This summer, as we cheered our athletes to gold after gold after gold, Britain remembered how it feels to win again. But more importantly, we remembered what it takes to win again. Whether from Jess Ennis or Mo Farah, Sarah Storey or David Weir, the message was the same: we may be the ones on the podium, but behind each of us stands a coach. And behind the coach, a team. And behind the team, the organisers, the volunteers, the supporters. And behind them, a whole city, an entire country, the UK nations united behind one goal.
What a contrast from a year ago when England's cities burned in a week of riots. When the images beamed to the world were not of athletes running for the finishing line, but the mob, running at police lines. When the flames climbed, not from the Olympic torch in east London, but a furniture shop in south London. A 140 year-old family-run business, which had survived two world wars and countless recessions, razed to the ground. Of course, even then, amid the smoke and embers, we saw our country's true character when residents came out onto the streets to clear up the mess.
And we saw it again this summer when the Reeves furniture shop in Croydon re-opened in new premises, the walls decked with photos of young people holding up messages of hope. And who put those pictures up? Young volunteers from Croydon and an 81 year-old man called Maurice Reeves, who, like three generations before him, ran the shop before handing it over to his son. Maurice, your example should inspire a generation.
You see, what Maurice has shown - what our Olympians and Paralympians have reminded us of - is that, for most people, success doesn't come easy or quick. That's what our culture of instant celebrity obscures: that real achievement in the real world takes time, effort, perseverance, resilience. The war veteran: a victim of a roadside bomb in Afghanistan, competing at the Paralympics. The businessman: a victim of an arson attack in south London, serving his customers again. The millions of people up and down the country, who, no matter how heroic or mundane their battles, keep going, keep trying, keep working, whatever life throws at them.
These are the qualities that will see our country through these tough times. And these are the qualities that will guide our party through tough times too. So let us take our example from the British people as together we embark on the journey ahead. Our party: from the comforts of opposition to the hard realities of government. Our country: from the sacrifices of austerity to the rewards of shared prosperity. Two journeys linked; the success of each depending on the success of the other. Neither will be easy and neither will be quick, but it will be worth it. And be in no doubt. If we secure our country's future, we will secure our own.
We live at a time of profound change, almost revolutionary in its pace and scale. Here in Britain, we are faced with the gargantuan task of building a new economy from the rubble of the old. And of doing so at a time when our main export market - the Eurozone - is facing its biggest crisis since it was formed. And while the European economy has stalled, countries like Indonesia, Malaysia, India and China continue to grow, and at a phenomenal rate.
The potential consequences of this shift in power, should we in the West fail to respond, cannot be overstated. Our influence in the world, our standard of living, our ability to fund our public services and maintain our culture of openness and tolerance - all are in the balance. For power would move not only away from the liberal and democratic world, but within it too; from moderates to hard liners, from internationalists to isolationists, from those committed to the politics of cooperation to those hell-bent on confrontation. If history has taught us anything, it is that extremists thrive in tough times.
So yes, if we fail to deal with our debts and tackle the weaknesses in our economy, our country will pay a heavy political price. But the human cost would be higher still. Not only would we fall behind internationally, we would leave a trail of victims at home too.
So to those who ask, incredulously, what we - the Liberal Democrats - are doing cutting public spending, I simply say this: Who suffers most when governments go bust? When they can no longer pay salaries, benefits and pensions? Not the bankers and the hedge fund managers, that's for sure. No, it would be the poor, the old, the infirm; those with the least to fall back on.
Labour may have thought it was funny, after crashing the economy and racking up record debts, to leave a note on David Laws' desk saying: "there's no money left". But it's no joke for the most vulnerable in our society; the people Labour claim to represent but let down the most. So let's take no more lectures about betrayal. It was Labour who plunged us into austerity and it is we, the Liberal Democrats, who will get us out.
It's easy to forget sometimes that the debate we're having in this country is playing out across our continent. It's a debate between those who understand how much the world has changed, and those who do not. And between those who understand the need to adapt to those changes, and those who baulk at the size of the challenge. And the fate of every European country - ours included - will depend on the outcome.
In the coming years, some countries will get their own house in order. But some will not. Those that do will continue to write their own budgets, set their own priorities and shape their own futures. But those that do not will find their right to self-determination withdrawn by the markets, and new rules imposed by their creditors, without warning or clemency. That that will never happen to us is often just blithely assumed; the comparisons with Greece, breezily dismissed. Yet it is the decisions we take - as a government, as a party - that will determine whether we succeed or fail. For the first time, the future is ours to make.
Our journey from austerity to prosperity starts, of course, with economic rescue; dealing with our debts and delivering growth. If you listen to Labour, you could be forgiven for thinking that austerity is a choice; that the sacrifices it involves can be avoided; that if we only enacted Ed Balls' latest press release we'd be instantly transported to that fantasy world where there is no "boom and bust" and the money never runs out.
But the truth is this: there is no silver bullet that will instantly solve all our economic problems. Some of our problems are structural, others international. All will take time to overcome. We are dealing with an on-going surge in global energy, food and commodity prices. An existential crisis in the Eurozone. And a banking collapse which, more than four years on, is still blocking the arteries of our entire economic system.
Ranged against these forces, the idea that if government just deregulated a bit more as Liam Fox proposes, or borrowed and spent a bit more as Ed Balls proposes, we would, at a stroke, achieve strong and lasting growth, is just not credible. In my experience, if you're being attacked by Liam Fox from one side, and Ed Balls from the other, you're in the right place.
You see, what is needed - and what we're delivering - is a plan that is tough enough to keep the bond markets off our backs, yet flexible enough to support demand. A plan that allowed us, when the forecast worsened last year, to reject calls for further spending cuts or tax rises and balance the budget over a longer timescale. A plan that, even at the end of this parliament, will see public spending account for 42 per cent of GDP - higher than at any point between 1995 and 2008 when the banks collapsed. And a plan that, because it commands the confidence of the markets, has given us the room to create a Business Bank, provide billions of pounds of infrastructure and house building guarantees and an £80 billion Funding for Lending scheme - the biggest of its kind anywhere in the world.
Of course so much of this is about perception. People keep telling me we should be doing what Barack Obama did with his fiscal stimulus. What they don't tell you is that much of what the President had to legislate for, we are already doing automatically. So let's not allow the caricature of what we are doing go unchallenged. If Plan A really was as rigid and dogmatic as our critics claim, I'd be demanding a Plan B, and getting Danny and Vince to design it. But it isn't. Which is why you were right, earlier this week, to overwhelmingly reject the call for us to change our economic course. We have taken big and bold steps to support demand and boost growth. And we stand ready to do so again and again and again until self-sustaining growth returns.
Of course, arguments about economic theory are of no interest to the millions of people just struggling to get by right now. The home-help whose earnings barely cover the cost of childcare. The builder who knows the company will be laying people off, but doesn't yet know if he'll be one of them. The couple who want to buy their first home but can't raise the money for a deposit. To them and to all the other hard working families just trying to stay afloat, I say this: the Liberal Democrats are on your side. You are the ones we are in government to serve. Not with empty rhetoric but real practical help. That is why we promised to cut your income tax bills by raising the personal allowance to £10,000. So you can keep more of the money you have worked for. So your effort will be properly rewarded. So the task of making ends meet is made that little bit easier.
At the last budget, we made two big announcements: that we were spending three thousand million pounds increasing the tax-free allowance, and just fifty million pounds reducing the top rate of tax while recouping five times that amount in additional taxes on the wealthiest. I insisted on the first. I conceded the second. But I stand by the package as a whole. Why? Because as liberals, we want to see the tax on work reduced, the tax on unearned wealth increased, and the system as a whole tilted in favour of those on low and middle incomes. The budget delivered all three.
But let me make one thing clear: Now that we have brought the top rate of tax down to 45p - a level, let's not forget, that is still higher than throughout Labour's 13 years in office - there can be no question of reducing it further in this Parliament. All future cuts in personal taxation must pass one clear test: do they help people on low and middle incomes get by and get on? It's as simple as that.
At the next election, all parties will have to acknowledge the need for further belt tightening. That much is inescapable. But the key question we will all have to answer is who will have to tighten their belts the most? Our position is clear. If we have to ask people to take less out or pay more in, we'll start with the richest and work our way down, not the other way around. We won't waver in our determination to deal with our debts. But we will do it in our own way, according to our own plans, based on our own values. So we will not tether ourselves to detailed spending plans with the Conservatives through the next Parliament.
Colleagues, we should be proud of the fact we have delivered fairer taxes in tough times. We should be proud of the fact that we're taking 2m people out of income tax altogether and delivering a £700 tax cut for more than 20m others, and should never miss an opportunity to tell people about it. But as we do so, remember this: our tax cuts, like our extra support for childcare, for schools, for pensioners - these are not stand-alone consumer offers. They are part of a broader agenda of economic and social reform to reward work, enhance social mobility and secure Britain's position in a fast changing world. In short, national renewal. That is our mission. Our policies either serve that purpose, or they serve none at all.
One of the things about governing is it forces you to confront the inconvenient truths oppositions choose to ignore. Like the fact that, over the last 50 years, our economy has grown threefold, but our welfare spending is up sevenfold. Or the fact that, to sustain our spending, we are still borrowing a billion pounds every three days. Or that, as a result of that borrowing, we now spend more servicing the national debt than we do on our schools. In combination, these three facts present us with a fundamental challenge: to not only regain control of public spending, but to completely redirect it so that it promotes, rather than undermines, prosperity.
How we do that - how we reshape the British state for the economic challenges of the 21st century - is a debate I want our party to lead. For there are only two ways of doing politics: by following opinion, to get yourself on the populist side of each issue, or by leading opinion, and standing on the future side of each issue. The first brings short-term rewards, of course it does. But the big prizes are for those with the courage and vision to get out in front, set the agenda and point the way.
So let us take the lead in building a new economy for the new century. An open, outward looking economy in the world's biggest single market. A strong, balanced economy built on productive investment, not debt-fuelled consumption. An innovative, inventive economy driven by advances in science and research. And yes, a clean, green economy too, powered by the new low-carbon technologies. Britain leading the world.
But I have to tell you, we will not succeed in this last task unless we can see off that most short-sighted of arguments: that we have to choose between going green and going for growth. Decarbonising our economy isn't just the right thing to do; it's a fantastic economic opportunity. The green economy in Britain is growing strongly right now, bringing in billions of pounds and creating thousands of jobs - in wind, solar and tidal energy; the technologies that will power our economy in the decades to come. Going green means going for growth. But more than that, it means going for more energy that we produce ourselves and which never runs out; it means going for clear air and clean water and a planet we can proudly hand over to our children. Going green means going forward.
So let the Conservatives be in no doubt. We will hold them to their promises on the environment. Of course, there was a time when it looked like they got it. It seems a long time ago now. When the Tories were going through their naturalist phase. The windmills gently turning; the sun shining in. As a PR exercise, it was actually quite brilliant. Until, at last year's party conference, they went and ruined it all, admitting that you can't in fact "vote blue and go green". Well of course you can't. To make blue go green you have to add yellow, and that's exactly what we're doing.
As we plot our path from austerity to prosperity, we need to remember that nothing we do will make a decisive difference if we don't make the most important investment of all: in the education and training of our young people. For we will only fulfil our collective economic potential, if we fulfil our individual human potential. Yet the legacy of educational inequality in Britain is an economy operating at half power, with far too many young people never getting the qualifications they could get, never doing the jobs they could do, never earning the wages they could earn.
The true cost of this cannot be counted in pounds and pence. Yes it's a huge drag on our economy, but more than that, it is an affront to natural justice and to everything we Liberal Democrats stand for. Because if you strip away all the outer layers to expose this party's philosophical core, what do you find? An unshakeable belief in freedom. Not the tinny sound of the Libertarian's freedom - still less the dead thud of the Socialist's - but the rich sound of Liberal freedom, amplified and sustained by the thing that gives it real meaning: opportunity. The freedom to be who you are. The opportunity to be who you could be. That, in essence, is the Liberal promise.
And that is why this party has always been - and must always be - the party of education. Because just as there can be no real freedom without opportunity, so there can be no real opportunity without education.
Every parent knows how it feels when you leave your child on their first day at school. That last look they give you before the door closes behind them. The instinct to go with them, to protect them, to help them every step of the way. That's how we should feel about every child. That's the responsibility we have to every parent. To support them at every stage: from nursery to primary, from primary to secondary and from secondary to college, university or work.
That's why we're providing more money so the poorest two-year-olds, as well as every three and four-year-old, can now benefit from pre-school education. Delivering our Pupil Premium - £900 per child next year - so the most disadvantaged children get the more intensive, more personalised support they need. And why, when they leave school, we're providing scholarships, bursaries, grants, loans, apprenticeships and wage subsidies, to help them go on learning or start earning.
But extra resources won't make a difference unless matched by greater ambition. Which is why money must be accompanied by reform. Reform to ensure all children can read and write. To make schools focus on the performance of every child. To turn around failing schools, and put more pressure on coasting schools. And yes, reform to replace GCSEs, not with an O Level, but with a new more rigorous qualification that virtually every child will be able to take, and every well taught child will be able to pass.
And to ensure they do, I can announce that from this year, we will provide a new 'catch-up premium' - an additional £500 for every child who leaves primary school below the expected level in English or maths. If you're a parent whose child has fallen behind; who fears they might get lost in that daunting leap from primary to secondary school; and who is worried by talk about making exams tougher, let me reassure you. We will do whatever it takes to make sure your child is not left behind. A place in a summer school; catch-up classes; one-to-one tuition; we are providing the help they need. So yes, we're raising the bar. But we're ensuring every child can clear it too.
I am proud of the resolve we Liberal Democrats have shown over the last two and a half years. We've had some real disappointments: tough election results, a bruising referendum. But through it all, we have remained focused, determined, disciplined. It hasn't always been easy, and, when we've made mistakes, we've put our hands up. But we've stuck to our task - and to the Coalition Agreement - even as others have wavered. The received wisdom, prior to the election, was that we wouldn't be capable of making the transition from opposition to government. The choices would be too sharp, the decisions too hard.
The Liberal Democrats, it was said, are a party of protest, not power. Well two years on, the critics have been confounded. Our mettle has been tested in the toughest of circumstances, and we haven't been found wanting. We have taken the difficult decisions to reduce the deficit by a quarter and have laid the foundations for a stronger, more balanced economy capable of delivering real and lasting growth. But conference, our task is far from complete, our party's journey far from over.
I know that there are some in the party - some in this hall even - who, faced with several more years of spending restraint, would rather turn back than press on. Break our deal with the Conservatives, give up on the Coalition, and present ourselves to the electorate in 2015 as a party unchanged. It's an alluring prospect in some ways. Gone would be the difficult choices, the hard decisions, the necessary compromises. And gone too would be the vitriol and abuse, from Right and Left, as we work every day to keep this Government anchored in the centre ground.
But conference, I tell you this. The choice between the party we were, and the party we are becoming, is a false one. The past is gone and it isn't coming back. If voters want a party of opposition - a "stop the world I want to get off" party - they've got plenty of options, but we are not one of them. There's a better, more meaningful future waiting for us. Not as the third party, but as one of three parties of government.
There's been a lot of discussion on the fringe of this conference about our party's next steps; about our relationship with the other parties; and about what we should do in the event of another hung parliament. It's the sort of discussion politicians love - full of speculation and rumour. But I have to tell you, it is all based on a false, and deeply illiberal, assumption: that it is we, rather than the people, who get to decide. In a democracy, politicians take their orders from the voters.
So let's forget all the Westminster gossip and focus on what really matters: not our relationship with the other parties, but our relationship with the British people. Imagine yourself standing on the doorstep in 2015 talking to someone who hasn't decided who to vote for. This is what you'll be able to say: we cut taxes for ordinary families and made sure the wealthiest paid their fair share. We put more money into schools to give every child a chance. We did everything possible to get people into work - millions of new jobs and more apprenticeships than ever before. And we did the right thing by our older people too - the biggest ever cash rise in the state pension. But most importantly, we brought our country back from the brink and put it on the right path.
Then ask them: are you ready to trust Labour with your money again? And do you really think the Tories will make Britain fairer? Because the truth is, only the Liberal Democrats can be trusted on the economy and relied upon to deliver a fairer society too. And to help get that message out there, I can announce today that Paddy Ashdown has agreed to front up our campaign as chair of the 2015 General Election team. I must admit, I'm not quite sure I'm ready for all those urgent e-mails and 5am phone calls. But I can't think of anyone I'd rather have by my side. Paddy, it's great to have you back.
Fifty, sixty years ago, before I was born, small groups of Liberal activists would meet up to talk politics and plan their campaigns. Stubborn and principled, they ignored the cynics who mocked them. They simply refused to give up on their dreams. They refused to accept that Liberals would never again be in government. And they refused to accept that Liberalism, that most decent, enlightened and British of creeds, which did so much to shape our past, would not shape our future. We think we've got it tough now. But it was much, much tougher in their day. It was only their resolve, their resilience and their unwavering determination that kept the flickering flame of Liberalism alive through our party's darkest days.
At our last conference in Gateshead, I urged you to stop looking in the rear view mirror as we journey from the party of opposition that we were, to the party of government we are becoming. But before we head off on the next stage of our journey, I want you to take one last look in that mirror to see how far we've come. I tell you what I see.
I see generations of Liberals marching towards the sound of gunfire. And yes, I see them going back to their constituencies to prepare for government. It took us a while but we got there in the end. These are the people on whose shoulders we stand. They never flinched, and nor should we. We owe it to them to seize the opportunity they gave us, but which they never had. Taking on the vested interests. Refusing to be bullied. Refusing to give up. Always overturning the odds. Fighting for what we believe in, because we know that nothing worthwhile can be won without a battle. A fair, free and open society. That's the prize. It's within our grasp. So let's go for it.
Commenting, Liberal Democrat Communities Minister, Don Foster said:
"Liberal Democrats have long campaigned to make planning more responsive to local demands and concerns. That is why we have reversed Labour's unworkable top-down, centralised planning system and appalling lack of house building to tackle the chronic housing shortage.
"The planning regulations proposals are accompanied by an extra £300m to ensure a significant increase in social housing. The increase in building will be a significant boost to the local economy.
"We are now consulting on how the planning regulations will work in practice and we will be listening to the views expressed today by Conference, which will form an important part of this process."
Commenting, Co-chair of the Liberal Democrat Parliamentary Party Committee on Health, John Pugh MP said:
"Mental illness affects a large number of people of all ages, from all walks of life, yet only one in four who suffers, seeks help. Without the right treatment it can ruin lives.
"Since coming into government, Liberal Democrats have made funding for mental health a priority, but we still have a long way to go to improve awareness and the provision of mental health services so more people seek help.
"The human costs of untreated mental illness can't be quantified but any additional costs to the public purse would be more than recouped in savings to the NHS and the overall economy.
"The Coalition Government has made real progress in addressing underprovision in mental health but more needs to be done and Liberal Democrats today promised we will ensure it remains a priority."
Commenting, Liberal Democrat Advocate General for Scotland, Lord (Jim) Wallace said:
"Liberal Democrats have made their unease about the Justice and Security Bill clear in the past and have confirmed this today. They have welcomed the significant changes that Nick Clegg has already secured, for example removing inquests from scope and restricting it to national security cases only, but they have made clear that they still have deep concerns.
"It has always been the Government's intention that closed courts should only ever be used as a last resort and in a very small minority of cases where the alternative is no justice at all. We will continue to work with parliamentarians from all sides, to ensure that the principles of open justice are protected."
Commenting, Liberal Democrat Treasury spokesperson, Stephen Williams said:
"The Libor manipulation scandal was just another example of what has gone wrong in our nation's banking industry. Public trust has been damaged and we now need to punish those guilty of wrongdoing in the Libor scandal.
"We need to see a fundamental culture shift in our banking sector to improve standards and boost lending for businesses. Vince Cable has led the way on restoring trust and vitality in the banking industry with the British Business Bank, which along with the Funding for Lending scheme will stimulate lending, drive growth and get our economy moving."
Commenting, Liberal Democrat Treasury spokesperson, Stephen Williams said:
"Liberal Democrats value the dedication and hard work of public sector workers across the country.
"I am pleased that Nick Clegg, Vince Cable and others have spoken out against regional pay. The Liberal Democrats have now made it absolutely clear that we want the Government to rule it out altogether."
Conference, it's great to be here today and share with you some vital issues of my work.
Some time in the past, if I had been asked about naked short selling and large exposures. I might have thought it all a bit risqué: Closer magazine maybe; Soho rather than City.
But times change.
Now I'm immersed in financial regulation and crisis control, and as in Lord of the Rings it's a burden that gets heavier.
But I won't be captured, or turn into Gollom - unable to tell right from wrong.
As part of the Liberal Democrat team, MEPs follow the same principles of economic responsibility, fairness and sustainability that Nick Clegg and Liberal Democrat minsters do.
In London they've wrestled with the economic mess left by the financial crisis, cut taxes on low and middle incomes, provided the pupil premium and the Green Investment Bank.
In Brussels we've also tackled economic mess, protected savers, pensioners and small businesses, stood up for civil and human rights and shaped opportunities for low carbon goods and services.
On what I do there is much to tell: the battle to save the Euro, how the UK should face up to the all-powerful role of Europe in financial regulation, what on earth is a Banking Union and how will the single market in financial services - so important to the City and the UK tax base - survive alongside Euro area integration.
That is a long list - so I'll touch lightly on detail - but embedded in these topics is a ticking time bomb which may see us on our way out of Europe. It won't come from a referendum, it will come from acquiescence.
And it's a short fuse. Remember the veto - who asked you? That little surprise is still a cancer souring both relations and structures in Europe.
Back here, ever since the financial crisis morphed into the Eurozone crisis it has been a field day for Eurosceptics saying "I told you so".
What a waste of space!
Yes, the financial crisis laid bare flaws in the operation of the Euro - notably feeble ineptitude of the finance ministers who were meant to police it.
But raking over old arguments - like old superstitions with entrails and incantation - does nothing to help us move forward and fix the future; nothing to keep the UK up with the pace of change; and nothing to deliver the jobs and growth in the UK and Europe that are so badly needed.
UKIP and tea-party Tories live in some 1930s fantasy of imperial power, even though we are a lot closer to 2030!
They suggest that the open, mixed trading economy of the UK can function like the niche economy of Norway.
But they omit to mention that Norway and Switzerland contribute to parts of the EU budget,and end up obeying Europe's rules anyway, all without having influenced them.
I know the reality - Norwegian and Swiss representatives beat a path to my door asking for help!
Last year Norway adopted 75% of EU legislation.
The Swiss are implementing the vast majority of Europe's financial services legislation.
Why? Because the Swiss want their bankers and traders to continue to enjoy full access to the world's largest single market.
Europhobes talk of a UK freed from the 'shackles' of Europe, snuggling up to the US, and trading at liberty with the emerging markets.
They forget to mention that Europe already has, or is negotiating, free trade deals with almost every country in the world.
Other countries make time to talk to the world's largest trading bloc.
And what of the special relationship? The US wants a strong British voice at the EU table, but they will soon look elsewhere if we're not there.
An isolated Britain is no good to anyone.
Britain is heard in Washington, Beijing and Moscow when we exercise influence and leadership in Brussels, Paris and Berlin. Britain is stronger when it stands with our partners in Europe.
And as for those Europhobes who promote the idea of a Eurozone collapse. Are they mad?
That would make current economic challenges look like a walk in the park; it is wishing on the UK a recession like the great depression - but as I just said, UKIP and their fellow travellers like the 1930s.
From the US to China, nobody wants the Euro to fail.
They all know the world is interconnected - that their trade, their jobs, their economies are all affected.
And from US to China, they do not have a seat at the decision-making table. The UK does. And we must use it wisely.
Turning now to fixing the Euro - this needs discipline and more Eurozone integration to deliver the prize of growth and stability.
But if people in one country are to guarantee, or even help pay off, debt in another country, democracy does not allow that decision to be rushed.
So there is no quick fix.
And the path so far has not been pretty, more a game of nudge - each short term rescue being bought by agreement to long term reform.
Euro history does not read well: small countries obeyed the rules about not having too much debt - then France and Germany got the rules weakened, Italy still over-ran and Greece hid the truth.
But now, over a dozen pieces of legislation have already strengthened EU scrutiny over individual countries' budgets and their impact on one another, over statistical reporting and performance. Tougher penalties apply to those who ignore the rules or fudge the figures.
There's actually a lot of work done beyond the media scrum of summits!
However, on top of discipline, we must harness the collective strength of the Eurozone. European Central Bank interventions are one way, acting a bit more like the US Federal Reserve, which is what Mario Draghi's recent proposals do.
But this cannot stand alone without moves towards integration.
I also support some pooling of short term Eurozone Government debt, what I have dubbed a 'beginners Eurobond' or Eurobill. The idea here is to get a few years of breathing space to complete other reforms.
All this greater economic integration in the Eurozone presents serious challenges to the UK and we need mutual respect, not animosity, for it to work out well for us too.
Running parallel with the drama of the Euro, is all the legislation to clean up the financial system.
The European Parliament has equal power with the Chancellor and his European ministerial colleagues in amending and approving European legislation.
And amend we do!
I submit hundreds of amendments to major legislation, most of which influence the final outcome.
These aren't just "i" dottings: they have a major impact in areas like the security of banks, financial markets and people's pensions, on lending to businesses and bankers' bonuses.
Aha - you've heard about bonuses - but you may not know the rules came from the European Parliament.
Limiting cash pay-outs, claw-back arrangements, payment in contingent capital, restrictions on pension-pot pay-outs - yep that was us, quite a lot of it me - at the time having to battle against the FSA and against the Labour Government to push it further than they wanted.
Now we are proposing to limit bonuses to a maximum of once or twice an individual's annual salary with ways to claw back even if bankers have moved on to a new job.
I do know all the arguments and reservations, but like rip-off mobile roaming charges there comes a time when it just has to be done.
It is time for a revolutionary change in the way the financial sector thinks and this is part of it.
More generally, all European financial regulation is being tightened.
But this is not taking place in a vacuum. Far from it, the framework follows the G20 internationally agreed program, improving existing regulations and plugging the gaps.
And if UK procedures don't fit with new European versions, they have to be changed. So there is a bit of a frissance about this - and fuss in the press.
But, whether fairly or not - and it is probably a bit of both, the rest of Europe blames the City for the financial crisis and its consequences.
'Mea culpas' from UK supervisory authorities actually reinforce that view - apologies for 'light touch' supervision are not seen as giving the UK the right to suggest that it knows better than everyone else how not to mess up again!
The point is, just as everyone now wants to be tough on big banks that made epic mistakes, so too the rest of Europe wants to be tough on a big financial centre and its regulators - that could and did spread risk through the single market to them.
That's why December's attempt to get a veto on financial services was never a possibility.
Of course the rest of the Europe is far from blameless, but they take all the new rules too.
I'm in the middle of this. I also chair the face-to-face negotiations that reconcile the Parliament's and Ministers' amendments.
In fact, I am the only person always in the room and steeped in the detail of every dossier.
Sometimes I'm not sure if I'm on a roller coaster or dodgems, but it usually ends up well.
Now, the relationship between banking and regulation is a bit like warfare. Banks and complex financial products are missiles - and we have anti-missile systems of regulation, capital and all that - to try and keep us safe.
The thing is, when designing a missile no engineer would leave it without a fail-safe mechanism. But there is plenty of 'fail-unsafe' hanging around in our financial systems.
Fear of losing star traders and key asset managers - which we hear a lot about in the bonus debate - looks less to do with star quality and more to do with nobody else knowing how to steer or disengage the missile.
You know, any small or medium sized business seeking a sizeable loan from a bank would have to have contingency planning in place. A bit more thinking like that on the inside of the banks would have helped!
I'm aiming for more simplicity.
So every fund or manager should demonstrate they are fail-safe, that their positions can be properly understood and taken over by another.
Accounting rules must reflect reality, not what you hope something might still be worth if you wait long enough.
And regulation should not fight complexity with complexity - because instead of encouraging careful and considered investment decisions that leads to blind faith in complex financial products neither regulator nor investor understands.
I've published a longer list on this - but you get the idea.
Finally, to a potential time bomb - the banking union - which is one of the steps on the way to fuller Eurozone integration.
The idea is to stabilise Eurozone banks by having pooled backstops. The first stage is common, strong, bank supervision by the European Central Bank, with options for non-euro countries to join.
Economically we need Eurozone stability.
But ECB-based banking union could unbalance the single market in financial services and marginalise the UK.
In the Parliament the mood is grim, with other countries' MEPs saying this is the moment other countries choose whether the UK is in or out.
Some countries' ministers say the same.
Thankfully the European Finance Ministers meeting I was at in Cyprus just over a week ago was friendly by comparison, with many countries having problems with the proposals.
And the outcome may be that the timer is set on a year rather than a few months. But it is still ticking.
Negotiations are extremely sensitive, and yes with moments to be tough, but the last thing that the UK needs is constant bellowing about repatriation of powers and wanton vetoes from the Tea Party Tories or silly part of the City.
Many City bosses agree with me, and I say to them it's no good crying to me, or behind closed doors, about UK exclusion while letting the Eurosceptic anti-regulation wide-boys portray London as anti EU.
It's no good lying low in case you don't get the deal you want on the Vickers plan for reforming banks - because you need single market access more than where a derivative sits in a ring fence.
You need EU clout to challenge US extra-territorial measures over who constitutes a swap dealer.
If you City bosses don't put your heads above the parapet now, and tell the Prime Minister, Chancellor, public and media about the concerns you share with me - then forget your UK lobbying, you'll need the time to find other ways to get full access to the Eurozone.
And the UK will be quietly on the way to EU side-lines, or exit, because nobody spoke up.
I won't be sitting with that on my conscience. Don't let it be on yours.
The City can't continue to be the leading financial centre in Europe if Britain leaves Europe.
There is no escaping international regulation of financial services in today's world. Either Brussels does it or Washington does it. What would the City prefer?
Regulation from Washington without the UK, or regulation from Brussels with the UK?
The poet John Donne, said that if a clod is washed away, Europe is the less. This quote is relevant today from Greece to Britain.
I doubt it would be much fun being 'clod Britain' either.
Washed away, would clod Britain's automotive industry boom continue when it's built on selling 50% of its cars to Europe;
Washed away, would clod Britain continue to enjoy formidable levels of inward foreign investment - over half of which comes from other European countries.
Would clod Britain be able to attract 128 free trade agreements?
Don't be fooled.
Don't allow the bell to toll for Britain.
Liberal Democrats rose to the uncomfortable challenge of coalition government. Our country needed it.
I'd like to talk to you about our conference slogan: "Fairer taxes in tough times."
Thanks to the Liberal Democrats, taxes are getting fairer. Our tough budget negotiations mean that next year 24 million people will benefit from the largest ever increase in the tax free amount.
From April, working people will have seen their income tax bill fall by £550 and 2 million of the lowest earners will have ceased to pay any income tax. This is happening thanks to the Liberal Democrats in the Coalition Government.
It would not be happening without you.
Not everything about the Budget this year was perfect. But the Income Tax cut was by far the most important measure in the Budget - and the working people of this country will have over £3 billion more of their own money to spend next year as a result.
A cleaner working full time on the minimum wage will see their tax bill halved, thanks to Liberal Democrats. Very soon no one will pay Income Tax until they are earning more than £10,000, thanks to the Liberal Democrats.
We promised it in our manifesto, we campaigned for it, and we had the courage to go into coalition to deliver it. At the next election, we will promise to raise that figure yet further, to £12,500. So that you don't pay any Income Tax until you are earning more than a full-time salary on the minimum wage.
And in 2015 people will know that promise is credible, because we have delivered in Government. Thanks to the Liberal Democrats, truly a record of action - a promise of more.
Fairer taxes matter, because times are tough. The spending power of most people's pay packets has fallen over the last 5 years.
For too many, the spectre of unemployment has become a painful reality. For the country as a whole, the adjustment to a level of government spending and taxation that we can afford is painful and difficult.
When we came into office, we knew things were bad. But the truth is, we didn't know how bad. The damage that the crisis has done to our economy is even deeper than we first thought. The headwinds from high inflation and the eurozone are stronger than anyone imagined. The mess Labour left, worse than they would ever admit - let alone apologise for.
Now, having heard all of that, you might think I am pessimistic. You couldn't be more wrong. We have a government determined to do the right thing for the long term. Over the last two years we have laid strong foundations for a stronger economy.
I am fundamentally optimistic for the future. Because there are brilliant businesses, talented and hard-working people in every corner of this country who make this one of the best places to do business in the world.
Like the members of the Bristol Junior Chamber of Commerce I met with our brilliant Mayoral candidate Jon Rogers on Thursday, enthusing about the opportunities for young people to start their own businesses.
Like the small manufacturing company I visited in Cardiff South with Bablin Molik, our inspiring by-election candidate. A business that that has grown and is providing much needed jobs in the local area.
Like the massive chemicals plant I visited in Redcar with Ian Swales, growing with the help of a regional growth fund grant. These people are the growth makers, the job creators - our job is to help them.
Last year I announced the creation of the Growing Places Fund. £730m to help local areas fund local infrastructure to unlock new jobs. I can tell you today that the fund that Andrew Stunell and I established has already helped fund around 170 projects, supporting an estimated 178,000 jobs.
Conference, the economy has rightly been the central focus of this party conference.
Yesterday, we had an excellent debate on some of the further measures we would like to see to support growth. And Vince Cable gave a brilliant speech, setting out the work his department is doing to help clear up the mess that Labour left.
I daresay the congratulatory text message from Ed Miliband has been unavoidably delayed. Mr Miliband has come out with a new economic theory this month: 'Predistribution'
Apparently it means spending money you don't have, without knowing where that money is going to come from in the future. Conference, it's not a big new idea.
It's a bad old one. Labour spent 13 years trying it - and let the British people down spectacularly.
Labour don't like us talking about their record in office. But the country can never be allowed to forget their disastrous mistakes in banking, in regulation, in the public finances - falsely promising the British people that they could end boom and bust.
So I make no apology for reminding people that when it comes to the economy, Ed Balls and Ed Miliband have about as much credibility as Andrew Mitchell's etiquette coach.
The country won't let them forget their role in the economic crisis but it is also true that growth is much slower than we want. It will take us longer to deal with the deficit than we expected.
Here's why. The eurozone crisis. Higher than expected inflation. The weight of our broken banking system suffocating businesses with growth potential. All of these things have been tougher for Britain than was forecast when we started down this road.
In the short term, we are borrowing more as taxes and benefits respond automatically to help stabilise the economy. Critics should welcome that, not criticise it, because it shows that our plan is able to adjust as new pressures emerge. We have always been clear that flexibility is built in to our plan.
But every time an alternative is put forward, I ask myself a simple question. Will it strengthen the foundations of the better future economy that we are building?
Despite all of the difficulties and the challenges that lie ahead, in the last two years we have re-secured for this country a very precious commodity: credibility.
No one now doubts that Britain is a nation that can pay its way. As a result, the people from whom we borrowed £125 billion last year (more than the entire cost of the NHS by the way) were willing to lend us their money at some of the lowest interest rates we have ever paid.
Those low interest rates help keep wasteful spending on debt interest down. We have spent two years earning the confidence that secures those low rates. And we will not sacrifice it now.
Especially as we are able to use that credibility to create jobs, to help build homes, to get more money to business. Guaranteeing mortgages for first time buyers. Funding for lending to get more money to small firms. Guaranteeing funding to bring forward the major infrastructure projects our country needs and for housing associations to build more affordable homes.
Let me give you an example. One major project we are funding is London's Crossrail.
It is the biggest infrastructure project in Europe right now. But we need to ensure the rolling stock is delivered on time.
Right now, difficulties raising the necessary private funding in the market could delay their delivery. So I can announce to you today that the train contract for Crossrail will be the first project to qualify for a new government guarantee.
And it will be the first of many across Britain, I am sure. We have rebuilt the confidence in this nation's ability to pay its way in the world, we can now put that credibility to work for the British people.
There could not be a worse time to argue that we should abandon our plan. As we overwhelmingly agreed in our debate yesterday - we won't do it. It is the foundation for everything else. It is the foundation for jobs and prosperity in the future.
Last autumn, we were faced with a worsening forecast from the independent Office of Budget Responsibility. Rather than add more cuts now, we decided to take another two years to do the job.
That was the right, pragmatic response to things getting worse. Fellow Liberal Democrats, that decision has consequences too. It means we are now committed to further deficit reduction into the next Parliament.
Let me be absolutely clear: I will not sacrifice this party's independence by binding us to detailed spending plans deep into the next Parliament.
But there is one thing we must do. We have to set a detailed budget for government for the year 2015-16 because we will be in government for the first 5 weeks of it, at least.
That means setting out specific plans for the £16 billion of savings that are needed in that year. And it means setting out how we, as Liberal Democrats, would make the further tough choices needed beyond that.
Nick and I will negotiate hard to get this right, to make choices that are shaped by our Liberal values and driven by our Liberal Democrat priorities. We simply will not allow the books to be balanced in a way that hits the poorest hardest. At £220bn, welfare is one third of all public spending - and despite our painful reforms it is still rising.
We will have to look at it. But that cannot, must not, and will not be the only place we look. We insist that the difficult choices must be fairly shared: that those who can afford more must contribute more.
Which brings me back to where I started: fairer taxes, in tough times. We have done a great job cutting income taxes for working people. We have helped millions of people by stopping Labour's fuel duty increases. Helping struggling families and businesses deal with the burden of very high fuel costs.
And we have made a good start in raising taxes on the wealthiest. High earners get less tax relief on their pension contributions. You can't dodge stamp duty by putting your home in an offshore company.
Banks pay a special new tax - paying £10 billion over this Parliament. Capital Gains Tax is up - ending the scandal that a hedge fund manager could pay less tax than their cleaner.
At our conference 2 years ago, I announced an extra £900m to get tough on tax dodgers and told you that by the end of the Parliament it would deliver an additional £7bn a year in revenue.
Last year, I reported back that we were on track for an additional £2bn. And this year, I can announce we are on track to raise an additional £4bn. Fairer taxes in tough times, means everyone playing by the same rule book, and everyone paying their fair share.
To their credit, even most Conservatives now agree with that too. Last year we set up a new affluent unit within HMRC. I can report that it is already a success: it has raised £44m in less than a year.
And so I can announce that we will build on that success and expand its remit to the wealthiest 500,000 people in the country, those with net wealth over a million pounds.
The vast majority of taxpayers in this wealth bracket pay their fair share. We have this message to the small minority of wealthy people who don't play by the rules: we are coming to get you and you will pay your fair share.
But conference, tax dodging is not limited to our own shores.
So when I say we are coming to get you and you will pay your fair share, I mean those hiding their assets offshore too. Back in 2009, Labour made an agreement with Liechtenstein that set a time limited window that closes in 2016 for people to bring their UK tax affairs up to date.
They thought it would raise a billion pounds. Under this Government many more people are fessing up. So, we are doubling the size of the team focussed on Liechtenstein. With that extra effort we can recover much more from those who thought they could hide their money offshore. Up to three times more - £3bn.
That is good progress. We should all be proud of it. Getting tough on those who don't play by the rules. And as times get tougher, as belts get tighter, as austerity goes on for longer, it is morally necessary to do more.
In the summer, I shut down the scandalous situation where thousands of public sector workers were being paid in a way that potentially allowed them to pay too little tax.
Rules are now in place to stop that happening - based on the simple principle that if you're being paid public money, you should pay your taxes. But it cannot be right that similar rules don't apply to companies doing business with the government too.
There are thousands of large firms that receive taxpayers' money to deliver a service - they do a good job helping to deliver public services. But I have discovered that there is nothing that prevents the very small minority of firms that don't play by the rules from winning government contracts.
That is not right. That is not fair. And I am determined that it comes to an end.
If you want to work for us, you should play by our rules. Taxpayers' money should not be funding tax dodgers. So I have tasked HMRC and the Cabinet Office to come up with a workable solution to this problem and we will set out more details later this year.
And we need to get wealthy individuals to pay a fairer share too. In this country, we tax work, effort and income too highly, and unearned wealth far too little. Now you can move your money off shore but you can't move your mansion. That's why we want a Mansion Tax. It's simple, it's fair, it's unavoidable.
An extra levy on high value property would get more money from those who can afford it. It would ensure that the burden of the next round of deficit reduction is shared more fairly. We will continue to argue for it within government.
Now, some experiences in government have been quite strange. Nick may have hit the heady heights of 143 in the official charts. But strangest of all, some people seem to think it is impossible to be Chief Secretary to the Treasury and a Liberal Democrat at the same time.
Yes, I do have to work closely with George Osborne and Oliver Letwin. I do my best to make the Coalition work. And, actually, they do too. It is not impossible to be a Liberal Democrat in the Treasury. It is essential.
My liberal values are not left at the door on Whitehall. They are strengthened by being applied in practice, toughened by the experience of government.
And through my department we are delivering Liberal Democrat ideas:
Commenting, the mover of the motion, Liberal Democrat MP for Edinburgh West, Mike Crockart, said:
"Rehabilitation is vital to the reduction of repeat offending. By providing offenders with the skills and support needed to find real jobs once they have served their sentence, we are providing them with a way out of a life of crime and prison.
"Currently, the probation and rehabilitation services are dominated by a few large companies - they should be made subject to Freedom of Information request. At the same time, not enough is done to address illiteracy nor is there enough support for offenders with mental health problems.
"Liberal Democrats believe we need to do right by our communities by preventing repeat offending through a rigorous and tough approach to rehabilitation. As part of this, more effort should be made by the Government to open up the process to small firms which are closely linked to their communities and will create jobs in their area.
"More should be done in prisons to address literacy and life skills in preparation for the end of an offender's sentence. Prisons should be held to account for their failure to prevent re-offending through introducing a model of payment-by-result. Only when prisons are able to play their part in preventing re-offending can they be said to work."
Friends, it's good to be here. In an ever-changing world, it's reassuring to know that Brighton conference remains the same. Fabulous weather, delegates compliant with the leadership line - and a conference slogan about building a fairer country.
Of course, the third of these is no joke. A belief in fairness - a society where those in need get help and everyone has the chance to get on - that is the core value of our party.
Liberal Democrats campaign to put that value at the heart of political debate. And in government, we work every day to ensure that it's at the heart of what we do. Now those of us who live in Scotland are well aware that not everyone north of the border wants to acknowledge what we are achieving.
There is opposition - quite a bit of it actually. But my response to them is this: we will stand up for our values and stand by our achievements.
Welfare reform is a good example. We want a welfare system that protects the vulnerable, supports people into work and makes work pay. A system that's fair to those who need it and fair for those who pay for it .
Not the deep and arbitrary cuts that some would favour but we will never support. And in so many other areas, we will show what Liberal Democrats are doing for Scotland in this government.
Supporting the young unemployed with a Youth Contract that guarantees support to young Scots who are out of work and down on their luck. Supporting older people with our triple lock pensions policy: the largest cash increase in the history of the state pension.
And supporting hard-working people through a fairer tax system. Raising the point at which people start to pay tax, year on year. And cutting income tax for low and middle income earners. With 160,000 low paid Scots coming out of income tax altogether and well over two million paying less than they were when we came to office. By April of next year, a total of £1.2 billion less tax taken from low and middle-income Scots.
So, when we go to the polls in 2015, we won't head into battle armed only with words. We have an armoury of evidence and a record of delivery. We have shown that even in the toughest of times, and against all the odds, Liberal Democrats have done for Scotland what Labour did not and the Conservatives would not.
We have shaped a fairer country. A fairness dividend, delivered by Liberal Democrats, for all of Scotland and the UK.
And in making these changes we will also strengthen Scotland within the UK.
One of my duties as Secretary of State is to safeguard the devolution settlement. That sounds a little grand, but it's a responsibility I take seriously. As a Liberal Democrat I believe in that devolution settlement. Scots making decisions closer to those they affect while remaining secure within a strong and stable UK. It means the best of both worlds for Scotland.
That's why, earlier this year, we passed the Scotland Act: the largest transfer of financial powers from London to Edinburgh since the creation of the UK.
It's why Liberal Democrats want to go further still - with the Home Rule Commission, chaired by Ming Campbell, examining what further powers might be devolved.
There are those in the Scottish National Party who see devolution as a stepping stone to independence. But they are wrong: devolution is about strengthening Scotland within the UK - independence is about taking Scotland out of it.
So I - we - stand up for devolution, and against independence.
And when referendum day comes, Liberal Democrats will be at the forefront of the campaign to keep our UK family together. We will work with others who share our view and we will make clear the benefits of the United Kingdom.
Not just for Scotland but for everyone in the UK family. Whether we look at the size and scale of the UK economy or our place in the international community or our defence capacity and the jobs that come with it.
On these, and so much more, our family of nations is stronger together and we will make the case for keeping it together.
There's an appetite for that. Poll after poll shows that Scots want to stay in the UK family. For reasons of the head, like the strength of our economy, but for reasons of the heart too - valid, emotional reasons.
For some, that's because they think of their own family - like mine - living across the whole of the UK. For others, it's because they trust in the quality and value of UK institutions like the BBC. And for others still it's about the shared cultural experience of being together in the United Kingdom.
This summer, the Olympic Games brought to the surface a clear pride in Team GB's achievements. Not a contrived or political feeling but a spontaneous and natural one. Those feelings are more than a match for nationalism.
Of course, the issue of independence cannot be resolved until a referendum agreement is reached between Scotland's two governments.
I have said from the outset that any referendum must be legal, fair and decisive. That it should be made in Scotland for the people of Scotland.
But a referendum run from the Scottish Parliament, fulfilling the SNP's election pledge, can only happen if we can reach agreement on devolving the power.
Yesterday I met with the Deputy First Minister for a third round of negotiations and I am more confident than ever that we can reach that agreement. I believe that there is good will on both sides.
We've discussed all the substantive issues, so we're moving on to the crucial detail. And we have now asked officials and lawyers to put pen to paper so that we can both see in print what a package might look like.
We'll talk again.
But we would not be talking at all if we did not believe that an agreement could be reached. That we can find a way to put this crucial question to the Scottish people.
Should we stay in the UK family, or should we leave forever?
Conference, as Liberal Democrats it is not in our nature to be nationalists. We believe in a fair society where what unites us is so much stronger than what divides us. Where the nations of our country come together and invest, in good times and bad, in our common goals and interests.
So let's sort out the process, and move on to the argument. Let's get this referendum started.
And let's show the people of this country that Liberal Democrats, in government, stand for a fairer Scotland in a stronger United Kingdom.
