Today, above the clamour of recent events, I want to talk to you about the long-term decisions and the long term changes we are making.

Long term decisions to prepare our country for the future.

Long term decisions to make sure Britain leads, best equipped for the challenges ahead.

Long term decisions to ensure that because we unlock all the talents of all the British people, there is security and prosperity not just for some but for everyone.

And in the last months and in the next months, we are committed to making long term decisions.

To build three million houses so that there are affordable homes for the many.

To construct a 21st century health service, so that health care is not just universal as in the past, but in future personal to peoples’ needs.

By leading the world with the first climate change bill, with legally binding cuts in carbon emissions, leading the world in the creation of a sustainable environment.

To cut crime and anti social behaviour, introducing neighbourhood policing teams answerable to the people in every community of Britain.

And to ensure managed migration where we attract the skills we need, but insist on responsibilities discharged by those who come to our country.

To make the long term changes in transport, energy, planning and our airports.

To support world-leading industries so that we create not just jobs, but new skilled well paying jobs millions will need.

And to ensure that every young person in Britain has an apprenticeship, a college or university place or is training for one.

Preparing for the long term future means that our constitution must change too: bringing government closer to the people.

That’s why Jack Straw will publish our proposals for citizenship with a bill of rights and responsibilities.

That’s why also Hazel Blears is building a new concordat between local and central government to empower local people in their own communities

And one area where reform can modernise our public realm is in encouraging greater participation in our democracy – and, as we said we would do in the Queen’s speech, reform party finance and expenditure.

Jack Straw has been examining detailed proposals.

And the latest problems in party funding show why it is right not to delay, and it is now time to act.

This past week brought the disclosure that some contributions to the Labour Party had been made in violation of reporting requirements.

I am saddened to learn that this has been happening for some time.

And I am angry when standards fall below what we and the general public want to see and should expect.

Where there is deliberate abuse, it corrodes confidence in the very idea of public service.

I believe we were right to act swiftly and to set up an inquiry.

And I am determined we will get the facts on the table, without fear or favour.

And we will co-operate fully with the electoral commission and the official investigation.

In the light of the events of the last week, coming on top of the difficulties all parties have experienced in recent years, we have learned just how easily trust in our politics can be eroded and how important it is that the highest standards are maintained.

The last week has shown the need for immediate change in our party.

But I would also argue it has shown the need for broader change within our system of political funding.

Disclosure of information is important because the public have a right to know.

Openness is indeed the best guide, transparency the best system, sunlight the best solution

But I am now more convinced than ever that more comprehensive safeguards for public disclosure are themselves, only the first step to building higher standards of public confidence in our politics.

Last year the Labour Party faced accusations about loans.

The Liberal Democrats have been questioned over a large donation from someone subsequently convicted of a serious offence.

And the last Conservative Government faced accusations about cash for questions, secret donations, and contributions from foreign millionaires.

John Major, with all-party support, established the committee on standards in public life.

Tony Blair established the Electoral Commission.

Now seven years on it is time to go further.

The 2000 reform act (Political Parties, Elections and Referendums Act), took important steps forward:

• banning foreign donors
• setting up the electoral commission and the appointments committee
• requiring all donations above £5,000 nationally and £1,000 locally to be made public.

Now notwithstanding these efforts of recent years we must now

- complete the work of change
- address the problems that still remain to be resolved
- not hesitate to make the changes necessary
- and seek to build greater confidence in the integrity of our political system

Overall limits

In his report on the 2000 Act, Sir Hayden Phillips concluded that the Act had “sought to control the level of spending, but it has proved inadequate to the challenge.”

He rightly diagnosed a serious problem---

the escalating ‘arms race’ between the parties in electoral spending.

None of us in any party should want a politics increasingly defined as a chase for money instead of a contest of ideas.

In the twelve months before the 2005 polling day, spending rose to £90 million, a 40% increase from 2001.

Even when there are spending limits at election time, they can be unfairly overwhelmed by vast sums of money directed to targeted constituencies in between elections.

So Hayden Phillips’ final report of this autumn advanced proposals for major change.

He recommends spending limits at both the local and national levels.

And these would be limits enforced not just at election times but throughout the Parliament

Individual caps

Many of us for many years have been troubled by the decline in the membership of all parties in Britain and elsewhere.

And as the fundraising base of all parties has been diminished, and yet our democracy requires to be financed, the effect has been to rely more heavily on a small number of individuals.

What’s more, with the spiralling costs of campaigns and the demands on cash, parties requiring finance, without which they cannot play their part in our democracy, have had to seek ever-larger sums from individuals who in almost every case act out of a strong sense of duty.

But while in the past in Britain we have prided ourselves in access to politics not dictated by private wealth as in some other countries, for the future we need also to ensure politics is not perceived as serving the interests of the few, when it should serve the interests of the many.

And that is why the final version of the Hayden Phillips report has proposed ways in which there can be not just a ceiling on overall local and national spending but a cap on individual donations

Agencies

In the 2000 legislation there is also scope for third parties to offer donations under agreed conditions.

But while the complexity of the rules has caused genuine difficulties and led to mistakes, it has also allowed scope for abuse.

So we must examine whether it is appropriate for third party organisations where there have not been full declarations to have as wide latitude as has been the case to date.

Levy payments

Questions have been raised about updating the legislation of the 1980s in respect of political funds.

All reports show that this system has been free of abuse.

And following his detailed consultations, the second Hayden Phillips report proposes specific changes.

In addition to what he says on donations, he proposes clearer information on the membership form including the choice currently available to join, or not to join the political fund.

He proposes annual reports to members, and he proposes a clear one-for-one link between the number of political levy payers and the numbers affiliated to the Labour Party – all measures important to modernising the relationship.

Way forward

Because I believe it is now time to move forward, I believe our party should now discuss and agree reform and how best to make change work.

Since the 1970s the provision of ‘Short Money’ and ‘Cranborne Money’ has provided public funds to the main opposition parties. So the principle of public funding of our democracy is already being implemented.

And all political parties have had the opportunity of free television and radio time, along with free postage.

The Short funding has increased more than fourfold since 1997. This year, the total amount of short money was £6.6m, with over £4.5m being paid to the Conservative Party.

While I myself need to be convinced that there would be public acceptance of extensions, I recognise that this will be a source of continuing consultation.

Action

So the Hayden Philips proposals this autumn represent a comprehensive framework for reform.

Indeed, at various times all political parties have welcomed the framework.

I am in no doubt that it is time to move forward.

Having, in the Queen’s Speech promised proposals on party finance and expenditure, we should progress to the next stage on the basis of this framework of reform.

Jack Straw will now consult on the way forward.

It would be best for the standing of politics as a whole, that all can come to an agreement across party lines on the changes that are necessary.

We would all prefer all-party consensus, but we will not accept one party deadlock— a breakdown that serves only to block progress.

While the task will not be easy and take time, the need is immediate. And the determination to agree and to put in place the necessary changes is real.

And by achieving agreement on higher standards I hope that we can work to build greater confidence in politics and a public realm that should be the common ground, where we come together to debate discuss and decide our shared future.

Political funding reform is part of those wider reforms needed to regenerate the public realm and encourage a wider engagement in politics –and to ensure there are more people involving themselves in politics

Challenges ahead

And let me explain why it is so important that we encourage more people to involve themselves in shaping the future of our country.

In the last few weeks we have announced the most radical extension in the scope and scale of education for forty years.

And while I will talk later about housing, about the NHS, about child care, about youth facilities, about conditions at work and about the environment and our quality of life, I want to outline the far reaching and fundamental changes that this year we will introduce, so that Britain can lead with world class schools and education.

Our changes are:

To raise the education leaving age from 16 to 18, the first legislation to raise the education leaving age since 1944.

And in doing so, to push ahead with our plans to give every child more hours in nursery education.

To treble the number of Sure Start children centres - five or six in the typical constituency, offering from first days to 4 early learning and support.

And then, the extension of new educational opportunities.

To ensure that every qualified young person has the right to an apprenticeship.

To reform tuition fees for students so that instead of just a few with grants, two thirds of students have grants.

To extend educational maintenance allowances so that no one is prevented form staying in education to 18 or unable to go to university through lack of finance.

And to introduce a new diploma whose excellence is acknowledged by universities and businesses.

And to address the needs of thousands of young people today not in education employment and training, who instead of falling through the net are now to receive special help.

And with the spending round announcements of more money for education, more investment per pupil has risen from the 2500 per year we inherited to 5,500 and will move closer to the 8,000 figure for private schools.

So that we give the best chances, not just to some, but 100 per cent of our young people.

The individual measures for new chances, new money and new places are important, but much more important is our underlying purpose of: to achieve what most of us joined the Labour Party to achieve: to help all young people realise their potential to the full.

To be the first generation to unlock not just some of the talents of some of our young people, but to unlock all of the talents of all our young people.

Ten years ago people said the apprenticeship was dying - today there are 250,000 apprentices.

Within a decade there will be 500,000 more than at any time.

A few years ago people said the student grant was going to die. With two thirds of students about to receive grants, there will be more students with grants than at any time in our history.

And instead of education from 5 to 16, the pattern for the last forty years, soon education which starts with nursery school at 3, will continue part time or full time to 18 - not 11 years of education as under the Tories, but a guaranteed 15 years with new Labour.

And what's more: for the first time we are giving ---free of charge --every adult the right to a second chance in education.

So that hundreds of thousands of adults can get the qualifications they need for the jobs of the future.

And to make these huge improvements in opportunity possible, our reforms are increasing specialist trust and academy schools.

Giving schools new powers of discipline, reforming further education with more business input, introducing personalised learning in the classroom. And with our council for educational excellence, bringing in from business and the whole education sector, anyone who can help us single-mindedly focus on our objectives.

And we are building extended schools open after hours, about to offer up to five hours a week for sport, and in communities round the country we have also made a new commitment to young people.

To use the unused resources of orphan pension funds to build youth centres so that young people who rightly complain they have nowhere to go, have the facilities they have been denied for too long.

And there is a fundamental principle at stake that goes to the heart of our beliefs

That every child matters

That no child be left out or lose out

That nothing but the best is essential to ensure that every young person has the best start in life

And that we want every child in every part of our country to have the chances that only some have had in the past.

And if the country wants an illustration of the new political landscape in British politics today, it is that while Labour supports for all, the Tories are revealed as supporting opportunity for just some.

So out of touch are they with the needs of thousands of families, that you never hear them talking passionately about the benefits of apprenticeships, or even university places, or about the opportunity of diplomas, or about more opportunities for young people staying on at school. Or about the chances that some have been fortunate to obtain being made available to everyone.

In the last few weeks alone they have attacked the new diploma designed to end the two tier system in education, they say ‘for undermining academic excellence’.

They have refused to commit to educational maintenance allowances for lower income teenagers who need them to stay on at school.

They have refused to match us in supporting 50 per cent of young people going to university.

And let us remember where their u -turns on grammar schools led them: for new grammar schools one day, against new grammar schools, and then for new grammar schools again, the old policy.

At one point they said they were for ‘a Clause Four moment’: within a day or two they were for no change from the status quo.

And they have refused to support raising the education leaving age to 18 saying it is ’a stunt’.

So it is opportunity for all to18 with the Labour Government, opportunity for only some with the Conservatives.

More young people going to university with our Labour Government, fewer going on to university under the Conservatives.

More help with educational maintenance allowances with the Labour Government, less help for young people under the Conservatives.

More status for diplomas with Labour, a two tier education system with the Conservatives.

And while the Conservatives like to think they are the party of excellence for the few - but we stand for excellence for all.

And this offer of opportunity with Labour, the denial of opportunity with the Conservatives, goes to the very heart of the competing visions of the kind of Britain we want to be.

Because we want every child and every young person to have the chance of a college or university place, or an apprenticeship or be training to do so.

And it’s more than not just about competing visions of opportunity.

Our whole economic prosperity depends upon which competing vision of the future will win in the next few years.

One choice for Britain -the choice we reject- is a low skilled, low pay economy competing in a race to the bottom with China, India and Asia.

But if our choice - a high wage, high skills economy – is to succeed, then Britain, a small country, cannot afford to waste the talents of anyone.

Today you cannot be first in business unless you aspire to be first in education.

So our decisions on education have the most profound of consequences for our economic future.

The Tories will invest not in all, but in some, leaving many without the opportunities they need.

And Britain will end up competing for low paid low skilled jobs with countries whose wages are one twentieth of ours.

But if we invest in ensuring education and training for all is available, then we can be one of the high skilled high paid economies of the future

The two tier Tory policies - doing the best by some but not all - will mean prosperity for some but not for all.

Our one nation policy, the best educational opportunities for all, can bring prosperity for all.

And this one nation Labour Government will not only set out those different competing visions that separate us from the Conservatives: we will rally the country to our cause.

We will urge young people to stay on at school

We will persuade more young people to sign up for apprenticeships

We will challenge young people to make the most of their potential

We will call on adults to seize the second chance of more qualifications

We will evangelise about the benefits of education for opportunity and prosperity

And we will work to make Britain the education nation of the future, the best chances for all with Labour: the best chances just for some with the Conservatives.

This to me, is the purpose of government and of public service – not to put a floor below which no one can fall, but to create a society where there is no ceiling on how high you can rise;

Not the old welfare state that just takes responsibility for you when you are in need, but also an empowering state where you take responsibility for yourself, for your community, for a wider world and for the next generation.

And when the headlines of the moment fade and the dust settles on the individual controversies, this is where I will stand: for the changes that will make Britain a more prosperous economy for all, a fairer society to all, and a stronger community for all.

A Britain where we at long last sweep away the old barriers that stand in people’s way;

A Britain of community where compassion is not a slogan but a commitment;

A Britain where all have the chance to go as far as your talents can take you;

A Britain where government is on your side;

Not a two tier Britain divided and unequal, but one Britain, where all British people can learn, earn and advance and fulfil their potential to the future.