As a former prisoner I recognise better than most that people in prison, and I include myself, are there because they deserve to be locked up. Some need to be there for the safety of society and some need to be there to be punished – and the loss of their liberty is a fair punishment for a lot of people.

But most offenders inside Britain's prisons are low on the scale of criminality and if we are interested in reducing offending rates and getting people into law-abiding lifestyles, which currently we could hardly be doing a worse job of, then we need to consider reform.

We have a system in which two thirds of prisoners are re-offending within two years. When you think that this is a prison system upon which we spend nearly £20bn a year, it's a very poor return. Because our system is based on punishment rather than rehabilitation, we are simply creating a permanent conveyor belt of crime and offending, which in turn leads to prison overcrowding.

People released from prison end up back there because they are not helped to integrate back into society. The best way to do that is for them to get a job, but our current legislation only allows for criminal records to be expunged after at least 10 years.

It makes it impossible for former prisoners to get jobs because if they are given an interview they are forced to admit that they have a criminal record. No one will then employ them, and they are dragged back into a life of crime.

No one is suggesting that people who have committed sex offences or have committed serious or violent crimes such as murder or rape should not have to disclose their criminal past. But depending on things such as age and seriousness of offence, this rule could be relaxed.

I think that in the case of a young prisoner who has committed a minor offence the time period for expunging a criminal record could be as little as two years. This would mean that they could make a fresh start when they have served their time and would be able to apply for jobs without having to mention the fact that they have a criminal record. It is a similar system to the Second Chance Act brought in in the United States last year under the sponsorship of Joe Biden. I see no reason why it can't work here.

I have not gone soft on crime just because I have been in prison, but I am the first to admit that if I were to look up some of the speeches I used to make as a right-of-centre Tory backbencher back in the 1970s, I know they would make me blush. I used to call for tougher sentences and say things like, "Life should mean life". I do not think I ever went as far as to say, "Lock them up and throw away the key", but I was from that school of thought.

With hindsight, I now realise that this is an unintelligent way to think if you are at all interested in reducing offending rates and rehabilitating people after they have paid their debt to society.

In Holloway Prison in north London it costs £52,000 a year to house women inmates, the majority of whom are not dangerous prisoners and could easily be kept in community homes. At £300 a week as opposed to £1,000, not only would this be cheaper, but it would go a long way to enabling these women to re-join society. They would be closer to their families and would have the opportunity to look for and apply for jobs. That would be a much better system.

I do not want to make excuses for my crime. I have always accepted that what I did was wrong and that I deserved to be sent to prison for it. I have never complained about my prison sentence. But when I came out I had plenty of problems. I did not have a bank account and I was not allowed a credit card for a very long time. It was because, in the eyes of the bank, I was a criminal.

It was not until I could prove that I was committed to earning an honest living that they gave allowed me a credit card. I had a difficult re-entry period during which I found it very difficult to get started again and I fully concede that I would have found it a lot easier than most people.

The sad fact is that the deficiencies in our system are making it difficult for prisoners to reintegrate into society and instead they are leading people back to a life of crime. This will continue to be the case unless we look at reform. We need to move away from retribution and towards rehabilitation.

Jonathan Aitken is a former Conservative MP who was imprisoned for perjury. His report, 'Locked Up Potential', for the Centre for Social Justice, is published today. He was speaking to Mark Hughes