Ministers cannot “warehouse” addicts and people with mental health problems who commit crimes such as shoplifting, a senior Conservative MP has said in response to a plan to give shoplifters mandatory sentences.

Sir Bob Neill, the chair of the Commons justice select committee, said the new policy would “pump low-level offenders” into almost-full jails at huge public expense and do nothing to change the “chaotic lives” of offenders.

Neill’s comments come as official figures unearthed by Labour show the growth of the prison population will outpace the supply of places.

The plans from Alex Chalk, the justice secretary, emerged on Monday. They would force judges to impose jail terms when sentencing repeat offenders for shoplifting, burglary, theft and common assault, using new legislation in the crime and justice bill.

Currently, these offences do not automatically result in a prison sentence in the way that two convictions for knife crime do.

Neill said such an approach could only work if it addressed the problems faced by many shoplifters.

“This will only work if it is done as part of a holistic, cross-government approach to tackle the underlying causes,” Neill said. “A majority of these low-level crimes are driven by addiction or mental health issues.

“Simply locking people up without addressing those issues will cause a record prison population to go up even further, and at a cost of around £40,000 a year per offender.

“There are some instances where we need to jail prolific offenders, I accept that, and for serious offences it should happen. But prisons do not do enough to address addiction, chaotic lifestyles or personality issues of many offenders who shoplift, for example.”

Neill added: “The devil will be in the legislation when it is published. But there is a risk that this proposal is oversimplistic. You cannot keep pumping low-level offenders into the prison system without consequences.”

The trigger for a custodial sentence for repeat shoplifting is expected to be between 10 and 20 instances as it is a lower-level offence than knife crime, according to the Times. Lower thresholds are reportedly being considered for burglary, theft and common assault.

According to official figures, the Ministry of Justice predicts the number of prisoners in England and Wales will hit 89,100 by November, but there will only be 87,573 operational prison places – a shortage of 1,527.

There have already been high-profile cases where offenders have avoided prison due to prison overcrowding despite committing serious crimes.

Earlier this year, lorry driver Fabian Greco received a suspended sentence due to “pressure on the prison estate” despite punching and repeatedly kicking a man in a road rage incident.

A people-trafficking offender also avoided a prison sentence after throwing boiling water over an emergency worker, due to overcrowding concerns.

Steve Reed MP, the shadow justice secretary, said: “Our prisons are turning criminals away because the Conservatives failed to build the cells they promised.

“The situation has become so chaotic that the Conservative government has instructed judges not to lock up dangerous criminals, leaving them to roam the streets and seek out new victims.”

Responding to Neill’s comments, a Home Office spokesperson said: “Shoplifting strikes at the heart of local communities and we expect police forces to take this seriously – deterring this kind of crime but also catching more offenders.”

Commenting on the figures unearthed by Labour, the prisons minister, Damian Hinds, said: “The last time Labour were in power, they released 80,000 prisoners early, including terrorists.

“Meanwhile, we have cut the reoffending rate to lower than when Labour left office, increased the conviction rate by 15%, introduced tougher sentences for the worst offenders, and are building more new prison places than under any Labour government.”

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