countries plus
Romania, Bulgaria, Norway and Turkey - showed that average prices
adjusted for inflation had fallen in most countries and for most
substances, with the price of ecstasy down 47%, heroin by 45%,
cocaine by 22% and cannabis by 19%.

This sustained fall in real drug prices coupled with evidence of
growing global production suggests that the attempts to disrupt the
traffic of drugs into Britain and Europe is proving ineffective
despite increasing amounts being seized.

Wolfgang Gotz, the European monitoring centre director, said the
latest figures showed that the Afghans were "producing heroin like
hell" with the most recent opium crop, which supplies 89% of Europe's
heroin, reaching a bumper harvest of 4,100 tonnes in 2005. "The
global supply for heroin is now exceeding global demand." The EU was
studying the implications of the fall in drug prices to see if they
did reflect changes in supply or demand.

He said heroin use and drug injecting remained at the heart of the
European drug problem and while the long-term trend was an overall
decline the use of heroin remained a big public health issue. There
were worrying signs that the long-term downward trend in drug-related
deaths may be faltering, with a 3% rise reported between 2000 and 2003.