Browns Bottom – Sale of Britains Gold
Newspaper headlines, at the time summarised Gordon Brown’s decision to sell off Britains gold reserves at the bottom of the market as “the worst economic judgement ever made by a chancellor.”
Ed Balls, Shadow Chancellor and Ed Miliband, Leader of the Labour Party, were close aides to Brown when, between 1999 and 2002, he ordered the sale of almost 400 tons of the gold reserves when the price was at a 20-year low. Since then, the price has increased manyfold meaning the decision cost taxpayers an estimated £20 billion. A huge amount which would have eased the burden of austerity which has been borne by the taxpayer in the period 2010-15 and is expected to continue until at least 2020.
It is understood that Brown pushed ahead with the sale despite serious misgivings at the Bank of England. It is not thought that senior Bank experts were even consulted about the decision, which was driven through by a small group of senior Treasury aides (Balls & Miliband) close to Brown.
After a public outcry and many aborted “freedom of information” requests the Information Commissioner was finally forced to hold a series of “private” meetings with the Treasury following which he agreed for much of the paperwork to remain hidden from the public so there has only been a “limited” release of information.
* The price of gold has increased markedly since Brown sold more than half of Britain’s reserves.
* The Treasury pre-announced its plans to sell 395 tons of the 715 tons held by the Bank of England, which caused prices to fall.
* The bullion was sold in 17 auctions between 1999 and 2002, with dealers paying between $256 and $296 an ounce. In January 2015 gold was selling at $1400 an ounce.
* The taxpayer has lost an estimated £20 billion, five times the amount lost when Britain left the ill-fated Exchange Rate Mechanism in 1992.