The FT splashes this morning with news that Cameron may be expected to increase Britain’s contributions to the International Monetary Fund – if other countries such as Japan and Brazil decide to increase their support for it to deal the eurozone crisis.
That would place the prime minister on another collision course with some of his most unruly backbenchers. Some 31 Tories rebelled by voting with Labour last July against plans to raise Britain’s potential contribution by £9bn from £10.7bn to £20bn. The country is now under pressure to increase this £9bn “headroom” to E30bn.
The vote in the House of Commons was close last time: 274 against 246. If the coalition is constrained from increasing its lending to the IMF there are implications for the UK’s international reputation.
Equally there are issues for Labour, given that Ed Balls has long been an advocate of IMF-style internationalism – as was his mentor Gordon Brown. The shadow chancellor wrote in the FT in November that he did not oppose higher IMF contributions per se but “there should be no IMF funding to plug the gap in the eurozone’s bail-out fund and do the job the ECB should be doing.” The coming weeks may see Balls having to make a tough decision on the issue.