David Davis has promised to "meet the challenges of the modern world" if elected as Conservative leader.
People feel powerless, Mr Davis said
Launching his campaign, the shadow home secretary said: "We delude ourselves if we believe more of the same will be enough next time."
The party had to have a platform of low taxation, better public services, a strong UK within Europe and needed to "reflect the diversity" of voters.
Mr Davies pledged to return power to "people who know best".
'People need options'
He said: "The best-off in society can move house or go private if they want to get their children into good schools.
"They can take out health insurance or pay if they fall ill and want to get treated quickly.
Reducing welfare dependency, strengthening families and enhancing social mobility
Wider ownership of property, shares and pensions
Returning power to communities
Reforming public services
Shared values of tolerance and decency
Returning power to UK government in open Europe
"They can afford to live in a better neighbourhood with safer streets. But most people simply don't have these options.
"People feel that the country is going in the wrong direction but they also feel powerless to change the system."
"Radical change" was required, he said, adding: "To gain a new hearing, we need to offer change, not just a change of management."
Mr Davis said: "Modern Conservatives, will show that we are not in politics for ourselves.
"We are not here to defend privilege or accept the status quo. We have a real purpose to change Britain and improve lives."
Nominations for the leadership contest open on 10 October - after the party's conference in Blackpool - with the first round of voting among MPs taking place on Tuesday 18 October.
One candidate will drop out after each round and there will be votes every Thursday and Tuesday until two candidates remain.
There will then be a vote of the 300,000 Conservative Party members across the country to decide which of the two succeeds Michael Howard as leader.
Kenneth Clarke, Sir Malcolm Rifkind, Liam Fox and David Cameron have also launched bids.