A shame David Cameron couldn't teach you how to win, Ed. Photo: Getty Images
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David Cameron has borrowed Ed Miliband's methods. He may end up with Ed Miliband's fate

David Cameron has come around to Ed Miliband's way of thinking on the welfare bill. He could end up in the same dead end.

Who is who? 

In 2013, Ed Miliband declared that Britain couldn’t continue “to be stuck with permanently being a low-wage economy”.

In 2015, David Cameron argues that, for too long, British governments have been dealing with “the symptoms of the problem, topping up low pay rather than extending the drivers of opportunity, helping to create well-paid jobs in the first place”.

In 2013, Miliband said that Labour governments past had erred by trying “to make work pay better by spending more on transfer payments”.

In 2015, Cameron says that, for too long, government has been on a “merry-go round: people working on the minimum wage having that money taxed by the government and then the government giving them that money back - and more - in welfare”.

The solution, he says, is to get Britain’s welfare bill down with a big payrise.

Miliband called it “predistribution”.  In 2013, Cameron derided it, saying that what he really meant was “spend the money before you get it”. So was Miliband right all along?

Well, it’s complicated. Miliband’s speech was right to say that, if you want to be tough on welfare, you’ve got to be tough on the causes of welfare. The Conservatives’ plans for £12bn worth of cuts to the benefits bill this year alone simply can’t be met without either cutting into pensioner benefits, which the Tories ruled out in the general election, further reductions in child benefit, which the Tories ruled out in the general election, or in making significant reductions to tax credits. It’s easy to caricature the long-term unemployed as scroungers – but somewhat harder to do the same to people working full-time, having their pay topped up by the state.

Miliband then, like Cameron now, was in a bind. Miliband’s big problem was the same question that has crippled the social democratic movement throughout Europe – what’s the point of the left when there’s no money to spend? – and “predistribution” was the answer. Instead of shovelling around tax revenues from the rich to the poor, Labour would raise the wages of the poorest through remaking capitalism. Cameron’s problem is this: how to cut £12bn from the welfare bill without hitting pensioners, child benefit or people in work. He’s hit on the same solution: make working benefits obsolete by raising wages.

The fly in the ointment is that Miliband never worked out how exactly you raise wages. His rhetoric wrote cheques that his policy couldn’t cash. Cameron has stolen Miliband’s lines – and doesn’t have someone else to nick a solution from. It may be that the Conservatives’ embrace of “predistribution”, in thought if not in word, ends up landing them in the same mess Miliband ended in: electoral defeat.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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