There was some good news in the reshuffle. Mr Hague’s decision to leave Parliament next May means we now have a Foreign Secretary who has stated he wants out of the EU if we do not get a much better deal. That is a better stance for our negotiation, and encouraging that he agrees with many of us that the UK’s current position in the EU   is unacceptable.

The decision to replace Mr Grieve as Attorney General suggests  according to some of the accompanying briefing that the government is planning to change its approach to the European Convention on Human Rights. Many Ministers and others are frustrated that the Convention and Court gets in the way of the UK seeking to extradite certain criminals and run the borders  policy it wishes to run.

Mr Gove’s arrival as a speaking Chief Whip with wider duties than a  traditional Chief Whip makes sense in the run up the General Election. Nikki Morgan as the new Education Secretary needs to push ahead with reforms that Mr Gove has instigated.

I invite your thoughts on the whole package.

In 2008-9, well into the financial crisis, the UK state raised £22.5 billion in Self Assessment Income Tax, with a top rate of 40%. The following year, the last year at 40%, saw another £21.7bn collected.

The 50% rate then introduced was assumed by the Treasury to yield a lot more self assessment income tax, as high payers usually  have to complete the self assessment process and are an important part of that total. In the June 2010 forecast the Treasury looked forward to raising £29.2 bn from self assessment in 2012-13, and £32,5bn in 2013-14. These forecasts were reduced steadily in successive years. So what actually happened?

In 2012-13 the Treasury collected just £20.6bn in self assessment Income Tax. In 2013-14 it managed £20.9bn. In  other words, the  Treasury collected 4 -5% less  in those two years than in the last year of 40% tax, despite the inflation in the meantime.

More worrying is the gross inaccuracy of the forecasts. Revenue in 2013-14 was a massive 36% down on the June 2010 Budget forecast in 2013-14. It was 32% down on  the Budget 2011 forecast.

Much of the debate about optimum or desirable tax rates in the UK is conducted without reference to any of these outcome numbers. Too many people assume the Treasury model and official statements about the impact of higher rates are correct, where the official word is they do not have a lot of effect either way.

People interested in this topic  should instead study the outturn figures. They are markedly different from the forecasts. They show that self assessment Income Tax was hit badly by the 50% tax rate, and has been running a huge one third below forecast.

Past Prime Ministers have often been damaged by their  reshuffles. The reason is simple. There is no sensible personnel function for Ministers in modern government.

It begins with the failure to map the interests, experience and qualifications of the talent pool, the MPs and peers available for appointment. It is worsened by those who may include friends and spin doctors of the Prime Minister who think the best way to conduct the run up to a reshuffle is a discussion of the merits and especially the  failings of the candidates in  the press without involving them. It can reach a climax with job offers to people who have no wish to do the job in question, allied to attempts to sack people from office who had no idea they were likely to lose their job and who are most reluctant to leave.

A badly conducted reshuffle ends with the Prime Minister having more unhappy colleagues. Those outside the tent who wanted to be Ministers have been passed over again, often with no explanation. Former Ministers have been bruised by the sacking and the unpleasant briefing that often accompanies it. Some Ministers who have been moved or kept in place remain unhappy because they are not doing the job they want or even deserve. So how could all this be changed and improved?

The first thing that needs doing is a Prime Minister needs to upgrade the Whips office to be more of a modern personnel function. Whips should know more about MPs’ past training, experiences and abilities. They need to have a way of keeping the PM informed of the talent available. They need to know what individual MPs and peers would like to do, and they need to manage expectations where these are unrealistic. In cases where they are possible they could guide the individual into what actions would be helpful for that MP or peer to take to make their appointment more likely. Proper mapping of wishes and skills might find many MPs and peers will be able to have a job they would like and is suited to them. Not all MPs want to be Ministers. Some want to be Select Committee Chairmen, or Deputy Speakers, or strong minded backbenchers. In my time as an MP I have only once been asked what job I would like to do. I made three  suggestions. I was never told why I did not get any one of them!

The second thing that is required is better management of Ministers in post. I put in place a system of regular meetings between directly reporting Cabinet Ministers and the PM when I advised Margaret Thatcher. I felt it was important that a senior Minister should hear from the PM about what she wanted to see and what she thought of his department’s work, and that the Cabinet member should get a private opportunity to criticise what Number 10 was doing, or to ask for more help, or to warn where things might be difficult. I wanted to make sure there were no surprises either way. The PM needed to know the truth about the big picture in each department, and the Minister needed to know if he was supported or was expected to raise or change his game.

Cabinet Ministers should do this for their junior Ministers. I worked closely with junior Ministers when they reported to me, using a system of regular  review of the progress they were making through weekly meetings and informal discussions. Cabinet Ministers should be consulted on the junior Ministers   reporting to them  before they are reshuffled.

The third thing  that would help is to do more to mentor and train Ministers. There should be a  course for those who want to be Ministers which most MPs could take whilst hoping for preferment. This would cover the law as it applies to Ministers, Ministerial powers, collective responsibility, handling the workload, managing the diary, relating to the public and media and working through Parliament. Doing the course would also  be useful to MPs seeking to hold Ministers to account. Completion of it would not guarantee  promotion.

The fourth thing is to manage retirements or “resignations”. Where the PM wishes to get rid of a colleague they should  be given warnings of what is expected of them and what they need to improve before being sacked. If Ministers understand that positions generally are 2-5 years in length there should be no shame or bad briefing if their tenure is terminated, as there can be no automatic right to promotion.  Some people will do a good job as junior Ministers for a period of years, and should be allowed to retire from the Ministerial role with thanks for their service. Entry into the Cabinet needs proof that the individual has a wider political pulling power, support within the Parliamentary party and the wider public,  a strategic sense and an ability to manage a large organisation, amongst a range of requirements.l

Today I want to concentrate on the narrower definition of the nation’s debts – the £1300 billion of official borrowing in the name of the nation that gets measured in the international comparisons, some 80% of GDP. This excludes the  public sector pension deficits, the semi nationalised bank liabilities and the private finance guarantees.

80% of GDP is a comparable level of indebtedness to Germany, the USA and France, and well below Japan. Markets are getting used to highly leveraged states these days.

29% of this state debt is now owned by the state. We have bought it back from the people who originally lent it, using created electronic money from  the Bank of England. It means as of today we only owe 57% of our national income in this core borrowing.

I raise this because we have ahead of us a decision to make about what we do with this self owned debt. Currently we pay ourselves interest on it, and recoup much of that one way or another. The Bank tops up the amount of government debt it owes as repayments come due. There are three main options from here:

1. Sell the debt back to the private sector, destroying the created money as we do so. This would drive interest rates higher, improve the position of savers and worsen the position of borrowers, and would lead to a monetary tightening. This seems an unlikely course of action for the authorities to pursue any time soon.

2. Stop replacing the debt we owe as debt is repaid. Over a period the state holdings of debt would be run down, and the Bank of England balance sheet gradually deflated as this happens.

3. Cancel the debt as we owe it to ourselves, creating an accounting transaction to sort out the Bank of England balance sheet when this happens.

Which of these would you like to see happen?

Many parts of the private sector are being changed dramatically by digital technology. If you want to buy a house you can now visit a range of properties on line and see their floor plans and their inside and outside appearance from your home computer. If you want to buy any good or service you can google it and see a list of competing offers, usually with prices. You can order on line from your armchair. If you want to find a new job there are electronic jobs boards with choices of openings on offer. You can bank online, insure your car on line, undertake a study course on line. The opportunities are endless. The role and nature of the estate agent, the insurance broker, the bank clerk and the employment agency have altered substantially.

As a result of all this change the private sector is rapidly having to adjust its staff and property to accommodate the new way of doing things,. Will we need a many shops when people shop more on line? How many bank branches and insurance broker high street outlets do we need when more is done on the home computer or on the mobile on the move?  Does the Town Centre become more of a leisure and entertainment destination. with much higher proportions of restaurant and leisure facility space? I sense we have only just started to see wide ranging changes this technology has unleashed.

The public sector has been slower to adopt the potential of this technology. Education is still mainly conducted by going to a school or college and sitting down to hear and be guided by a teacher. Health care still mainly involves going to visit a Doctor or dropping into A and E for triage. It is true at the edges you can now renew your road fund licence on line, and can file your tax return electronically. The new Universal benefit system is a massive investment in new technology to deliver people’s state financial support.

Today I am inviting you to comment on what new applications and changes you would like to see in the way we deliver the main public services. If we can no order our food shop from our own living room and pay all our bills from our phone, what more could we do in this way when meeting government requirements or accessing public services?

Yesterday Parliament debated whether to opt back in to 35 of the EU Criminal Justice measures.  We have recently rightly opted out of all 135 measures, as we were entitled do under our version of the centralising Lisbon Treaty. I and others told  Parliament why we do not wish to opt back in to anything.

On June 15th 1215 at Runneymede the King conceded an important grant of liberties to Englishmen called Magna Carta. Though this was just one of many evolving constitutional documents thrown up in our history of curbing the powers of  executive government and building a stronger dem0cratic Parliament to curb excessive state power, it has become one of the earliest and most iconic. It gave Englishmen the right to fair trial under English law with proportionate punishments for the guilty. It set up a forerunner of Parliament, an elected council of 25, to supervise the settlement and check up on the government’s good faith in implementing it.

The government plans to celebrate and commemorate this event next year. It is no way to do so by passing control of these important matters of justice to the European Union. I and like minded colleagues fully understand the need for cross border police collaboration, for some common investigations of cross border crime with agencies from other countries, and the need from time to time to extradite possible criminals for trial elsewhere. We do this by Extradition Treaty or agreement with other countries in all but the EU. The EU wishes us to have different arrangements in the EU, submitting our control and jurisdiction to EU and European Court jurisdiction. This to me is a step too far, and a needless sacrifice of the sovereignty of the British people.

Yesterday the government argued that the European Arrest Warrant was necessary to get back nasty criminals for trial who had travelled to EU countries. We explained to them that we too wish to see serious crime pursued across frontiers. We wish to have an Extradition Treaty with the EU just as we have such treaties with many non EU countries. That is a better route than putting ourselves under the control of the ECJ and the Commission. We can change, influence or cancel an Extradition Treaty if we wish. Once we have opted into EU criminal justice we are powerless to change anything unless 27 other EU countries, the Commission and the European Parliament agree.

Members of Parliament are heirs to a great tradition. Some of our predecessors took great personal risks to defend  and extend the liberties of Englishmen and women. They fought to prevent the executive government, the Crown, exercising too much arbitrary power at the expense of the people.

Today we need to remember that when  Parliament debates whether important matters of criminal justice, recently repatriated to UK control, should be surrendered to the EU. John Hampden, John Pym and John Eliot fought against a Crown which wanted to presume to itself the power to tax without reference to the grievances and rights of those paying the bills. They fought to uphold the right of Parliament to fashion the law and ensure its fair enforcement. John Eliot died prematurely from his stay in prison for refusing to accept Ship money. John Hampden died of his wounds  in an early battle of the civil war. Their cause was just and ultimately upheld.

Today the threat to our liberties and right of self government comes not from the Crown but from the EU. Some of us this day will argue against surrendering any criminal justice powers to the EU. We accept the need to co-operate with the police and criminal justice systems of our  neighbours to track criminals and bring them to court. This can be done by bilateral agreements which preserve the authority of the UK Parliament and the sovereignty of the UK electorate. Eliot, Pym and Hampden would expect no less.

Most people want to own their own home. Today it is too difficult for many young people to do so. How should this be tackled?

Some suggest renting is better, more flexible. They usually make these statements from  their  home which they own!  Renting is meant to take the stress of home ownership away, as mending a fault or problem should be just a phone call away to the landlord. That’s fine if the landlord is attentive, but it can be far worse than getting on with sorting out your own fault if he or she does not co-operate speedily. Renting limits your ability to improve and change your home environment. It takes much of the pleasure of a place of your own away. Many Generation Renters can only afford to share rented premises with others, so it is not a true home of their own. If you rent throughout your earning years you will be paying even more rent when you retire. If you have bought a place of your own and repaid the mortgage before you give up work, costs in later life are lower and easier to pay for out of the pension.

So how can we give more people the choice of owning and the chance of buying?  There are various policies the next government could adopt to help.

First we need control of our own borders, with a measured approach to migration. We are not building enough new homes to deal with all the demand resulting from demographic change, largely driven by migration.

Second, if the government reduced Stamp Duties buying a home would be cheaper, and more homes might come onto the market as people would be more willing to trade up or down.

Third, cutting CGT to an optimising rate, so more people with homes they do not need would be willing to take their profits.

Fourth, putting more emphasis on affordable homes for purchase, shared equity and other ways to make owning possible within the substantial budgets and programes of social housing

I would appreciate your thoughts on what else could be done to assist.

Both main parties are experiencing an electoral torture over the vexed topics of free movement of people and immigration.

Labour has traditionally captured a large share of the recent migrant vote. It is reluctant to say or do anything that could upset that important constituency. It also under Mr Blair made a successful pitch for many more votes from the better off and higher earning sections of society. Many in this group welcome more migration, as they wish to employ the new migrants and  want to see the market for their goods and services expand.

Labour’s traditional voters often  take a different view. They do not wish to see migrants in the queue for social housing, nor like  cheaper competition in the labour market for unskilled jobs that already pay very little. The Unions are none too keen on a plentiful increase in the supply of labour when they are trying to get a better return for their members. Labour are now seeing some of their traditional vote disappear to parties of the  anti immigrant right and are not sure what to do about it. Some in Labour, never enamoured of the EU, want a new policy to get more control over the UK’s borders and welfare back. Others think the Blairite approach of appealing to the better off and  migrants will still be a winning combination so they can ignore the traditional Labour voters.

The Conservatives have been far less successful at attracting recent migrant votes, but wish to improve their performance with these groups. They also wish to improve their appeal to the young, to the metropolitan and to the more socially liberal, who all tend to accept or welcome more migration.

This produces the same problem as Labour’s. Traditional Conservative voters, especially pensioners, dislike the pace of change in their country and wish to see strict controls on migration. They worry about supply and access to benefits and public services and the impact on housing. It fuels the ability of UKIP to attract Conservative voters away, sometimes in sufficient numbers to deliver the Council seat or Parliamentary seat to Labour or the Lib Dems as recently at Eastleigh. In office past Conservative governments did impose much stricter controls on migration than the last Labour government. To do so again requires that renegotiation of our relationship with the EU, as free movement is an important part of the issue.