Thursday, July 29, 2010

Cost of Crime in UK

In 1993, the UK prison population was 44,000. Today it is over 83,000. This trend is set to continue: the government has recently announced an extra £3.8bn to create 20,000 more prison places.In the UK it is estimated that each new prison place costs £119,000 and that the annual average cost for each prisoner exceeds £40,000. (Guardian link)
A key economic debate at the moment is the best way to reduce Britain's budget deficit in a way that:
  • Helps improve maintain equality / fairness in society
  • Doesn't negatively impact on economic growth
  • Helps to improve economic incentives and economic welfare.
So far, the best policy seems to be raising the retirement age. Arguably though it will increase inequality for pensioners who have low private pensions, but, at least one benefit is that it doesn't negatively impact on economic growth - it can actually help.

Anyway, I've always wondered why we have not made greater use of much greater financial penalties for crime, rather than relying on the expense of putting people in prison.

For crimes of theft / burglary e.t.c. there must be an economic incentive for people to resort to crime. The proceeds from crime being weighed up against the potential loss of liberty. At the moment, it seems that many feel that there is an economic incentive to steal. In the eye of the criminal the benefits outweigh the costs. - Society pays heavily for this.

However, suppose there were very stringent financial penalties for being involved in this kind of crime. Either one off lump sum penalties or the prospect of higher taxes for a certain number of years.

If the state had the power to confiscate property, money in bank, society could be financially compensated for the crime, rather than society having to pay even more to keep them in prison for a long time..

You could criticise higher financial penalties for crime on the grounds of.
  • Impacts on individual liberty to confiscate property / bank accounts. But, what is prison if not a confiscation of individual liberty?
  • The family of criminals may suffer if car and house repossessed.
  • Prospect of higher taxes in future may dissuade criminals from returning to the legal economy. It may be an incentive to remain in the black market and report a low income.
Nevertheless, I still think it has the potential to be a very good policy.

  • If the prospect of jail is insufficient to deter crime, maybe the prospect of a high % of your wealth / property being confiscated would be.
  • Greater financial penalties wouldn't replace prison altogether. But, it may justify shorter sentences (for non-violent crimes), given the criminal is being hurt in different ways.
  • The money raised from fining criminals could be used to pay for drug rehabilitations programmes e.t.c which help reduce crime in future.
Ironically, it is a kind of an eye for an eye justice. - You steal £1o,000 of bikes from the public, you have to repay £10,000. Seems fairer than cutting off their hands or putting them in prison for seven years.

Just my idea of the weak.



Michael said...

Very interesting. What has been the experience of any authorities who have tried out this idea? If no one has yet done so, how do you account for this lack of innovation in the political economy?

Anonymous said...

Being imprisoned also protects the society - leaving the committer no money actually has the opposite effect.

I would suggest letting prisoners work for what their imprisonment costs the state while imprisoned.