By Tim Montgomerie
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In yesterday's Daily Mail I suggested that Eurosceptic Tory MPs were playing down the veto retreat because they wanted to keep their powder dry for three bigger battles to come. Battle one, I suggested, was whether Britain should further increase its subscription to the IMF.

TYRIE ANDREWWe had a further sign that George Osborne is minded to send more money into Christine Lagarde's warchest when, last night, the Government's Whips Office circulated an article from Andrew Tyrie (see Paul Goodman's tweet). The article by the Chairman of the Commons Treasury Select Committee made a very strong case for increasing Britain's contribution. You can read it in full at the Wall Street Journal but here are three key extracts:

  • We need to solve the €uro emergency before we can design an ideal new set up: "The euro is flawed. But redesigning its architecture will inevitably take time—something we do not have. It is no use phoning an architect when your house is on fire. You need to put the fire out before the house can be rebuilt. And the only fire-brigade we have for the global economy is the IMF."
  • Individual countries like Greece must persuade the IMF that they will do what's necessary and that may mean them leaving the €uro: "the IMF must not flinch from its long-standing policy of negotiating only with member countries and not with the currency zone. The IMF's traditional remedy for countries in trouble has been devaluation and fiscal contraction. The most salient fact is that the economic prospects of a number of countries—certainly Greece—lacks price competitiveness. They need to grow if their debts are to be sustainable. And they must either leave the euro, or somewhat improbably find a way of restoring competitiveness within the euro zone."
  • The IMF may not be able to do its rescue job if Britain refuses to contribute and other nations follow our lead: "If the U.K. does not contribute our share, more countries may follow; the outcome could fulfil the Bank of England's direst warnings. The Great Depression of the 1930s was internationally contagious partly because creditor countries were niggardly in extending support to their debtor counterparts. It all seemed sensible at the time but failure by creditor countries to act led to catastrophic consequences."

By way of footnote it's worth noting what a considerable, effective and independent TSC Chairman Andrew Tyrie has become. On this occasion he's probably been helpful to the Chancellor but he's previously challenged the cautious nature of the Coalition's growth programme and raised very important concerns about the extent of supervisory powers being handed to an insufficiently reformed Bank of England. Tyrie has never been one to toe the conventional line – repeatedly backing Ken Clarke for leader and joining with the likes of Nigel Lawson and Peter Lilley in opposing the Government's climate change policies. He's a model Select Committee Chairman.