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.

Photo: Getty
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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.