Non-payment of confiscation orders for proceeds of crime should be made a criminal offence, an influential group of MPs said today - and no convicted offender should be allowed to leave prison without satisfying their confiscation order.

The Home Affairs select committee also calls for specialist courts to be established to combat what it says is the current lack of interest in confiscation orders among prosecutors and judges.

The government claws back only 26p out of every £100 of identified criminal proceeds, the National Audit Office reported in December 2013. In a progress report more than two years later, the watchdog said improvements in collecting confiscated income had not been enough to reduce existing debt.

According to today’s report, the select committee received evidence that the creation of a confiscation court ‘would combat the current lack of interest in confiscation orders among prosecutors and judges, which has led in turn to a lack of training and specialist skills’. Meanwhile, there are few incentives for criminals to engage with the courts or to pay money back.

Specialist courts would enable complex confiscation hearings to be dealt with more efficiently and with much greater expertise, with the ‘added bonus’ of leaving Crown courts more time to focus on criminal trials, the committee says.

Confiscation courts would also encourage the specialisation of judges in the area of proceeds of crime. ‘This would mean that one judge could deal with the financial aspect of a serious and/or complex case from cradle to grave.’

The committee adds: ‘The confiscation courts must therefore be properly resourced, with highly motivated and expertly trained judges and prosecutors, to ensure the highest standard of understanding and consistency in the application of this aspect of the law.’

The committee recommends 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’. 

Amjid Jabbar, a partner at criminal defence litigation practice Stokoe Partnership Solicitors in London, said the confiscation process, particularly in complex cases, could take months, if not years. 'The idea that people should be held in custody until they pay the order off does not take into account the fact that many orders are made after the defendant has been released,' he added.

'There needs to be a new realism, an attempt to make realistic orders, which defendants are encouraged to pay and then revisit using the extensive powers available.'

The committee, which described London as a ‘welcome mat’ for money-launderers, recommends that the government set up a dedicated, specialist court to hear complex cases featuring cross-border financial transactions, use of corporate vehicles or very high-value proceeds.

With at least £100bn laundered through the UK every year, committee chair Keith Vaz (pictured), Labour MP for Leicester East, said the existing proceeds of crime legislation had ’failed to achieve its purpose’.