British Chancellor Remains Relaxed over Gold Sales
Source: Knight Ridder/Tribune Business News
Publication date: 2000-11-26
Arrival time: 2000-11-28
Nov. 26--Gordon Brown has "no problem" with the National Audit Office investigating his decision to order the Bank of England to sell gold reserves and buy euros, which critics claim has cost Britain UKpound 100 million.
The chancellor has been heavily criticised for selling 200 tonnes of gold in eight auctions, the most recent in October. A further 200 tonnes will be sold in the coming months, taking UK reserves down to 300 tonnes.
The Bank has used the money raised to create a portfolio split between 40 percent in euros, 40 percent in dollars and 20 percent in yen. With the value of the euro continuing to fall, the Treasury has been accused of squandering as much as UKpound 100 million.
Analysts have pointed out that because the Bank has signalled its intention to sell at regular intervals, the price of gold has been depressed, adding to the Exchequer's loss.
Now the NAO, the independent spending watchdog that is brought in to monitor potential government mismanagement, is investigating.
Brown has been attacked for the sale and was given a rough ride by members of the Treasury select committee last week when he was repeatedly pressed to give a figure of exactly how much has been lost through the eight auctions that have been held.
He was shown a copy of a parliamentary answer which refused to put a figure on the losses. Brown also denied that the Bank of England had expressed disquiet over the sale, an assertion made by committee member Sir Teddy Taylor.
The chancellor said: "I have no problem with the National Audit Office looking into this issue, but it's about exchange portfolio diversification."
But Taylor believes that, in the interests of open government, Brown should publish the exact figures of the losses.
infoseek.yellowbrix.com |
