Thirty thousand pupils leave school each year without a single GCSE, Mr Duncan Smith said in a speech to the Bow Group, a Tory think-tank.
"In cities like Durham and Newcastle and Sheffield and Leeds the number of school-leavers failing to obtain even a single GCSE is going up." In Manchester, more than one in 10 pupils fail to do so, he said.
He said Labour was "dumbing-down our education system to the point where standards become meaningless".
"We have schools where teachers refuse to use red ink to correct pupils' homework for fear of undermining their self-esteem." He said that while fairness and social justice was a laudable aim the result had been neither fair nor just.