THE home secretary wants to add a £35 surcharge to fixed penalty notices, such as parking tickets and speeding fines, to boost the state compensation fund for victims of crime, leaked cabinet papers reveal.

The controversial move, approved by Gordon Brown, the chancellor, will be seen as another Labour stealth tax.

The "victims' surcharge" would apply to a range of misdemeanours, including motoring offences, littering, dog fouling and graffiti as well as yobbish or drunken behaviour. The extra £35 would be added to the fixed penalty.

It would also be applied to all criminal sentences that are punished with fines, but most of the funds raised would come from the millions of petty offences committed by generally law-abiding people.

David Blunkett risks further alienating middle-class voters by proposing a £3 levy on every home insurance policy in order to raise a further £54m a year for the victims of crime.

In 2001 the police issued 3m fixed-penalty notices for motoring offences, giving the potential for raising more than £100m a year. Blunkett has extended fixed-penalty notices to bring in "on-the-spot" fines for antisocial behaviour, but these are unlikely to raise much income with only a few thousand issued in pilot schemes in four parts of the country so far.

A leaked letter from the home secretary to cabinet ministers reveals that he wants to unveil the proposals in September as part of his victims and witnesses bill.

He points out that similar schemes operate in America, Sweden and Belgium. However, in America the surcharge money is also used to improve school buildings or roads.

"The proposals set out here would send out a clear message of placing the victim at the heart of the CJS [criminal justice system]," Blunkett wrote on June 25 to John Prescott, chairman of the cabinet's domestic affairs committee.

The plans are part of proposals designed to boost the coffers of the criminal injuries compensation scheme, under which Ï160m is paid out a year.

Blunkett added: "The package of measures proposed would generate new resources that should be used to support a number of priority measures for victims."

Defying fellow ministers to challenge his plans, Blunkett, who is close to Tony Blair, adds: "The prime minister has seen these proposals."

Cabinet colleagues have given their consent to the surcharge on fixed penalty notices, although they have raised concerns about the effect of the insurance policy levy on the financial services industry.

Paul Boateng, the Treasury chief secretary, wrote back to Blunkett agreeing to the £35 surcharge. However, he raised concerns about the effect of a levy on insurance policies.

"I am not convinced of the case for such a fee, not least because it would add to rising premiums and, especially if levied on household insurance, would risk further social exclusion from the insurance market," he said. "I would find it hard to justify such a levy given that insurance companies have no liability for the criminal actions of others and there is no direct link between many of the policies they sell and the outcomes to be compensated for."

Another controversial move is disclosed in Blunkett's seven-page letter. He risks the wrath of thousands of public sector workers by stopping them being compensated out of the criminal injuries compensation scheme for injuries sustained at work. He wants the organisations they work for to find alternative insurance.

Blunkett also wants to save administration costs by getting private firms to run the criminal injuries compensation scheme. A Home Office spokesman said that it did not comment on leaked documents. "We announced a review of compensation for victims last Tuesday," he said. "No decisions have been made."

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