Let me entertain you with a modern-day version of the tale of the old woman who lived in a shoe. To be absolutely accurate, Shona Waugh is not that old - she's only 37 - but she has eight children and definitely doesn't know what to do.

On Wednesday she was given a five-month jail sentence for buying groceries with stolen credit cards to feed her children, one of whom is handicapped. This caring, sharing, compassionate society of ours, shaped by 11 years of a Labour government, deemed that fair punishment for such a crime.

By all means check your calendars. It's 2008, not 1858, and this is modern justice in action. For nicking credit cards from neighbours, and using them to buy two big loads of groceries - to whit, £234.59 from Tesco and £337.07 from Asda - Ms Waugh was jailed for five months.

The sentence means that she will lose custody of her children, some of whom may have to be taken into care. What also seems unavoidable is more anguish for the woman and her family; and more expense for the taxpayer, who will pick up the prison and care costs.

Lots of things about this story are interesting, the most important of which is that Ms Waugh didn't use the credit cards on herself. She didn't treat herself to luxuries, or go crazy in Toys'R' Us. There is no suggestion that she bought drugs. This desperate housewife - that's real-life desperate housewife rather than the TV version - resorted to fraud to put food on the table for hungry mouths.

From what can be gleaned from her appearance in court, where she sat quietly, smartly dressed, hair neat, I can tell you a little more about her circumstances. For a start, her three-year-child is handicapped. According to her lawyer, as the child's carer, Ms Waugh was “emotionally and psychologically drained”. Her youngest child is a year old, with whom she had a difficult pregnancy. She has a history of anxiety and depression.

And just to make Ms Waugh's cup of joy really overflow, she has a former partner, from whom she was recently separated - a man who, it was said, had subjected her to emotional and psychological abuse.

So there we have it: a snapshot of a heinous modern criminal who has to be locked up. A picture of a woman trying to keep the lid on chaos and failing badly. Eight children, some grown-up, but one with special needs and one a new baby; a rotten relationship and no money. And, to top it all, incarceration and the loss of her children.

This is almost a version of Angela's Ashes, except that it won't sell a million copies. No one is interested in pitiful Shona Waugh. Her court appearance in Edinburgh was reduced to a few fleeting paragraphs in the papers.

Now there is no suggestion that Ms Waugh is a saint. She is clearly not so clever on the contraceptive front, nor in her choice of partner - but these are not criminal offences, nor are they by any means faults exclusive to any particular class of society. She had appeared in court two days earlier, when she was sent to jail for four months for an assault that had taken place as her life spiralled out of control. Ms Waugh's fraud was hardly on the Baring's Bank scale. It's achingly sad, hopeless stuff - born, as her defence made clear, from the fact that she was under “significant financial pressure”.

But what fascinates me about this case, makes me come over all shivery and Victorian, is that the plight of this one pathetic woman says an awful lot about the failure of political systems of every kind. It is a fairly catastrophic indictment of new Labour that the mother of a handicapped toddler with a new baby can still be jailed for stealing to feed her children.

Plainly, Ms Waugh wasn't equipped to cope with her situation, but the entire infrastructure of authority wasn't either. That vast, shiny, regulated edifice of justice and compassion - social services, tax credits, child poverty targets, law reform - that Labour has constructed over the past decade failed this woman as miserably as the poorhouse would have. When the gloss was tested, there was nothing behind it.

The hollow logic of locking up all transgressors is also pitifully exposed. Women's prisons remain packed with individuals guilty primarily of not coping. Such prisons perform, as one governor once told me wearily, as psychiatric holding camps.

But if conventional policies are pointless, inappropriate, and potentially catastrophic, what should be done with a woman like Shona Waugh? What acceptable solution returns her to law-abiding, competent mothering; keeps the family fed and together; stops crime; and costs the taxpayer least?

There is room here for imagination - will David Cameron's young tyros provide it? - but plainly firm intervention short of jail is necessary. A community sentence is essential with the threat of imprisonment remaining as the final sanction. Regular respite for the parent of a disabled child might do wonders. Rehabilitation and practical advice should be compulsory. All of which, miraculously, would be cheaper, and more humane, than the present Dickensian option.

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