Gordon Clown .Com

It’s being reported in the press today that Gordon is to face questions in parliament after telling a news conference at the IMF that selling off Gold reserves in 1999 for a cut price was the “right thing to do”, despite the fact that Gold has nearly trebled in price since then.  The Times is reporting that this single decision alone by Brown, taken against the advice of his more experienced colleagues at the Bank of England, has cost the country £2bn.  To put that in perspective, Black Wednesday - when the Major government attempted to protect sterling within the ERM - cost £3.3bn, and was seen as a massive and catastrophic event at the time.

Insiders involved in the decision have broken ranks after an 18-month battle in which the Treasury has blocked attempts by The Sunday Times to make public the official advice received by Brown before he sold the gold.

They have revealed that Bank of England officials had serious misgivings over the chancellor’s determination to sell 400 tons of bullion in a series of auctions between 1999 and 2002, when the price was at a 20-year low. Since then the price has almost trebled, meaning the decision cost the taxpayer an estimated £2 billion.

The Bank of England, which has managed Britain’s gold reserves for more than 300 years, was never asked for its advice on whether Britain should sell the gold. A senior Bank of England executive said the timing of the sale was “not debated”.

At a secret meeting with senior gold traders, Bank of England officials were warned that the proposed auctions would achieve the worst price for taxpayers. The officials are understood to have agreed with the analysis but said they were powerless to influence the Treasury.

Warnings over the risks of losing money from the gold sell-off are understood to be set out in internal correspondence sent by Bank of England officials to the Treasury in 1999.

Last night the Bank of England sought to distance itself from the decision to sell off the gold. In an unusual intervention, it said: “In regard to the gold sales, the Bank acted solely as agent and the decisions were taken by HM Treasury.”

Its statement casts doubt over previous assurances given by Treasury ministers and Tony Blair to parliament that the decision to sell the gold reserves was made on the “technical advice of the Bank of England”.

A senior investment bank director, present at a meeting held by the Bank of England in May 1999 to discuss the sell-off, said: “We were told this was a Brown thing and that the Bank had no say over what was going on. The officials were unhappy.”

The gold sell-off is seen in the City as Labour’s equivalent of “Black Wednesday”, when John Major’s government lost £3.3 billion in a day in its failed attempt to prop up the pound.

Parliamentary questions will take place on Tuesday.