The Times February 04, 2005
Cover-up row over GBP27 billion secret of Black Wednesday By Philip Webster, Political Editor
HIGHLY sensitive Treasury papers on the events leading to Black Wednesday in
1992 are being kept secret at the request of John Major and Lord Lamont of Lerwick, Prime Minister and Chancellor at the time, The Times has learnt.
Senior Treasury officials are furious that the documents, which should have been published under the Freedom of Information Act on Tuesday, are being held back, apparently on the orders of Sir Andrew Turnbull, the Cabinet Secretary, to give Mr Major and Lord Lamont more time to study them.
The delay has raised fears among Treasury officials that publication could be delayed indefinitely, or that key passages will be removed to prevent embarrassment to figures in one of the most humiliating episodes in recent economic history, when Britain left the European exchange-rate mechanism on September 16, 1992, and the Bank of England reputedly spent £27 billion of reserves propping up sterling.
There is also anger among some officials at Sir Andrew¹s position. He worked in senior roles for both Mr Major and Lord Lamont. In a febrile atmosphere in Whitehall, there were accusations that the ³Old Boy network² had held up publication. But sources close to the two politicians insisted last night that they were not trying to block the papers.
Mr Major¹s office said that he had been told of plans to publish them only while travelling in America on Wednesday. It said that it would have been impossible for him to give them his proper attention while on a speaking tour thousands of miles away and that he had asked to look at them when he returns to London next week. ³There is no attempt to play for time,² an official said. ³He will look through this next week.²
Lord Lamont told The Times: ³I am relaxed. I will read the papers. They are being delivered.²
Senior Conservative sources accused the Treasury of trying to rush out the documents to embarrass the party. An official said: ³There is an intriguing disparity between the speed with which they are trying to get these papers out and their singular failure to respond to some of the requests other papers and parties have made.
³We will be watching this like a hawk to ensure that there are no double standards here.²
Other Tories accused the Treasury of trying to create a row in order to remind people of Black Wednesday near an expected election.
It is also the biggest test so far of the Freedom of Information Act which came into force on January 1, and the readiness of Whitehall to yield up secrets.
The Treasury had been asked by the Financial Times to publish its evaluation of events leading to the ERM exit.
The papers were supposed to have been produced on Tuesday, 20 days after receipt of the application. But they have been delayed all week. When Mr Major and Lord Lamont were told of the intention to publish yesterday afternoon and that they would receive the papers several hours in advance, they are believed to have raised objections, saying they needed time to read the five or six papers, comprising 200 pages.
But the delay has caused anger. Insiders point out that officials named in the Hutton report on the death of David Kelly received it only a day in advance. Publication had been approved by the Treasury and the Cabinet Secretary, The Times has been told. The documents were sent to Mr Major and Lord Lamont ³out of courtesy², as they are named in them. The guidance is that former ministers should be informed, although there is no provision in the legislation for delays.
One insider said that they had no right under the legislation to demand changes or to seek suppression of the entire document. ³So why are they buying time?² The issue has undertones because the Conservatives will suspect the Government of being keener to disclose papers that are damaging to them.
A key part of Labour¹s election campaign will be to remind voters of the economic crisis when interest rates hit 15 per cent after being raised twice on Black Wednesday.
Mr Major denied last night that he was blocking the release of papers. He said through a spokesman that such reports were ³wholly untrue².
Senior Tory sources suggested that malicious rumours were being put about as part of a political game.
The Cabinet Office pointed out last night that Mr Major and Lord Lamont had been informed in accordance with guidance to officials. It refused to comment on whether Sir Andrew had ordered the delay.
In an official statement last night the Treasury said that the papers would be released after all normal procedures had been gone through. An official said that, despite the delays, publication would happen ³however long it takes².
HUMILIATING DAY
11am Norman Lamont raises interest rates from 10 per cent to 12 per cent after frenzied selling of sterling on the exchanges
2pm Rates go up to 15 per cent as £27 billion is speculated on propping up the pound. The net loss is put at £4 billion-£10 billion
7pm Mr Lamont withdraws from the ERM and drops the second rate rise