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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.

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

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.