Former MEP Ashley Mote explains what happened to British physical gold assets...
Why did Gordon Brown sell our gold?
April 9th, 2010
In recent days The Daily Telegraph has been making enquiries about the sale of our gold reserves ten years ago. Despite using the Freedom of Information Act they are having trouble getting to the truth.
For reasons we can all work out for ourselves the editor failed to use the following letter which was intended to clarify the facts for him and his readers.
There is no mystery about Gordon Brown's sale of British gold reserves. I set out the facts on the strength of well-informed sources in my book Vigilance - A Defence of British Liberty, published in 2001.
The Maastricht Treaty lays title claim to all the UK's gold and dollar reserves. At the time of the sale the recently-launched euro was struggling to establish itself on the currency markets. Receipts from the gold sale were used to buy euros, which propped it up for a while but failed to stop the slide.
However the transaction simultaneously met a large part of the demand that all the UK's gold and dollar reserves be passed to Frankfurt while neatly avoiding physical transfers in fleets of bullion trucks driving to the Channel ports. A huge potential political flashpoint had been smartly sidestepped.
As many of your readers already know, such deceit is the normal modus operandi when the EU (and the British government for that matter) knows a proposal or directive does not have popular support.
Gordon Brown lied when he claimed it was a purely commercial decision. It was intended to show support for the euro, and it started to meet the UK's treaty obligation to transfer our national assets to the ECB if the UK were ever to join. It also assumed that the result of then promised referendum on joining the euro would be in the government's favour.
It is highly unlikely that the Labour government would have won the 1997 election at all, let alone in a landslide, if they had said that they intended to sell a significant proportion of the UK's gold reserves - whatever the reason.
After the sale, gold represented a mere seven per cent of total reserves. Previously it was 17 percent. And all without anyone being asked, agreeing or voicing a view. By mid-2000, British taxpayers were sitting on a loss of some £26 million. Now it is many billions.
With hindsight, perhaps I should have added a footnote to the editor pointing out that my sources at the time were impeccable. One of them was even inside the Bank of England.
I might also have added that the physical gold was held in the Bank of England on behalf of the EU for some time after the sale. Where those ingots are today I don't know.