Rachel Reeves has made costly mistakes – but she’ll never match Gordon Brown’s horrorshow
Former Labour chancellor Gordon Brown is a hero to Rachel Reeves. It’s easy to see why.
Even Rachel Reeves hasn’t matched Gordon Brown’s gold price howler (Image: Getty)
The two have plenty in common. Both arrived in No 11 swollen with their own importance, and both made costly mistakes that have cost ordinary Britons absolute fortunes. Both love blindsiding us with stealth taxes, and both spend other people’s money as if it will never run out.
Neither wasted any time either. In 1997, fresh from Tony Blair’s landslide election win, Brown launched his infamous raid on workplace pensions by scrapping tax relief on dividends.
hat single move destroyed private sector final salary schemes by making them too expensive to run. At last count, it ripped around £200billion out of Britain’s pension savings and left millions facing a poorer retirement. Public sector pensions, naturally, were untouched by Brown. They remain gold-plated to this day, funded by the taxpayer.
Reeves has shown the same great clunking instinct. In her first Budget, she slapped inheritance tax on unused defined contribution pension pots. In her second, she went after pensions salary sacrifice. Yet she’s done nothing about the £2.9trillion unfunded public sector pensions liability, because that’s politically untouchable for Labour.
The two Labour chancellors share another grim trait.
Brown styled himself the Iron Chancellor and, for two years after 1997, he did keep a tight grip on spending. Then he opened the spigots. Government spending rose from less than 35% of GDP when he took to 40% just before the financial crisis. It was almost 45% by the time he was booted out in 2010.
And it’s hardly come down since.
Reeves has also assumed the Iron Chancellor mantel, and she doesn’t deserve it either, as she taxes and spends like crazy.
But there’s one way she’ll never live up to Gordon Brown, who made a howler unprecedented in UK financial history.
In 1999, under pressure from absolutely nobody, Brown sold off half the UK’s gold reserves. The price was at a 20-year low and he decided the precious metal had lost its shine for good. Worse, by flagging the sales in advance, he helped drive global prices down even further as markets knew they’d be flooded with supply.
In total, Brown sold 395 tonnes at an average price of $276 an ounce, raising £2.6billion. Then guess what happened.
Gold has since become the standout investment of the millennium, smashing every other rival. And it’s skyrocketed in the last 12 months.
As the world’s ultimate safe investment haven, it has soared due to stock market volatility, 9/11 terror attacks, the financial crisis, pandemic, Ukraine war and US-China tensions.
From $288 at the end of 1999, the price has hit almost $4,500. That’s an increase of a staggering 1,461%. Central bankers, led by China, are buying all the gold they can. We’ve totally missed out, thanks to Brown.
His dumped gold stock would now be worth more than £40billion. And it’s set to rise higher, with gold forecast to top $5,000 this year.
By arrogantly trying to time the market, Brown is responsible for arguably one of the worst investment decisions in British history.
Even Rachel Reeves hasn’t managed a howler on that scale. Not yet, anyway. Give her time.
