George Osborne’s failure to buy gold cost up to £4.5bn
Every time the gold price hits a new high, some foolish Conservative gets out the plastic recorder and plays the same old tune: Gordon Brown lost the taxpayer billions by selling the national reserves of gold in 1999-2002.
The Tory press office did it again today:
Gold hit another record high today of $1,826: Labour’s decision to sell off the nation’s gold in 1999 at a 20 year low has cost £12 billion.
This is the same figure as the last time gold hit a record price a few weeks ago, but the point is that it is nonsense.
And just because Gordon Brown made the decision does not necessarily mean it was wrong.
It is not the job of Government to gamble on commodity prices on behalf of the taxpayer, and it is simply unfortunate that the Treasury advised Brown thus at a time of what turned out to be low gold prices.
The Tories ought to be embarrassed that the gold price has continued to rise since the election last year. At a rough guess I thought £2bn of the £12bn “loss” that they cite occurred while George Osborne was Chancellor - Thomas Penny of Bloomberg thinks it is more like £4.5bn.
The corollary of their argument is that Osborne should have bought the gold back in May 2010 – it need not have cost him anything because he could merely have speculated in the gold futures market. If the Conservatives knew that the gold price was going to go up, the logic of their attack on Labour is that they should have ensured that the taxpayer benefited.
Also, Francis Maude, shadow chancellor in 1999, said nothing about the sale of gold in the House of Commons at the time, and I cannot find anything he said about it before it took place. After the gold sales started, and the gold price fell, he told journalists that he was opposed to it.Tagged in: gold, Gordon Brown
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