Modernising the teaching profession is the essential next step in our standards crusade. Reform has swept across the education service, but the structure of the profession itself has remained virtually untouched.

Last week’s Comprehensive Spending Review, with its promise of significant extra investment to raise educational standards, provides a unique opportunity to end the years of drift. Every penny of increased funding must secure modernisation. No one should expect something for nothing, but in the years ahead we are offering the promise of investment in return for reform.

We are now in a position to build a profession which is forward looking, ambitious, open to change and committed to continuous improvement. Above all we want a profession which is held in high esteem and attracts the most talented people to join it, and in which teachers are supported in achieving the best for their pupils.

The case for modernisation is overwhelming. There is growing concern about teacher recruitment. In secondary subjects such as technology and mathematics, recruitment is more than 30 per cent below target. The quality of applications is also worrying. The average A-level score for entry to BEd degrees is 5.2 points lower than that for other courses. Only 4 per cent of those entering teaching have first-class degrees compared to 10 per cent of all new graduates.

We also need to improve the quality of leadership in the profession. There are many excellent heads but not enough. The Office for Standards in Education estimates that one in six primary schools and one in ten secondary schools suffers from poor leadership, and recruitment to primary headship is increasingly difficult. Yet without consistently good leadership in schools, our standards drive cannot succeed.

Part of the problem is the profession’s old-fashioned image. While information and communications technology has transformed most sectors, our schools - apart from a few cutting-edge examples - remain almost untouched. In the next decade this will have to change. We will need a profession ready to take advantage of the great opportunities new technology will bring.

Worse still, high quality teaching is not rewarded at the moment. Only 0.2 per cent of teachers receive extra pay for excellence, even though this has been possible since the early 1990s. Most classroom teachers, whatever their quality, get stuck around the top of the basic scale on a salary of Pounds 23,000 or so.

All this contributes to a sense of fatalism that teaching always has been, and always must be, this way. It is symptomatic of this that teachers have been saying, seemingly since time immemorial, that morale is lower than ever.

It does not have to be like this. The high profile we have given education is driving home the message that teachers do make a difference. Our ambitious targets for literacy and numeracy have created a sense of expectation. We have improved teacher training and have legislated to establish, at last, a General Teaching Council. From September the first advanced skills teachers will be in place, paid up to Pounds 40,000 a year.

We must now go much further. Before the end of the year, we intend to publish a major Green Paper on the future of the teaching profession and the educational changes needed to support it. This will set out our vision of a modernised profession capable of creating a world-class education service. The Green Paper will provide the opportunity for teachers, support staff, parents, governors, local authorities and business - and their representative bodies - to join in a debate on the kind of profession we want.

The goals for the Green Paper are clear. We want an education service which can achieve even better results than those envisaged in our current ambitious programme. This will require a modern structure for the profession with opportunities for promotion for successful teachers, either in management or in the classroom. We need to provide incentives for excellence and ensure that good performance is recognised and rewarded. Modern professionals expect pay to be related to their competence in the job. It is essential that the many successful teachers get the rewards they deserve.

This does not mean crude “payment by results”. We intend to look at much more sophisticated methods of assessment linked to broader performance standards and the meeting of teachers’ personal targets, including those which are related to pupil performance. It is also about rewarding teachers doing a good job in difficult schools as well as in successful schools. We want to consider carefully what approach is right for teachers and listen to the views of all those concerned. This will take time, so there will not be major changes for the 1999-2000 pay round.

Investment will also support teachers’ professional development. It is vital that we invest in this area of in-service training. All teachers must take responsibility for ensuring that they keep up to date with best practice and develop scholarship throughout their career.

In recent years teachers have often been distracted from focusing on standards by bureaucratic demands. We have already acted decisively to cut bureaucratic burdens, but in the Green Paper we will go further. We will set out plans to provide additional classroom assistants so that teachers are freed to teach and so that we can make the most of the talents and the abilities of others in the classroom.

The big investment we are making in the National Grid for Learning will also provide the opportunity for schools to develop smart systems for attendance records or test results. This should mean lean administration, again freeing resources to invest in the classroom. The grid will also enable teachers to access up-to-date resource materials.

Our plans to double investment in school buildings and equipment should also enable us to improve the working environment for teachers as well as pupils. Teachers have a right to expect the kind of access to technology and office services that are taken for granted in other comparable professions.

Change will involve “something for something”. I believe this combination of a new structure, improved leadership, rewards for excellence, systematic development opportunities and practical support can transform the teaching profession and the environment in which it works.

I want the many hard-working, dedicated and highly professional teachers I meet to see how reform can help them to do their job better, to be rewarded for it and to have their success celebrated. I want teaching to become a profession that attracts, retains and motivates the talented, the brightest and the best, so that in turn it can give all our children the education they deserve.