Osborne criticised over "IMF bailout bull"

 

George Osborne is facing anger from Tory backbenchers and Labour after announcing Britain is to commit another £10 billion to the IMF.

Tory MP Douglas Carswell branded the decision "madness" and "IMF bailout bull".

Writing on his blog, he suggested the loan "makes you wonder how all those earlier bailouts have worked out".

Mr Osborne told BBC Radio 4's Today programme: "When you look at the Tory backbench opinion, of course some people have been critical and they have been critical all along, but actually quite a lot of Conservative backbenchers have come out and said this is the necessary and right thing.

But critics said he was putting the taxpayer on the hook for more bailouts of the struggling eurozone.

He was also accused of dodging a potentially embarrassing parliamentary vote on the extra contribution.

Finance ministers and central bank governors struck the deal, which should boost the IMF's resources by $430bn, at a meeting in Washington.

Alongside the UK's increase, Japan is to contribute an extra $60bn dollars, South Korea 15 billion dollars, Switzerland 10 billion dollars and Australia seven billion dollars.

However, the US and Canada have refused to add any more into the pot.

Mr Osborne said: "The UK sees itself as part of solution to the challenges facing the global economy, not part of problem. We are helping to solve the global debt problem rather than adding to it.

"Jobs and growth in Britain depend on stable world economy. That needs a strong IMF.

"And because we have taken strong action to rescue our own economy, we can be one of many countries that can support the IMF, instead of being bailed out by the IMF."

IMF managing director Christine Lagarde said: "We warmly welcome pledges by our members to increase IMF resources by over $430bn, almost doubling our lending capacity.

"This signals the strong resolve of the international community to secure global financial stability and put the world economic recovery on a sounder footing.

"These resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members. They will be drawn only if they are needed, and if drawn, will be refunded with interest.

"I would like to express my thanks to all the countries that have already announced specific contributions ... I am also grateful to China, Russia, Brazil, India, Indonesia, Malaysia, and Thailand, and other countries, all of whom have indicated that they will be among the contributors."

Parliament has previously approved around £40 billion in support for the IMF, of which about £30 billion has already been committed.

If the increase had gone beyond the £10 billion "headroom" still available to Mr Osborne it would have required a fresh vote by MPs.

Committing money does not mean it will necessarily be drawn against and, because it would be given in the form of a loan, it would not deplete public spending budgets.

Shadow chancellor Ed Balls accused Mr Osborne of signing up to a "sticking plaster" deal and "running scared" of parliamentary scrutiny.

"It is disappointing that the Chancellor has not taken the opportunity to press the wealthy eurozone countries to dig into their own pockets and establish a strong firewall of their own, before offering up more funding from Britain," he said.

"There is a real risk that yet another sticking plaster response will mean the eurozone continues to duck the tough decisions they need to take.

"The IMF has a vital role to play in the global economy and should have the resources to do that job, but it should not be bailing out the eurozone when the euro area countries are not doing their own bit to help themselves."

Mr Balls added: "George Osborne needs to explain why he has suddenly changed his mind and why he is running so scared of parliamentary scrutiny on this important issue."

Conservative Peter Bone branded the move "bonkers" and said money used to prop up the euro would be wasted.

"It seems to me it is all about bailing out the eurozone," he said. "It should not be up to British taxpayers to shore up a doomed project that is for the benefit of our European colleagues.

"People will not understand how we can have all these cuts but put £10 billion at risk for other countries. It is bonkers."

However, Mr Bone said there was now no obvious way of forcing a Commons vote on the issue.

"It does seem very strange that £10 billion can be spent without getting a proper parliamentary debate," he added.

Tory MP Mark Pritchard, secretary of the influential 1922 Committee, said Mr Osborne appeared to have "got away with the politics" of the issue by avoiding a fresh vote.

But he told BBC Radio 4's PM programme the UK should not be underwriting a currency that "clearly is not working".

"Indirectly that is exactly what British taxpayers' money and IMF funding is going to do," he added.

However, other senior Conservative figures expressed support for Mr Osborne.

Treasury Select Committee chairman Andrew Tyrie said the increase was "essential".

"The IMF is the only fire-brigade available to the global economy," he said. "It is vital that the IMF has the necessary tools to deal with the current eurozone crisis and the risks to wider global financial stability.

"Any IMF loans to the eurozone must be on rigorous terms, with full conditionality.

"The IMF must not flinch from its long-standing policy of negotiating only with member countries."

The Tory MP added: "Britain benefits more than most from having a tough global watchdog and no country outside the eurozone has more reason to want the crisis resolved than the UK."

Conservative backbencher Laura Sandys hit out at Mr Balls for "shallow opportunism".

"He isn't taken seriously at home and now with this opportunistic approach he isn't taken seriously around the world," she said.

"George Osborne is taking the tough, responsible decisions. It's about time Labour started doing the same."

Camborne and Redruth MP George Eustice said: "Britain should play its part to help stabilise the world economy so we should support the IMF but we must also ensure that the financial help only goes to support countries and that eurozone members take responsibility for their currency."

News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
people>Her debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Sport
FootballGerman sparks three goals in four minutes at favourite No 10 role
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
News
people
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
music
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
New Articles
i100... she's just started school
News
news
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... despite rising prices
Voices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
voices
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Volunteer Trustee opportunities now available at The Society for Experimental Biology

Unpaid Voluntary Position : Reach Volunteering: Volunteer your expertise as Tr...

Early Years Educator

£68 - £73 per day + Competitive rates of pay based on experience: Randstad Edu...

Nursery Nurse

£69 - £73 per day + Competitive London rates of pay: Randstad Education Group:...

Primary KS1 NQTs required in Lambeth

£117 - £157 per day + Competitive London rates: Randstad Education Group: * Pr...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam