Thursday, March 3, 2011

Brown and Balls' gold sale has now cost country £9bn

Everyone knows that Gordon Brown sold off 400 tonnes of the government’s gold at the absolute bottom of the market in 1999. It is a fact so well known that gold traders even call it the “Brown Bottom” and of course this Conservative campaign poster helped as well.

However with gold reaching $1,437.20 an ounce yesterday, it’s becoming apparent just what that “mistake”, to which no Labour politician has ever apologised for, cost the country.

Then Chancellor Gordon Brown, and his advisors at the time, Ed Balls and Ed Milliband, who were copied into all correspondence relating to the sale, sold off our country’s Gold reserves at between $256 and $296 an ounce, raising £2.343 billion. If it was sold at today’s prices it would raise £11.2bn, an incredible £8.8bn difference.

To put that into perspective, a 1p reduction in fuel duty would cost the exchequer £500m, so this is enough to pay for a one year 18p reduction in fuel duty. Or to reverse the coming fuel duty rises scheduled by the last Labour government, and a few of those from the past for several years.

Before anyone says, ahhh but what about inflation, according to the inflation calculator at total inflation since 1999 has been 30%. So the value in today’s money of the £2.34bn would actually be £3.042bn (still a massive difference of £5.75bn)

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