Brown says 1999 gold sale was right

WASHINGTON Sun Apr 15, 2007 12:56pm BST

Chancellor of the Exchequer and IMFC Chairman Gordon Brown pauses during a news briefing on the second day of the IMF and World Bank spring meeting in Washington April 14, 2007. REUTERS/Molly Riley

Chancellor of the Exchequer and IMFC Chairman Gordon Brown pauses during a news briefing on the second day of the IMF and World Bank spring meeting in Washington April 14, 2007.

Credit: Reuters/Molly Riley

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WASHINGTON (Reuters) - Chancellor Gordon Brown defended on Saturday his decision to sell a part of Britain's gold reserves in 1999 following a report that he did not take proper advice on the sale.

"Gold sales are a decision for the government. They were a decision that I made as chancellor of the exchequer in the right and proper way," Brown told a news conference at the International Monetary Fund/World Bank meetings in Washington.

Many countries at the time were doing exactly what Britain was doing, "diversifying our portfolio and reducing the risks. Actually, at the time, the governor of the Bank of England Eddie George said to the Treasury Select Committee that the decision to sell gold was a perfectly reasonable portfolio decision," Brown said.

A report in the Sunday Times citing "insiders" said some Bank of England officials had opposed the 1999 sale at the time.

It follows a political storm late last month over documents showing Treasury officials had warned Brown of possible risks to the pensions system from tax changes he made a decade ago that cast a shadow over the finance minister's bid to become prime minister.

Prime Minister Tony Blair is expected to step down in the next few months and Brown, in charge of the Treasury for a decade, is the overwhelming favourite to succeed him.

Brown told reporters the move to sell the bullion then had been studied by the National Audit Office and a parliamentary committee.

"Indeed, the National Audit Office said that it was in a transparent and fair manner that the sale had happened while achieving value for money, so that is actually what happened.

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