Fervent Mandelson wows Labour faithful

Lord Mandelson, once reviled across wide sections of the Labour Party, sealed his remarkable return to Government with an impassioned speech yesterday urging Labour activists not to give up on an election victory.

The Business Secretary received a rapturous reception and announced a £100m boost for the motor industry by extending the cash-for-bangers scheme. He told his party to cheers: "If I can come back, then we can come back."

He said prolonging the car scrappage scheme would support the "fragile " recovery of the motor industry. It offers motorists £2,000 off the price of a new car when they trade in a vehicle which is more than 10 years old. The cost of the discount is split between the Government and car industry.

Nearly 230,000 cars have been sold under the scheme since the Chancellor, Alistair Darling, allocated £300m to it in this year's Budget. Lord Mandelson said such schemes were part of the Government's "clear plan for growth" out of recession.

Warning against defeatism and pessimism resulting from Labour's opinion poll ratings, he said he had always known "deep down" who was going to win previous elections he had fought.

"This time it is not cut-and-dried. This election is up for grabs. So, yes, we may be the underdogs. But if we show the British people we have not lost the fighting spirit and appetite for change ... then we can, and will, win."

He urged activists to fight like "insurgents, not incumbents" and to campaign on their vision for the future and not just on Labour's record in power. Lord Mandelson, whose return to Gordon Brown's Cabinet last October stunned Westminster, addressed the antipathy many in Labour feel for him.

"I love this party and those who work so hard for it – even if at times perhaps not everyone in it has loved me. I understand that. I made enemies, sometimes needlessly. I was sometimes too careless with the feelings and views of others. But please accept this. It was for one reason only. I was in a hurry to return this party to where it should be – in government to help the hard-working people of our country."

Lord Mandelson said the real choice facing voters was between the "experience and change" of Mr Brown's leadership and the "shallowness of David Cameron" and claimed Tory policy would have made the recession "deeper, longer and far, far worse".

He admitted that the Government had made mistakes in the run-up to the financial crisis: "Growth was so strong we started to take it for granted. We nurtured finance, not wrongly, but we should have done more to nurture our other strengths as well."

Mr Darling also tore into the quality of the Tory leadership in his speech, claiming the election would pit "maturity and experience against the politics of the playground".

He said it was "too early to say with total confidence" that Britain was coming out of recession, but added that he stuck by his prediction in the April Budget that recovery would be under way by the end of the year.