Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
6 January 2009
14:2812222In a revealing answer to a Parliamentary question the Government has revealed its strange idea of prudence and perhaps gives us an inkling of how it got us into the current financial mess.
Robert Key MP asked the following question to the Chancellor of the Exchequer: ....how many tonnes of gold have been sold from UK reserves in each year since May 1997; what revenue was received from sales in each year; and if he will estimate the revenue which each sale would have generated at current gold prices.
Treasury Minister Ian Pearson replied: 395 tonnes of gold have been sold since 1997: 75 tonnes in 1999; 150 tonnes in 2000; 130 tonnes in 2001; and 40 tonnes in 2002.
he provided the exact details of dates and revenue raised (see Hansard 18 Dec 2008 : Column 932W).
He then summarises that total proceeds from the sales were around US$ 3.5 billion. On the 15 December 2008 the total value of this gold was US$ 10.5 billion.
In other words by selling the gold the Government lost US$ 7billion, or about £5,000,000,000.... Not bad given that the gold raised only half of that figure!
That loss is enough to fund a reduction of the income tax rate by 2p for a year... Or it could fund the increase the starting rate for tax to about £8,000. If it was not lost, that is.... Just to put these figures into perspective.
This Treasury Minister then farcically said: "The gold sales between July 1999 and March 2002 reflected a prudent decision to reduce over-exposure to a single asset in the net reserves portfolio."
The 'over exposure' excuse is a nonsense, you do not sell on a low price unless you really cant afford not to. You sell on a high and buy on a low. Brown actually drove the price of gold lower by telling everyone he was ordering a sale and it is no co-incidence that the price of gold has risen ever since he sold off those reserves.
So this is Labour's 'prudence'. The crazy warped world of Brown, divorced from common sense and reality.
Guest 653- Registered: 13 Mar 2008
- Posts: 10,540
6 January 2009
19:1012228I'm sure many Labour posters on here will support them Barry - crazy as it may seem.
Roger
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
6 January 2009
20:3712233Crazy indeed Roger. Remember that Brown went against advice in doing this. Do you realise what the implications would be in local government if the Leader of a Council went against the advice of officers and that resulted in a significant financial loss? A judicial review could result in the Councillor who ignored advice being personally surcharged and expected to pay up.
Imagine that happening to Gordon Brown, how many lifetimes would it take for him to repay that much?
Perhaps Government should come under the same rules then those like Brown would have to be more careful with the nations assets.
Guest 640- Registered: 21 Apr 2007
- Posts: 7,819
7 January 2009
11:1412275I have to be honest here and admit at once that I know nothing at all about the nations gold reserves. But let me make a case for the government as to why they might have needed to cash in our golden assets.
Its quite clear to one and all that the gold may not have made as much in revenue terms when the gold was sold by HMG. But thats not too revolutionary a shock. Gold prices go up and down. The fluctuation of the humble assets is something we are all very familiar with now.
If we had all cashed in our savings a year and a half a go, we now would be literally laughing all the way to the bank, as they were worth something. Certainly worth considerably more than the are today. All our savings have crunched onto the floor of despair, our house prices have gone the same way.We are left with nothing. The rainy day money has taken a bath. But did anyone see it coming. Did any of our financial advisers tell us to get out now. No, nobody knows, nobody saw it coming, when the crash comes it comes out of the blue and strikes between the eyes.
The Labour Government, a big spender on services, probably needed the gold to fulfill there aims and dreams. Tony Blair spent the money on the NHS like never before at the time, and on all our services. presumably the gold reserves were used as cash injection. You sell it at the best price available at the time. If you want credit now then you want it now, not in another 8 years when you think you might get a better return. It doesn't work out that way. Nice theory.
As I say Im just speculating here as Ive no real idea what the gold was used for but I think the labour philosophy of spending on public services is the best of the options available.
Brian Dixon
- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
7 January 2009
12:2212281a bit like the torys under thacter then no change there then.a labour goverment nicking tory ideas.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
7 January 2009
13:2612284You are flailing around a bit there PaulB. The simple fact is that gold was at an all time low, he announced the sale and drove the price even lower as a result. Sheer idiocy.
It does not take a genius to tell him it was the wrong thing to do, in fact he was told that and ignored the advice.
Basic stuff, sell high, buy low.
The gold price has since then been rising steadily.
Brown has a track record of ignoring advice and as a result getting it wrong. Taxation of pensions for instance in 1997, he was warned of the implications and ignored them. Then after that the pensions 'simplification' introduced in 2006, three years before then he was told some proposed changes to permitted investments would not work but he stuck to his guns, then 3/4 months before implementation he did a U-turn, after costing the pensions industry a lot of money.
Incidentally - he made a lot of blunders on pension simplification. He made it easier to get tax relief on life cover premiums through a pension but found advisers were recommending it too much (of course, because it is right and sensible to look after your family and why not get tax relief for doing so) so he reversed that 9 months after it was introduced. Other blunders are in respect of Alternatively Secured Pensions, again resulting in a u-turn.
His changes to tax free savings (PEP/TESSA change to ISA) were a disaster to the savings ratio and over complex, he u-turned eventually on part of that. His implementation and concept of Stakeholder pensions went against experience and advice and were a flop.
That is just my industry - everyone will remember the 10p tax fiasco, again he was warned and advised of the impact well before implementation and ignored it until faced with a by-election defeat.
He is now blundering around on the economy. His VAT cut is another flop, I (and others) have been saying he should have increased the starting rate for income tax to £10,000 at the same cost instead. Now we hear that he is likely to do just that in the budget....
He is simply a disaster area whatever he touches.
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
7 January 2009
17:2212295i supose maggie selling of all the silverware was ok then barry.what choise had brown/blair have.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
7 January 2009
20:1612297Loss making and inefficient industries, not precious silverware. Often dead ducks that cost the taxpayers a fortune.
Producing cars that didnt work, steel that even subsidised no-one wanted to buy except to build merchant ships for Poland, in subsidised shipyards so these subsidised Polish ships, could compete with unsubsidised British Merchant Navy ships. Just one reason for the shinking of our merchant fleet...
Then of course, there was the first privatisation, the NFC. Sold to its employees (including me at the time) making losses for the Government paid for by the taxpayer, turned around by its employees to a profit making tax paying company.
Then there was BT which, when it had a monopoly of the telephone service, you had to wait 6 weeks for a phone (usually black, big, with dial - unless you paid extra for a trimphone...remember those?).
Remember 34p basic rate tax to pay for it all and top rates at 85p. Remember 29% inflation.
Yes, those were the days.
There can be no comparison with the sale of gold.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
7 January 2009
21:0512304barry
the nationalised industries were finally beginning to pull their weight in the later years of the 1970's.
modernisation had happened, otherwise how would the tories been able to sell them off?
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
7 January 2009
22:1412311Disagree totally. The nationalised industries were inheritantly inefficient and wasteful and were simply being used by the Labour Government to hide the real underlying level of unemployment through expensive subsidised 'jobs'.
Free from the dead hand of Government and without taxpayer subsidy to rely on the privatised management restructured the businesses to much leaner more efficient and competitive concerns.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
7 January 2009
22:3412313they had been for decades barry, but times were changing, the unions were trying to stop the modernisation and rationalisation.
they would have not been able to sell them unless changes had been made.
good scam though, sell back to the public what they already owned.
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
7 January 2009
22:4612315at lest the coalboard was making a profit before the torys got there gruby hands on it then shut themall down and brought polish coal along with coal from other eu countrys which were also sub sidised.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
8 January 2009
08:4812323Brian - no, it was a protected industry producing expensive coal, way above the market price (hence your correct comment about cheap Polish coal). Those industries forced to rely of that expensive coal were then themselves less competitive, a viscious cycle.
Howard - real public ownership is through the ownership of shares by the public either directly or through collective investments such as pensions and ISAs. they will then beneefit directly from the profits made and success of the businesses in which they invest.
The public dont benefit by the State ownng ineffficient and heavily loss making industry. It just costs them tax money that would be better spent on defence, health or education. Governments have no place owning businesses.
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
8 January 2009
15:0712344tilmanstone collery 5 years before it closed was producing 10000 tons of coal a day which made it cheaper than polish coal the other two collerys were prouducing 8000 tons of coal a day which made kent coal the cheapest in europe.at the time a new coal seam was being openend up,at the time i left the industrie there were 5 new faces working with 4 more being made ready.each seam was 7 foot thick and each face was estamated at 15 to 20 yearsvof production.what did maggie do she closed it down with an estimated 20 million tons of cheap coal buried in one pit alone.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
8 January 2009
15:1312346Then sadly, if that was true and the mines really were truly profitable the Kent mines can only have been closed because of the militancy of the Kent miners.
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
8 January 2009
15:1812348maybe so but all that coal wasted because of her anti unionisom and her moral high ground sentiments.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
8 January 2009
16:3412350Not Mrs T's anti unionism, Brian, but Scargill style militant unionism resulted in that waste of coal.
Unregistered User
8 January 2009
17:5812355Of course the coal is still there Brian
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
8 January 2009
18:2912359barryw it was maggies anti union attitude that killed every thing off,scargill wasnt millitant but was active in trying to save jobs.paulw its a little bit late for that now as the cost of reopening the kent pits would cost to much and would cut any possable profits.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
8 January 2009
18:3612361Brian - you and I will never agree.
The Trade Unions in the 70's were a menace to the economy and it could not go on. Mrs T's reforms were essential for a modern economy to prosper and extremist idiots like Scargill needed their wings clipped, they just had too much power. They are the ones who destroyed their own industries.
Mrs T was the right person at the right time with the right policies and it is thanks to her that our economy did not sink to the level of Albania.