'It's good to be back in Wales - a country which has given the Labour Party so many of its finest politicians: Nye Bevan, the father of the NHS, Jim Callaghan, Michael Foot, and of course Neil Kinnock.
And it's good to be among so many friends from the Assembly, where Rhodri and his team are doing a great job, and from Labour Councils up and down the country.
You have an absolutely critical role to play in delivering the improvements we need in our public services.
Now that years of Tory cuts to local services have been replaced with Labour investment, the task we face is to match that investment with reform and deliver the sort of improvements to local services that people want to see - like higher school standards, better care for the elderly, safer communities, clean streets and decent housing.
But local councils will only be able to empower local communities if they themselves are empowered. That is why we are introducing new freedoms and flexibilities for high performing councils, effective intervention where there is poor performance, and less red tape for all of you.
Because if we are going to transform Britain, we don't just need a Labour government. We need Labour councils as well.
To the delegates to the women's conference, I say this:
We don't just want a more prosperous Britain. We want a fairer Britain too. A fairer deal for women.
Already, hundreds of thousands of women are benefiting from the minimum wage, the National Childcare Strategy, the New Deal for Lone Parents, improved maternity leave and maternity pay, and from the laws on fairness at work.
But we will still have a lot more to do to tackle the problem of unequal pay, improve women's health and help women balance work and family responsibilities.
And we must improve the representation of women in public life, which is why we are legislating to make it possible for parties to take positive steps to get more women MPs. Not because it is the politically correct thing to do - but because it is right.
Everything we do flows from our belief that in a fair and just Britain, everyone should have the chance to make the most of their potential.
4 big objectives define this Government
Economic stability and an end to boom and bust economics which hurt so many families and so many businesses
Measures to cut social division and inequality which contributed to mass unemployment and the doubling of crime
Investment and reform of essential services
Engagement not isolationism in Europe and the wider world.
Each objective is driven by our values.
We believe in a stable economy because we want jobs and rising living standards for all the hard-working families in our country, not just a few.
We believe in a society of opportunity and security because we know that to reduce social injustice is to increase the chance people have to make the most of their potential.
We believe in strong public services because access for all to quality education, healthcare, safe streets, mobility, is the embodiment of social justice.
And we believe in engagement in the world because in today's world what happens in one country can impact massively on what happens in every country.
And though the focus of this conference, and this speech, is domestic issues and public services in particular, let me say a few words about this final point.
If September 11th showed us anything, it is that you can no longer divorce foreign policy from domestic policy. And it is that countries achieve for more working together than they do working alone.
And if the speech of the Leader of the Opposition on Thursday showed us anything, it is that they have learned nothing. There never could be a worse time to turn your backs on the world. The isolationist policy they advocate would hugely damage our country's interests.
They damaged Britain in government by turning their backs on Europe. If ever they got back they would damage Britain now by, it seems, turning their backs on the entire world.
I am in no doubt whatever that our future lies as a strong independent party in the E.U. The policy on the single currency in the right policy for Britain. We're in principle in favour; in practice the tests must be met and the British people would have the final say in a referendum. But to pretend the Euro can be ignored, to sit on the sidelines just willing it to fail, is the abdication of the true national interest.
At this stage in our first term, the outlines of the Parliament were clear: we were stabilising the economy, focussing on education as the No1 priority, getting people back to work, modernising the constitution, internationalising the country's foreign policy.
At this stage in our second term, the outlines and the purpose of this Parliament are even clearer: it is all about maintaining that stability and then driving through radical change in education, health transport and crime.
Our aim is clear: to re-design these services around the interests of the user.
Our means are clear: invest and reform.
On the basis of our hard-won first term economic stability, we will deliver second-term sustained investment, record spending on health, on education, on tackling crime, on transport.
And because we know that money is not the only answer, we must accompany that investment with reforms that will see services rebuilt around the consumer - because we are, always have been, and always will be, on the side of the consumer, the pupil, the patient, the passenger, the victim of crime.
And I say to the Tories: If you're on the side ofthe pupil who needs the changes, get on the side of the teacher whose making them. If you're on the side of the patient in need of a reformed NHS, get on the side of the hospital staff who are reforming it, because without them, we won't deliver for the people we serve.
The battle lines with the Tories are clear.
They believe the problem of the last Conservative Government was not too much Thatcherism but too little. So on Europe their position on the single currency is now 'never' not even 'wait and see'.
And on public services they have a strategy that is cynical and, ultimately, totally dishonest about its implications. In truth they think the problem with public services is that the Thatcherite policy of the 80s was never completed.
They believe that instead of trying to rebuild the NHS, we should accept it is fundamentally flawed - 'Stalinist' as the Shadow Chancellor called it - and instead of investing more in the NHS, cut that investment, cut tax and then get people to purchase their own services.
That is why they are now mounting a concerted campaign systematically to denigrate the NHS, its standard of care, its staff, its ethos.
Every case, true or false, disputed or clear, of error or poor treatment is held up before the public as typical, as the rule rather than the exception.
It is denigration for a purpose: so to demoralise patients and staff, so to mock and belittle the achievements that are happening that people become so disillusioned that they give up on the NHS.
I say this strategy is cynical for this reason. Yes, there are real cases of bad and unacceptable treatment. Yes, there are real challenges for the NHS as it goes through this period of change. In a service treating one million people every 36 hours, performing 5.5 million operations a year, with 270 million GP appointments, there will be mistakes - there are in any healthcare system in the world. But the vast majority of people in the NHS receive superb treatment from highly dedicated staff, and to pretend otherwise is just the same Tory lie they have tried to use about the NHS ever since they opposed its creation in 1948.
And I say it is dishonest because to read the Tory propaganda you would think there is one healthcare system, the NHS, for which you pay tax; and some other system for which you can pay less tax and get the service for free.
If we want to invest more in healthcare, we have to pay for it. How we pay is open to debate; that we pay isn't.
Yes, you could opt for the French or German system of funding, but are they really going down the French route where working families pay 20 per cent of their gross income on health, including insurance contributions, and where GPs are paid half what they are here?
Yes, you could force people into private insurance as in the USA, but will they be honest with people about what families then have to spend on their healthcare each week, what charges they have to pay and what of the millions who can't afford to pay and go without?
As virtually every independent survey shows, pound for pound the NHS is an efficient service. But it has suffered from chronic under-investment and, as a result, has not focused on the need for change.
Make no mistake: this battle for public services will be one of the dominant issues of the Parliament, and rightly.
And it is a battle not to be fought only on technocratic, managerial grounds. This is not just about management systems, PCTs, CHIs, NICE and the rest. All of that matters, of course it does.
But this is more than a battle about systems. It s a battle over values.
I believe in the NHS not for sentimental reasons but because I believe that, without it, millions of people could never afford proper healthcare and that access to healthcare should not depend on ability to pay but on your need as an equal citizen in a fair society.
I believe in good state education because a child's life chances should depend on their merit not their birth.
Public services are what make us a community of people. And they need investment. But don't fall for the myth that private services come for free. They don't. People pay. And if they can't pay, they don't get them.
And in the end, it's not just the weakest who suffer. We all do. If we had carried on with barely 50 per cent of youngsters getting the right results at primary school, languishing behind other nations, instead of where we are now, in the top 8 countries for education in the world, we would pay a price as a nation.
Every under-educated child is a national asset squandered.
So these are the battle lines.
The Tories have made their choice. They want spending cut to 35% of GDP - that would mean£60 billion. Tough choices - that is your entire health spending wiped out. Or your entire spending on education. Or your entire spending on crime and transport combined. Madness. And they can only even ever begin to make the political case for that if they run the public services down. Do them down. Do them in.
Our strategy is to build up the public services. Theirs is to knock them down. Reformers versus wreckers. That is the battle for this Parliament and it is one that we must win.
And because we are on the side of the pupil, the patient, the passenger, the victim of crime, we know we don't do that by leaving things as they are, for just as we must take on and defeat the big C Conservatives who want to undermine public services, so we must defeat in argument the small c conservatives who believe the old ways will do and who resist reform.
We want quality public services, built around these 4 key principles of reform.
National standards, backed by proper system of inspection and accountability - OFSTED, CHI, HMIC, SRA show the way.
Devolution to the front line so that doctors and nurses, heads and teachers, police officers, get real power over resources, and freedom to innovate.
More flexible terms, conditions and working practices so that their time is spent doing what they do best - helping the users of public services.
More choice for the consumer, being prepared to use alternative providers, including where it makes sense and gives value for money and with guarantees that staff are properly treated; using the voluntary and the private sector.
Forget the nonsense about privatising public services under this Government.
Since 1997, we have increased the number of employees in the public sector by 140,000.
This year, we are increasing public spending on health and education as a percentage of national income faster than any other major country in the world.
And this year for the first time in a decade public sector pay increases are outstripping private sector pay.
And those public sector workers deserve it. They do a fantastic job. They are bound to be the main deliverers of our programmes.
But are we going to make patients wait in pain for operations because of some dogma about not using private hospitals, even though they may have spare capacity to do NHS operations?
Are we going to force local communities to put up with crumbling Victorian buildings for years and years and years just because we have some ideological objection to a private company building their new hospital?
How could we justify it to parents or patients if we refuse to consider bringing in outside expertise to help turn round a failing school or hospital?
If we are to win the argument for collective provision, defeat the wreckers and secure the future of our public services, then we must be prepared to use all available means to make the improvements that patients and pupils and passengers demand. And we will.
The foundations for this were laid in the first term.
And be aware of another part of the Tory strategy - it is to say that because we haven't done everything, we've done nothing.
Imagine if a Labour activist had been present at our 1997 spring conference and had been kidnapped by John Redwood and his friends, taken to Planet Zog for a few years, and was only returned to our fold today. What change would they notice?
They'd see there have been two Labour landslides. Would they have believed that possible in Spring of 1997?
They'd see that the party that sees itself as the natural party of government had been reduced to a useless rabble.
But, more important, they'd notice:
Lowest inflation in Europe.
Interest rates at their lowest since the mid Sixties.
That their party, the Labour Party, was now the natural party of economic competence.
If they came from Cardiff they'd soon learn that unemployment here had halved and youth unemployment is down by 80 per cent.
But, more important than that, because of our commitment to education, education, education.
They'd find there were 11,000 more teachers than when they left
17,000 schools repaired or rebuilt
98 per cent of schools connected to the internet, up from barely 10 per cent when we came to power
Record numbers of 11 year olds making the grades in English and Maths.
The best ever GCSE results
virtually no infants in classes over 30
More people in university then ever before.
Because this Party that created the NHS believes in saving the NHS
they'd find there were 27,000 more nurses
10 new hospitals, with many more on the way.
40 new NHS walk-in centres.
100,000 fewer patients waiting.
500,000 more operations each year.
They'd notice crime down 22 per cent and, from next month, record police numbers.
A Parliament in Scotland, an Assembly here
A viable peace process in Northern Ireland
They'd be in a country in which over a million people had had a pay rise thanks to the first ever national minimum wage.
Where homeowners pay an average£1,800 less a year on their mortgage.
And 100% of debt owed to us by the world's poorest countries written off, and aid rising as a percentage of national income.
Where every family with children guaranteed an income of at least£225 a week, with the WFTC.
Where every worker can gets at least 4 weeks paid holiday every year.
Where new mums AND dads can get more time off with their newborn baby.
Where every four-year-old and nearly every three year old gets a free nursery place.
Where 3 million pensioner households get free TV licenses.
Where 8 million pensioner households getting an extra£200 to help with their winter fuel bills. Where one million children have been lifted out of poverty. Where children and families can visit our great national museums for free.
So don't let anyone say nothing has changed as a result of a change of government.
But in politics, it's always the next thing, not the last thing, that drives you, so let me say where we're heading.
Building on our own success in primary schools, to a Britain where by 2004 at least 75% of our 14 year-olds are up to scratch in maths and English: where by 2004 we reduce the number of adults without basic literary and numeracy skills by 750,000: and where by 2010 at least 50% of under 30 year-olds progress to higher education.
Building on the success of our first term, where we put in the biggest ever sustained investment in the history of the NHS, kicked off the biggest ever hospital building programme and modernised virtually every A&E that needed it - to a Britain where by 2005 the maximum wait for any outpatient will be 3 months, and for any inpatient down to 6 months. A Britain in which in 3 years we will have increased the number of heart specialists by half, the number of cancer specialists by nearly a third. And a Britain where patients will get decent food in clean wards, adequately assessed.
Building on the success we had in targetting and reducing car crime we'll go further and get vehicle crime down by 30% by 2004, burglary down by 25% by 2005 and robbery in the major cities down by 14%.
And though transport may be the toughest nut to crack we already have 1,700 more train services running every day, 2,100 stations have been improved, 17 new stations have been built, and there are 34,500 new buses. And by 2005 we'll have seen 25% of the whole rail rolling stock replaced by new carriages.
In every area, therefore, we now have plans for the short, medium and long-term that will see year by year improvements building on the success of the first term.
And our legislative programme is geared precisely to this agenda.
An Education Bill removing unnecessary regulation of schools, enhancing school diversity and autonomy, and providing bold approaches to tackling failing schools including turn-around contracts with successful schools and the private sector.
A Health Bill stripping out the layers of bureaucracy by devolving power and budgets to Primary Care Trusts at the frontline of the NHS, and giving greater power to the Commission of Health Improvement (CHI) to monitor NHS performance.
A Police Bill to lever up performance, including national standards to ensure every force is applying the lesson from the best, new powers to tackle failure and new roles and powers for civilian staff to free up uniformed officers for crime fighting.
A Proceeds of Crime Bill giving law enforcement agencies the powers they need to pursue organised criminals and their assets.
An Asylum, Nationality and Citizenship Bill to streamline the asylum application and appeals process.
So the first term foundations are laid. The second term plans to build upon them are clear. And the fairer, stronger, more prosperous Britain is being built.
Progress there has been plenty. But many challenges lie ahead.
With the right values for today, the right plans for our economy and on public services, we will meet them.'