Homelessness has increased 170% since 2010 and more people are on the streets. And we are using a 200-year-old law to lock up homeless addicts for begging, in some cases sending them to already overcrowded prisons.

Vigilante groups are even naming and shaming rough sleepers they believe to be “professional beggars”.

The police reaction? Arrest, caution, lock them up. Lock people up and fine people with no money. What do the police think they are going to do when they come back on to the streets? Yet the level of debate rarely rises above “should we give to beggars or not?”

There is an industry worth hundreds of millions of pounds, made up of charities and public bodies that is very keen for you to give money to them and not the people in need. It’s a thriving sector employing some very well-paid people, and it has an agenda – using its ingenuity and creativity to sustain itself. Meanwhile, there’s a guy on the street who has no home who you just walked past.

Researching a BBC Radio 4 documentary, The Truth About Britain’s Beggars, recently, I met people begging in Brighton who were using legally acceptable phrasing on their signs: they can’t directly ask for money, or even use a hat, as this is defined as aggressive begging and they can be arrested.

Everywhere I went people spoke about the so-called professional beggars who drove BMWs. Most hadn’t actually seen them and had no evidence of their existence.

I met a guy in Brighton who makes about a fiver a day – the most he has ever made is £30. He doesn’t see anyone making a comfortable living from begging. Even Brighton police told me that their response doesn’t feel right.

In Cambridge, a police sergeant told me he felt his role was to make life as uncomfortable as possible for beggars. Luke, a homeless man I met there, a former chef, is now an addict with mental health issues. He’s been arrested 17 times and jailed twice (not for begging but for breaching orders banning him from begging).

Why are we so uncomfortable when destitute people hold their hand out? Because their need is ugly

The sergeant had little sympathy. Someone who I saw as really ill was, in his eyes, “an adult capable of making his own decisions”. In other words, Luke had a choice and had chosen this existence, and the police felt they had every right to arrest him every time he came back on to the streets because society was uncomfortable and wanted him to find a solution.

I told the Cambridge sergeant I thought this cycle of begging and prison wasn’t working.

I was told that people on the streets are going to spend their money on drugs. Luke said: “I try not to spend it on drugs.” He tries. Who reading this wouldn’t want something to warm the cold out of their bones, or the damp from the pavement? I challenge anybody to spend a week in Luke’s shoes and not feel the urge to find some pain relief. I certainly needed drugs when I was homeless and sleeping rough more than a decade ago. I’d beg and steal to get my fix.

There’s a lack of our own sense of morality when we judge a group of people who are largely mentally ill in this way. We seek to dictate what those who are on the street can spend their money on.

SureStart schemes close and funding dries up for community projects, leaving vulnerable people even worse off. These cuts are a war being waged against incredibly vulnerable people.Why are we so uncomfortable when destitute people hold their hand out? Because their need is ugly. So we dehumanise them. If we ignore the person and just give money to charity, assuming the money will help them, we are avoiding the issue – the same happens if we arrest them.

Sometimes, rather than engaging, we look away, hoping someone else will deal with it. In Torquay, I met a business owner who, with the support of the head of the local chambers of commerce, is running a campaign naming and shaming people, claiming they are professional beggars – one homeless man, a heroin addict who sleeps in a doorway, had been “outed”. Later, he was attacked with a hammer – he felt this was a result of the campaign.

Those mythical beasts in their BMWs are driving policy and the reactionary politics of our citizens. More people are begging and our fear drives us to perpetuate stereotypes and spread rumours. It can lead to violence. It definitely leads to an unhelpful police response and a huge waste of public money. Money that could have been spent on a solution instead.

We should all get involved – and accept homeless people and people begging. We mustn’t demonise or criminalise them. We don’t have room in our prisons, for a start. We have to press for change, for services that support them so they don’t have to beg in the first place.

The Truth About Britain’s Beggars, presented by Mark Johnson, founder of User Voice, is on BBC iPlayer Radio