Deception unworthy of the Office of Prime MinisterBy Sir John Major
Gordon Brown's decision to sell 400 tons of Britain's gold was catastrophic, Sir John Major says
On May 7, 1999, Gordon Brown announced he was planning to sell 400 tons of our natural stock of gold.
The British economy was still in good health and required no cash injection, yet he threw away more than half a century’s worth of the country’s inheritance – at the very bottom of the market.
This catastrophic decision – unilaterally made by Gordon Brown – has lost Britain £6.6billion, double the cost of Black Wednesday.
In fact, to put Black Wednesday in context, the Exchequer now borrows almost £3.3billion every week simply to cover Labour’s debts.
Gordon Brown was warned about the gold sales. Senior Treasury officials cautioned him against it.
Investment banks told him the price was too low and would rise. Yet he chose to ignore them all, and claimed he was acting ‘on the technical advice of the Bank of England’.
We now see from documents released under freedom of information legislation that the Bank of England was, in fact, reluctant to back his proposal, but a key passage remains blacked out. What is it that the Prime Minister wishes to hide?
The sale of gold is just one of many decisions illustrating how the Blair/Brown years have wrecked the golden economic inheritance that the last Conservative Government bequeathed them. Alas, there are plenty more.
In 1997, as Chancellor of the Exchequer, Gordon Brown abolished the Dividend Tax Credit paid to pension funds and companies. It has been estimated that this reckless action may have cost pension funds up to £150billion.
Indeed, Tony Blair’s own former pensions adviser stated that Gordon Brown ‘knowingly destroyed what was once one of the great pension systems in the world and he did it deliberately’. It was economic and social vandalism on a seismic scale.
The Prime Minister consistently argues that Britain’s deficit has been the result of a global financial storm that started in America, and that spending grew because he did not want to ‘do nothing’ during the recession. This is sophistry beyond the point of deception.
A huge structural deficit – or government overspending that is with us year on year – has been built up by Gordon Brown since he stopped following the Conservative Government’s spending plans in 2001.
As soon as he began to take his own decisions, the decline towards today’s economic train wreck began. Gordon Brown alone built this deficit. He alone is responsible for it. The British people will pay for it.
And what of ‘boom and bust’? For years we have had to endure the Blair/ Brown mantra that they would abolish what they called ‘Tory boom and bust’. The British people have now discovered the reality. Labour has certainly abolished the boom, and has created an almighty bust.
The Blair/Brown ‘boom’ was a fake, built on a mountain of consumer and corporate debt, and the bust has been the longest and deepest, as Alistair Darling himself has admitted, for 60 years.
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