A dreary ritual follows any pronouncement from Professor David Nutt, former government drugs adviser and brain chemistry pundit. First, politicians groan. Then civil servants hide. Then newspaper editors run howling back to the dark ages. Nothing happens, absolutely nothing. A day later the waters close over the debate. A few months later the professor speaks again and the same thing recurs.

The sacking of Nutt last year by the then home secretary, Alan Johnson, was a disgrace that disqualified Johnson from high office. Anyone who so lacked the guts to hear occasionally unwelcome expert advice should not be shadow chancellor. Nutt's offence was to protest, mildly, in an academic lecture, at the political second-guessing of his official committee on drug classification. Johnson was a typical Labour headline-grabber and thought it would look tough to sack Nutt, who went off with his more robust colleagues to found an "independent scientific committee on drugs".

On Monday this group produced a report in the Lancet on drugs harm. It draws a distinction between the harm done by mind-altering substances to the individual and the harm done to wider society. Libertarians and authoritarians have long argued over the role of government in straddling this distinction. Most people in a free society recognise the distinction, with most accepting a more liberal interpretation of what they should be allowed to do to their bodies.

This could apply to everything from abortion and assisted suicide to drunkenness and drug-taking. What we do to other people is naturally of concern to society, and thus to government, but what we do to ourselves is increasingly regarded as our own business.

Nutt's new study heads straight for the enemy, the lax approach of the last government towards alcohol consumption. Just about every statistic on drunkenness – such as death from alcohol, crimes of violence attributable to alcohol, imprisonment for alcohol, driving under the influence of alcohol – puts Britain in the European doghouse. The last government, far from ignoring this record, made it steadily worse by allowing the duty on alcohol to fall, increasing the affordability of alcohol in household budgets and easing pub licensing hours. As sure as night followed day, Britain's alcohol problem got worse.

So far, so bad. Nutt's new study goes further. It seeks to fuse legal and illegal drug use and combine the resulting personal and social harms, the better to inform public policy. The outcome is a glaring hierarchy of harm. By far the biggest menace is alcohol (with an overall score of 72). Heroin (55) and crack cocaine (54) come next, outscoring nicotine (26) and cannabis (20), with anabolic steroids and ecstasy both on nine. As a social menace, the government should clearly worry most about drink. Yet it does not, being obsessed instead with taboo drugs designated as illicit and filling prisons with the resulting miscreants. This is crazy.

The report does not recommend anything so radical as legalisation or the abolition of drug classification. This is despite Johnson having wrecked the purpose of classification by regarding it as about "sending a message" rather than denoting harm. Nutt and his colleagues want regulation to reflect reality, to play some part in minimising the wreckage that most mind-altering substances do to the community, even when little can be done about the harm they can do to their users. The state cannot protect people from themselves, but it can protect others from them, up to a point.

Today, Californians are voting on Proposition 19 to legalise and tax cannabis use across their state. The campaign has been fronted by a retired police chief and funded by the financier George Soros, with $1m. The case for leaving the drugs as criminal has long gone by the wayside, as California high streets boast "dispensaries" for medicinal drug use and factories are preparing to set up production. The state is eager for the taxes on revenues, which at present disappear, literally, into the undergrowth.

Britain is far behind California, and behind most of Europe. Yet half the crime that is packing Britain's jails is attributable to the criminalisation of drugs and the easy availability of alcohol. The failure of state regulation in both cases wrecks pubs and clubs. It pollutes streets and public places, and imposes costs on communities that are absent from most other European countries. Young lives are ruined. Huge sums of money end up in the wrong pockets.

The incompetent regulation of legal and illegal drugs is the biggest self-inflicted wound of modern British government. Nor is it fair for ministers to blame public opinion. There is a weight of polling evidence showing opinion in favour of easing the laws on drug possession, and in favour of curbing alcohol consumption, at least in public places. We regulate cigarettes with a measure of subtlety. Why do we not dare regulate other narcotic substances, now freely available in every high street in Britain?

Like many commentators who have championed this subject over the years, I have attended seminars and committees galore. Never again. Not one of them has made the slightest difference. Millions have been spent on research. Each government meekly orders another study. The Home Office this week said it has "alcohol consultation" on the stocks and a "drugs strategy" in the offing. So what? The giveaway was the Department of Health's response: it was "determined to prevent alcohol abuse without disadvantaging those who drink sensibly". Why is it in favour of "sensible" alcoholism but against sensible drug use? The whole business is hypocrisy on stilts.

There is no need for any more reports, seminars, committees or thinktanks. There is no argument for more research or more consultation. It is all a waste of time. There needs to be a ban on cheap supermarket drink and "happy hours". There needs to be a thumping increase in alcohol taxes, a clampdown on public drunkenness, and the legalisation, taxation and regulation of currently illicit narcotic distribution, graded according to the Nutt committee's hierarchy of harms – as may happen in California. There is not a shred of evidence it would increase cannabis consumption, and such reform would secure millions for the Treasury.

What stops this happening? One thing: the absence so far of a home secretary and a justice secretary with the guts to do it. Or might the coalition amaze us all?