In a speech on Monday, Cabinet Office Minister Mo Mowlam detailed proposals for England and Wales including the creation of a confiscation agency to target the assets of offenders.

The cost of crime

Illicit drug trade costs UK economy �1bn a year �3m recovered annually from drug trafficking Confiscating all criminals assets could raise �40m a year 20% of drug prosecutions result in confiscation orders Recovered drug money provides treatment for abusers 12 times as much money recovered per criminal in Ireland than in UK

Ms Mowlam said the government was also examining proposals for new measures against money laundering and wider laws to ensure income from all crimes - not just drug trafficking - can be seized.

The Conservatives are welcoming the proposals, but say Labour has been rattled by Tory leader William Hague's decision to focus on the law and order agenda.

Ms Mowlam said: "Why should millions of law abiding people work hard for a living whilst a few criminals live a life of luxury built on the misery of others?

"Arresting and convicting criminals is not enough - we must also take away their profits.

"In every court case we should be looking to confiscate the unlawful assets that have built up. That should be the norm, not the exception.

"Courts must make much more use of the powers they already have. Where confiscation orders are made, the money must be collected."

If the plans go ahead, courts would be allowed to confiscate the homes, cars and traceable money of persistent criminals.

Millions uncollected

Ms Mowlam told the BBC millions of pounds are left uncollected from criminals who had already been convicted, adding that Irish authorities were recovering 12 times more money from criminals than authorities in the UK.

Homelessness is also being tackled

Describing how the two measures will work together, Ms Mowlam said that the money taken from criminals will be "re-cycled" and used to help treat drug addicts.

Speaking for the Tories David Lidington said: "I think it shows that the government is pretty rattled by the way in which William Hague has struck a chord with the public, with his comments on crime.

"I have to say the announcement of a new crackdown on crime comes a bit rich from a New Labour government that has slashed police numbers by over 2,000."

Ms Mowlam also used her speech to launch Safe in the City's report, Staying Safe, on attempts to help children at risk of becoming homeless.