Some Black Wednesday files 'may be kept secret'

Click to follow
Indy Politics

Thirteen-year-old files on "Black Wednesday" may be kept secret due to fears the Treasury could be forced to release details of Chancellor Gordon Brown's own economic forecasts, it emerged today.

Thirteen-year-old files on "Black Wednesday" may be kept secret due to fears the Treasury could be forced to release details of Chancellor Gordon Brown's own economic forecasts, it emerged today.

The Treasury's files on Black Wednesday, when Britain crashed out of the European Exchange Rate Mechanism, are due to be released tomorrow under the Freedom of Information Act.

However, an internal memorandum, apparently sent in error to the BBC, disclosed that Treasury officials have discussed withholding some of the documents.

One of the reasons given in the memorandum, according to the Radio 4 Today programme, was that releasing economic forecasts from 1992 could set a precedent for the disclosure of more recent material.

It warned that release of the forecasts could "read across" to a request by shadow chancellor Oliver Letwin to see Mr Brown's growth forecasts, which he believed may have been "deliberately exaggerated or simply mistaken".

The memorandum also expresses concern that the release of some documents could expose British economic espionage against France.

The Treasury sought to play down the significance of the memorandum, saying it was "misleading and outdated" and cautioning against drawing conclusions about what was in the Black Wednesday files.

The release of the Black Wednesday papers - which were requested by The Financial Times under the Freedom of Information Act - has already caused one political row.

John Major, who was Prime Minister at the time, has angrily denied reports that he tried to block the release of the documents.

The Tories have accused Labour of trying to use the Freedom of Information Act as a political weapon in the run-up to the General Election to dig up embarrassing details about the previous Conservative government.

Mr Letwin today called for "even handedness" in the way the Act was applied.

"This is supposed to be a Freedom of Information Act not a freedom of propaganda act," he told the Today programme

"We will have to see what is released but I fear there appears to be an intention to use the Act not to reveal things that could be embarrassing about the present regime and to use it to maximum effect to achieve a propaganda coup."

The Treasury said in a statement that it would publish as much information as it was required to do under the terms of the Act.

"It would be wholly wrong to draw conclusions about the content of the Black Wednesday papers on the basis of this misleading and outdated leak," it said.

"The Treasury's concern throughout this is to ensure maximum fairness to former ministers and civil servants while ensuring that we publish as much material as is required under the terms of the Act.

"The final papers to be published tomorrow will show that we have achieved that balance.

"Throughout this process we have worked closely with, have taken advice from, and shared all drafts of paper with the Cabinet Office and the Department for Constitutional Affairs and ensured that at all stages we have operated in line with standard guidance."

A spokesman added: "We are very disappointed with the irresponsible way in which the BBC have treated what was obviously a mistake."

Black Wednesday, September 16 1992, was the day Britain crashed out of the ERM - the system which tied the value of sterling to other European currencies ahead of the creation of the single currency.

The Conservatives' reputation for economic management was destroyed as vast sums were spent trying to defend the value of the pound and interest rates soared to 15%.

It is thought that previously unpublished forecasts from 1992 will be published because the Treasury has decided they should only be withheld where they contain information which is still market-sensitive.

However it is understood that a number of private conversations between former ministers, and the personal views of civil servants about their ministers' actions, have been deleted.

According to the memorandum seen by the BBC, one sentence disclosing the UK got wind of a French interest rise may be excluded because, the Treasury implies, Britain had been spying.

"It is not clear what the information source for this was. The source could be covert and still in use," the memorandum said.

Other sentences were said to have been the subject of internal debate between officials and lawyers.

There are references in the memorandum to the Government's "hype about economic miracles" and division in the Cabinet.

"The open warfare between the Chancellor and the Prime Minister made it especially difficult for the markets to decide what the effective objectives of the Government were," it said.

"There are also references to then Chancellor Norman Lamont's 'undiplomatic' behaviour and to economic mistakes.

"The Stamp Duty holiday which had been intended to bring forward a recovery in the housing market ended up further undermining the confidence that was essential to recovery," it said.