Either Britain will bail out the euro, or it won't. There's no middle way

David Cameron wants to fudge the issue with a technical argument about the IMF. It won't work.

Domestic debate around the euro crisis has taken yet another awkward turn for the prime minister. An essential aspect of the government's political strategy is to draw a clear distinctions between, on one side, a failing single currency project, ill-starred from the outset, and, on the other side, a wise Britain that chose to remain free to set its own interest rates and is blessed with a flexible exchange rate.

By extension, UK taxpayers should not be expected to contribute to a eurozone rescue fund. Greece's solvency woes are not, according to that argument, our problem. Except, of course, plainly they are, for at least two reasons. First, crisis in the eurozone is continuing to depress confidence and demand in the global economy, which is the main reason why growth is so sluggish in the UK. Second, if the Greek crisis is not contained, it will spread to larger European economies - Italy is next in the firing line - and a solvency crisis there would drag down those banks, including those in the UK, that hold European sovereign debt. A prolonged eurozone crisis will eventually become another banking crisis.

So it is in the UK's interests that a bailout works and if UK capital - whether administered through the IMF or bilaterally - is required for that outcome, well, then that surely is the national interest too. Downing Street is trying to delineate different kinds of contributions, attributing different moral weights depending on how "European" they look. If I understand it right, the ethical judgement maps out roughly as follows: If the IMF helps a struggling nation directly, that is a "good" bailout - and so UK taxpayer's money can be used. Britain might increase its IMF contributions on that basis. If the IMF joins forces with the ECB and eurozone governments to create a collective mechanism to support the euro that is a "bad" bailout - the UK would not increase its contributions on such a basis.

The obvious question is how the government plans to enforce the distinction before agreeing to pay more. The UK is already wading into deep diplomatic water by hinting it would hold any proposed EU treaty changes hostage, demanding repatriation of powers in exchange for cooperation. Now is it hinting it will withhold support for the IMF unless it gets guarantees that the Fund will not ally itself too closely with any European political project to save the euro?

Meanwhile, UK government policy - confirmed by Mark Hoban, Financial Secretary to the Treasury, in an emergency parliamentary debate today - is to impress on eurozone governments the "remorseless logic" of further fiscal integration.

So, just to be clear: The government (or at least its Conservative side) think it is a terrible idea for sovereign nations to bind themselves into a single currency and yet supports the urgent acceleration of that process. It rejects the contribution of British taxpayers' money to a bailout that might explicitly support a euro stabilisation process but would be happy to contribute to one that helped eurozone countries independently, thereby supporting euro stabilisation indirectly. This is not a sustainable position.

The ultimate problem for David Cameron remains the same as it has been for weeks. He has to choose between being a European statesman akin to his peers in Cannes and being an authentic Tory sceptic. Either he thinks the euro must succeed and that Britain, as a major EU player, must play a constructive role in working out a technical solution to the crisis. Or he thinks that Britain should step back from the whole disaster and, out of parsimony or moral horror at the idea of a Euro superstate, keep Treasury money away from the entire business. Or, to put it bluntly, either he is signing us up to a bailout or he isn't. He can try laundering the argument through technical IMF questions for a while. (And Labour seem for the time being to play along with the distinction.) But it won't work for long and it will be exposed by the sceptics as dishonest as soon as any debate on UK contributions comes to parliament.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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How tribunal fees silenced low-paid workers: “it was more than I earned in a month”

The government was forced to scrap them after losing a Supreme Court case.

How much of a barrier were employment tribunal fees to low-paid workers? Ask Elaine Janes. “Bringing up six children, I didn’t have £20 spare. Every penny was spent on my children – £250 to me would have been a lot of money. My priorities would have been keeping a roof over my head.”

That fee – £250 – is what the government has been charging a woman who wants to challenge their employer, as Janes did, to pay them the same as men of a similar skills category. As for the £950 to pay for the actual hearing? “That’s probably more than I earned a month.”

Janes did go to a tribunal, but only because she was supported by Unison, her trade union. She has won her claim, although the final compensation is still being worked out. But it’s not just about the money. “It’s about justice, really,” she says. “I think everybody should be paid equally. I don’t see why a man who is doing the equivalent job to what I was doing should earn two to three times more than I was.” She believes that by setting a fee of £950, the government “wouldn’t have even begun to understand” how much it disempowered low-paid workers.

She has a point. The Taylor Review on working practices noted the sharp decline in tribunal cases after fees were introduced in 2013, and that the claimant could pay £1,200 upfront in fees, only to have their case dismissed on a technical point of their employment status. “We believe that this is unfair,” the report said. It added: "There can be no doubt that the introduction of fees has resulted in a significant reduction in the number of cases brought."

Now, the government has been forced to concede. On Wednesday, the Supreme Court ruled in favour of Unison’s argument that the government acted unlawfully in introducing the fees. The judges said fees were set so high, they had “a deterrent effect upon discrimination claims” and put off more genuine cases than the flimsy claims the government was trying to deter.

Shortly after the judgement, the Ministry of Justice said it would stop charging employment tribunal fees immediately and refund those who had paid. This bill could amount to £27m, according to Unison estimates. 

As for Janes, she hopes low-paid workers will feel more confident to challenge unfair work practices. “For people in the future it is good news,” she says. “It gives everybody the chance to make that claim.” 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.