Cameron's EU budget deal is bad for Britain and for the eurozone recovery

Spending on the bloated Common Agricultural Policy has been increased, while spending on infrastructure and other growth projects has been cut.

David Cameron was right to call for an EU budget cut. Agricultural payments and regional funds have been bloated and badly spent for years. But the deal he looks to have secured is bad for Britain and bad for the eurozone recovery.

Last year, IPPR called for a 25 per cent cut in the EU budget with reductions to the Common Agricultural Policy (CAP) and the repatriation of regional funds for rich countries. We suggested that Cameron put the UK rebate on the table in order to deliver this 'grand bargain'. Our calculations showed that the UK would be better off as a result, with a lower net contribution than at present. But in order to secure a headline cut in the overall size of the budget, to assuage eurosceptic demands, the Prime Minister appears to have taken a backward step on the road to European recovery.

The British rebate has been preserved in its entirety but reports suggest that the UK (along with all rich countries aside from Italy) will end up making a bigger net contribution. This is partly legitimate because cohesion funds for poorer EU countries will increase. But it is also because €27bn of cuts have come, not from the inefficient and distortive CAP budget, which has increased by €9bn, but from the funds for competitiveness and growth.

This budget includes funding for research and development, transport and energy infrastructure, which create jobs in the short-term as construction takes place and growth in the long-term as they improve the productive capacity of the economy. For example, the Connecting Europe Facility, which is intended to increase the efficiency of energy transmission and therefore bring down bills, has been cut from €9.1bn to €5.1bn. 

By seeking a favourable headline from the already sceptical British press, the PM is selling Britain a lemon.

David Cameron and his entourage arrive back at the EU headquarters in Brussels, Belgium. Photograph: Getty Images.

Will Straw is Associate Director at IPPR.

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I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.