Osborne lays the groundwork for IMF cash increase

The Chancellor has indicated that Britain could increase its IMF contribution - again. Tory Euroscep

George Osborne has said that Britain could provide more funds to the IMF if there is a "strong case" for an increase. Speaking at the World Economic Forum in Davos, the Chancellor said that he would consider increasing Britain's contributions above the £10bn extra already pledged, if there were adequate reassurances.

This is nothing new: Osborne has been laying the foundations for an increased British contribution for a while. It's vital for Britain that the IMF has enough cash to help struggling eurozone countries, because of our geographical position and trade links with Europe. But David Cameron gained some serious brownie points with his party when he opted out of further contributions to the eurozone bailout, and it will be difficult for the government to sell this as anything but propping up the eurozone by another name.

My colleague Rafael Behr recently explained why increasing IMF contributions is a political headache for Osborne:

The epicentre of instability is, of course, the eurozone, but Osborne cannot make an explicit commitment to bailout Britain's continental neighbours for fear of aggravating eurosceptic Tory backbenchers. Labour has also made it clear that it would oppose a direct transfer of UK money to a dedicated EU bailout fund - even one administered by the IMF. If enough Tories rebelled, a vote in parliament that ended up being framed in terms of whether or not good British pounds should be thrown after bad euros would be very tricky for the government. So any UK assistance to precarious eurozone economies has to be laundered through the general IMF kitty. (In practice that is hardly different from contributing to a specific euro bailout fund and eurosceptic rebels are unlikely to accept the distinction.)

Yet it looks as if it is edging closer to happening. The FT today reports that "Osborne has swept away most of the hurdles the government had erected to prevent Britain pledging billions of pounds for the International Monetary Fund", suggesting that the funds could be upped as soon as March.

Osborne will not be relishing the prospect of returning to parliament to ask for more funds -- particularly given the struggle he faced in July when the Commons voted on the last funding increase.

Sir Peter Tapsell summed up the feelings of many on the Conservative backbenches when he told David Cameron this week that "for Britain to commit still more funds to the IMF would, in effect, be providing a subsidy to Germany" because Berlin was not doing enough to support the euro.

The government is braced for a rebellion on this, but that will not mean it will not go ahead. It all comes down to Labour's position. The party sided with the sceptics in July (Ed Balls took a notably hostile position) but the Tory rebellion was not big enough to defeat the government. It's likely that there would be a higher turnout, and more strong feelings, in a repeat. The question is whether Labour decides to play the role of responsible global citizen (and some are reporting they might), or whether the chance to destabilise the coalition is too good to miss.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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What will Labour's new awkward squad do next?

What does the future hold for the party's once-rising-stars?

For years, Jeremy Corbyn was John McDonnell’s only friend in Parliament. Now, Corbyn is the twice-elected Labour leader, and McDonnell his shadow chancellor. The crushing leadership election victory has confirmed Corbyn-supporting MPs as the new Labour elite. It has also created a new awkward squad.   

Some MPs – including some vocal critics of Corbyn – are queuing up to get back in the shadow cabinet (one, Sarah Champion, returned during the leadership contest). Chi Onwurah, who spoke out on Corbyn’s management style, never left. But others, most notably the challenger Owen Smith, are resigning themselves to life on the back benches. 

So what is a once-rising-star MP to do? The most obvious choice is to throw yourself into the issue the Corbyn leadership doesn’t want to talk about – Brexit. The most obvious platform to do so on is a select committee. Chuka Umunna has founded Vote Leave Watch, a campaign group, and is running to replace Keith Vaz on the Home Affairs elect committee. Emma Reynolds, a former shadow Europe minister, is running alongside Hilary Benn to sit on the newly-created Brexit committee. 

Then there is the written word - so long as what you write is controversial enough. Rachel Reeves caused a stir when she described control on freedom of movement as “a red line” in Brexit negotiations. Keir Starmer is still planning to publish his long-scheduled immigration report. Alison McGovern embarked on a similar tour of the country

Other MPs have thrown themselves into campaigns, most notably refugee rights. Stella Creasy is working with Alf Dubs on his amendment to protect child refugees. Yvette Cooper chairs Labour's refugee taskforce.

The debate about whether Labour MPs should split altogether is ongoing, but the warnings of history aside, some Corbyn critics believe this is exactly what the leadership would like them to do. Richard Angell, deputy director of Progress, a centrist group, said: “Parts of the Labour project get very frustrated that good people Labour activists are staying in the party.”

One reason to stay in Labour is the promise of a return of shadow cabinet elections, a decision currently languishing with the National Executive Committee. 

But anti-Corbyn MPs may still yet find their ability to influence policies blocked. Even if the decision goes ahead, the Corbyn leadership is understood to be planning a root and branch reform of party institutions, to be announced in the late autumn. If it is consistent with his previous rhetoric, it will hand more power to the pro-Corbyn grassroots members. The members of Labour's new awkward squad have seized on elections as a way to legitimise their voices. But with Corbyn in charge, they might get more democracy than they bargained for.