'They said we'd be disheartened. But they hadn't reckoned with the heart, spirit and resilience of the people who've travelled to Bournemouth this week.
'They said we'd run out of ideas. But they hadn't bargained for our lively debates on health, education and the constitution which have shown our readiness to start the new thinking for the future.
'They said we'd lost our vitality. You tell Ann Widdecombe we've lost our vitality. On second thoughts, you'd better not.
'I'll be totally candid with you: it hasn't all been plain sailing since the election.
'I never expected it would be after such a heavy defeat.
'We've made real, substantial progress this last year. But I have never once pretended to you that the road ahead for our Party was anything but long and difficult.
'One of our successful council candidates summed it up the other week when she said to me: 'the old hostility to us on the doorsteps has gone but we've still got to create the enthusiasm in its place'. And she was right.
'We've changed our Party to make it the most open and democratic in Britain and I want to pay tribute to the tireless work of Cecil Parkinson in seeing those reforms through. But now the best and most lasting thanks which we can all give to Cecil is to bring thousands more new members into our reformed Party.
'We've set out with clarity and certainty enduring values which guide us, but now we must get on with communicating those values to the British people.
'You know the best thing about my job? Wednesdays, 3pm. Prime Minister's Questions. The most disappointing thing about my job? Prime Minister's answers.
'One of our new MPs did a study of Prime Minister's Questions. In the last year the Prime Minister has been plain wrong 44 times; failed to answer the question another 44 times; and on seven occasions said he'd write a letter because he hadn't got a clue. 95 times in a year. That's twice a week he doesn't answer the question, and he only turns up once a week.
'What a shameful example of the contempt which this Government has for our Parliament and to the millions of voters who elected representatives to hold the Prime Minister to account.
'We're winning the battle in Parliament. But now we've got to take that battle out to the country.
'There will be four steps to victory. None of them easy, but all of them within our reach.
'We've already taken the first step. In this May's elections in London and around the rest of the country we gained 250 seats.
'The next step is next May's local elections. This time we will win council seats and take control of councils. And we're going to win them from Labour and Liberal councillors who have betrayed their local communities with high taxes, poor services, and gross mismanagement.
'The third step will be in Scotland and Wales. We are not going to leave the battleground to nationalist parties who want to destroy our country and a Labour Party which has played into their hands. We are going to invest the time and the energy and the resources to make sure the Conservative voice is heard in Edinburgh and Cardiff. We are a Party of the whole United Kingdom.
'The fourth step will be the European Elections. We're going to elect Conservative MEPs who will stand up for the Europe we believe in and for our country, instead of Liberal and Labour MEPs who would sell our interests short.
'You have chosen our outstanding candidates for the European Parliament. From their Chairman, Edward McMillan-Scott, to new young candidates like Teresa Villiers and Andrew Reid who you have heard from this week. We owe it to all our candidates to get behind them next June.
'But before we even come to these elections, there is another battle we must win.
'Later this month we will have the report from the so-called independent commission on electoral reform. The Jenkins Commission. It's a rigged commission; it will be a rigged report. It is going to propose a plan to gerrymander our voting system and take away from the British people their basic democratic power to choose their government.
'And when that report comes out I expect every member of this Party, every Member of Parliament, and I mean every Member, and every candidate in every election to fight it with all the energy and determination they can muster.
'If you want to know what is at stake, just look at New Zealand. They abandoned our system in favour of PR. It took them two months to form a government. And they ended up with two parties who swore they would never work with each other. In other words, the one government that not a single voter had wanted.
'So we are going to make common cause with people in other parties, with businesses, with trade unions and pressure groups, and we are going to fight in favour of a system which has served Britain well against the worst possible concoction of voting methods cobbled together over too many bottles of claret.
'Mind you, recent rumours suggest that the Prime Minister doesn't know what he's going to do on PR. The rumours have upset some people. I spotted this letter in a newspaper last week.
'Dear Agony Aunt
I've been involved with a married man called Tony for 18 months now.
He said personal relationships, or PR as I call it, were high on his life's agenda; although, looking back, he always winked at his friends when he said it.
But recently he hasn't written, he hasn't called. No flowers. No chocolates. He goes off to the seaside without me and he's been horrible about me in front of all his friends.
Now I'm terribly confused - not a new experience for me - and I wonder if I should trust this man? Are we really going to have a relationship or were my friends right all along?
Yours, Heartbroken of Yeovil.'
'TheAgony Aunt replies, again in complete confidence.
I'm sorry to have to tell you that you've been taken in by this man. But take heart. You're not alone. Many others have been taken in too.
'Paddy, it's time to go away and get a life. You'll be much happier hanging out with little groups of chums. Just like you've always done.
Yours Agony Aunt.'
'Now all that means we have a lot of battles to fight. And to win those battles we have to get three things clear.
'One, we must be clear about what it is to be a Conservative.
'Two, we need to be clear why we are different from a Labour Government that is using our language but reversing our most successful policies.
'Three, we have to be clear about the things we are going to stand for in the future.
'That is what this speech is about.
'Through the long, proud history of the Conservative Party runs a golden thread. That thread stretches out through the decades, linking each one of us to the great men and women who have led this Party.
'It is that we are a Party which draws its inspiration from the character of the British people, it is that we cherish the precious traditions and freedoms of our island home, it is that we found our programme on the experiences of the people not the abstract theories of purists and ideologues.
'When Pitt and Wilberforce pleaded with the House of Commons to abolish slavery it is because Tories love justice and freedom as the British people love justice and freedom.
'When Disraeli told the crowds gathered in Manchester's Free Trade Hall that constitutional stability is the only parent of personal liberty and political right, it is because Conservatives value tradition and continuity as the British people value tradition and continuity.
'When Salisbury and Joe Chamberlain came together to advance the Empire and defend the Union, it is because Conservatives are unionists as the British people are unionists.
'When Winston Churchill led this country in War rather than submit to the will of tyrants it is because Conservatives show resolve and courage as the British people show resolve and courage.
'And when this country was laid low with a failing economy held hostage by union barons, and we turned that economy into one of the most dynamic and successful in the world, it is because Conservatives like Margaret Thatcher possess enterprise and determination as the British people possess enterprise and determination.
'And then there is Northern Ireland. When we welcomed David Trimble to this Conference and wished him well with his daunting responsibilities, it is because Conservatives like John Major are dedicated to peace and democracy as the British people are dedicated to peace and democracy.
'Our character is the character of the people. Our beliefs, the beliefs of the people. Our purpose the defence, the advancement, the elevation of the people.
'Our history is that of a Party that trusts the people.
'It is a strange paradox that this instinctive quality of Conservatives, this belief in the value of experience over theory, this feeling of confidence in being British has been our most potent weapon in the battle of ideas.
'Look at the battles of the last 20 years.
'We fought the ideas of state control and intervention with a British belief in enterprise and freedom. And we won.
'We fought the defeatism over trades union power with a British optimism and refusal to be defeated. And we won.
'We fought the economics of the madhouse with British common sense. And we won.
'We fought the pacifists and the unilateral disarmers with a British sense of our world responsibilities. And no thanks to you Tony Blair or Gordon Brown or Margaret Beckett or Jack Straw or Robin Cook - we won that battle too.
'When I hear Tony Blair talk of these achievements I realise that he respects them, that he fears them, that he would like to take credit for them. But that he doesn't understand them.
'He thinks we won just by publishing pamphlets, so he publishes his own.
'He thinks we won just by holding seminars, so he holds his own.
'He thinks we were ideologues, so he tries to invent his own ideology, the Third Way.
'It is true that without the academics and the think tanks the Conservative Party's common sense revolution would not have been all that it was.
'But without an instinctive understanding of the character of the British people, it would not have happened at all.
'Our way is not the first way or the second way or the third way. It is the only way for us. It is the British way.
'There are those commentators and politicians who do not like it when I say that the Conservative Party is going to listen.
'The message of our history is that unless we listen we cannot hope to lead.
'It is my profoundest belief that if the Conservative Party is not in touch with the identity and values of the British people then it cannot be authentically Conservative.
'What are the opponents of listening afraid of? We have nothing to be afraid of.
'For when we listen to Britain we are listening to the defenders of liberty and freedom.
'When we listen to Britain we are listening to the friends of tradition and continuity.
'When we listen to Britain we are listening to the upholders of moral and social responsibility.
'When we listen to Britain we are listening to those who every day show the strength of their compassion and responsibility to others.
'When we listen to Britain we are listening to patriots, to true internationalists, to a vigorous, courageous and independent people.
'I know that when we listen to the people of Britain we have nothing to be afraid of.
'The Conservative Party has always been able to rely on the British people. Now we must make sure that the British people can once again rely on the Conservative Party.
'For Britain needs the Conservative Party today, needs it now, more than ever.
'For instead of a Government following the British Way, we have a Government searching for the Third Way.
'Tony Blair knows he is in favour of the Third Way, if only he could work out what it is.
'I hope he doesn't think it's a new idea.
'In the 1930s an ambitious politician abandoned Old Labour and formed what he called the New Party. He used the term the third way to describe what he said was his position 'in the centre of politics'. His name? Oswald Mosley.
'Not a happy precedent.
'In the Cold War President Nasser and Marshal Tito found a way to avoid taking sides and being everyone's friend. What did they call their approach? The Third Way.
'And 800 years ago St Thomas Aquinas came up with an original name for his philosophy: the Third Way.
'He described it in terms New Labour would have felt quite comfortable with: it is, he said, 'A thing that need not be, once was not, and if everything need not be, once upon a time there was nothing'.
'The thinking of Tony Blair in the language of John Prescott.
'For New Labour, the Third Way means having it every way.
'You can be in favour of freer markets and more government intervention. You can talk about personal responsibility and pursue nanny state policies that erode personal responsibility. You can say you support the family and then demolish the last recognition of marriage from the tax system. You can call for trade union powers to be curbed and steadily extend the power trade unions have. You can promise to devolve power and run the most centralising, authoritarian government. You can say you love the pound and do everything possible to abolish it at the earliest opportunity.
'Handy thing, this Third Way, isn't it?
'Tony Blair answers the charge that he believes in nothing by saying that on the contrary he believes in everything.
'I say that to believe in nothing and to believe in everything is exactly the same thing.
'That's why before the election it was a good idea to ban tobacco sponsorship and after the election it was not a good idea to ban it for Formula One.
'That's why before the election they said they wouldn't interfere with PEPs and TESSAs and after the election they interfered with PEPs and TESSAs.
'That's why before the election they said they wouldn't introduce tuition fees and after the election they introduced tuition fees.
'That's why before the election they said that hospital waiting lists would go down and after the election hospital waiting lists went up.
'That's why before the election they said they'd control public spending and after the election they lost control of public spending.
'That's why before the election they said they wouldn't raise taxes and after the election they raised taxes seventeen times.
'That's why before the election they said they would deal with young offenders more quickly and after the election they deal with young offenders more slowly.
'That's why before the election they said they'd be an open government, and went on about high standards, and after the election they treat Parliament and the public with arrogance, secrecy, cronyism and contempt.
'That's why before the election they went on about off-shore trusts and after the election appointed as Minister for off-shore trusts a man with offshore-trusts who influences his off-shore trusts.
'That's why before the election they said they'd be a People's Government and talked about the People's this and the People's that, as if we were all going to China, when
'All we've seen since the election is overpaid advisers, overseas junkets and overpromoted cronies all paid for by the People's money.
'That's what happens when you believe in everything and believe in nothing.
'It would be funny if we weren't talking about people's jobs and people's prosperity and people's freedom.
'At the election Labour boasted that things could only get better. Now they talk about hard choices because they know things can only get worse.
'It is not their fault if there is a downturn in the world economy; but it is their fault if they pursue policies that mean those problems are going to be hitting Britain harder.
'One job lost every ten minutes while this Government presides over our economy.
'And the search is on for somebody else to blame: the managers, the workers, the investors, the Russians, the Malaysians.
'The only thing Labour Ministers are certain about is that they're not to blame.
'Nothing to do with them. Forget the high interest rates, high pound, loose public spending, extra employment laws, new union powers and damaging European regulations. Nothing whatsoever to do with them.
'In July, Gordon Brown announced his spending spree and his forecasts for the economy. We all knew those forecasts were wrong. Most economists knew they were wrong. Francis Maude told the Chancellor they were wrong.
'I asked Tony Blair at Prime Ministers Questions whether he accepted that the forecasts were wrong. 'No', he said with supreme complacency.
'See what I mean about those answers. 96 now and still counting.
'This week we discover they are completely wrong. Grim, but wholly predictable news for families and businesses throughout the country.
'So don't tell me there's no difference between the two Parties on economic policy. There is every difference.
'What we have seen in the last year and a half amounts to a major reversal of the economic policy of the last Government.
'We are close to a jobs crisis in this country.
'Agriculture is already in recession. British farming faces its worst crisis for more than half a century yet Labour Ministers have closed their ears to the countryside. We shall never forget that the food we eat and the landscape we enjoy depend on a thriving rural economy. We shall speak up, as we always have, for British agriculture and the British farmer.
'Manufacturing industry is on the brink of recession. Foreign investment is draining out of the country.
'No amount of scripted sympathy and mock concern from the Government is going to lessen the impact on families around Britain this winter.
'At a time of great difficulty for businesses and jobs this Government plans extra burdens, extra regulations and extra costs.
'This is exactly the wrong policy at exactly the wrong time.
'What we need is action.
'First, the Government should announce a moratorium on any measures likely to increase business costs. That doesn't just mean statutory union recognition and the minimum wage, it means getting to grips with their family tax credit plan with all its extra bureaucracy.
'Second, they should urgently rethink the New Deal. Help should not be concentrated on those people likely to find work anyway but on areas and people worst hit by big job losses.
'Third, the Chancellor should make an emergency statement as soon as the Commons returns. Since he's been reckless enough to announce his spending without knowing his revenue, he must immediately come to the Commons to tell us how he is going to reconcile the two.
'Interest rates have come down today by a quarter of a percent and that's welcome. But rates will stay higher and do so longer than necessary because of Labour's mistakes on tax, spending and regulation. I don't blame Eddie George but I do blame Gordon Brown.
'And without such a Jobs Crisis Package the Government will be responsible for yet more lost jobs and factory closures.
'It won't be enough to produce another gimmick. This Government is very good at gimmicks.
'Take the Millennium Computer Bug - a huge potential problem for every business in the country.
'The Prime Minister's answer? A great fanfare. Bright lights. Flash backdrop. Packed press conference. 20,000 specially trained 'bug busters'. Super bug busters. Doesn't it sound good?
'How's he getting on? Six months closer to the Millennium and he's appointed 26 of them.
'New Labour says it's preparing Britain for the new Millennium and they're not even ready for the first day of it.
'What about Welfare Reform? One of the most important issues facing our country. Remember how Harriet Harman was going to sort it out? Remember Harriet Harman?
'Remember the Welfare Roadshows that were going to travel round the country persuading everyone of the need to make urgent reforms to the welfare state?
'What happened to those roadshows? Did one come down your way? Hands up anyone who's actually seen one.
'The roadshows never got beyond Lambeth Bridge. You're more likely to have seen Elvis shopping in a local supermarket than caught sight of one of Labour's roadshows.
'And with the roadshows went any serious commitment by this Government to cut welfare bills, reduce dependency and reform our welfare state.
'The short ministerial career of Frank Field is a parable of New Labour.
'For a whole year the Prime Minister traded on the reputation of the only man of principle in his Government; and when that man had the courage to resign rather than sell out his principles the whole House of Commons sat and listened to his resignation speech - everyone that is except Tony Blair and Gordon Brown who went creeping and crawling out of the Chamber.
'That was when wereally needed a bug buster.
'That is what happens when you believe in everything and you believe in nothing.
'But if you want to believe in everything and to believe in nothing, you need to find some allies with experience. Enter the Liberals.
'For too long our Party has ignored the Liberals at a local level. We're not going to ignore them anymore.
'We're going to attack Liberal councils which are failing their local communities with high tax bills, poor services and wasted money.
'We've always said voting Liberal is a wasted vote.
'And as anyone who lives under a Liberal Council will tell you, a vote for the Liberals is never so wasted as when the Liberals win.
'New Labour and the Liberals: the Third Way and the Third Rate.
'Our way is the British Way.
'The British Way is about smaller Government and bigger citizens.
'I was 16 years old when I first addressed a Conservative Party Conference. I sometimes think I'll be 116 years old before people stop reminding me of it. When I was 16 I had all that hair, but now I've lost some of it. I had a rather nice jacket with wide lapels, and I've lost that too. Thanks Ffion.
'And I also had an abiding belief in freedom, and that's something I'll never, ever lose.
'While I may be as embarrassed as anybody is when looking at an old photo, I can always be proud of what I believed in.
'If I was Tony Blair and someone had a picture of me as a grown man wearing a CND badge and calling for unilateral nuclear disarmament, I don't think I'd ever show my face in public again.
'I spoke of my belief in freedom when I was just 16 because a belief in freedom is in the bones of British people.
'We bridle against interference, bureaucracy and petty rules. We value our personal freedom and each one of us talks of the sanctity of our home as if it were the finest castle. We demand that power is always limited, law always restrained, authority always checked.
'It is because of these instincts that Conservatives want, in Chris Patten's striking phrase, 'smaller Government and bigger citizens'.
'New Labour is making Government both bigger and bossier. Few decisions have been more ludicrous than banning beef on the bone. Since Labour took office it is now possible to go into a restaurant and be told that the starter has been banned, the main course is under investigation and the cheese has been impounded by Department of Health officials.
'In this Government we see all the instincts of the nanny state. Don't eat beef, don't drink, don't stay up late, don't drive and if you do have to drive don't park.
'I thought this was supposed to be a free country.
'All this nonsense provides us with a great opportunity.
'We have always been seen as the Party of economic liberty. In the face of this Government's attitudes we must make sure we are seen as the Party of personal liberty too.
'For the British Way is to keep Government in its proper place - as the servant, not the master. It is to keep taxes as low as possible, keep regulation to a minimum, make sure Government minds its own business so that people can get on with minding their own.
'That's why the Conservative way is the British way.
'The British Way is also about safeguarding the independent institutions which alone nurture freedom and responsibility.
'We are more than a nation of shopkeepers. We are also a nation of volunteers, of hobbyists, of sports fans, of churchgoers, of carers, of hundreds of thousands of charities and associations and societies.
'We Conservatives draw on a long and rich tradition of voluntary work and public service.
'Now we are going to be the champions of the local school, champions of the local hospital, champions of the voluntary group and of the charity.
'We must show that we have listened to Britain and that we are the people who can be trusted best with our public services.
'We have a lot of work to do - on health.
'The NHS doesn't belong to the Labour Party, it belongs to the people of Britain.
'We are proud of what our Party has done to look after the NHS in fifty years.
'But let's be honest. One of the reasons we lost the General Election is that people thought the Conservative Party didn't care about the NHS. We cannot allow this damaging attack to go unanswered.
'The NHS is part of the British Way. Free at the point of use, it belongs to rich and poor alike.
'But to say that we are true friends of the NHS is not enough.
'We have got to help this country engage in a mature debate about the NHS. The Labour Party, with its simplistic rhetoric and dishonest promises and cruelly raised expectations, is already letting people down.
'And that gives us another great opportunity.
'Of course there are real challenges. Medical technology advancing at a staggering pace. New treatments and new medicines emerging every month.
'And we will be straight with the British people. We shall certainly stand for generous public funding.
'But we will also stand for a future in which the people at the frontline of health care have the freedom to take their own decisions.
'A future when local GPs and local hospitals are embedded in strong local communities.
'A future where the Berlin Wall between the public and private sectors is torn down.
'A Conservative future for the NHS. So let's go and fight for it.
'We've got a lot of work to do - on education.
'I was lucky enough to go to Wath-upon-Dearne Comprehensive where dedicated teachers opened the door to a world of opportunities for me.
'I want to open the same door to the thousands of young people who are still denied the good teaching and high standards which ought to be their birthright in a civilised society.
'We made a start in Government.
'But in his excellent speech on Wednesday, David Willetts got it right. In the post war era all politicians, including Conservatives, came to believe that we could put everything right by adding more and more regulations into a system planned from Whitehall. It must be clear by now that in education, as in anything else, this simply will not work.
'New Labour hasn't understood this. All they offer is more and more central control - over what teachers teach, over how they teach, over the way schools are run, over the amount of homework that is set. They even seem to know when every child in the country should go to bed.
'Here's another opportunity for us.
'For we must develop policies which set all our teachers free. Policies which give power back to parents. Policies which give all children the high standards of teaching they deserve.
'Labour's going to be the Party of political control. We're going to be the Party of school freedom.
'Labour's going to fail on public services. They are going to let down the massive expectations they have aroused. And we are going to grasp the opportunity this gives us. We are going to be the true Party of public services.
'For the British Way is not uniformity. Not state monopoly. Not central control and direction. No, the British Way is about the creativity that comes from independence, it is about the diversity that comes from freedom, it is about the efficiency that comes from choice.
'That's why the Conservative way is the British Way.
'The British Way is to be on the side of people who try to do the right thing.
'People who save, who work hard, who try to be independent of the state, who obey the law and pay their taxes, people who are good citizens and who find that the system is not on their side.
'They're the kind of people I grew up with in Rotherham.
'They're hard-working families whose parents go out and try their best to find jobs because they don't want to accept hand-outs from the benefits office; hard-working families in which children are taught to respect values like self-discipline, honesty, self-reliance, good manners and respect for other people.
'They don't want to see the Labour Government abandoning welfare reform, increasing dependency, making it more expensive to work and putting up welfare bills by£40 billion in the next three years alone.
'They want to see people who do the right thing rewarded and not undermined. And they look to our Party to support them.
'We must come forward with real welfare reform - welfare reform that ends the culture of dependency that pervades too many of our inner cities; welfare reform that encourages families to stay together and doesn't discriminate against marriage; welfare reform that helps people off benefit and into real jobs.
'Strong and stable family life is the cornerstone of a healthy society and let me make clear to you today that we shall develop policies on welfare reform which strengthen family responsibility and support for the institution of marriage.' CONT