Lib Dems to look at prison reforms to tax inmates on work they do inside

Previous work schemes have been shut down for paying cash-in-hand

Labour has vowed to “increase the amount of time prisoners spend working and learning” and Liberal Democrats said they would “reform prisons so they become places of work, rehabilitation and learning”. (Getty)

Prisoners should be allowed to pay tax and national insurance so that “proper businesses” can be set up in jails, according to campaigners.

Frances Crook, the chief executive at the Howard League for Penal Reform, told The Independent that she was calling on the political parties to fully develop vague manifesto references to the rehabilitative benefits of work in prisons.

The Howard League established a graphic design studio called Barbed in HMS Cordingley in Surrey, but shut it down in 2008 when prisoners were barred from paying NI and tax. Government rules meant they were paid cash-in-hand, which the charity believed reinforced that it was acceptable to avoid paying tax.

The Conservative-led coalition nearly changed the rules, but the plans were ditched when Ken Clarke was replaced by Chris Grayling as Lord Chancellor in 2012.

Ms Crook said that the change would be particularly useful in the retail sector. She added: “Work carried out in places of exploitative conditions, like factories in Bangladesh, could be brought in [to jails]. Retail is obvious because it takes little capital infrastructure but lots of labour.

“It’s no good prisons sticking to their 18th century models. Prisoners should be allowed to pay tax and NI, a full day’s pay for a full day’s work in proper businesses, and bring prisons into the new millennium.”

Labour has vowed to “increase the amount of time prisoners spend working and learning” and Liberal Democrats said they would “reform prisons so they become places of work, rehabilitation and learning”.

A Liberal Democrat source said the party was “happy to look” at the idea.