Miliband throws down a challenge to Cameron on second jobs and party funding

The Labour leader shifts the focus from the unions by calling for new limits on MPs' outside earnings and a cap on party donations.

Delivering his much-hyped speech, Ed Miliband masterfully shifted the focus from Labour and the unions to party funding and outside interests. He called for "new limits" on MPs' earnings from second jobs and "new rules" on conflicts of interests, declaring that "the British people must be reassured that their MPs are working for them". In a clear challenge to David Cameron (whose MPs would suffer most from this reform), he added: "I urge other party leaders to respond to this call for changing the system."

After pledging to introduce a new opt-in system for donations from trade union members, he used this dramatic concession, which Labour sources told me could cost the party as much as £5m, to call for the reopening of the stalled talks on party funding reform. He repeated his call for a cap "on donations from individuals, businesses and Trade Unions", which would likely be set at a level (Miliband previously recommended a limit of £5,000) that would significantly hit Tory coffers. 

The political calculation behind Miliband's move was that it would allow him to frame the Conservatives as the party of big money and Labour as the party of hundreds of thousands of working people. CCHQ has responded by questioning how he will introduce the opt-in system without a change in the law (should the unions refuse to play ball) and by challenging him to publish the Falkirk report. But Milband's smart pivot on second jobs and party funding means that they will immediately be challenged to say whether they will accept his proposals. For the first time since the Unite scandal broke, Miliband has done what he needed to and set the terms of the debate. 

David Cameron and Ed Miliband stand in Westminster Hall. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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George Osborne's surplus target is under threat without greater austerity

The IFS exposes the Chancellor's lack of breathing space.

At the end of the last year, I noted how George Osborne's stock, which rose dramatically after the general election, had begun to plummet. His ratings among Tory members and the electorate fell after the tax credits imbroglio and he was booed at the Star Wars premiere (a moment which recalled his past humbling at the Paralympics opening ceremony). 

Matters have improved little since. The Chancellor was isolated by No.10 and cabinet colleagues after describing the Google tax deal, under which the company paid £130m, as a "major success". Today, he is returning from the Super Bowl to a grim prognosis from the IFS. In its Green Budget, the economic oracle warns that Osborne's defining ambition of a budget surplus by 2019-20 may be unachievable without further spending cuts and tax rises. 

Though the OBR's most recent forecast gave him a £10.1bn cushion, reduced earnings growth and lower equity prices could eat up most of that. In addition, the government has pledged to make £8bn of currently unfunded tax cuts by raising the personal allowance and the 40p rate threshold. The problem for Osborne, as his tax credits defeat demonstrated, is that there are few easy cuts left to make. 

Having committed to achieving a surplus by the fixed date of 2019-20, the Chancellor's new fiscal mandate gives him less flexibility than in the past. Indeed, it has been enshrined in law. Osborne's hope is that the UK will achieve its first surplus since 2000-01 just at the moment that he is set to succeed (or has succeeded) David Cameron as prime minister: his political fortunes are aligned with those of the economy. 

There is just one get-out clause. Should GDP growth fall below 1 per cent, the target is suspended. An anaemic economy would hardly be welcome for the Chancellor but it would at least provide him with an alibi for continued borrowing. Osborne may be forced to once more recite his own version of Keynes's maxim: "When the facts change, I change my mind. What do you do, sir?" 

George Eaton is political editor of the New Statesman.