Cameron offers the eurozone advice

The PM offers advice to Europe but suggests little change at home.

David Cameron has made his big speech on the economy and the eurozone, focusing on the "three challenges" which Britain faces:

First, the struggle to recover from a long and deep recession at home.Second, the turbulence coming from the Eurozone. And third, the uncertainty over whether the world is on the right economic path, with debates about trade policy and how to support growth.

On the recession, the recent switch in emphasis from getting spending under control to building a sustainable plan for growth was in evidence. Cameron highlighted the reform to the planning regulations, which scrapped over 1000 pages of rules, the creation of 24 enterprise zones, and the regional growth fund. The latter has been panned as a costly mistake, but the Prime Minister suggested that it is on track to create 324,000 jobs – almost ten times as many as the National Audit Office predicted.

Internationally, Cameron was intent on offering advice which he doesn't seem to be particularly qualified to give, and which none of the recipients really want. He highlighted three things which the euro countries should do to keep the currency functioning properly:

First, the high deficit, low competitiveness countries in the periphery of the Eurozone do need to confront their problems head on. They need to continue taking difficult steps to cut their spending, increase their revenues and undergo structural reform to become competitive. The idea that high deficit countries can borrow and spend their way to recovery is a dangerous delusion.

Yes, point one: austerity! Of course, Italy and Spain are actually textbook practitioners of austerity already, and it hasn't done them a lot of good. But Cameron does also echo our leader today in calling for Germany to loosen monetary policy to make up for the absence of fiscal expansion, saying:

Germany’s finance minister, Wolfgang Schäuble is right to recognise rising wages in his country can play a part in correcting these imbalances but monetary policy in the Eurozone must also do more.

Cameron's second point calls for "governance arrangements that create confidence for the future":

As the British Government has been arguing for a year now that means following the logic of monetary union towards solutions that deliver greater forms of collective support and collective responsibility of which Eurobonds are one possible example. Steps such as these are needed to put an end to speculation about the future of the euro.

More collective support will irritate the already fuming Andrew Lilico, who wrote on Conservative Home today that Osborne and Brown should face criminal charges for the help already extended to Greece. Lilico wrote:

It cannot be acceptable for UK bureaucrats and ministers to act in clear defiance of the law, and then lose billions of pounds as a consequence of their nakedly illegal acts. That isn't just "one of those things". It is, in principle, actionable in much the same way as if the chief executive of your council acted clearly against the law and lost money by doing so. Ministers are not above the law, and are not entitled to defy Treaties, losing billions of pounds in the process, just because it seemed convenient to do so at the time.

Thirdly, Cameron argues that "we all need to address Europe’s overall low productivity and lack of economic dynamism":

Most EU member states are becoming less competitive compared to the rest of the world, not more. The Single Market is incomplete and competition throughout Europe is too constrained. Indeed, Britain has long been arguing for a pro-business, pro-growth agenda in Europe.

Cameron claiming a pro-growth agenda in Europe could be seen as faintly ironic. Lest we forget, Britain contracted last quarter while the eurozone merely stagnated. Perhaps this could be the government's new excuse for Britain's economic woes: we're pushing so hard for growth in Europe that we forgot to get any back home.

One line from Cameron was particularly welcome, however. Speaking about the right economic path to take post recession, he announced:

I’ve asked the Treasury to examine what more we can do to boost credit for business, housing and infrastructure.

We’ve taken the tough decisions to earn those low interest rates – so let’s make sure we’re putting them to good use. Building recovery is hard work because we are not reinflating the bubble but building a new model of growth. Some people asked why we didn’t have more economy Bills in the Queen’s Speech.  If you could legislate your way to growth, obviously we would. The truth is you can’t.

Despite the fact that many would argue that our low interest rates aren't "earned" at all, but merely a fortunate outcome of our low growth expectations, if we have them, we certainly should be using them. Let's see how the Prime Minister intends to do that.

Greek shoppers in Athens. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Why isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

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