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    In 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.

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