Good Morning everyone. It is a great pleasure to welcome you here to my constituency of Sedgefield and to be able to talk to you a little about education and education policy, but also some of the important changes that have been happening in our region.

It is interesting to note that economic growth here exceeds that of London and the south east at the present time. The creative industries employ some 100,000 people and are growing faster than in any other region of the country. They now contribute 10% to the region's economy. Overseas investment has been extensive. ��200 million is being invested in the region in new and emerging technologies, such as life and health sciences, new and renewable energy, and nanotechnology. There are 40,000 more jobs in this region than there were in 1997. Unemployment, once the scourge of the area and the cause of famous civil protest, has been halved. And now there is almost no young person that is long term unemployed.

Newcastle, as we know, is a thriving and great European city - with a great football team. OK, we won't go there. One of the earliest lessons I ever got on being a constituency MP was when I went to a primary school not far from here, and as those who aren't from the region may know, there is quite strong competition in terms of football teams, and I got up in front of the class and the head teacher and I asked these 5 - 11 year olds which football team they supported, and the nearest thing I have ever seen in my constituency to a civil war broke out. The head teacher said: "Please, either don't come here again, or when you do don't talk about football."

Regeneration policy however, that has contributed so much to our region, is an object lesson in one of the realities of modern government. Different sectors have to work in partnership, and I know that this forum has heard a lot about this. Government has often provided the impetus and the initial capital for projects, and both for example may be linked to public projects, like the Commonwealth Games in Manchester, or the Olympics in London, or indeed the investment in public artists in Gateshead. But then the crucial thing is that the private sector takes up the challenge, and that is why we put so much effort into public-private partnership for neighbourhood renewal. Part of that has encouraged a situation where at long last the gap in education attainment between the 88 most deprived wards and the rest of England has been closing. Employment has increased more rapidly in those places than nationally. But it is also why, as I have said many times, we cannot hope to prosper as a nation if we do not educate all our citizens properly. This is not a rhetorical platitude any more, it is a statement about a profound change to the world we inhabit.

At the beginning of the 20th century the Tyne was building over 10% of the world's ships, 100,000 people were employed in mining. As late as the 1980s, nearly one-third of all the jobs were still in coal mining, ship building, chemicals and manufacturing. A young man entering the world of work just after the Second World War could get by perfectly well without a good education. And it was just as well, because the educational provision for many of our people was very poor. But the factory doors opened to welcome the young man, as the school door closed behind him. School was not just no preparation for work, it was often irrelevant to it.

Yet as we know, today this is no longer true. Now the expanding sectors require graduates and highly trained people. Here in the north east the flourishing enterprises are in micro electronics, biotechnology, mechanical and precision engineering. We have seen rapid growth in the service sectors, in public administration, education and health. Anyone coming out of school today with no qualifications will find the world a great deal less hospitable than their fathers would have done. And there are still far too many people who do not have the qualifications that they need. Nationally, 44% of our children still don't get 5 good GCSEs. In this area in the north east it is 48%. Nearly 1 in 10 pupils who get free school meals - therefore from the poorest families - leave school with no qualifications at all. Yet none of this country's basic objectives - a prosperous economy, fair opportunity open to merit, and people making the most of their potential - can be realised whilst this remains the case.

That is, in a nutshell, why we are so passionate and so insistent about public service reform, it is because we are still not doing enough for our least well off citizens. The demands of justice that we provide opportunities for all, and the requirements of a prosperous modern economy are symbiotic. This has been the central insight that has governed this new Labour government's economic policy, that far from social justice being a drag on economic good health, the two require each other.

And yes we have some real success to our credit. There are currently over 225,000 young people in apprenticeships, which is three times as many as 8 years ago. But as many of you know, there are warning signs. The manufacturing, construction, financial services and food and drink sectors all report vacancies due to skills shortages. That is why as well as investing in traditional and further education, we are establishing skills academies in those sectors, and this is an important move because it is a joint venture between government and business. Already we have an impressive line-up of companies ready to take part. Business plans will be ready by Easter 2006, and the academies will be operational by autumn 2008. We aim to have 12 in place, and in the longer term one for each major sector of the economy. And the future challenge, I have no doubt, is to make vocational education every bit as attractive and fulfilling as traditional academic education.

But the point about the different sectors of the education system is that they build on one another. The main reason for skills shortages is not enough quality vocational education. The main reason that not enough working class children get to university is not bias in university admissions, it is that not enough of them do A Levels and stay on at school to do so. The main reason that not enough A Levels are got by those children is that not nearly enough of them get good GCSEs.

So it all comes back to the basic and central importance of education. Education is the spark that can light a love of learning, and we know what learning means - horizons broadened, imaginations are fired, confidence and ambition take root. Success only comes through hard work, but how much easier it is to work hard if you can feel the strength of your own inner potential. That is what a good teacher and a thriving school does, they give a child that most precious asset in life - self-belief.

That is why I am so restless for change, not because I do not recognise the huge progress that we have made as a country in the last 8 years - I do - not because I want to pick another fight for the sake of it, I have enough of them already, but because whilst there remain schools, not some, hundreds of them, where fewer than half of the children get the results they need at 16, when for all the progress there are still 17,000 children that leave school every year without any qualifications, whilst that remains I cannot rest, I will not, until we do all in our power to root out and change that failure.

And in saying that, of course I do not mean to imply that progress since 1997 has not been substantial, because it has, and many of those here today have contributed to it. We now have the best ever GCSE and A Level results. 2005 saw the best ever primary school results. 80,000 more youngsters are now attaining the basic standard in English, and 90,000 more each year in maths. And since 1998 primary schools in the areas of the highest poverty have improved at double the rate of schools in the most affluent areas. In the north east, here, more 11 year olds now make the grade in maths and English. The number of those getting good GCSEs is up to 52% from 37% a few years back.

But there is a lesson for us in the achievements that we have to our credit, it is that they came out, not just of money, but also of reform and none of the reforms were easy. We began in 1997 by being tough on failing schools. In 1998 we introduced the literacy hour and the numeracy strategy. Then later we sought to make good the problems of some of the most deprived areas of the country by introducing the Excellence in Cities programmes. In 2001 we began the rapid expansion of specialist schools. Every one of these innovations was opposed at the time. It was said that the failing schools strategy penalised schools that were already struggling; it was said that the literacy and numeracy hours were too long for some and not long enough for others; it was said that specialist schools would encourage selection; it was said that the City Academy programme was an educational gimmick. But in each case the reform is working. The results in academies are improving at three times the national rate, despite having twice the number of children on free school meals. Almost all academies were over-subscribed on opening, and in each year afterwards. In 2005 non-selective specialist schools out-performed traditional comprehensives at GCSE, as they have done consistently. 1,300 failing schools have been turned around, and half a million pupils benefited.

So we have corrected the deepest failures of the system we inherited, we have reversed the long trend of under-investment, we have turned around the exodus out of the public service professions. The reason to do more is quite simply that it isn't enough.

Comprehensive education was formed out of the injustice of rigid selection on grounds of ability through the 11-Plus, but with it came another injustice. Because there was insufficient focus on educational standards and on high attainment, there seeped into parts of the system a deadening uniformity. The goal was to make the system comprehensive, whereas in reality the goal should have been, through abandoning selection, to bring high quality education to all.

We now have a once in a generation opportunity to correct that. We can see what works - investment in school buildings and equipment, properly paid and motivated teachers and head teachers, strong discipline, a relentless focus on high achievement and excellence. Today in Britain's school system, private and public, you can see such schools, they serve many diverse groups of pupils. But you know they have one thing in common, they have their own purpose and ethos, individual to each school. They aren't run by anyone, local or central, they have an independent sense of mission, the parents and governors drive their own aspirations through the school. And there are many more such schools today than there were 8 years ago, there are just not enough. Yet the opportunities to develop them are all around us.

There are business foundations, charities and voluntary organisations with the energy, resources and commitment to partner schools in transformation. There are head teachers with the ambition to transform, there are higher quality teachers who want to play their part in assisting that transformation, and above all, there are parents who know that the dream that their children can do better than they did depends on high quality education.

The Schools White Paper is quite simply about releasing that energy inside and outside the school system. In every other walk of life in the 21st century there is flexibility, diversity, an opening up for new ideas and innovation, a breaking down of the barriers between public, private and voluntary sectors. For public services to flourish as universal services, they need that same dynamism.

The big change in the White Paper is that we want to build on the success of specialist schools and academies so as to enable any school to have the freedom to develop in the way it wishes, subject to fair funding and a fair admissions policy. Should schools choose to do so, they can become self-governing trusts and government, neither local nor national, should be able to stop them. Trust schools can then forge links with universities and business sponsors, they can be connected to other schools and educational trusts, they will share curriculum expertise, work together on developing effective teaching and learning practice. 2,400 specialist schools and 27 academies already have these kinds of links to their wider communities. We need to extend them to all schools and allow specialist schools to enter a further stage of development.

The purpose of the Schools White Paper is therefore to ensure that the choices, now exercised only by the fortunate and the well off, can be given to all parents. It is true, and it is often said, that some parents do not have high ambitions for their children. We acknowledge that, it is why we focused intensive resources on some of our poorest areas, it is partly the reason for the Sure Start programme that is, as I saw in Leeds yesterday, at least as much helping parents as helping children.

But actually it is a myth that middle class parents aspire and working class parents don't. Instead such arch categorisation is hopelessly out of date in itself. Where any longer does the middle class of years ago, and the traditional working class, form their boundaries? Look just up the road here at the new housing estate to be built at Fishburn, where the old coke works once was, with three bedroom houses selling from ��150,000. The world is changing, and quite right too, but the point is this, I want a school system in which middle class and lower income families' children mix happily together, where there are sufficient numbers of good schools to make parental choice a reality, and where if schools aren't good enough the power lies with people, parents and teachers to affect change.

Of course such a system must have rules to ensure fair funding and fair admissions, as they do now. All schools will have to have regard to the statutory code on admissions. The adjudicator will continue to enforce the code, exactly as happens now. Providers will be either from the existing state sector, as good schools grow or federate to meet local demand, or from the voluntary and charitable sectors. Schools will be free to expand if they wish to do so. Of course not all will, and we will not be compelling them to do so, but there are plenty that would like to react to strong local demand from parents by providing a few more places each year.

Then we want new providers to come into the school system, to take over existing schools where the previous management was failing, or not doing as well as it should. We need to make sure that they can start new schools in some cases. And the lesson from every walk of life is very clear, new supply brings with it innovation and enterprise.

The White Paper does not destroy the role of local government, it gives dynamic local authorities a great opportunity to re-invent themselves as champions of the needs of pupils and parents. In practice this means they can map local needs, ensure that popular schools can expand and poor schools are closed, and make sure there is proper competition to open new schools. But it does take away the power of government, central and local, to block change.

And there are great opportunities here also for government and for business. It was not long ago that government and business operated in largely separate spheres. Now, as I said a moment ago, the three sectors - public, private and voluntary - overlap to the extent that at times it is hard to see the join between them. There is a lot more business involvement in services than was once the monopoly domain of the public sector, and we want to encourage more, such as in the academies programme which is bringing business, expertise and new money into the education system. Some services, like the emerging childcare market, are mixed economies. Indeed virtually all the extra free nursery places created since 1997 are in the private and voluntary sectors.

Sometimes it is said that changes in public services are all to do with the problems of London and have no relevance in areas like ours. In fact in my experience that is a sentiment far more heard at the dinner parties in London than in the communities of constituencies like Sedgefield. Above all, this region today is one that knows its future livelihood depends on science, technology, quality education, in a word, on knowledge. That is our future. And we in this region are the least nostalgic for the past. When we defended communities against pit closures, we did so to defend jobs. But in all my time as a constituency MP, now over 20 years, I never heard, not once, someone who actually worked down the pit, even in the better post-war years, opine any sentiment other than a fixed determination that their sons should never have to do so.

Over these past 20 years I have seen this region change, and I have also learnt a lot from those changes. Some of the things that have most influenced my political thinking, both as a Member of Parliament, then on the opposition front bench, then as opposition leader, then as Prime Minister, have actually happened here in this region. And I remember one of the most important meetings I ever attended in my life, though at the time it didn't seem like that, it was in the County Hall, the Durham County Council building, it will be very familiar to some of you, and in which I once worked incidentally - you may not know this - in a holiday job in the Vehicle Licensing Department I think it was. All I know was that it was me, at a young age, surrounded by a very large number of young women. It was a very tough work experience. But when I went back there as a Member of Parliament in the later years, the Council leader at the time at Durham County Council was someone called Mickey Terrence, who will be known to some of you here, but who had been a branch official in the 1926 General Strike, and he was an extraordinary man, Mickey Terrence, a wonderful man of principle and integrity and extraordinary canniness as well.

He was by then in his 70s and he could see the world around us changing. And the purpose of the meeting in Durham County Hall was for Mickey to get up and make a key speech, which he did in his own very simple and blunt way. Essentially what he said is, there is no point in worrying about the demise of the coal industry, it has happened to a large extent already and it is going to be completed, and no-one should be under any illusion that this process is going to stop. It isn't. And therefore what we have got to do in the north east is to set out our stall differently, to decide we have got a different economic future and go out there and get it. And because it came from him, and because of his background and his length of service, those who might have attacked him for a betrayal of everything he was supposed to stand for, were taken aback. And it was an important meeting, because after that meeting I reflected that if he, with all his background and all his tradition had the courage to make changes, then really we should be prepared to embrace that change as well, we within the Labour Party, but also outside of it in the wider community.

And by and large over these past 20 years, since he made that speech, we have changed our region enormously. And I know we have still got major issues and problems, huge challenges to do with skills, and business, and transport, and all the issues with which we are well familiar, but on the other hand, think of the change we actually have brought about in this region, think of how different it is, and then think of where we could be if we had the imagination and vision to change further.

And that is the purpose of what we are trying to do in public service reform. I know here in this constituency that yes of course the problems are different from inner city London, yes of course people have a different way of life and a different culture, but sometimes the important thing is not to exaggerate the differences, but actually to analyse the similarities. Different though the position is here than in inner city London in so many ways, one thing remains the same - education and knowledge is the only route to prosperity. For a young kid in the inner city of London, or Manchester, or Newcastle, and a young child growing up in the old pit villages and mining communities of County Durham, education is the liberator, it is the gateway, it is the only thing that can transform their lives. And if it is true that in this region we have transformed our prospects by partnership between government, central and local, by partnership between public and private sector, by the efforts of civic society and voluntary groups, if we have been able to do that in transforming our economy, can't we then import the same lessons into completing the transformation of our education system?

And that is what I want to do. I believe there is huge energy there, in and outside of our school system. I think there are people who want to make a contribution, because they know if you are in business that you need a proper educated workforce, and there is energy there that can be used to motivate and to build for the future. So that is what it is about. And when we change and make changes that are necessary to provide opportunities, because the world around us is changing so fast, we don't betray the principles in which we believe, we fulfil them. All of you will know, from different walks of life, just how big that transformation in the world around us is. Anybody who travels even minimally in the world today can see it, whether in China, or India, or the other emerging economies of the world. This country will succeed or fail on the basis of how it changes itself and gears up to this new economy, based on knowledge.

Education therefore is now the centre of economic policy making for the future. What I am saying is, we know what works within our education system, we can learn the lessons of it. The key is now to apply those lessons, push them right throughout the education system, until the young children, whether they are growing up here in the constituency of Sedgefield, or in the inner city urban estates of London, or Liverpool, or Manchester, or Newcastle, wherever they are, they get the chance to make the most of their God given potential. It is the only vision, in my view, that will work in the 21st century.

Go to your local school.  You can see the progress in the buildings, in the computers and the results.   But it is not good enough.  Not for Britain; not for the modern world.  Now I want us to lift our ambitions.  We will continue to put more money into our schools, and complete the reforms we began so that in time we have a system of independent, self-governing state schools, with fair funding and fair admissions, but driven above all by the needs of pupils, wishes of parents and the dynamism of our best teachers.

The Ofsted report into teaching and the recent batches of school results show both the progress achieved and the challenge ahead. 

Ofsted found that standards in teaching had significantly improved - good or better teaching in primary schools rising from 45per cent in 1997 to 74per cent last year and from 59 per cent to 78per cent in secondary schools.

Ofsted said this gives grounds for what it called "cautious optimism".  Of course, at the same time, it still found teaching in 1 in 4 schools was only satisfactory or poor.

We have had the best primary school, GCSE and 'A' level results ever.  Now, around three quarters of children reach the expected grade in their literacy and numeracy tests. 

It is true that if you break down literacy into reading and writing, the result is that only 57per cent passed all three tests.  But that is up from 43per cent in 1997. 

In other words, in eight years, the proportion of success to failure has been turned around.

It is also true that if you only measure five good GCSEs that include both English and maths, the proportion passing at 16 is 44 per cent rather than 56 per cent; but in 1997, it was only 35 per cent.

Take London. In 1997, 94 schools had less than 25 per cent of pupils getting five good GCSEs, and only 36in the whole of London secondary education, achieving over 70 per cent five good GCSEs.

In 2004, only 17 schools had less than 25 per cent of pupils getting five good GCSEsand92 now getting over 70per cent. Again, radical turnaround for the better.

So despite our critics' desire to focus relentlessly on the negative, the picture is clear:  there has been sustained improvement. 

Moreover, almost any visit to almost any school will reveal the effect of the huge extra investment in buildings and equipment, together with over 30,000 extra teachers and 130,000 extra teaching assistants.

And there are 60 per cent more applicants for secondary teacher training in just six years, thanks to much better pay and radical initiatives such as Teach First.

But if the critics should accept the improvement, we must accept the challenge.  We must do better.

We must do better to tackle the pockets of deep educational disadvantage; do better in lifting schools from average to good; do better in enabling more good schools to become genuine centres of excellence, giving as good an education in the state sector as anyone can buy in the private school system. 

To do that, we have to take the reforms so far, learn from them and then complete the process of change. 

That reform has led to improvement is, in my view, irrefutable.  Literacy and numeracy strategies worked.  There has been step change at primary level.  Specialist schools, denounced at the time, have now consistently outperformed traditional comprehensives.  The early results of City Academies are immensely promising.  The Excellence in Cities programme turned round many of the worst examples of inner city failure.

But what can we learn from reform; what works and what doesn't; what is it necessary to do, to take the logic of the reforms presently in place, to their completion?

In answering those questions, it helps to set the reforms in education in the wider context of public service reform.  In 1997, the public services were declining.   Underinvestment was stark.  This is not propaganda.  It's fact. 

Over half of the hospital buildings were pre the formation of the NHS.  Schools were often in a terrible state of disrepair.  Far too few nurses, doctors and teachers were being trained.  Their pay had fallen way behind private sector equivalents.  Waiting lists had risen by over 400,000.  Some school results were getting better but very incrementally. 

To be fair, there were genuine attempts at reform.  But they only ever touched a small minority and through the incentives given, often accentuated inequalities in provision rather than ameliorated them. 

For example GP fund-holding worked well for some practices but created a two-tier system that hugely disadvantaged others.  GM schools only covered 18 per cent of secondary schools and 3per cent of primary schools and on both funding and admissions, where special privileges were given, created a real sense of anger amongst other less fortunate schools, needlessly creating a two-tier system.

In particular, the reforms did not tackle chronic failure.  The number of failing schools in 1997/8 was 515.  Thousands of people waited over 15 months for their operation, tens of thousands over a year. 

So whereas there were elements of the reforms - greater powers for the frontline - that were welcome - they were seriously flawed because they helped the few at the expense of the many and developed within a culture of neglect and underinvestment where failure for some was seen as inevitable. 

Since 1997, there have been two stages of reform.  In the first, we corrected the underinvestment and drove change from the centre.  This was necessary.  For all the difficulty, without targets for waiting, for A&E, for school results, we would not have got the real and genuine improvements in performance. 

In particular, we would never have dealt with chronic failure.  In 2005, the number of failing schools is 238.  From December no-one waits more than 6months on an in-patient waiting list. 

In the second stage, essentially begun in 2001, we added another dimension.  We started to open the system up to new influences and introduced the beginnings of choice and contestability. 

We brought in the first wave of independent sector procurement in healthcare; choice in cardiac care and bit by bit, into elective surgery.  People used to wait two years for removing cataracts.  The maximum now is three months.

In schooling, specialist schools all have external sponsors, on a small scale but nonetheless important in focussing the specialism, whether business, science, languages, art or sport.  City Academies are further along the spectrum, with the external partner fully engaged in the formation of the school.  And Academies, of course, are specifically designed for the schools that are underperforming and failing; the beneficiaries being some of the poorest kids in the inner city. 

We are now at the crucial point where the reforms can be taken to their final stage.  In the NHS, healthcare will remain free at the point of delivery, but there will be a system in which patients can choose to go to any part of the NHS able to treat them, and with freedom for the independent sector to compete in providing the service.  The aim is to deliver an 18 week maximum wait, not on an in-patient list but on the combined out and in-patient wait ie door of the GP to door of the operating theatre. 

In our schools, as I shall go on to describe, the system will finally be opened up to real parent power.  All schools will be able to have Academy style freedoms.  All schools will be able to take on external partners.  No one will be able to veto parents starting new schools or new providers coming in, simply on the basis that there are local surplus places.  The role of the LEA will change fundamentally. 

There will be relentless focus on failing schools to turn them round.  Ofsted will continue to measure performance albeit with a lighter touch. 

But otherwise the schools will be accountable not to Government at the centre or locally but to parents, with the creativity and enterprise of the teachers and school leaders set free. 

In both the NHS and in education, there will in one sense be a market.  The patient and the parent will have much greater choice.  But it will only be a market in the sense of consumer choice, not a market based on private purchasing power.  And it will be a market with rules.  Personal wealth won't buy you better NHS service.  The funding for schools will be fair and equal no matter what their status; and there will be no return to selection aged 11. 

The reforms will naturally come under sustained attack.  The right will say they don't go far enough.  They will say there should be top-up vouchers in health and a free for all on selection in schools, with the LEA abolished. 

Both would lead to inequity. 

Parts of the left will say we are privatising public services and giving too much to the middle class. 

Again both criticisms are wrong and simply a version of the old "levelling down" mentality that kept us in Opposition for so long.

The purpose of the reforms is to create a modern education system and a modern NHS where within levels of investment at last coming up to the average of our competitors, real power is put in the hands of those who use the service the patient and the parent; where the changes becoming self-sustaining; the system, open, diverse, flexible able to adjust and adapt to the changing world. 

Where parents are dissatisfied, they need a range of good schools to choose from; or where there is no such choice, able to take the remedy into their own hands.  Where business, the voluntary sector, philanthropy, which in every other field is an increasing part of our national life, wants to play a key role in education and schools want them to, they can.  Where local employers feel local schools aren't meeting local skill needs, they can get involved.

The system is being empowered to make change.  The centre will provide the resources and enable local change-makers to work the change.  We will set the framework and make the rules necessary for fairness.  Where there is chronic failure, we will intervene. 

But the state's role will be strategic; as the system evolves, its hand will be lifted, except to help where help is needed.  Our aim, explicitly, is to combine the drive for excellence, often associated with the right in politics, with the insistence that opportunity be open to all, the basic principles of the political left, in a public service system where the relationship between Government and people is one of partnership; not central control or laissez-faire. 

Let us set education reform directly in the line of the history of schooling in Britain. 
History of education reform

Prior to the introduction of universal secondary schooling in 1944, there was no real right to education, at least beyond the primary phase.

But while education became universal, it was also unequal. The forgotten reality is that grammar schools denied choice to the vast majority of parents.

They catered well for the brightest students, but the 80 per cent of children who failed the 11 plus usually had to go to secondary moderns which failed to challenge them and where few achieved qualifications.

Until the sixties, only 15 per cent got five O levels and 5per cent of young people went on to university.

That's why pressure - initially from middle class parents angry about secondary modern standards - led to comprehensives in the 1960s and 1970s. 

Local authority efforts to create equity often produced deadening uniformity, with child-centred learning and a rigid adherence to mixed ability teaching too often failing to raise expectations and meet basic standards.

Jim Callaghan recognised all this as Prime Minister in 1976 when he urged a National Curriculum to ensure a basic entitlement for all.

When it was introduced in the late eighties, it was accompanied by greater accountability through national testing and regular independent inspection.

Schools were also encouraged to apply for grant-maintained status, where they had more freedom over their assets and staffing.

But the Conservative government undermined this policy when they allowed unfair admissions and unfair funding.

And their failure to invest in education allowed real terms spending on schools to fall during the mid-nineties.
Re-energising secondary education

We sought to re-energise secondary education in a post-comprehensive system, by encouraging every secondary school to aim for specialist status, a process that has meant their setting challenging targets for improvement and developing a clear mission, with the support of external sponsors.

Grant-maintained schools kept their key freedoms as foundation schools, while all schools were given greater financial independence.

Academies were introduced in the areas of greatest challenge, harnessing the drive of external sponsors and strong school leadership to bring new hope to our most disadvantaged areas.

These structural changes were backed by radical reforms of teaching to help deliver a more personalised education for young people.

Through Excellence in Cities, we funded learning mentors and advanced classes for gifted and talented youngsters.

To help teachers address disciplinary problems, we greatly increased the places in off-site pupil referral units and on-site learning support units.

As I said earlier, crucially, these reforms were supported by an unprecedented level of investment in better teachers' pay; more support staff; new computers, new facilities; and new buildings. 

Schools have access to twice as many computers, as well as new interactive whiteboards and broadband technology.

Investment in school buildings has risen six-fold.
An improving school system

What is important to schools - specialist, Academy or Foundation - that are doing well is their ethos, their sense of purpose, the strength of their leaders, teachers and support staff, the motivation of their parents and pupils.

The best state schools share these characteristics. But many would also like to go further:  to develop new freedoms and strong relationships with sponsors.

�� From next year, schools will be able to plan ahead with a dedicated schools grant separate from local authority funding - and its distribution must be agreed by local heads and governors.

�� Ofsted has already begun new lighter touch which depend on schools taking more charge of their own destiny and standards.

�� And since August, all that has been required to become a foundation school is a simple vote of the governing body.
Self-governing independent state schools

What then should the schools system look like over the next five years?

Within two years, virtually every secondary school will be a specialist school.

We will have at least 200 Academies by 2010, with new opportunities to develop them wherever they can make a big difference. The focus will remain on areas of real and historical underperformance and underachievement. But Academies, as a legal model for independent state schools, could apply elsewhere, for example enabling independent schools to come into the state system on an agreed basis.

We need to make it easier for every school to acquire the drive and essential freedoms of Academies - and we need to so in a practical way that allows their rapid development to be driven by parents and local communities, not just by the centre.

Tomorrow's reforms will provide a logical and radical development of both the academy and the specialist school models - schools both independently managed and strongly distinctive, each with a powerful ethos and centre of excellence,offering wholly new choices and options.

Schools should not just play to their strengths, but be unafraid to present and market them to parents.

And this can mean developing national and regional educational 'brands' whether led by good schools like Thomas Telford, established educational charities like the Mercers or the United Learning Trust or linked to leading universities and business foundations.

If we are to enable every child to fulfil their potential, whatever their background, we must spread the benefits of such an approach widely, so that schools serving every community can build such links.

We want every school to be able quickly and easily to become a self-governing independent state school - an opportunity not just open to a small number of schools, but to all who want it.

More power and choice for parents

And for parents that means:

    * It should be easier for them to replace the leadership or set up new schools where they are dissatisfied with existing schools.
    * They should find it easy to complain where they are dissatisfied
    * They should have more practical information about their child's progress to realise potential.
    * They should be able to exercise choice, whatever their background
    * And they should be more involved in decisions on issues like the curriculum, school meals and uniform

And with these rights comes an expectation that parents become much more engaged and interested in their children's education.
New system, new role for the local authority

And if parents are to have real power and choices, we must also open up the school system so that:

    * Good schools can rapidly expand and extend their influence
    * Independent schools can more easily join the state system
    * parents can drive change where they want it.
    * failing schools are even more speedily turned around
    * every school can quickly gain the freedoms they need to succeed
    * every school has the freedom to work with new partners to help develop their ethos and raise standards

The best local authorities already increasingly see their primary role as championing parents and pupils rather than being a direct provider of education.

We need to see every local authority moving from provider to commissioner, so that the system acquires a local dynamism responsive to the needs of their communities and open to change and new forms of school provision.

This will liberate local authorities from too often feeling the need to defend the status quo, so that instead they become the champions of innovation and diversity, and the partner of local parents in driving continuous improvement.
Personalised lessons for pupils

Where schools have the right freedoms and flexibilities - underpinned by independent inspection - they can make a huge difference to the achievement and personal fulfilment of every youngster.

So there should be support for teachers and teaching assistants to work one-to-one with children who need extra help with literacy and numeracy.

There should be more advanced classes for the brightest youngsters.

And there should be renewed encouragement for setting by subject ability, which has already been extended since 1997.
Good discipline

But without good order and discipline in schools, it is impossible for teachers to teach and pupils to learn.

Schools have more on-site units to help them deal with disruptive pupils. There are more places, for longer hours, in off site pupil referral units.

But many schools still face real discipline challenges because there is too little consistency in dealing with poor behaviour, particularly the low level disruption to lessons that makes teaching and learning more difficult.

Moreover, some parents do not take their responsibilities seriously enough; and even question the teacher's right to discipline their child.

That's why Sir Alan Steer's discipline task force report is so important.

Teachers must have the clear and unambiguous right to discipline children.

Every school should have its own clear discipline code, actively and fairly enforced.

And parents must take their responsibilities seriously, and face sanctions where they don't.

Such reforms will create and sustain irreversible change for the better in schools....

Over the last fifty years, state education has improved. And that improvement has accelerated in the last eight years.

But successive reforms since the War have not always delivered all that they aimed to deliver.

What is different this time is that we have learned what works. We have the experience of successful schools.

What we must see now is a system of independent state schools, underpinned by fair admissions and fair funding, where parents are equipped and enabled to drive improvement, driven by the aspirations of parents.

We have pushed higher standards from the centre: for those standards to be maintained and built upon, they must now become self- sustaining to provide irreversible change for the better.

That is the challenge.  We intend to meet it.

The UN must come of age. It must become the visible and credible expression of the globalisation of politics. The modern world insists we are dependent on each other. We work with each other or we suffer in isolation.

The principles of the UN have always had a moral force. Today they receive the sharper impulse of self-interest.

The terrorist attacks in Britain on 7 July have their origins in an ideology born thousands of miles from our shores.

The proliferation of nuclear, chemical and biological weapons will never be halted outside of an international consensus to do so.

Failed states, as we know to our cost, fail us all. The protection of the environment, the promotion of international trade: we can do nothing without effective action together.

And when we look with revulsion, as we should, at the misery of the millions who die in Africa and elsewhere through preventable famine, disease and conflict, the urgency to act is driven not just by conscience but by an inner sense that one day, if we refuse to act, we will reap a dire reward from our refusal.

What's more, humanity today is confident of its common values. Give people the chance and they always vote for freedom; always prefer tolerance to prejudice, will never willingly accept the suppression of human rights and governance by extremism.

So the challenge is clear; the values clear; the self-interest in upholding them together also clear.

What must now be clear is that the UN can be the instrument of achieving the global will of the people.

It must give leadership on terrorism. There is not and never can be any justification, any excuse, any cause that accepts the random slaughter of th innocent. Wherever it happens, whoever is responsible, we stand united I condemnation.

The United Nations must strengthen its policy against non-proliferation; in particular, how to allow nations to develop civil nuclear power but not nuclear weapons.

The new Human Rights Council must earn the world's respect not its contempt.

The United Nations Peace-building Commission must become the means of renewing nations, where war and the collapse of proper systems of government have left them ravaged and their people desolate.

For the first lime at this Summit we are agreed that states do not have the right to do what they will within their own borders, but that we, in the name of humanity, have a common duty to protect people where their own governments will not.

Stalking this summit, like a spectre, are the Millennium Development goals.

The struggle against global poverty will define our moral standing in the eyes of the future.

The G8 in Scotland shows how we redeem it. I have heard people describe the outcomes of this Summit as modest, No summit requiring unanimity from 190 nations can be more than modest.

But if we did what we have agreed on doubling aid, on opening up trade, on debt relief, on HI V/AIDS and malaria, on conflict prevention so that never again would the world stand by, helpless when genocide struck, our modesty would surprise.

There would be more democracy, less oppression. More freedom, less terrorism. More growth, less poverty. The effect would be measured in the lives of millions of people who will never hear these speeches or read our statements.

But it would be the proper vocation of political leadership; and the United Nations would live up to its name. So let us do it.

Thirty years ago a political leader who said that the way to advance the national interest was through the spread, worldwide, of the values of democracy, justice and liberty, would have been called an idealist.

Today such a person is a realist.  We describe the modern world as interdependent.  We acknowledge the force of globalization.  But we fail to follow through the logic of these realities in global politics.

Nations are deeply connected at every level. Of course, economically, but also now through communication, travel and technology. 

Yesterday, by chance, I watched part of the MTV Music Awards.  Well, it was certainly the most relaxed part of the week I just had.  I recommend it to any person who wants to understand modern politics.  Why?  There was no politics discussed.  But the fusion of sounds, rhythms and musical influences from vastly different cultures was an allegory for today's world and the context in which politics exists.  This is a world integrating at a fast rate, with enormous economic, cultural and political consequences.

And it all happens as a result of what people themselves are doing.  Occasionally we debate globalization as if it were something imposed by Governments or business on unwilling people.  Wrong.  It is the individual decisions of millions of people that is creating and driving globalization.  Globalization isn't something done to us.  It is something we are, consciously or unconsciously doing to and for ourselves.

But, of course, it has a number of effects.  People want to consume more and get higher economic growth.  Pressure grows on energy supply.  As the global financial markets become bigger and reach out further, so the confidence on which they rest becomes simultaneously more powerful and more vulnerable to anything that destroys that confidence. 

Political causes, even, become more readily raised, communicated and agitated about.  Sometimes, as with Make Poverty History, this is entirely benign.  But it can mean media focus determines saliency and under pressure, political decision-making.  You can summons hundreds of thousands out on the street to protest against America.  But how many placards do you see highlighting the plight of the oppressed in the numerous dictatorships that still exist, where people suffer grievously but where, since there are no cameras, there is no demonstration?  In other cases, globalisation means the cause of extremism can be fanned through the thoroughly malign use of modern communication.

What I am saying is that out of this great pumping up of global integration, comes the need for stronger and more effective global, multilateral action.  There is a real danger that the institutions of global politics lag seriously behind the challenges they are called upon to resolve.

These challenges are pressing.  The most obvious is global terrorism.  Barely a week goes by without another country being added to the grieving list of victims.  Jordan, Egypt, Indonesia, India and of course here in London.  Recently, in Australia,  it appears an attack was foiled.  We have disrupted two groups planning attacks here in the UK since 7 July alone.  What is obvious now to all is that this is a global movement and requires global action in response, of which the successful completion of a democratic process in Afghanistan and Iraq is a major component.  So is the push for peace between Israel and Palestine.  In all of these conflicts, the only successful solution is based on democratic consent; and success would have a tremendous persuasive effect far beyond the frontiers of the countries concerned.

Similarly, with the challenge of climate change, the world has to act together.  After Gleneagles we began the G8 + 5 talks with the first meeting in London on 1 November.  The commitment period under the Kyoto protocol ends in 2012.  We urgently need a framework, with the necessary targets, sensitively and intelligently applied over the right timeframe, that takes us beyond 2012.  It can only happen if the US, China and India join with Europe, Japan and others to create such a framework.  Failure will mean not only increasing the damage to the environment but in a world of greater competition for carbon fuel, real pressure on energy supply and energy prices.  Yet such an agreement cannot materialize without the major nations of the world agreeing an approach that is fair and balanced, sharing the most advanced science and technology to tackle carbon emissions.  In other words, a just settlement as well as an effective one.

And we surely know already that if we leave millions of the world's poorest out of the onward march of global prosperity, we do not merely indicate moral indifference, but commit a foolish betrayal of our own long-term interest.

I want to concentrate tonight on another example: trade. 

The challenge is clear - can we make trade work for all of us; or do we continue with a system with 2 billion locked out of prosperity and denied a chance to work their way out of poverty.  This is a test for all of us.  A test of our commitment to make globalization work.  A test of our global leadership.

At Gleneagles we showed the world - and the world's poor - that political leaders in rich countries not only care about world poverty, but are capable of acting together to help eliminate it.  Of course we could have done more, but we showed that cooperation can deliver results.  If we follow through the gains made at Gleneagles then 13,000 people who die preventable deaths every day will be saved. Some 600,000 African children who would have died from malaria will live. Six million Africans will get anti-Aids drugs within the next five years. Polio should now be eradicated. Twenty million more children will go to school. Five million more orphans will be cared for.  

The challenge now is to extend that principle of cooperation into the multilateral trading system - and that is what the Doha Development round is about.

Sometimes I worry that we lose sight of what is at stake.

Of course trade ministers are there to negotiate. And of course the problems raised in the trade negotiations are difficult. But the Doha round is an opportunity to tackle some of the most fundamental injustices at the heart of world trade - an opportunity to create the conditions in which millions of people will have a chance to escape poverty.

Ultimately, agriculture accounts for under 2% of the GDP of rich countries and roughly the same share of employment. Can we afford to allow differences over support for agriculture in rich countries to block an agreement that could give renewed hope to the 1 in 5 people in the world living on less than $1 a day? And can we afford to weaken an international trading system on which future employment and prosperity in rich countries depends?

The benefits of a successful Round are: 

For the poor: we know a one per cent increase in Africa's share of world trade will benefit Africa by over $70 billion, three times the aid increase agreed at Gleneagles.

For ourselves: it will not just be the poor countries of the world who will benefit from an comprehensive and ambitious Doha round.  From Non-Agricultural Market Access alone, Europe could gain 20 billion euros a year.

For large developing countries of the G20, including Brazil and India and the Cairns Group, including Australia, New Zealand and Canada - they will get improved market access to sell agricultural goods, to the EU, to the US and to each other.

And we benefit multilateralism itself: i n trade, possibly more than in any other area of international cooperation, we have a rules-based system.  

There are some who argue that the poor will lose from an ambitious liberalising round. Far better to continue to offer them preferences - an old form of welfare. In one sense they are right. In the short term they may loose from some changes to the preference system if we do not take other actions.  But ultimately the preference system is not the way forward. They stand to gain far more if we are bold; if we are confident; if we are ambitious.

Developing countries could gain $47 billion in increased agricultural exports.

We know the current system of preferences is not helping Africa.  African trade with the EU has fallen over thirty years under the Lome and Cotonou Preferences.  We also do not give enough market access to larger developing countries including countries like Nigeria, Kenya and South Africa who are not LDCs. Yet the blunt reality is that it is they who will drive African economic recovery. 

And most of the world's poor live in India and China. They will benefit from an ambitious trade deal too.

This, then, is the vision.  But Hong Kong will be upon us in a month.  Because everyone wants someone else to move first nobody has moved far enough and the talks seem to have stalled.

The US President recently threw down the gauntlet to the rest of the world in his speech to the UN in which he called for the removal of all agricultural and industrial subsidies, and said the US would do it if other countries did too.  We must take up this plea and answer it.

We need a comprehensive, ambitious agreement to cut barriers to trade in the three key areas: agriculture, non-agricultural market access, and services.  The aim of Hong Kong has to be to create the conditions whereby, by the end of 2006 we can get there.

To break the logjam, the EU and the US must go further, within the negotiations, on agriculture.  We must reduce trade distorting subsidies; we must see a credible end date for export subsidies; we must put an ambitious limit on the number of sensitive products that can be afforded extra protection.  In return Brazil, India and others must move on cuts in industrial tariffs, services liberalization, with proper flexibility for developing countries that need to sequence their commitments in line with their development needs.

We need specific measures for the poorest including:

    * doubling investment in infrastructure
    * eliminating all forms of export subsidies
    * providing strong special and differential treatment, to give them flexibility to make their own development choices
    * providing complete market access for LDCs to all rich country markets, as the EU has already offered
    * taking strong action on commodities of special importance to poor countries, like cotton and sugar   
    * simplifying the rules applied to exports from the poorest developing countries. This will cut red tape for you too.

The European Commission committed in Gleneagles to increase aid for trade to 1 billion Euros a year.  EU Member States are currently looking at matching that collectively with another 1 billion Euros a year. This evening I can announce the UK will contribute a major share of that: to treble aid for trade to ��100m a year by 2010.  And I challenge other G8 countries to follow this lead and an announce increases in their aid for trade ahead of the meetings in Hong Kong next month.

Let us recall the moment when the Round was launched.  Two months after terrorists crashed planes into buildings in New York and Washington DC, trade negotiators had the courage to gather at Doha because it was important that the world showed to those who perpetrated that evil, that we would not be bowed. 

The Doha trade round is absolutely central to showing that the world has the capacity to confront its multilateral challenges with the necessary unity of purpose and overcome them.

The last trade round added $500 billion to world GDP.  Forget the statistic.  Measure it in jobs, living standards and increased opportunities and it is vast.  Pascal Lamy, Head of the WTO and whose ambitions for this Round we should fully support, estimates that success in cutting trade barriers by a third would boost the world economy by almost $600 billion.  And he rightly emphasises the urgency of the task since the present US Presidential mandate on trade expires in 2007.

But agreement on trade is also a metaphor for today's world.  Trade increases prosperity.  Prosperity gives people and nations a stake in the future.  Such a stake shows how we gain by helping and not harming each other.  At some point, we will have to return to the issue of UN reform and how we create the right institutional capability to handle global challenges.  But in the meantime, at least let us send a clear statement of our determination to shape events not be overwhelmed by them.

Global terrorism can be defeated but only by the ideas of democracy, tolerance and freedom as well as hunting down those that murder, without limit, the innocent.

Climate change needs economic growth to be sustainable in its environmental effects, but no agreement will be effective unless it recognises that developing nations need to grow.

Global poverty in Africa will be fought not just by aid but by good governance, the absence of corruption and an end to the ravages of unnecessary conflict.

And the world trade round embodies the hope that we can at least see past a narrow view of self-interest to a more enlightened view that comprehends more trade means more help to the poorest, more prosperity to be shared amongst the wealthy, more reasons for people to see that justice for all, not divisions whether by faith, race or nation, is the only rational course in today's world.

In a modern world there is no security or prosperity at home unless we deal with the global challenges of conflict, terrorism, climate change and poverty.  Self interest and mutual interest are inextricably linked.  National interests can best be advanced through collective action.

Calculate not just the human misery of the poor themselves. Calculate our loss: the aid, the lost opportunity to trade, the short-term consequences of the multiple conflicts; the long-term consequences on the attitude to the wealthy world of injustice and abject deprivation amongst the poor. We will reap what we sow; live with what we do not act to change.

Here, in the City of London, which makes its living above all by being the meeting point of many nations; and which through trade, creates much of the wealth on which this British nation depends, is a good place for this call to action.  So let us act.