Let the message go out to Gordon Brown and David Cameron – we are ready – we are ready to take you on.

I am delighted to be here in Cheltenham. I was privileged to spend time in Parliament with Nigel Jones – a man of remarkable character and courage. Cheltenham was fortunate to have Nigel as MP and the party was fortunate to have Nigel in Parliament. As Nigel knows and you know, Martin Horwood is a worthy successor with a bright parliamentary career ahead.

The remarks from Jenny were too kind.

Thank you.

Jenny is one of the great talents of our parliamentary party and I’m so pleased that she is on my team!

In the early hours of this morning – the party and the country had reason to celebrate.

Dunfermline and West Fife – Liberal Democrat gain!

A fantastic victory for Willie Rennie and a fantastic victory for the Liberal Democrats.

A victory which marks the end of the road for the Prime Minister and the beginning of a difficult road for the Chancellor.

After all the boasts of the Tories and all the bluster of Labour it was the Liberal Democrats united, credible and professional who showed how to campaign and how to win.

We are back in business and let the message go out to Gordon Brown and David Cameron � we are ready � we are ready to take you on � because we can win anytime, anyplace, anywhere.

I was going to say something more about David Cameron – but for once I agreed with the Prime Minister who this week characterised the young man as a “flip-flopper”.

One minute a Conservative to his very core – the next minute a liberal Conservative.

One minute the conscience of Michael Howard – the next minute the friend of Ken Clarke.

One minute the heir to Tony Blair – the next minute the flag carrier of Norman Tebbitt.

Well, I think that at the next election people will not want a party of spin and inconsistency; they will want a party of principles and values.

So I look forward to spending my time over the next few years contrasting liberal democrat principles, values and consistency with Conservative U-turns, flip-flops and inconsistency.

Tonight, I want to say a few words about Labour.

This week�s exchange at Prime Minister’s Questions on police restructuring highlighted what I believe is one defining feature of Mr Blair�s government – centralisation.

And as and when Mr Brown takes over, centralisation will be the defining feature.

We know from his time at the Treasury that Gordon Brown is centralising and target-driven.

Mr Blair has often behaved as Britain’s first president – taking ever more power to number 10.

Under Mr Brown matters will get even worse. His stewardship has seen the tentacles of the Treasury extended into welfare policy, health policy, education policy, police policy.

Whatever the area, the government’s mantra is not one-size-fits-all; it is ‘any size, as long as it’s bigger.’ This is true for police authorities, primary care trusts, fire control centres, ambulance trusts and strategic health authorities.

Centralisation is eroding our democracy and undermining personal responsibility.

Under Labour, accountability has decreased as centralisation has increased. When did a Minister last resign because of incompetence in their department? Yet this government has presided over the fiasco of the tax credit system and the disaster that is the Child Support Agency.

Local government has been emasculated as councils have lost control over their budgets and have to meet targets set in Whitehall.

The government talks about wanting to promote personal responsibility, but their nannyish behaviour has the opposite effect.

None of this will change under Gordon Brown, or indeed David Cameron. Both are competing solely on the basis that they can be better managers of a centralised state.

John Prescott is even rumoured to want to abolish next year’s local elections! I wonder why?

By accruing ever more power in Whitehall, Labour behaves as if the state always knows best how people should run their lives.

There are targets, Tsars, delivery units, strategy units, spin doctors, personal advisers, executive agencies and national quangos – all arms of the central state – all designed to extend central control.

For this is the Prime Minister who relies on advice from people who have never been elected by anybody to anything.

For this is a Prime Minister who seeks to marginalise the Cabinet and exclude Parliament.

For this is a Prime Minister the mantra is “modernising” and after nine years in power we know that his modernising is centralising.

And all this from a Prime Minister who promised a “new politics – because Britain deserves better.”

And now the Prime Minister wants a legacy.

He has one.

History will record that Tony Blair headed a centralising government which led us to disastrous war with Iraq at the behest of the worst American President in modern times.

We need to put values back into our politics. British politics does not need a third management party. An injection of liberal values is the only way to undo years of centralisation, bring back local control and accountability, and help people to take responsibility for their own lives.

I want us Liberal Democrats to reduce the power of the over-mighty state � with community services, locally provided, democratically accountable.

In short, here in Cheltenham locally elected people responsible for local schools, local hospitals, local police and local transport.
I know it is time to trust people in Cheltenham to make the key decisions about services for themselves rather than wait on bureaucrats in London.

My leadership – values and integrity, judgement and credibility.

Positive policies.

Waging war on poverty.

Cherishing our environment.

Promoting opportunity.

Defending civil liberties.

Championing equal opportunities.

Decentralising power.

Spreading democracy.

Playing a leading role in our world.

A credible, distinctive, principled party.

Working together, going forward.

Not looking inwards, but reaching outwards.

Not a debating society but a party of local and national power.

Liberal Democrats in Government.

Nothing less will do for Liberal Democrats or for our country.