In the middle of complex crises that require hard work to explain, the political-media class loves to charge off in search of a piece of distracting, empty trivia. This week, they are obsessed with Jacqui Smith's expenses forms.

The Home Secretary is entitled to claim help for a house in London and in her constituency – but (hushed whisper) did she put them in the right order on the forms? Does she spend four nights a week in her sister's house, or (drum roll please) only three?

Meanwhile, on the other side of Westminster Bridge, crime is set to soar – and Smith's policies will make it worse. It is an iron law of sociology that when the economy falls, crime spikes. If you increase the number of people milling around jobless and listless, you inevitably end up with more muggings and burglaries. So we need to talk now – urgently – about how we can stem this rise. The debate should be about your house, not Smith's house.

There are two paths from here. The government can continue to posture as "tough" to gain applause in the right-wing press – and crime will get worse. Or they can get smart. Let's look in this column at three policies that have been proven to slash crime. They don't allow Smith to posture as a hard-woman beating up the baddies – but the facts show that if we introduce them now, we will avoid the worst.

Step one: Transfer the mentally ill who are in prisons to hospitals instead. The first thing that strikes you when you visit British prisons – as I do – is the sheer number of people there who are insane and barely know where they are. In the bowels of Wormwood Scrubs I found a man in his sixties who had been diagnosed with severe brain damage. He thought I was his father. He wasn't so unusual. Michael Spurr, the operational head of the Prison Service, admits that 10 per cent of the prison population is "seriously mentally ill". Almost everyone in the field considers this a serious underestimate.

This isn't just a scandal – it makes you less safe. If you take somebody who is paranoid or delusional and lock them in a tiny cell without proper treatment, they get rapidly worse. A recent study by Professor David James found when you send a mentally ill person to jail rather than hospital, they become 50 per cent more likely to reoffend. That's a lot of muggings and attacks that will be wiped out by proper treatment.

Step two: Increase methadone and heroin prescriptions for chronic addicts. If you fall into heroin addiction, your body becomes so ravaged by the need for the drug that you will do anything for your next fix. That's why a majority of the property crimes and sex-for-cash are carried out by junkies. Providing rehab is important – but the drug is so addictive that even the best treatment centres in the world fail 80 per cent of the time. So for most addicts, the only safe option is for doctors to give them a legal prescription – which halts their crime overnight. The Cheshire Drug Squad found in the 1980s that the presence of a heroin-prescribing clinic on their patch caused a 94 per cent drop in property crimes.

This week I visited the "Addaction" drug treatment centre in the suburbs of north London to see what can be done. A typical client of theirs – I'll call him Andy – became depressed after his girlfriend died in an accident. He began using harder and harder drugs in an attempt to dull his pain, and soon became hooked on heroin. As the addiction got worse he began to fuel his habit through theft. He turned up at the centre for help and was prescribed methadone, which helped to stabilise his drug use. With the therapy and guidance he was given here, he was able to slowly cut back. Today, he is working, crime-free, and receiving only small doses.

Yet places providing treatment like this are struggling. Under Labour, 15 of Britain's 100 rehab centres have closed down in the past year. David Cameron's Tories, incredibly, want to go even further: Iain Duncan Smith's policy paper called for an end to all prescription in favour of requiring immediate "abstinence". Tim Sampey, one of the on-the-ground "Addaction" workers, says this would cause "a crime explosion". Labour needs to stop being so cowardly and make the open case for medicalising drug addiction. In Switzerland, this policy was unpopular – until it was introduced and crime rates crashed down. Now it has overwhelming support.

Step three: Bring rehabilitation back to our prisons. Today, 60 per cent of prisoners have a reading ability below that of a six-year-old child – and most leave having learned nothing. How can we be surprised that only 25 per cent stay away from crime when they are released? There are some brilliant rehabilitation programmes, but they are underfunded and sparse. Joe Baden has founded one of the best, the Open Book Project. When he was imprisoned in the seventies facing armed robbery charges, Baden was taught creative writing – and it inspired him to go straight. Today he goes back into prisons to help inmates get academic qualifications, supporting them at every step. He has taken prisoners from illiteracy to gaining degrees – and only two per cent of the people he works with re-offend. Yet he warns that "most rehabilitation today is just crap".

As it stands, it is going to get even harder for prisoners to be matched up with retraining in the next few years. One in four probation officers is being sacked to save money. Instead of expanding the probation service to make sure released prisoners are not homeless, jobless and skill-less, the government is actually scything them back.

Is this the path we want to choose? Yes, it gives us all a cheap kick to be rhetorically "tough", smacking around the insane, addicts, and illiterates who made horrible choices in their past – but it ends with more of us becoming victims of crime.

That's the inevitable dark alley we will stumble into now if we go back to jabbering about Jacqui Smith's expenses while the economy tanks and our politicians unthinkingly smoke more of the crack-down crack. It's time to get liberal – or get mugged.

j.hari@independent.co.uk