Labour vote against more IMF funding raises questions

Amidst all the sound and fury around the hacking scandal, another rather very interesting event passed almost unnoticed in the Commons yesterday.

Up on the Committee corridor MPs approved a Statutory Instrument authorising the near doubling of the UK's subscription to the International Monetary Fund from £10.7 billion to £20.15 billion.* The interesting point? Labour voted against.

Shadow Treasury Minister Chris Leslie argued the UK should balance its commitment to supporting the world economy with its domestic woes - and added that he was worried about the risk being taken with taxpayers' money.

Why does this matter? Because this is unlikely to be the last bailout vote in the Commons - indeed this very SI will have to be voted on in the Commons, probably next week. And if Labour start voting against such orders, the Government may have difficulty getting them through.

There's a growing network of eurosceptic Conservative MPs, including many from the 2010 intake, who're mobilising against a further British contribution to euro-zone bailouts, whether routed through EU mechanisms or through the IMF - they have already shown that they can mobilise enough backbenchers to give them at least the theoretical capability to overturn the Coalition's majority.

And, interestingly, Labour eurosceptics, once a rather atomised band of mavericks, are also networking in a way not seen before.

The worries articulated by Chris Leslie sound pretty similar to those you can hear from some Conservative MPs - about the problems of explaining to voters why big loans (and plenty of MPs think these potential liabilities will rapidly become the real thing) are made to foreigners when money is not available to support the British economy, (he cited the cancelled loan to Sheffield Forgemasters) and the exposure of British taxpayers if loans routed through the IMF are not repaid.

So it is not impossible to imagine the Government being defeated, for the first time, in a Commons vote on a Euro-issue. And even if the key decisions on - say - a second bailout package for Portugal happened to fall during the Summer break, I'm told Tory backbenchers will be organised and ready to communicate their displeasure to the leadership. Certainly the whips could have their work cut out containing the increasing backbench euro-dissent.

* Nerd Note: this is not an up-front financing commitment of £9.5 billion for the UK, but simply increases the potential amount of financing from the UK that the IMF can call on.