Miliband delivers the performance he needed in Queen's Speech debate

The Labour leader brilliantly ridiculed calls for a Tory-UKIP pact, but his borrowing problem remains.

After one of his most difficult months since becoming Labour leader, Ed Miliband needed a strong performance in today's Queen's Speech - and he delivered. His best moment came when he referenced the calls from Tory MPs for a pact or even a coalition with UKIP. "They used to call them clowns. Now they want to join the circus," he quipped, a line that improves with each reading. 

He went on to remind the House how Cameron's promise of an in/out EU referendum (which many predicted would prove disastrous for Labour) had failed to counter UKIP or sate his recalictrant backbenchers. In a well-crafted passage, he declared: "The lesson for the Prime Minister is you can’t out-Farage Farage. Banging on about Europe won’t convince the public. And the people behind him will just keep coming back for more. A Europe referendum tomorrow. Drop same sex marriage. The demands go on and on. They will never be satisfied. And every day he spends dealing with the problem behind him he’s not dealing with the problems facing the country."

Earlier in the speech, referring to Iain Duncan Smith's suggestion that wealthy pensioners hand back their Winter Fuel Payments, he asked Cameron: "why doesn’t he set an example and hand back the tax cut he’s given himself?" Seizing on David Davis's plea for "no more old Etonian advisers", he quipped that it was "time for some diversity" - "let's have someone from Harrow". After the abandonment of minimum alcohol pricing and plain cigarette packaging, Miliband also brought up Lynton Crosby's links to the alcohol and tobacco industries, declaring, once again, that Cameron stands up for "the wrong people".

This is what they used to say about cigarette packaging: 'It's wrong that children are being attracted to smoke by glitzy designs on packets … children should be protected from the start.'

That was the previous Health Secretary. Before they hired their new strategist. The one whose company worked for big tobacco. And now what’s happened? They’ve dropped the bill.

After his now-infamous World At One interview, in which he was unable to say whether Labour would borrow more to fund a temporary VAT cut, three Conservative MPs intervened to challenge Miliband over his plans. In response to the first, Jacob Rees-Mogg, he replied that "of course" a VAT cut would "have a cost" and "lead to a temporary increase in borrowing" (perhaps the first time Miliband has admitted in the Commons that Labour would borrow more), but that the increase would be justified since it would help to stimulate growth. But he was unable to answer Penny Mordaunt's claim that the measures included in Labour's alternative Queen's Speech would cost an extra £28bn, insisting that he had "already addressed this" (he hadn't). After he was challenged again, he fell back on the line that it was the government that was "borrowing more". This is true (£245bn, in fact) but it invites the Tory rejoinder, "you would borrow even more", leaving the Labour leader back where he began. The danger for Miliband is that Tory MPs will continue to challenge him over the total cost of Labour's plans until, as with the VAT cut, he finally gives way.  

But while Miliband still gives the impression of running scared of his own economic policy, today he did enough to remind his party why he could emerge as the victor in 2015. 

Ed Miliband speaks at the CBI's annual conference on November 19, 2012 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.