Put yourself in the position of a secret-service high-up.
You've been given a big task: you're to create an organization that can achieve 'things' within the UK. These things will be 'ground-work': the actual 'doing stuff' leg-work that exerts small-scale, local influence which, if carefully applied (to, e.g., politicians, police-chiefs, etc) could have useful larger-scale effects. Your organization will work with other departments (psyops/propaganda, political, economical, military, etc) in order to exert influence within the UK.
The exact specifications are:
Must be capable of 'getting stuff done', mainly the illegal stuff: espionage, entrapment/framing, bribery, forgery of documents, theft, breaking-and-bugging, kidnap, torture, blackmail, coercion, assassination, provoking riots, anything else that might need doing.
Must be capable of logistics to facilitate the above: importing, exporting, transporting, storing, manufacturing stuff; finances (movement of cash); identification and appropriation of skilled operatives; etc.
Size and spread: must be present in every city and ideally infiltrate the power structure (police officers, magistrates, civil-service, etc.), and be large enough to bear a large workload if necessary.
Must do all the above in a deniable way (not traceable back to us) and be as cheap as possible.
Now, the 'cheap as possible' requirement kind of rules-out many potential approaches: armies of operatives spread thickly throughout the UK would cost a bomb and, anyway, it would kind of risk the 'deniable' requirement.
A much better idea is to pass 'stupid' laws.
See, illegalizing cannabis, for example, contributes to the profitability (and thus sustainability/maintenance) of the UK criminal infrastructure. It funds illegal transportation networks, and criminal gangs. Cocaine does likewize, and also makes it financially viable for 'organized crime' to maintain some (at least small and basic) chemical manufacturing plants. All drugs contribute to the profitability of crime, and thus facilitates criminals bribing police officers for information.
Patent laws lead to forgery, which includes stuff like, e.g., televisions: make a sub-par TV that just-about works, slap a 'sony' label on it, and sell it above what it's worth, and you get 'organized crime' maintaining electronic-equipment factories and the skilled electronics and machining experts who are required to set up the factories.
Obviously, chuck thieves and thugs, forgers and whores in there too, as they're all illegal. And, for every law that pushes more 'economics' into the hands of the organized criminals, and -- given that even the 'victimless criminals' such as prostitutes can't really go to the police -- there's more and more demand (and more and more money available) for organized crime's 'police' -- People Who Go Have Words With People, People Who Break Other People's Legs, People Who Kill People...
Mostly staffed by People Who Do Things For Money, and administrated by People Who Know People...
Lets look at the requirements of our organization again:
Must be capable of 'getting stuff done', mainly the illegal stuff:
espionage; breaking-and-bugging: Pay the more-skilled thieves to break and enter, and plant bugs (the bugs can be manufactured by the patent infringers in bulk, or the people who design their factories in small numbers, or by the gov. and then smuggled in by the drug smugglers); use the police/etc contacts for internal information.
entrapment/framing/blackmail: whores and drug-dealers would be good for this. 'Got caught snorting coke off of two whores breasts' makes an awful headline, don't'cha think... as does anything relating to whores or drugs, tbh.
bribery: of officials? drug-dealers, crime-lords, etc, already do so for early-warning of raids and 'accidentally' losing evidence. Of other people, you just need the money and someone to go make the offer.
Forgery of documents: forgers
theft: theives
kidnap, torture, coercion, assassination, provoking riots, anything else that might need doing: organized crime is quite versatile enough to get all of these things done, given sufficient money, and half of those things are done by their 'police'.
Must be capable of logistics to facilitate the above: importing, exporting, transporting, storing, (drug smugglers mainly) manufacturing stuff (patent infringers; drug-makers for chemical stuff); finances (have their own trust-based money-moving systems, and money-laundering too); identification and appropriation of skilled operatives (the 'leaders'); etc.
Size and spread: must be present in every city and ideally infiltrate the power structure (police officers, magistrates, civil-service, etc.), and be large enough to bear a large workload if necessary (umm... yes).
Must do all the above in a deniable way (not tracable back to us, criminals take the blame) and be as cheap as possible (no maintenance costs, simply pay on an as-needed basis).
Bloody cheap way of doing it. You just need to make sure that the criminal infrastructure remains strong. That's easy, just illegalize enough that they have a crapload of stuff to do and make money off of, and ignore all arguments based on 'makes organized crime more powerful' and police badly ('zero tolerance' policing, for example, leads to more and more people not being able to go to the police == more power for organized crime; underfunding would work too).
Now you have a branch of the secret service that can do the 'ground-work' cheaply. No one who matters will get hurt.
On the down-side you'll have to constantly fend off 'hippy liberals' who want to decriminalize stuff, and you'll have to play silly-buggers with the organized criminals so that they don't get too powerful (maybe arrest the leaders who try to unite the gangs, and leave the more conflicty bosses in charge to keep the society less cohesive?), not to mention that others could, in theory, use this system against you; but on the plus it's a method that can be applied to other countries as well, as long as you can put enough influence on them to pass organized-crime-friendly laws and have enough money to be 'the highest bidder' when it matters.
tl; dr?
If we assume that the secret service desires a large, deniable network of people who can get local-scale dodgy stuff done in order to exert control, with its own supporting infrastructure (e.g., logistics) and all on the cheap, then organized crime doesn't half fit that need well...
Also, it works to exert influence on foreign countries as well, as long as you can influence them enough to get an organized-crime friendly set of laws passed.
Therefore, our arguably stupid approach to law and order (especially conceptual crimes) may well not be so stupid, if you assume they're supposed to promote, rather than suppress, crime (especially organized crime).
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