Launching the Breakthrough Manchester Report, in Manchester today, Conservative Party Leader, David Cameron, said:

 

"It's always a pleasure to come to Manchester and feel the energy and creativity here. This is one of the great cities of the world.

 

You've got the fastest growing economy in the UK. Only London has more inward investment and more visitors. Manchester is the number one choice for young people going into further education. And it's obvious why. There's the most amazing sense of optimism here.

 

You know what's coming. The word 'But'.

 

There's another side to the story of modern Manchester and you know it better than I do. I won't go into the statistics in the report from Iain Duncan Smith and the Centre for Social Justice. I simply want to underline Iain's work with this observation.

 

If Manchester has the fastest growing economy in Britain, it also faces some of the greatest social challenges.

 

Under Labour, Manchester, like the rest of our great cities, is a two-tier city. The growing affluence here is offset by growing inequality.

 

I am passionate about the need to make our country one country - and this place should be one Manchester, one great city where everyone is part of the success story.

 

Three weeks ago Iain Duncan Smith and I announced the next phase in our modern Conservative mission to make British poverty history.

 

I am enormously grateful to Iain and his team for all their work - not just pointing out the social challenges that Britain faces, but developing the real-world answers to those challenges too.

 

New organisations

 

Today I want to talk about one specific answer to our social challenges. All over Britain, all over the world, something is happening which I find really exciting. People are coming together in new forms of collective activity - bespoke organisations designed to tackle entrenched social and economic problems.

 

From coffee farmers in Colombia forming fair trade associations to market their produce... to new online forms of global collaboration like Wikipedia or mumsnet.com.

 

And here in Britain, there are hundreds of new organisations - many of them tiny - springing up every month to organise and mobilise and make things happen.

 

I have argued before that we are in the post-bureaucratic age. The age of the omniscient civil servant is past. The age of the active, engaged local citizen is now.

 

Education

 

Let's look at education - one of the key issues that Iain highlights in his report today.

 

I have a simple analysis of the problems our schools face. They are partly ideological - outdated teaching methods, for instance. And they are partly political - most of all, the failure to give heads the power to impose discipline.

 

But I believe that the real, underlying problem with our education system is structural. There are simply not enough good school places. Parents lack the freedom to choose where their child is educated, and schools lack the freedom to innovate and respond to local need.

 

We have a centralised system in which the supply of education is tightly controlled by the government and the losers are our children.

 

And it's getting worse. Before he left office Tony Blair managed, after many years of struggle with Gordon Brown, to set up a small number of independent state schools called City Academies - modelled on the old City Technology Colleges set up by the Conservatives.

 

But now look. When Gordon Brown became Prime Minister he strengthened the power of the local education authorities, which are themselves closely regulated by central government, to manage City Academies.

 

We need to break that centralised control. And we need more than large Academies planned from Downing Street.

 

Under Iain's proposal if a group of local people - parents or teachers or just local residents - want to establish their own school, they will be able to demand the money the local authority spends on their education and take that money to the new school.

 

We will shortly be publishing our policy proposals for a supply-side revolution in Britain's schools system - a long-term response to the some of the challenges of educational failure that Iain highlights in his report today.

 

And there is one specific aspect of that supply-side revolution that I want to highlight here in Manchester - the opportunity that our schools reforms will create for a new generation of co-operative schools in our country.

 

Co-op schools

 

We talk a lot about parental involvement in education. We know that if parents have a say in how their school is run, if they feel that their view matters and their wishes count, the school is always better.

 

What better way, then, to give parents direct involvement in their school than to give them ownership of it? To make them not just stakeholders, but shareholders - not of a profit-making company but of a co-operative built around the needs of local children?

 

Down the road from here, Reddish Vale City Technology College is consulting on whether it can establish itself as a co-operative using recent legislation on Trust schools. The Co-op Bank is involved in supporting one of the new Manchester Academies. I welcome these initiatives and I want to see more of them across Britain.

 

In other countries co-operative education is central to the system. Over 100 schools in Sweden are co-ops. Over 600 schools in Spain.

 

So I want to explore how we can create a new generation of co-operative schools in Britain - funded by the taxpayer but owned by parents and the local community.

 

Co-operatives

 

This is the right place to make the argument for co-ops. Manchester became great in the 19th century when the words 'Manchester liberalism' stood for free trade and capitalism. And of course the city also inspired another idea - Friedrich Engels lived here for many years and he wrote about the dark side of the industrial revolution.

 

But capitalism and communism weren't the only ideas to take their inspiration from Manchester. In 1844, a few miles up the road from here, a group of 28 weavers and other artisans formed the Rochdale Society of Equitable Pioneers - a local store, selling household necessities and owned by members of the local community.

 

The Rochdale Pioneers created the first successful co-operative in the world.

 

And for me the co-operative model represents an enormously exciting possibility for public service reform and the fight against poverty and social breakdown.

 

A co-op has a flexibility and dynamism that a central state agency lacks. Like the Rochdale Pioneers, a co-op is part of the community it serves. Its interests are their interests. And it is able to respond to the needs of the community immediately and directly.

 

The Conservative Co-operative Movement

 

Let me finish by making a political point and then explaining the next steps for this idea.

 

The co-op movement has generally been associated with the political left. I think that's a shame. First, because there have always been people on the centre-right concerned about the effects of capitalism on the social fabric. Men like Carlyle and Disraeli, following the tradition of Edmund Burke and Adam Smith himself, who recognised at the outset of the industrial revolution that profit was not the only organising principle of a healthy society.

 

And second, because the co-operative principle reflects an important part of the vision of social progress that we on the centre-right believe in: the role of strong independent institutions, run by and for local people. That's why Conservatives have always argued that free enterprise and the co-operative principle are partners, not adversaries.

 

Much great work has been done on the centre-right - for example by thinktanks including Civitas and the Centre for Policy Studies - to explore the potential role of mutuals in public service reform.

 

And now I want the Conservative Party to take the lead in applying the co-operative ideal to the challenges of the 21st century.

 

So I am delighted to announce today the establishment of the Conservative Co-operative Movement. This will be independent of the Conservative Party but it will be a resource for Conservative activists and local community groups of all kinds wanting to set up their own co-ops to take over the management of local public services. It will campaign for innovation using co-ops in public and other community services.

 

The chair of the Conservative Co-operative Movement will be Jesse Norman, our parliamentary candidate in Hereford and a former director of a co-operative enterprise. The Movement's trustees will include Debbie Scott, the director of Tomorrow's People and Iain's deputy on our Social Justice Policy Group.

 

In the coming months the Conservative Co-operative Movement will publish research and advice on how to run a co-op in a variety of different fields - from schools, as I've been discussing today, to food co-ops for local farmers, to co-operative approaches to welfare.

 

In addition, I've asked Greg Clark, the shadow minister for charities and social enterprise, to make mutualisation a core part of our policy framework for the voluntary sector.

 

Conclusion

 

Lastly, my thanks to Iain and his group for all their work. Iain has done an enormous amount for our party and for politics in our country. And his work has reminded us of a simple but elusive point.

 

Social justice does not just mean individual action - paying your taxes and obeying the law. It doesn't just mean state action - providing universal public services. These things are vital but they are not sufficient.

 

Social justice really means neighbourhoods acting collectively and voluntarily. It means people fulfilling their duties to each other through the natural networks, the institutions and associations of a community.

 

Social justice means social responsibility: the idea that we're all in this together, that there is such a thing as society - it's just not the same thing as the state. That is my political philosophy in a nutshell."