Long applause for Mr Kennedy

Mr Kennedy received long applause when he said devolution in Scotland and Wales had shown that where Liberal Democrats are in power they make a difference.

He praised Scottish Liberal Democrats for implementing land reform, the abolition of tuition fees and free personal care for the elderly.

And he went on to praise the chancellor for putting more funding into the NHS in this week's Budget.

"It's just a pity Tony Blair and Gordon Brown, at the time of general election, did not have the courage of our convictions to put that case honestly to the electorate," Mr Kennedy said.

"Courage"

He said that the chancellor and the Prime Minister had a heavy responsibility to bear for fuelling public cynicism about politicians.

Mr Kennedy said: "No wonder people are cynical, when they produce a budget before the last general election in which they cut tax for next year by �3bn - and their first budget after the general election is the one where they increase tax.

"Can you blame the voters for feeling cynical?"

He told delegates that the Liberal Democrats were showing that they could make a difference in politics.

Can you blame the voters for feeling cynical?

Charles Kennedy

He said that the Chancellor's Budget for health had done nothing to address the problem of bed-blocking related to the closure or running-down of residential care homes for the elderly.

And he praised the Labour/Lib Dem Scottish Executive coalition for grasping the issue of free long-term care for the elderly.

He said that Mr Brown must be made to provide the same solution for England.

Conference delegates were told of a "rising curve of expectation and hope" which could lead to Liberal Democrat gains in the next Holyrood election.

"And therefore more influence and more power in the next Executive", Mr Kennedy said.

On foreign policy Mr Kennedy called on Israel and the Palestinians to draw back from the abyss and warned the United States against attacks on Iraq.

He also called on Britain to set a clear timetable for a referendum on entry to the Euro.