UK to increase annual subscription to IMF by £9 billion

News Article - 24 June 2011
Category: Business

The UK Treasury has revealed it is set to increase its annual subscription to the International Monetary Fund (IMF) by more than £9 billion - almost double the amount it is currently lending the organisation.

At present the country pays £10.54 billion toward the IMF, but HM Treasury insists UK taxpayers will not feel the pinch as the UK received interest on its loan, provided using currency reserves.

Conservative MP Douglas Carswell has however criticised the Government for doubling the IMF subscription at a time when significant cuts to public services are rife.

"I'm appalled to see at a time of cutbacks at home, at a time when many constituents are worried about cuts in public services in the UK that we're doubling the amount of subscription that we pay to the IMF.

"I'm very concerned that the Government tried to announce this, not by standing up in the Commons and telling us that it was spending the money in this way, not by having a debate to allow MPs to question the wisdom of doing this but by slipping it through when no-one was looking with a written statement.

"We're talking about an enormous sum of money. We're talking about the equivalent of 1.5p on income tax. I think a lot of people will be quite shocked to discover that we're increasing our subscription to the IMF in order to bail out the Eurozone," said Mr Carswell.

However, the Treasury revealed IMF members had previously agreed, in principle, to double their annual subscription back in April 2009 - months before the threat of the Eurozone debt truly came to the fore.

The Treasury revealed: "We are lending money from existing foreign exchange reserves to the IMF on which they pay interest to us. It has no impact on our borrowing whatsoever.

"This gets all the facts wrong on the UK's membership of the IMF and seems to suggest that we should not be part of the IMF, which the Government totally rejects."

The move to double the IMF annual subscription was taken to increase the financial share paid by emerging economies across the organisation, with the agreement finalised in November 2010 and included in the March 2011 Budget.

Article keywords: HM Treasury, International Monetary Fund, Douglas Carswell, Eurozone, Budget

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