'˜Criminals should stay in jail till debts are paid'

Offenders should have to pay all of a confiscation order or convince a judge their debt to society is squared before they are let out, MPs said.

Those subject to orders should also have their passports taken away until they have paid.

The proposals follow warnings that only a “paltry” share of the proceeds of crime is ultimately recouped.

Figures show criminals owe the taxpayer nearly £2 billion, but only a tenth of the sum is seen as “realistically collectable”.

Non-payment of a confiscation order - a key route for seizing offenders’ assets - should be made a separate criminal offence, according to the Commons Home Affairs committee.

Its report said: “To enforce this, we recommend that no criminal be allowed to leave prison without either paying their confiscation order in full, or engaging with the courts to convince a judge that their debt to society is squared.”

Last month an administrator who defrauded Leeds City College out of £480,000 was ordered to pay back £62,000 from the sale of a house and a ring.

Julia Hogg, of Thorpe Willoughby, near Selby - who had spent the money on her partner, holidays and trying to “buy” friends - was given three months to pay or face a longer period in jail.

Similarly in May, Paul Kelly, an Asda director, who defrauded the supermarket’s charity fund of £180,000, was ordered to repay the sum or spend longer behind bars. Kelly, who is currently serving a three-year sentence, was expected to sell his home in North Yorkshire.

Kelly persuaded fellow directors to sign blank cheques, claiming he was due to meet with Prince Charles in a bid to assist flood victims. Instead, sums of up to £80,000 were handed over to a failing ballet company run by his new young boyfriend.

Confiscation orders are issued by courts against convicted offenders and can be applied to any offence resulting in financial gain, with the amount based on “criminal benefit”.

Even after an order has been made, many chose to extend their prison sentences and avoid paying, the report warned. It said: “It appears that some criminals view paying back their proceeds of crime as an option rather than a requirement - essentially a choice between payment and prison.”

Committee chairman Labour MP Keith Vaz said: “Non-payment of a confiscation order should be a criminal offence to ensure offenders do not just see out a prison sentence to keep their ill-gotten gains, and these orders should be set by dedicated ‘confiscation courts’.”