Can I begin by thanking you for the support and unity you have shown since I became leader.

As we approach Remembrance Sunday let me start by paying tribute to all our troops serving in Afghanistan including those from Scotland.

We owe them and thier families an enormous debt of gratitude for their bravery and commitment.

Let me say how good it is to be working alongside Iain Gray.

Iain has led this party in Scotland with a sense of values and purpose.

He has helped rebuild Labour in Scotland and helped the party regain the trust of the public.

I look forward to working with him and you to make sure he is the next First Minister of Scotland.

And I want to thank yo u all for the tremendous result you achieved in Scotland at the General Election.

Let us pay tribute to the great Scottish wins of 2010.

We won seats where the media had written us off.

Like Edinburgh South – and let us pay tribute to Ian Murray MP for his victory.

We won seats back from the SNP and Liberal Democrats.

Glasgow East – and let us applaud the absolute determination and relentless campaigning of Margaret Curran MP.

And Dunfermline and West Fife – let us congratulate Thomas Docherty MP for taking that seat back.

We increased our majority in once marginal seats.

Like East Renfrewshire which has gone from being the safest Tory seat in Scotland to a seat where Labour wins half the vote because of our brilliant former Scottish Secretary, now the Shadow Defence Secretary Jim Murphy.

And let me also say that I will be supporting the Scottish election campaign with Jim’s excellent successor – a woman with grit and determination, Ann McKechin.

In fact, we have a record number of women in the Shadow Cabinet.

And I can tell this Conference I won’t rest until we have true gender equality in our party.

And let me pay tribute to the best fighter for gender equality and equality in every sense that our party has – our fantastic deputy leader Harriet Harman.

Let me also thank our formidable Scottish General Secretary, Colin Smyth and his team for the work they do and the dedication they show.

And I want to acknowledge the excellent work of our councillors all across this country.

We must make sure that as well as winning the Scottish elections in 2011, we also win back control of councils across Scotland in 2012.

Coming back to Scotland reminds me of the many occasions I have come here with the person I worked with for a number of years – Gordon Brown.

He taught me many things about Scotland and about politics.

It was my privil ege to work with him to help win those first Scottish Parliament elections.

He has an incredible legacy: he improved the lives of millions of people here and around the world.

I am proud to call him my friend. We should pay tribute today to Gordon Brown for his leadership of our party and our country.

I remember visiting Gordon at his home in Fife and looking over the River Forth where my father served in the Royal Navy during the war.

Along with my mum, he came as a refugee from the Nazis and built a life here.

It was his values – it is my mum’s values – that explain why I am standing on this stage today.

They taught me some basic principles: most of all, a sense of optimism that politics, that people can change our society and be a force for good.

Fundamentally this is an optimism about people acting together, and their ability to change the society in which we live.

The belief that injustice, unfairness, inequality are not immovable facts.

Our world can be what we make of it not simply what we inherit.

That is what I was taught as I grew up.

That is my family’s experience; that is their story.

That too is our story as a labour movement.

It is a story that echoes down the ages.

Keir Hardie believed that getting representation for workers in Parliament could make a difference to the lives of working people.

And it did.

Clement Attlee in the economic ruins of the Second World War had the optimism to believe that we could build a National Health Service.

And he did.

And this month, we mark the 10th anniversary of the death of someone who fought long and hard for a Scottish Parliament, for a voice for the people of Scotland within the United Kingdom, and had the vision to believe it was possible.

And it was.

The man to whom the Scottish Parliament is a living memorial – Donald Dewar.

What ties together all of these struggles is a belief in human progress: that the forces of optimism can defeat the forces of pessimism that would say things cannot change.

What is the nature of this optimism?

It is about acting together so that we can change the world.

But it is about more than that.

It is about a view of human nature which says that we do care about ourselves and our families, but we also recognise that the interests of each of us is served by the flourishing of all of us.

And that politics at its best can unlock new possibilities for our world.

And what about those forces of pessimism?

They tell us that a belief that our world can change is a flight of fancy: unfairness, inequality are facts of life.

That people are best left on their own, and that government is normally the problem not the solution.

And the best thing politics can do, they say is get out of the way.

I’m afraid that is today’s Conservative Pa rty. That is David Cameron.

The fundamental difference between the optimists and the pessimists is that they believe that the greatness of a country lies merely in individual acts.

Whereas we understand that greatness lies in what we achieve as individuals and what we achieve together.

Each generation is called to this fight.

And so as we think about how we rebuild as a party after what was a bad general election defeat, let us be true to who we are.

What is the character of the party I intend to lead?

Let it be true to our values of fairness, prosperity, aspiration and justice – the values that brought me into this party – and you.

As Donald Dewar said of John Smith: “He knew politics was the art of the possible, but on the great principles he would not give ground.”

Let us understand the reasons we lost power across the United Kingdom and show humility: because we lost touch and because people lost a sense of what we st ood for and whose side we were on.

Let us always remember that we had great leaders who held power but too many great leaders who never did: there is no role for this party as one of protest; we must be a party of government again.

Let us ensure that the new generation embraces and responds to the new issues that people face in their lives: from aging to immigration to climate change.

And let us be a movement not a fan club: debating issues, reaching out to the community beyond our own party, linked to the trade unions and all of civil society and above all, a party that people want to join because of our ideals.

In this way, let us fight for optimism in our time.

This task starts with our economy and the financial crisis and the lessons we draw from it.

The pessimists want to tell you that the problem of the financial crisis was government.

That somehow a crisis that began with financial markets out of control should be seen as a cris is of government’s making.

That is why they have spent the last five months telling you that all the problems we now face are Labour’s fault.

Conference, we must stand up for the truth.

We know the story and we must tell it like it is.

There was a global financial crisis affecting every country and every country is having to cope with the consequences.

Remember, our government paid down the debt before the crisis hit.

At the same time we were investing in the schools, the hospitals, the infrastructure which had suffered chronic under-investment under the previous Conservative government.

I remember it – I went to school in the 1980s.

Conference, we didn’t just fix the roof, we built the schools.

And we didn’t just cut the waiting lists, we built the hospitals.

And we didn’t just do it when the sun was shining either, we did it all year round.

My partner is due to have our second child… any mi nute now actually.

She will do so in a brand new NHS hospital.

It was us, the optimists, that won the argument for the investment in that hospital and made it possible.

Conference, we should all be proud of this record and we should stand up for it – because it made Britain stronger and fairer.

But why did the deficit go up so much?

Not because of this investment.

But because we lost 6% of our economy due to the global financial crisis.

Because Alistair and Gordon used the power of government to stop recession becoming depression and stopped people losing their jobs, homes and savings.

That’s why the deficit rose and we should fight back against the Tory deceit.

The pessimists are trying to rewrite history.

Why? Because they don’t believe in the role of government.

They’re hoping that if they win the argument about the past, they can win the argument about the future.

What is our responsibili ty as the optimists?

To learn the right lessons of history.

That markets unchecked and unfettered in finance can spiral out of control and must instead be regulated.

That we can’t have an economy based on one type of industry. We need to lead in all of the industries of tomorrow – from bio-tech to creative industries to green manufacturing.

And we must learn the lesson that a more unequal economy is a more unstable economy.

If we don’t properly reward lower and middle-income families, they will rely on ever-increasing personal debt.

And if those at the top feel there are one-way bets worth millions, tens of millions, hundreds of millions of pounds, they will gamble without responsibility.

We should never let that happen again and have ordinary families paying the price.

The flaw in their plan is this, if we reduce our economic policy simply to deficit reduction, we will not build the strong economy of the future.

Of course we need to reduce the deficit.

Everybody in this room agrees about that and we would have halved it over four years if we had been in government.

We would have made some tough decisions and no doubt some unpopular ones too.

But I have to tell you this: I believe they’ve got it wrong in the pace and scale of deficit reduction.

They’ve got it wrong because they have no plan for jobs and growth.

And they have no plan for fairness either.

Their cuts will mean half a million jobs lost in the public sector over the coming years.

A similar number in the private sector.

One million jobs lost—that’s their plan.

And how will they replace them? By hoping that things turn out OK and that the private sector fills the gap.

The Tories say we want recession or indeed that we are predicting it.

We’re not and it’s nonsense for them to pretend we are.

But there’s no plan to make growth happen and n o plan if things go wrong.

And what do they offer those people who have lost their jobs?

They say wait and see, fingers crossed.

We remember Conference the effects of unemployment which scarred communities for generations here in Scotland and all over the UK.

We have a fundamentally different view about what our economy can achieve for people and how to make it so.

We need to reform our financial system.

We need to invest in the industries of the future. We need to use the power of govt procurement to promote British businesses and we need to provide people with the skills they need.

And we say unemployment is never a price worth paying.

We say never again.

And we have a different view about society as well.

The Tories used to say that there’s no such thing as society

Now they claim they’ve wised up… now they offer something you may have heard of… the big society.

They praise the special cons table, the parent/teacher council, the tenants association, the local charity.

They say they want more of it.

But Conference, what does it really amount to?

They think if government gets out of the way, the big society will miraculously spring up.

They fail to learn the lessons of history.

Today we have more voluntary organisations than ever before in Britain; more people working in the sector than ever before; and the sector’s income is double what it was when we came to office.

Not because government got out of the way but because it supported and encouraged this important part of civil society.

I saw as minister for charities the amazing work that is being done by the voluntary sector but it was based on a vital partnership between the state and citizens.

And what happens now when budgets are being so savagely cut?

When the local day centre closes, it destroys the services on which elderly people depend.

When the local library reduces its hours, it destroys the place at which people come together.

And when people are worried sick about losing the roof over their head and moving their children to another school, how they can be active in the parent/teacher council?

And do you know what has been revealed about this government since the Spending review last week:

It’s not just economically wrong,

It’s not just unfair,

It is grossly incompetent.

And we all know it is families and children who will pay the price.

They announced a child benefit policy which is unfair and now apparently unworkable.

It’s a complete shambles.

Next came a Housing Benefit policy that their own Mayor of London detests.

Why is it fair for someone who has been doing the right thing… who’s been looking for work for a year… to lose 10% of the help with their rent?

Don’t they get it? If you drive up homelessness, families end up in bed and breakfasts, and that costs more.

Why are they showing this incompetence?

Because of ideology – they came into politics to make these cuts;

Because they’re out of touch – they don’t understand the lives and experiences of ordinary people;

And because they’ve made bad decisions in haste and stubbornly refuse to change.

A week from Tuesday we will force a vote in the House of Commons on Housing Benefit.

Our appeal is to all MPs of conscience:

Join us, vote against these unfair and unworkable changes and force the government to think again.

And there will be no better person to lead our attack than my friend of nearly 20 years, someone who really did come into politics to help the poorest in society, our Shadow Work and Pensions Secretary Douglas Alexander.

The big society is one big figleaf for an old pessimistic idea: that people do better on their own.

The optimists have a different view of socie ty and the state.

We know – and this is a hard lesson – that government can be overbearing. We know the importance, particularly in the years ahead, of getting more for the money the state spends.

But we also know that the right and the best kind of government can support people to take control of their own lives.

When I visited the Wellhouse project in Easterhouse with Margaret Curran, I saw the difference that it was making to people: improving the health of young and old people, helping tenants have a real say in housing decisions and a fantastic community centre.

We understand that the good children’s centre enables families to go out to work and form bonds with others.

Good neighbourhood policing provides the reassurance and the security that is the foundation for communities to thrive.

And many of the best voluntary organisations have a mix of paid staff and volunteers.

Ours is a view about the good society where we support each other.

Let me tell you also what we understand: the good society depends on the fair economy.

If you are holding down two jobs, working fourteen hour days, worrying about childcare, anxious about elderly relatives, how can you find the time for anything else?

That’s why we need an economy which lifts people out of poverty and supports not just a minimum wage but a decent living wage.

Until we address the conditions that mean that people’s lives are dominated by long hours, then the big society will always remain a fiction.

And I tell you this also: we know the divided society cannot be the good society.

We know that from the 1980s: the last big experiment in the retreat of government.

We know that every major city across the country lost out: economically weakened, socially divided and here in Scotland it took almost twenty years to fully recover.

Two decades on, we know that economic regeneration and social improvem ent have happened together.

And we know the dangers of going backwards.

Mr Cameron by your deeds not your words shall we know you.

There’s no point in saying you believe in the big society, if by your actions you undermine and weaken the very fabric of our communities.

But let us be the party who always stand for giving our citizens greater control over their own lives

And what greater example is there of us giving people more control than devolution.

The Scottish Parliament is one of our proudest achievements.

When Scottish Labour led the government, it pioneered historic firsts:

Free bus travel for the elderly;

Land reform;

The smoking ban.

And again at these elections ahead of us in May, as Iain will set out tomorrow, it will be Scottish Labour leading the way.

Let me say something about Iain’s leadership.

He learnt the lessons of why we lost power in Scotland.

He’s shown h ow to reconnect with people’s lives and hopes.

He has shown that values must drive everything we do.

That is why his campaigns on school standards, safer streets and apprenticeships speak to who we are and who we represent.

And what is the alternative?

If there is one lesson that the economic crisis teaches us, it is that we are stronger together and weaker apart.

The collective resources of Britain, the tens of billions of pounds that we invested to protect people’s savings and homes was only possible because we are one United Kingdom.

Where would each of us have been on our own? Scotland, Wales, England, Northern Ireland.

Let’s face it: across the world, the debate has changed since the financial crisis.

And who is left behind? The Scottish National Party.

As problems become more global, the solutions need to be global too.

As the climate change secretary, I saw the impact that Britain could have when we worked together.

We may be 2% of global emissions but we punch above our weight.

Does anyone really think any one of us would have more influence on the climate change debate if we went our separate ways?

Narrow nationalism has nothing to offer the challenges of the 21st century.

While we’re fighting for jobs and hope, they are fighting to break up Britain.

They claim that an independence referendum is a referendum on jobs.

Let us make next May’s election a referendum on the job they have done for the people of Scotland.

Never has a party promised so much and delivered so little…

Like their broken promises on class sizes, student debt and support for first time buyers.

They have let down the people of Scotland. And Scotland deserves better.

And what about the Lib Dems?

What did they used to say?

The progressive alternative to Labour.

It has taken Nick Clegg and Danny Alexander just five short months to undermine 150 years of the Liberal tradition.

Remember what they said: Vote for us to keep the Tories out.

Have they no shame?

Now they have become the cheerleaders for the worst things the Tory government does.

The VAT rise? Send out a Lib Dem.

Child benefit cut? Put up a Lib Dem.

Housing benefit slashed? Get me a Lib Dem.

No wonder Nick Clegg is choosing his desert island discs.

And let’s make sure that coming soon to an election near you is a new hit series:

I’m a Liberal Democrat, get me out of here.

And as they face the prospect of electoral meltdown, what do they do?

They try to rig our electoral boundaries.

Get this, the government that claims to care about localism is now saying local identity doesn’t matter when it comes to boundaries – unless you happen to be Charles Kennedy whose constituency gets a special opt-out.

We all care about endangered species in the Highlands and Islands, but we draw the line at Lib Dems.

Talking about endangered species, what about the Scottish Tories. What about them?

So we are the optimists, we are the only credible alternative to the pessimists who would damage our economy and divide our society.

But this election won’t be won simply by Iain, myself and other MP and MSP colleagues.

Everything we know from our history tells us that it is people that change the world.

This will be a doorstep election, won or lost by us.

It is the hard graft, the dedication, the hours we put in that will decide this election.

It is our chance to show we are back on people’s side – optimists with the right values to change our country.

This election is critical to the people of Scotland.

Four more years of broken SNP promises or a new start under Iain Gray.

And it is a vital moment in Labour’s rebuilding across the United Kingdom.

Britain cannot afford this to be anything other than a one-term coalition.

So let the message go out.

We are ready to take our case to the people of Scotland.

We are ready to take on the pessimists.

There is an alternative.

Based on our values – an optimistic future for Scotland.

Labour’s fight back has begun.

We are ready for the fight.

Let’s fight for the people we came into politics to serve

Let’s stand up for Scotland.

Let’s fight to win.

Thank you.