Scotland's top policeman: Let us keep 'gangster tax' and we'll massacre organised crime 'The money that comes from criminals should go back into catching more criminals'

Strathclyde Chief Constable Stephen House believes police should be allowed to keep a share of the ever-growing haul of underworld assets seized under Proceeds of Crime – or Poca – legislation, which allows for the civil recovery and confiscation of money, goods and property earned through illegal means.

House is so confident such powers would work to boost his force's bottom line that he is even ready to forgo future central funding from Government in exchange for the new revenue stream.

But House, the front-runner to lead Scotland's coming new single national police service, admits he has still to overcome what he calls a "mental block on the issue" among SNP ministers.

Speaking to The Sunday Herald, the Chief Constable said: "We have all these criminals out there with all this money that they have stolen from law-abiding people.

"It seems daft to me that we have not got all the weapons we need to go after them. Everybody is worried about paying their taxes. But why keep taxing law-abiding people when we could be taxing criminals?"

Essentially House wants to use more of the money raised through Poca to build his force's capacity to strip underworld figures – convicted or not – of their unearned millions.

That, he believes, would in turn raise more cash, which could go to foot bills for everything from new police stations to the wages of procurator fiscals or prison officers. Insiders joke of panda cars emblazoned with markings revealing which gangster paid for them.

They are not being entirely facetious: just over a year ago Strathclyde, in a move designed to humiliate and infuriate gangsters, briefly adapted as a patrol vehicle a luxury Audi 4X4 seized under Poca.

Currently almost all funds raised through Poca go to good causes – some £44 million since 2007. House believes police and prosecutors, if given the incentive of being able to keep a share of such income, could increase that amount tenfold. If he's right, that would be a game-changer in the battle against Scottish organised crime, as House – and his prosecution colleagues – would start to cut deeply into gangland finances.

Gradually they would have the resources to go after the biggest gangsters, the men and women who masquerade as legitimate entrepreneurs or respectable white-collar professionals.

House is blunt. "If we got to keep some of the Poca money, we and the Crown could double, treble or quadruple the size of our investigation teams," he said. "We would massacre organised crime."

Organised crime is a huge business, and its leaders are far richer than the low-life mobsters featured in the tabloids.

In terms of one of organised crime's main customer bases, Scotland has around 50,000 injecting drug users alone. Recently it was estimated that the cash value of whisky exports exceeded that of heroin imports.

Law-enforcement insiders happily concede gangland Scotland turns over more cash than the combined £1.2 billion budget of all eight Scottish police forces. "Imagine a 40% income tax on that lot," said one source.

Recent cases hint at just how much criminal money is out there to be tapped.

Last month, for example, two businessman linked to North Glasgow's McGovern crime family, Russell Stirton and Alexander Anderson, were forced to hand over £922,000 after years of legal wrangling.

In a landmark ruling on a civil action under Poca legislation, a judge decided that the two men, who have no criminal convictions, had profited from drug importing, extortion and money-laundering.

The case – which began with a series of 2004 police raids on suspected money-laundering businesses, including taxi firms – was long, hard and expensive. But it was a huge moral victory for the Crown and, insiders insist, paves the way for more big hits.

In 2010 the Crown finally seized control of £6.5 million, frozen after it was transferred into a Scottish bank account by a Russian businessman, Anatoly Kazachkov, in 2004. He couldn't explain where it came from – and lost his money.

But it isn't just money Poca is taking. Recent seizures, the Sunday Herald can reveal, have included collections of tin soldiers, historic stamps, jewel-encrusted

watches, paintings and, increasingly, the secret currency of the underworld, gem certificates.

Gangsters have always liked to pay for their drugs and other goods and services in diamonds often, the cliche would go, carried by their girlfriends in rings and bracelets.

Law enforcement, of course, got wise to that. Criminals are still buying stones – often blood diamonds from Africa. However, instead of "blinging up their molls", they are leaving the gems in the vaults of Belgian commodity exchanges.

They then use a certificate for the stone – a bit of paper with a gem serial number on it – as currency. That too can now be seized by police, effectively devaluing crime currency.

House believes there is much more money like this to be had. "The tap right now is only dripping," he said. "It could be turned on full."

The Met, the chief's old force, collected £70m from criminals last financial year.

In England and Wales police and the Crown Prosecution Service get a cut of that to fund their investigations, to buy the highly-paid and highly skilled forensic accountants they need. They don't spend any extra on general policing, they distribute it to good causes.

In Scotland the Government dishes out such cash, through its CashBack for Communities initiative. Justice Secretary Kenny MacAskill, pictured right, and other ministers are reluctant to give this up.

House argues that if police and prosecutors scaled up their Poca teams the good causes would get a smaller slice of a much bigger cake. The chief constable is trying to appeal to those in charge of the purse-strings at the Scottish Government.

"If I was [Finance Secretary] John Swinney," he said, "I would be thinking that in five years time we could rely on £30m, £40m, £50m and £60m a year from criminals. We could give half of it to the police or the crown, whatever percentage you want. That is public money you have saved and can divert somewhere else.

"The police budget under a single force is going to shrink. By the end of 2015 we will be spending £80m less on policing than now. Why not say, we will spend a bit and reinvest a bit to save even more?

"Why not keep that target of £80m and say another £20m should be derived from organised crime. What is wrong with that?

"Basically what we are suggesting is that the money that comes from criminals should go back to catching more criminals.

"It is not for us to decide exactly how much money goes where – and I can't see why good causes couldn't benefit – in fact they would end up getting more money if we were more effectively at raising Poca cash. Some of the Poca money should go to police and some should go to the Crown Office and some should go elsewhere in law enforcement."

The Scottish Government, House acknowledges, has taken £500,000 from the Poca pot and given it to three forces in return for match-funding from police boards. Another £1.5m for the whole country is to follow by 2013-14.

House said: "There has been some movement by MacAskill – he is a guy who will always listen to arguments.

"When he first met me he said we will always listen to you but we won't always agree. Well, we clearly don't agree on this one. I think they have a bit of a mental block around this one."

Ministers and civil servants, House said, worry incentives may skew law enforcement priorities. "They think", he said, "the police will start going after the cash-rich targets who might not be the right targets."

Senior civil servants also question the wisdom of basing police funding on something as variable as Poca receipts. House rejects this, saying a Poca action takes more than a year to go through the courts so it is easy to predict how much money will be available each year.

A Government spokesman said: "We recognise a proportion of money recovered should be ploughed back into the agencies directly involved in recovering assets and criminal profits to help maximise the opportunities available to us."

However, she backed current CashBack arrangements, which, she said, have benefited some 600,000 young people, adding: "We believe that the cash seized under Poca should be used to benefit communities who have suffered from criminal acts.

"Our CashBack for Communities programme uses the ill-gotten gains of criminals and invests them in building better, safer, stronger communities."

House's response? "The government and civil servants have made a value judgment. They think: 'We don't really feel that this is how we should fund the public sector'. OK. But my view is that means without the investment you're letting organise crime get away with it."