Currently, relatively few prisoners work in real, salaried employment, but the government is planning to make it easier for private companies to employ prisoners in regular nine-to-five jobs.
Prisoners will be allowed to keep a small stipend of around £10 a week, with the rest of their earnings providing compensation for the victims of crime.
“I want to revive a policy of John Major’s government and make deductions from the earnings of working prisoners to provide compensation for victims of crime,” Clarke will tell delegates at the Tory party conference in Birmingham today.
He is expected to say: “If we want to boost the amount that can be provided for victim support, we need as many prisoners as possible to work. In order to raise those funds, we need to instil in our jails a regime of hard work.”
An aide to the justice secretary said it was hoped industries with labour shortages would take advantage of prison workers.
Most of their earnings will go to victims, but companies will still have to pay prison workers the national minimum wage.
Initially, the scheme is expected to raise about £1.1m-a-year for victim support groups.