4. Guide to the papers and full list of documents
The papers released today were, with one exception, written between 17 September 1992 and 10 January 1994. The final paper was written on 6 August 1997, but was circulated only to officials in the Treasury and, like all the other papers, has not at any time prior to release been seen by Labour Government Ministers or their special advisers. 3
The papers were all written by Treasury officials, and the latter papers in particular, were written with the aim of better understanding the events so that the Treasury as an institution could learn these lessons for the future.
The ten documents released today, and listed below in chronological order, fall into three categories:
(a) Papers 1 and 2 relate to the immediate economic aftermath of sterling’s exit from the ERM;
(b) Papers 3 and 7 to 9 are mainly retrospective analyses of strategic decisions, operations and wider events before and during the UK’s period of membership of the ERM. Particular attention is drawn to Paper 7, a lengthy document which was the culmination of a detailed internal Treasury project reviewing the UK’s experience ERM membership. Papers 8 and 9 are comments on this paper (Paper 8 is a covering minute circulating paper 7 within the Treasury with additional comments). This exercise was initiated by senior officials within the Treasury so that the Treasury might learn the lessons of the episode;
(c) Papers 4 to 6 and paper 10 are mainly technical papers aimed at providing estimates of the cost of intervention. The most recent and definitive Treasury assessment is paper 10, though as the papers themselves point out, estimating these kinds of costs accurately is fraught with difficulty. An important distinction is drawn in these papers between the net cost of the intervention in the financial markets in the run-up to the suspension of sterling’s membership of the ERM in September 1992, and the size of the actual intervention. The former is the best estimate of the net cost to the reserves, whilst the latter relates to the swapping of one financial asset for another.
For an explanation of why certain sections of some of the documents have not been released, please see Note 3: Guide to exemptions applied and redacted documents.
3 This paper marked the completion of an official level exercise commissioned by senior officials prior to the 1997 General Election. The exercise was completed in August 1997.
1. The Exchange Rate 17 September 1992
2. Should sterling rejoin, and if so when? 18 September 1992
3. Britain and the ERM – Chancellor’s speech 29 July 1993
4. Calculating the cost of ‘Black Wednesday’ 2 August 1993
5. The cost of Intervention, 3/9/92 to 1/4/93 25 August 1993
6. The cost of Intervention. 10 December 1993
7. Part one: ERM Project - The UK’s membership of the ERM 21 December 1993
7. Part two: ERM Project - The UK’s membership of the ERM 21 December 1993
8. Reflections on the UK’s Membership of the ERM 5 January 1994
9. Reflections on the UK’s Membership of the ERM 10 January 1994
10. The cost of Black Wednesday reconsidered 6 August 1997
The quality of these documents is based on the originals.