By conceding that a large rise would not cost jobs or damage the public finances, Osborne has made it harder for the Tories to credibly oppose a more radical offer from Miliband.
The party challenges the Chancellor to veto any move by RBS to double the bank bonus cap under new EU rules.
If the spectre of Gordon Brown alone were sufficient to propel the electorate into Cameron’s arms, he would now be governing with a majority.
Expect big cuts in housing benefit, the removal of child benefit from out-of-work families with more than two children, and a reduction in the benefit cap.
The Chancellor says he will prioritise further cuts to the housing benefit budget before making any changes to universal pensioner benefits.
Ministers have pledged to fund policies like the extension of free school meals and the freeze in fuel duty through extra revenue from reducing avoidance. But HMRC is struggling.
In an attempt to achieve an economically worthless but politically valuable budget surplus, cuts to public services will continue even once the structural deficit has been eradicated – this is unworkable.
The IFS warns that further cuts to pay could make it "increasingly difficult" for public sector employers to "retain and recruit high quality workers".
The Chancellor suggests a future Tory government would make large welfare cuts, including a lower benefit cap.